Things I wish I knew about (U.S.) credit cards slightly earlier

22 Mar, 2026

Before we get to that, here are some

things I already knew about credit cards but feel it would be kind of irresponsible not to mention

1. I'm not your financial advisor
2. I only know about U.S. credit cards, sorry. And, based on five minutes of research, the U.S. credit card ecosystem is a weird outlier globally. I imagine that if you're not from here, you'll be horrified at this Kafkaesque labyrinth of percentages and points and credits and exorbitant interest rates that we've imprisoned ourselves in.
3. Speaking of which, credit card interest is absurdly high, and not paying your credit card off is terrible for your credit score. Therefore, it's higher priority than anything below to pay off your credit card in full every month. If you don't or can't do that, the rest of this post probably won't be helpful.
4. Though: if you've been paying off your credit card promptly for years, and then forget once, you might want to try asking your bank nicely to waive the interest and fees, as well as to take it off your credit report. This worked for me once.
5. But you should probably just set up autopay and forget about it

Ok let's go back to the title with a number reset

1. When you buy something with a credit card, it'll typically reward you with either some percent "cash back", or some institution-specific "points" or "miles"¹ as a multiple of dollars spent. Most of the latter type of cards are focused on travel (airlines, hotels). This is the most easily-quantifiable long-term benefit of credit cards.
2. If you're doing a first-pass comparison of cards, it's not a bad guess that each point or mile is worth roughly 1 cent, so that a card that gives "2% cash back" and a card that gives "2× points" are roughly comparable. Some points can be worth slightly more, 1.2 or 1.5 or even 2 cents, depending on how patient and selective you're willing to be about redemption opportunities. This measurement of point value, "cents per point", is sometimes abbreviated "cpp".
3. The highest-value redemption opportunities are usually luxury purchases like first-class flights, which online credit card reviewers tend to consider when estimating point values. If you're not into those, those reviewers' estimates may be too high for you.
4. Even if you're not picky, don't assume that it'll be easy to redeem your points/miles at 1cpp. There are some credit cards where it's easy or even automatic, but others have fiddly rules about when you can redeem your points, how many, and at what rate. You'll frequently be confronted with terrible redemption opportunities that net out to terrible rates, maybe 0.5cpp or 0.7cpp. (Or terrible opportunities to buy points at, say, 3.0cpp.) I redeemed a bunch of miles at pretty bad rates before realizing this.
5. On the other hand, since you can't invest or earn interest on points, they're slowly losing value to inflation while you don't use them. They can also quickly lose value if the credit card company changes the rules for redemption. Finally, there are rewards programs where points just expire if unused for too long. So redemptions at suboptimal rates aren't that bad, and it doesn't make sense to hoard points indefinitely until the absolute best rate rolls around either.
6. As a baseline, many cards give you 2% cash back on every purchase (see lists from NerdWallet or The Points Guy or /r/CreditCards), and these are probably Pareto-optimal — every card I've seen that gives you at least 2% everywhere with additional benefits also has some significant drawback or requirement, like that you have to keep at least $X with a specific bank. So if you just want to find one credit card to use for everything, a 2% cash back card is a safe choice, and you should compare any other credit card offers against this baseline.
7. Corollary (true story): if a card offers, e.g., 3 points per dollar on every purchase, assume its points are worth well below 1cpp.
8. However, there are many cards that give 3–5% or 3–5× points on purchases in specific categories (e.g., dining, travel, or groceries) or from specific institutions (e.g., the airline the card is branded with). They might give 1% or 1× points on everything else, but if you're willing to juggle multiple cards and choose the best one to use for any given purchase, it's not hard to outperform having only one flat-2%-cash-back card.
9. Offers above 5% or 5× points in any category are rare and worth scrutinizing. Some cards offer >5× points if you use some card-specific platform to book hotels or flights; but their platform might not have every hotel/flight that you actually want to buy, or it might sell it to you at a markup that more than cancels out the extra points. Check reviews online.
10. Otherwise, the flashiest benefit on many cards is the "sign-up bonus" (or "SUB"), which is usually of the form: spend $X (the "minimum spend") on the card in the first Y months to get Z points. A typical set of values might be, spend $4,000 in three months, get 60,000 points (worth $600 at 1cpp, maybe more if you play the credit card point redemption game). There's no partial credit — if the end of month Y rolls around and your total spend is $(X − 1), you won't get any of the bonus, so budget carefully. This is probably the biggest benefit targeted by the reddit activity of "churning", where you strategically sign up for a bunch of different cards to collect all their different sign-up bonuses.
11. Depending on your lifestyle, you might find that sign-up bonuses are easy to get. I didn't have a great sense of how my monthly spend had crept up over the years, and underestimated how quickly I was able to get my last sign-up bonus without any tricks.²
