Six Reasons You Should Not Play the Miles and Points Game
My wife and I have amassed hundreds of thousands of airline miles and hotel points over the last few years, providing us free travel that would have otherwise cost tens of thousands of dollars.
The perks of playing the Miles and Points game are fantastic. You’re able to fly, in many cases comfortably, to destinations you might not have otherwise visited had it not been for airline miles. And hotel points allow the opportunity to stay in accommodations for which most “normal” travelers would never pay.
While potentially highly lucrative, the game does take time and effort to play correctly. Not taking it seriously could result in financial consequences that could haunt you for years to come.
Before you venture into the Miles and Points game, review the six reasons you shouldn’t get involved, and take the time to seriously evaluate your suitability for playing the game.
The allure of free travel is not worth falling into debt, or worse, significantly damaging your credit score/history.
1. You Don’t Pay Credit Card Balances in Full
This is a non-starter. If you don’t pay your credit cards in full, every month, do not get into the Miles and Points game.
If you currently carry a balance on one or more credit cards, your goal, first and foremost, is to pay that credit card debt off. And signing up for more credit cards is NOT how you get that done.
There are plenty of resources available to guide you on how to pay off credit card debt. Use them to become credit card debt free.
2. Your Credit Score is Below 700
Your credit score is what credit card issuers will look at – in conjunction with your employment/income situation – to determine eligibility.
Those with credit scores below 700 will have a harder time being approved for credit cards, especially the higher-end cards that offer the bigger sign-up bonuses.
It’s not unheard of for those with sub-700 FICO scores to get cards, it’s just more likely those applicants will be rejected, and multiple hard pulls on your credit report along with multiple denials is just not worth it.
3. You’re Tempted to Spend
We all are tempted to spend from time to time. But if you’re the type of person who sees money in the bank and immediately feels the urge to spend, well, that’s a red flag.
In the Miles and Points game, if played correctly, you’ll be approved for a number of different credit cards, all with their own lines of credit. It might not be unheard of to have thirty, forty, fifty thousand or more in available credit spread amongst all your open cards. For someone with limited will power, all that available credit just might be a call to shop…and a recipe for financial disaster.
When you do see fifty thousand dollars in available credit, you should be thinking, “How little of that can I use to keep my utilization rate low and credit score high?” If that’s not what you would think, steer clear of the Miles and Points game.
4. You’re Not Detail Oriented
The Miles and Points game requires a strong attention to detail.
You have to keep track of the different credit cards you sign up for, the dates you sign up for the cards, the terms of the sign-up offers, when minimum spends must be completed to receive the bonuses, when waived-annual-fees will come due, making sure all card balances are paid in full, on time, every month, etc., etc.
And that’s not even factoring in the multiple airline/hotel rewards accounts you’ll have active and needing attention.
There’s a lot to keep track of to play the game successfully, and ensure your financial health stays intact.
If you’re not a detail-oriented person, it can be easy to get in over your head. And when you miss the deadline for completing a card’s spend for getting a sign-up bonus, or you are dinged with a late fee for missing a payment, well, that defeats the whole purpose of playing the game.
5. You Don’t Have Flexible Travel Dates
This point is rarely talked about in the Miles and Points community. Finding airline award availability – depending on the airline and/or class of service – can be difficult.
If you have a fairly set schedule that only allows you a certain number of vacation days during certain periods of the year, Miles and Points may not be for you.
However, that depends on the type of travel you’re looking for. Hotel award availability isn’t usually as difficult as business/first class airline award availability to find/book. So if your travel goal is to drive and stay in hotels for free during specific times of year, it probably is workable.
And depending on where and when you want to fly – and the airline (Southwest availability might be better than others) – economy class availability within the continental U.S. might not be too difficult to get.
If you have limited travel dates throughout the year, I’d ease into the Miles and Points game until you see how it fits with your restricted travel schedule.
6. You’re Buying a House
I finish the list with another non-starter. If you’re planning on buying a house – or refinancing – in the near future, don’t play the Miles and Points game.
A house will be the biggest purchase you ever make. The payments for which will take the largest chunk out of your monthly budget. So you want the absolute best interest rate you can get on a mortgage and the smoothest application process possible.
Credit cards themselves won’t necessarily keep you from getting a mortgage, but what they could represent might give a loan officer pause.
Multiple credit card applications might be viewed as you’re having financial difficulties and are using those lines of credit to support a lifestyle beyond your means. Not something a bank wants to see when considering a loan of hundreds of thousands of dollars.
To err on the side of caution, only a few (maybe 2) credit card applications two years prior to a mortgage application/refinancing and no credit cards the year before.
Now What Do You Think?
If, after reading, you think the Miles and Points game is for you, go for it. The benefits of playing can be significant.
But, I’d caution, start slowly, and read as much as you can from a variety of sources as you go. The game has a way of changing on a dime, and you most definitely don’t want to be caught flat-footed when it does.
image courtesy of freedigitalphotos.net and Stuart Miles
