Who Shouldn't Use Points and Miles

Travel hacking may be for everyone, but that doesn't mean everyone should start trying to use points and miles today. You have to have your financial house in order if you're going to get real value from points and miles. Let's cover two groups who should not be using "points and miles" strategies.

You shouldn't try to use points and miles if you're completely new to credit cards

This is going to be a small group of people, but if you're really completely new to credit cards, you shouldn't be focusing on using points and miles. Rather, you should be focusing on developing your credit and managing your spending habits. We'd suggest going with a simple cash back card that will give you 1-2% back as you spend. Learn to pay your balance every month in full, enjoy the cash back, and turn back to points and miles in 6 to 12 months.

The Discover it card is a good starter cash back card.

The Discover it card is a good starter cash back card.

You shouldn't try to use points and miles if you can't pay your credit card balances in full every month

If you carry a balance on a credit card, you should not be focused on using points and miles to fund travel. The reason is that using points and miles is mainly driven by spending on credit cards, and the interest you will pay to maintain the balances required for significant points (e.g. sign-up bonuses) will outweigh the value of the points you earn. What's more, you'll be left in a more complicated financial situation than before (more balances on different cards).

For example, one of my cards has an APR of just under 24%. That means for every month I carry a balance, I pay 2% in interest. That 2% will very nearly - if not completely - offset whatever I earn with points. Since many credit cards compound the interest daily, any advantage I've gained from points and miles quickly disappears.

If you're in one of these groups, there's still plenty here for you!

Just because you can't rely on points and miles doesn't mean there isn't plenty of travel hacking to be done. Discounts and deals are a great way to save, and travel hacking is about so much more than using points and miles, as this post on 8 Ways to Travel Hack Disneyland Hotels (Without Using Points) shows.