The Biggest Points and Miles Myth

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📣Get ready….common misconception coming for you!

And it’s one I hear all the time….“If you’re opening a lot of credit cards to earn travel rewards, you must have terrible credit.”

But that is just so NOT true. I am 100% not over here destroying my credit just to take a trip to Hawaii. 🥴 It’s quite the contrary actually. My credit score has never been higher than it is today with 12+ credit cards to my name. So let’s break how credit scores are determined and how you can responsibly open travel rewards credit cards to increase your credit scores too!

How is a credit score determined?

There are several factors that determine your credit score and they are all weighed differently. Things that are taken into account are:

*Information courtesy of FICO

How to keep your score high

Let’s look at the credit history factor first. I always always always recommend keeping your oldest credit card open. I opened my first credit card when I was 18 and I still have that card and keep it open! This helps maintain my established length of credit history.

As far as payment history goes, this one is crucial. As you can see, it is the largest factor in determining your credit score. This is why it is so imperative to only get into points and miles if you can treat your credit card like a debit card. Whatever you charge to the card should be things that you have either planned or budgeted for. Paying your credit cards in full and on time each month is the #1 way to keep your score high!

That brings us to our second biggest factor; the amounts owed. If you’re keeping your amounts owed low, this will positively impact your credit score. It you are leaving large balances on your cards, this means that your available credit will be lower and can negatively impact your credit score. Paying your cards off in full helps improve your credit score long term!

When you consider the last two factors, new credit and credit mix, those are both just 10% of the calculation. So even though you might be opening cards more frequently, this is the smallest factor in determining your credit. The payment history and amount owed and by far the most important considerations for a healthy credit score.

Bottom line

While I am not a credit expert, these are tips that I have learned after years of earning credit card points and miles and opening multiple cards a year. I always encourage you to do what is best for your own financial situation and make sure you are ready to treat your new credit card like a debit card.

EDITORIAL DISCLOSURE: Opinions  expressed here are the author's alone, not those of any bank, credit card issuer, hotel, airline, or other entity. This content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post.