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Today’s post is inspired by reader Aaron, who writes in to ask

I’ve been working on rewards since this January.  My wife and I would like to start traveling with our 4 kiddos.
One question I have is, should I keep getting new cards to work on more and more sign on bonuses, or earn points from existing cards while maximizing categories?
We’ve also started signing up my wife for cards as well.

Where to spend your money

I believe the decision to open up new credit cards is one that each person or family should make on their own, based on their financial situation and discipline as well as their comfort level with what they’re doing.  I have been very clear that it is my personal belief that YOU SHOULD NOT SIGN UP FOR A CREDIT CARD JUST BECAUSE SOME GUY ON THE INTERNET SAYS THAT YOU SHOULD.

Having said that, if you are comfortable with it, you are going to get a lot more return on your spending dollar if you are spending to meet signup bonuses.  Consider even a good category bonus is going to get you 5x points for 1 dollar spent (and most are going to be closer to 1 or 2x points).  But if you are meeting a signup bonus that say, gives 50,000 points for $2000 in spend, then you are getting TWENTY FIVE points per dollar spent.  Clearly a much better ROI!

My general rule of thumb is:

  1. First, spend on cards that I am meeting minimum spending bonus on
  2. Then, anything where I am meeting a targeted spend offer
  3. Then, something with a good category bonus
  4. Finally, a card that gives 2% cashback or similar

Downsides of opening a lot of credit cards

Of course, there are a few downsides to opening up “a lot” of credit cards, depending on what you mean by “a lot”

(SEE ALSO: Keeping track of my 43 credit cards)

American Express currently limits you to one signup bonus per card per person per lifetime.  So if you “waste” your signup bonus when the bonus is lower (like say signing up for a Delta card that is currently at 30,000 Skymiles), you’ll miss out on potentially getting a 60,000 Skymiles bonus when it goes back up.

And of course, with the Chase 5/24 rule, you may find that unrestrained signing up for cards can eliminate your ability to get some (many) Chase cards

(SEE ALSO: The 2 types of cards not subject to Chase 5/24)

As always, if you do decide to open a new credit card and wish to support Points With a Crew, you can see top travel credit card offers here.

Readers now it’s your turn – what’s your strategy?

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