12. Rewards and sign-up bonuses usually aren't taxable because they're rebates: you have to spend money to get them.
13. On the cost side, cards can have annual fees (AF). Many lower-tier cards have $95 AF, whereas fancy ones can have AFs approaching $1,000. I was skeptical of these at first, but now I can understand why such a card might be worth it. For one, the AF is generally much less than the sign-up bonus, so you'll easily come out ahead for the first year. But even in later years, there might still be enough benefits that are easy to redeem for face value, like credits for a broad category of spending or for a store/service you're already paying for, that justify the AF. Of course, many of the cards' benefits will be aggressively played up by their ads despite being benefits that you wouldn't actually pay face value for — vacations you'd never otherwise consider, luxury brands or restaurants you have no interest in, lounge access at airports you'll never visit, and the like — so you'll want to be careful; but many of the high AFs are more defensible than I expected.
    • For example, my United Explorer offers monthly rideshare credits by simply refunding me $5 once per month when I pay for a rideshare with it. I take enough rideshares even without considering such a benefit that I really do consider this free money. (I did have to go into the rewards page and explicitly click a button to enable this, and will have to do this again every year I want this free money, which tells you something about the kind of game that credit card rewards are.)
14. One specific benefit that might have motivated me to start the credit card game earlier is that several travel credit cards cover the full cost of TSA PreCheck and/or Global Entry. This isn't a lot of money in the grand scheme of things since both memberships last five years, so the credit cards will only cover it roughly that often, but TSA PreCheck is something I was finally convinced to pay for out of pocket a year or two ago, so this benefit would have been free money if I had known about it before then.
15. Another one: no foreign transaction fees. This is a common perk on travel credit cards, which I thought would be totally irrelevant to me as I don't think I've ever used a U.S. credit card while traveling internationally... but then I remembered I commission furry artists from other countries with some regularity and have paid foreign transaction fees on those before. Based on one data point, this saved me $5.
16. If an annual fee card isn't working out, you can cancel it, though there are some additional considerations. Many credit card reviewers warn against canceling a card after only one year, as the credit card issuer may get mad at you and refuse to offer future bonuses, or even claw back your sign-up bonus using fine print in your card contract. Alternatively, you can try smooth-talking the issuer into giving you a retention offer: maybe an annual fee waiver, maybe a deal similar to a sign-up bonus. Or, more reliably, you can "downgrade" / "product change" your card to a different card from the same issuer, probably one with no annual fee, which is often better for your credit score than canceling (though some reviewers also warn against doing this after just one year).
17. Speaking of which! Credit cards are affected by and will affect your credit score, but it's a pretty opaque system.
    1. Opening new cards hurts your credit score in the short term, especially within 1 year, which might make getting the next credit card harder. (Specific issuers will also have their own arcane rules about how often you can get new cards, such as "Chase 5/24"; I won't get into that here.)
    2. However, having more cards likely helps your credit score in the long run because the total credit available to you will be larger, so that your ratio of debt to credit will probably be smaller, showing that you can use credit responsibly; though there are likely diminishing returns. As a data point, a vice president of FICO (a credit score company) said in a CNBC interview that cardholders with good credit scores had an average of three open cards. Of course, this is pure correlation-not-causation.
    3. Having a long credit history also helps your credit score, which is a reason to get your first credit card sooner rather than later.
    4. Both points above are reasons to downgrade / product-change cards instead of closing them, though the second reason is sometimes overstated because closed accounts stay in your history for 10 years.
    5. But making sure you're always paying off your credit cards is more important than any of this!
    6. All this is sort of just educated guesses floating around the internet, because even though the high-level categories of information that credit scores take into account are public, the exact algorithms are not.
    7. In addition to helping you get better credit cards, a good credit score is useful for getting better deals on loans and insurance, in case those are ever your thing.
18. Onto logistics. You may not be able to use a new credit card right after you're approved: be prepared to wait two weeks to get your physical card in the mail. So if you've planned some big trip or other purchase and are thinking, oh, I can use that to get a new sign-up bonus, you should apply well ahead of time. A few card issuers will immediately give you the card number online or otherwise give you access, but they're the exception rather than the norm; look yours up.
    • In my case, the last two cards I applied for were both Chase cards. I had read online that I wouldn't be able to get the card number right away, but that I could add the cards to my phone via the Chase app. Unfortunately, the first card was my first account of any kind with Chase, so I didn't have an online account, and the Chase app needed me to provide some kind of card number or application number to create an account in the first place, so I had to wait for the card in the mail anyway. My second card, I was able to add to my phone right away.
