Loyalty programs or bust

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Applying for credit cards temporarily harms your credit scores. But experts claim it's a matter of only a few points on credit scales that might go up to 850 or 990, depending on the credit rating company. Formulas for calculating scores are secret.

So, applying for cards is unlikely to harm your chances of being approved for an auto loan or wireless phone contract. Still, if you have a major borrowing event coming up soon, especially something as important as a home mortgage or refinancing, you might want to wait until after you've secured the loan.

Miles vs. cash-back

Many personal finance experts advise consumers to use cash-back rewards cards, which typically offer 1 percent back in cash or statement credit. There's nothing wrong with that, but travel experts say you can earn many times that reward if you're willing to take rewards in the form of travel loyalty points.

"If done right, you can get 5 or 6 cents per point, which means you could get a $7,000 business class international flight for 120,000 miles," Kelly said. It would take tremendous spending on a typical cash-back card to earn a $7,000 reward.

Everyday spending

The strategy for all rewards cards, whether the currency is miles, points or cash back, is to put most of your everyday spending on credit cards to reap greater rewards. The more spending you pile on a card, the greater your rewards. More sophisticated users will use different cards for different purchases because some cards offer greater rewards on certain categories of spending — groceries or gasoline, for example.

"People who play this game seriously have more than one credit card in their pocket," Ingersoll said.

A potential pitfall is that some people will subconsciously spend more with plastic than cash because swiping a card doesn't feel as psychologically painful as parting with hard currency, consumer behavior studies have shown.

Online shopping portals

Instead of going directly to a major retailer's online site to make a purchase, you can often go through a shopping "portal" that gives you cash back or travel points. Prices and selection are the same. You visit the portal site first and then click through to the retailer site. That minor detour, like entering a store through a different door, is another way of racking up airline miles with everyday purchases. By entering through that different door, your reward points — typical is an amount equal to 5 percent of your total purchase — are automatically credited to your account.

"If you're going to make the purchase anyway, you might as well go through the portal," Kelly said. And if you pay with your mileage reward credit card, you get even more points or miles for the same purchase.

For example, if you were going to buy something online at Macy's, you instead could go to Macy's via a portal, such as Chase Ultimate Rewards Shopping Mall, or airline-specific ones, such as MileagePlus Shopping (United Airlines) or AAdvantage eShopping Mall (American Airlines).

Cashing in

Whole other strategies are developed around the best ways to redeem miles and points. "The whole myth with all these mileage programs is there's nothing available, with blackout dates, etc." Kelly said. "It's absolutely false."

Fortunately, advice sites also offer guidance on cashing in points and miles.

"It's a pretty loving community of people who are all trying to see the world," Ingersoll said. "And we're willing to help one another out to accomplish that."


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