While many of the best rewards credit cards come with excellent perks, for some, they're not enough. Some card users utilize “credit card hacks” in order to get maximum value out of their credit cards. They use tips and tricks to earn as many points, miles and rewards as possible, as well as to take advantage of a variety of valuable benefits.
However, while these “hacks” can be helpful, they can also backfire. Here’s what to know about credit card hacks and if they work.
Credit card hacks that work
Any useful credit card hacks just involve strategic ways to use credit cards in order to maximize rewards and benefits. One of the most commonly used credit card hacks is “travel hacking,” a way of utilizing your credit cards to earn as many points, miles and other perks as you can to save on future travel.
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Here are a few credit card hacks that actually work.
Sign-on bonuses: One of the main aspects of travel hacking is capitalizing on credit card sign-on bonuses, which help you amass a large amount of airline miles or points very quickly. Strategically applying for cards with large welcome bonuses can help you gain enough points/miles to score heavy discounts on travel expenses, or even free airfare.
For example, some of the best travel rewards credit cards offer sign-up bonuses rewarding tens of thousands of points if you meet spending requirements in a certain number of months after opening the card. For some of the latest deals, jump to the end of this article.
Some card issuers have strict rules to protect them from those who would churn through credit cards with high bonus offers. For example, Chase's "5/24 rule" means that the bank will not consider any applicant who has been approved for five or more credit cards in the past 24 months.
Rack up benefits: By strategically opting for some of the best travel cards, you’ll be able to utilize a wide range of benefits, which can also help save on travel costs. Top travel benefits include credit for TSA PreCheck, free hotel stays and airline companion passes, travel insurance and rental car insurance. Many card issuers also have shopping/rewards portals that can help you save as well.
Rotate spending between top-earning cards: Opening multiple cards with various benefits is a credit card hack that non-travelers can also utilize. Opening cards that offer a high rewards rate for spending in a wide variety of spending categories can help you maximize cash back, rewards or miles on all of your purchases.
However, you'll need to be careful before applying for several credit cards. To earn many of the rewards associated with credit cards, you'll have to meet minimum spending requirements, which can add up over time. Failure to pay these back can result in credit card debt and expensive interest charges.
Plus, having high credit utilization or even missing one payment can damage your credit score. If you've worked hard to boost your credit score, you may be disappointed when it tanks after multiple card applications. Additionally, too many credit inquiries in a short period of time is also bad for your credit score.
Credit card hacks to avoid
The following credit card hacks are a waste of time.
15/3 hack: Speaking of credit scores, some popular card hacks actually aren’t all that great — like the popular 15/3 hack, which involves paying off your credit card statement twice a month, as opposed to only once. The hack is used by cardholders as a way to boost their credit score, but it misses the mark. Once you receive your credit card statement, you’ll subtract 15 days from your due date, which is when you’ll pay at least half of your total balance. You’ll then subtract 3 days from your payment due date, at which time you’ll pay off your remaining balance.
The idea behind this is that you’ll double the number of on-time payments you make, which will in turn boost your credit score. However, this is a myth; it will only count as one on-time payment because of the way credit card accounts are reported. While this hack does lower your credit utilization, you can also achieve the same results by paying once a month.
Spending over Venmo: Another credit card hack that doesn't work is using your credit card to send multiple payments to family or friends over Venmo. While it is possible to use a credit card on Venmo, you'll get hit with transaction fees that can offset any cashback you might have earned in the first place. For this reason, it's not a good way to rack up points or cash back rewards.
Buying and returning items: If you're thinking about buying items with your credit card just to earn cashback, only to turn around and return those items, don't waste your time. While you will earn on the initial purchase, if you decide to return any of your purchases, any cashback, miles or points will also be subtracted from your rewards balance.
Canceling and reopening a card for multiple sign-on bonuses: Taking advantage of credit card sign-up bonuses can help you earn a large number of points in a short amount of time. Some offers are so good you may even be tempted to cancel your card and reapply just so you can earn it again. But card issuers have caught on to this "hack" and have put rules in place against it. For example, Amex has a "once per lifetime" rule, limiting cardholders to one welcome offer per card. With many Chase cards, you can only earn one bonus offer every 24 months, or 48 months with a Sapphire-branded card.
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