Are You Wasting Your Time on Credit Card Points?
When it comes to credit card rewards, opinions seem to fall into two camps. Some people see them as free money waiting to be claimed, while others feel the effort outweighs the benefits. But here’s the big question: is it really worth your time? If you’re part of a high-income household—think families making $300,000 or more annually—you might want to rethink your approach. Let’s take a closer look at who truly benefits from chasing credit card points, who doesn’t, and the simplest, most effective way to use credit cards.
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Credit Card Rewards Can Be Great—When They Make Sense
Don’t get the wrong idea—credit card points can be fantastic. Many people (myself included) enjoy the perks they bring. From travel rewards to cashback incentives, these programs can bring genuine value if used wisely. But this is where the waters get murky. While I firmly believe in the power of credit card points, they aren’t for everyone. Some people are simply spending too much time, effort, or money chasing these rewards. So, how do you figure out if they’re worth it for you?
The Most Common Money Question: “What Card Should I Use?”
It’s no surprise that one of the most frequent questions clients ask is, “What’s the best credit card for me?” The answer isn’t as simple as naming a specific card. It ties into your financial habits, your discipline, and even your lifestyle goals. Over the past decade of working with high-income families, particularly physicians, and professionals, I’ve learned that the strategies for using credit cards differ based on income and personal preferences. One thing is clear: not everyone should be chasing credit card points like it’s a full-time job.
High-Income Households: Why This Conversation Matters
If your household earns six figures or more, you’re in a unique position when it comes to credit card rewards. You likely have the means to qualify for premium cards, complete with significant perks and sign-up bonuses. But here’s the catch—you’re also more likely to have less time, higher spending, and financial priorities that may not align with maximizing points.
For example, if your household brings in $300,000 annually, your time is worth roughly $145 per working hour. Spending hours tracking, optimizing, and redeeming points might not yield a return that makes sense for someone with a valuable skillset or career.
Who Should Be Maximizing Credit Card Rewards?
Let’s break down who actually should consider diving into the world of credit card rewards. If you meet the following six criteria, you’re likely in a good position to maximize these perks.
1. You Have Excellent Credit
This one’s a no-brainer. If your credit score isn’t great, your options for premium rewards cards shrink considerably. Many top-tier cards have strict approval criteria, and frequent applications could harm your score further if not managed carefully.
To make the most of rewards, start with a solid foundation. Work on boosting your credit score before considering any new cards.
2. You’re Financially Disciplined
Rewards aren’t free money. If you’re carrying balances month-to-month, the interest rates on those cards will wipe out any cashback, points, or airline miles you’ve earned. High-interest rates, often 20% or more, can quickly outweigh even the best rewards program.
Discipline is key. You need to pay off your balance in full every month, track multiple cards, and stay organized. If you aren’t in control of your finances, you could end up spending more than you’re saving.
3. The Rewards Match What You Love
This is where credit cards can actually make life more fun! Align your rewards with what matters most to you. Love to travel? Opt for a card that gives you perks like free flights or hotel stays. Enjoy cashback? Stick with a card that helps you save on groceries, gas, or other frequent expenses.
Personally, my family shifted from cash back to travel benefits over time. As our kids got older, we started enjoying family trips more. For others, cashback for everyday items might be a better fit. Choose what suits your lifestyle.
4. You’re Not a High-Income Earner (Relative to Rewards)
If your income is on the lower end of six figures, rewards may still make sense because the “free money” can feel more impactful. But the higher your income, the less impressive a $1,000 travel credit feels. For some high-income families, the math just doesn’t add up. Spending hours collecting points that save a fraction of your annual income doesn’t always make sense when you could be focusing on other investments or even relaxation.
5. You’re Highly Organized
Managing multiple cards for different reward categories can feel like juggling. If you lose track of spending requirements or miss a payment, it could cost you more than the rewards are worth. A system—whether it’s a spreadsheet, app, or organized filing system—can help you stay on top of it all. Without organization, it’s easy to let the reward game turn into a stressful mess.
6. You Love The Perks
Airport lounges. TSA PreCheck. Hotel upgrades. For some, these little luxuries make rewards programs worthwhile, especially if you’d never spend money on them outright. If you genuinely enjoy the free extras, chasing points might feel rewarding. But make sure you’re not falling for a card just because the perks sound flashy. They need to work for your lifestyle.
Who Should Avoid Chasing Credit Card Rewards?
Now that we’ve covered who benefits from credit card rewards, let’s flip the script. Here’s who might want to hit pause and rethink their strategy.
1. High-Income Households
This one might sound surprising, but hear me out. If your time is incredibly valuable, chasing rewards may not pay off. For example, if you’d need to spend ten hours figuring out how to redeem a million points for $10,000 in value, that’s time you could’ve spent making far more in your actual job.
The math is simple: your income often far outweighs the return on credit card rewards.
2. Anyone in Financial Trouble
Credit card rewards should be at the bottom of your priority list if you’re paying off debt, struggling with expenses, or trying to repair your credit. Focus on stabilizing your financial situation first. Chasing points won’t help you pay off a high-interest loan or build an emergency fund.
3. Low Spenders
Rewards programs rely on spending. Without meeting spending thresholds, especially for those enticing sign-up bonuses, the math doesn’t work in your favor. If your lifestyle doesn’t naturally include high spending on groceries, travel, or other categories, rewards are unlikely to outweigh the fees attached to many premium cards.
4. People Lacking Time or Energy (Looking at you, Doc! 😉)
If managing rewards feels exhausting, don’t sweat it. Letting go of the idea that you have to optimize every single financial decision is freeing. Focus on what truly matters to you—whether it’s your career, family, hobbies, or self-care.
5. People with Poor Credit or Fixing Credit
Opening and closing accounts constantly can wreak havoc on your credit score. If boosting your credit is a current goal, steer clear of reward strategies. They’re not worth the potential damage.
The Smart, Simple Strategy: Pick Two Cards
Here’s my favorite approach for using credit cards, and it’s as simple as it gets: stick to one or two cards that align with your goals. This “Keep It Simple” method minimizes the headaches without sacrificing value.
For example, my family focuses on two personal cards. One is dedicated to our biggest expense—groceries—while the other caters to travel rewards for family vacations. On the business side, we use two cards—one practical for everyday expenses, and one tuned for travel perks as our needs have shifted over time.
When you limit the number of cards, there’s less to track, fewer fees, and less risk of hidden costs sneaking up on you. It’s also easier to periodically reevaluate if the card perks remain worth the annual fees. If the rewards stop aligning with your spending habits, it’s time to look elsewhere.
Closing the Rewards Debate
Credit card rewards, like dessert, are best enjoyed in moderation. They’re a nice bonus, but they shouldn’t drive your financial decisions—especially if your income is high or your time is better spent elsewhere. By focusing on a simple strategy and sticking to a few cards, you can reap the rewards without unnecessary stress.
So, are you wasting your time on credit card points? That depends entirely on you. Take a moment to reflect on your habits, goals, and financial needs. And remember, rewards are just a tool—they should work for you, not the other way around.
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