Common Mistakes I See People Make

Since I started sharing my rewards strategy with friends and family, I've noticed several patterns in how people approach credit cards. Let me save you from these pitfalls:

Mistake #1: Chasing Too Many Cards

My friend Mike has seven different credit cards. He signed up for a new one every few months to chase signup bonuses. The problem? He can't keep track of which card to use where, he's missed payments because he forgot about a card, and his credit score has taken a hit from all the applications.

Here's what actually works: Start with one excellent everyday card. Master it.

Mistake #2: Paying Annual Fees Without Doing the Math

Some premium cards have annual fees of $95, $250, or even $550. Those can absolutely be worth it—if you actually use the benefits enough to offset the fee.

Do this instead: For most people, a no-annual-fee card with solid everyday rewards is the sweet spot.

Mistake #3: Carrying a Balance to "Build Credit"

This is probably the most expensive myth in personal finance. You do NOT need to carry a balance and pay interest to build credit. In fact, carrying a balance just costs you money.

The winning strategy: Use your card regularly for normal purchases, then pay the full statement balance every month before the due date.