19. Phone tap to pay is pretty good these days. It's totally compatible with normal phone cases and also probably more secure than tapping physical cards. You unlock your phone, open the payment app, and tap the front edge of your phone to the sensor. Not all stores and restaurants support it, so I wouldn't stop carrying my credit card around after setting it up, but it's sometimes more convenient. I don't know who else needs this advice, but my past self resisted setting this up out of pretty unjustified paranoia. (You might be able to set it up to not require unlocking your phone, but my paranoid self needed to know that that's optional.)
20. Another trick you can do with credit cards is add authorized users. The card may or may not charge a fee for this; it might even give you a bonus. Doing this means the authorized user gets a copy of the card with their name on it, which they can use to buy things as if it were their own, but you are still fully responsible for paying the card off, so you should only add people you trust.³ On the other hand, the charges can help you meet your sign-up bonus minimum spend, and the points go to you too. This might also be a way of sharing some of the card's other benefits with the authorized user. Finally, this causes them to inherit your card's credit history, which might help their credit score and allow them to apply for a card on their own. This mechanism seems to be designed for things like parents adding their children to help them build credit, but you can do it to anybody (given their permission). I don't know how real anything is on the internet these days, but I saw a redditor claim they got a bonus by adding their dog as an authorized user.
21. But, most credit cards don't give you great tools for listing or managing your charges separately from an authorized user's charges. So if you want to make somebody you trust an authorized user and just have them pay back whatever they spend (presumably because this lets you use the card's other benefits somehow), you may have to do the bookkeeping yourself. This is also something you should look up online for each specific card.
22. Credit card programs and bonuses change a lot, month-to-month and year-to-year, so a credit card that looks good today might be bad tomorrow. A financially savvier writer might be able to connect the changes to broader macroeconomic conditions, but that's beyond my pay grade. There are so many changes that it could be a full-time job just to keep up with all of them, but some of the bigger news I paid attention to:
    • Bilt, a credit card marketed as letting you earn rewards while paying rent, relaunched in January 2026 with possibly the most complicated rewards program on the market, featuring two kinds of currency, Bilt points and Bilt Cash.
    • United Airlines is redoing its rewards program in April 2026 to be somewhat more complicated. Most people will earn fewer miles, but United cardholders will earn more.
    • Bank of America is redoing its rewards program in May 2026. It's not easy to do a full apples-to-apples comparison between the old program and the new one, but my impression is the new program will be better for some cardholders with a small balance deposited with BofA, but worse for most cardholders with more deposits (though they can keep some of the old program's benefits for six months).
23. Personally, I doubt that the financial returns justify the time and effort I put into obsessively reading about credit cards and then signing up for the ones I did. If everything goes exactly according to plan I might be ~$2,000 better off over the next two years, which isn't nothing, but it will require ongoing attention even beyond the effort I've already invested, and there are other things I could be doing. The main excuse I give myself is that it was fun, in the same way that micro-optimizing my build in a video game (something I pay to do!) is fun. I can also kind of justify it with the peace of mind from decent travel insurance⁴, the additional relationships with other banks, and (this is embarrassing but I have to mention it to be honest) the satisfying clunk of a metal credit card⁵. The biggest financial opportunity cost is that I had other assets I should have paid more attention to, but that's beyond the scope of this post.
24. Still, I have been using a single credit card for about a decade and could have started more gradually. If I could start over, I might give myself advice like:
    1. Five years ago, when I started my first full-time job: spend a small amount of time, pick one additional credit card without an annual fee with rewards that complemented the one I had, set up autopay, and stop thinking about it.⁶ The benefit would be maybe a few hundred dollars from better reward rates, slightly better credit score, and the possibility of stashing one credit card somewhere as a backup for when I misplace my wallet.
    2. Three years ago, when I started flying more than twice or so each year: spend a small amount of time looking into a third credit card for travel; one of the $95 AF cards might have become defensible by then. (But this is kind of cheating because I'm told credit card rewards were also generally better a few years ago.)
    Of course, there's a good chance my past self would, upon receiving such advice, also accidentally spend a few weeks obsessively reading about credit cards and produce a blog post similar to this one, so this advice might not actually have improved my financial returns from effort.

footnotes