Don't Let These 5 Fears Hold You Back From Getting a Rewards Credit Card

Before I started to get serious about travel rewards credit cards, I had some concerns. Applying for extra credit cards felt like a bit of a risk and hassle. I didn't want to hurt my credit score, mess up my monthly budgeting, or otherwise cause unnecessary stress for my personal finances.

But the reality of these credit cards has been better than I expected. I now have a Chase Trifecta of the Chase Sapphire Preferred® Card, the Chase Freedom Flex℠ and the Chase Freedom Unlimited®. I'm strategically using the unique features and bonuses of each card to earn maximum points on everyday purchases and monthly bills. It's a fun hobby and a new way of life for me.

Let's look at a few worries that you might have about signing up for rewards credit cards, and how to overcome them.

1. "Applying for rewards credit cards will hurt my credit score"

It's true that when you apply for credit cards, card issuers do a "hard credit pull," which can cause a temporary decrease in your credit score. Some credit card companies have started to offer pre-approvals online, where you can see if you will qualify before they run the hard credit check.

When I applied for the Chase Trifecta in one month, it caused my FICO® Score to go down by seven points. I am fortunate to have a great credit score, so this was not a big worry for me. But if you are struggling to improve your credit score, or if you're not confident that your credit score is good enough to get approved for the card you want, you might want to wait to apply. Use a credit monitoring app to understand how to increase your credit score. Or consider applying for a secured credit card to build credit history.

2. "It's too complicated to keep track of multiple credit cards"

This was a big concern for me. I wasn't sure if I was up for another item on my personal finance to-do list, or one more thing to think about every month.

The truth is: Chase Bank's mobile app is smoothly designed and even fun to use. I can get a quick overview of how much I've spent on each of my cards, when the statement dates happen, when payments are due, and all the rewards points that are heading my way.

3. "I might make a mistake and fail to pay a credit card on time"

Again, Chase makes it easy. The Chase mobile app allows you to set up automatic payments for each credit card, schedule multiple advance payments (sometimes on the same day) and even see how much of your statement balance you still need to pay off before the due date to avoid interest.

In a way, rather than giving me more problems and stress, travel rewards credit cards have helped me gain better visibility and focus into my monthly spending.

4. "Rewards credit cards will cause me to spend too much money"

One big criticism of rewards credit cards is that they tempt people into spending more money than they can afford. I personally have always been fairly frugal and passionate about saving and investing; retail therapy and "doom spending" have never been my way of relating to money. If anything, sometimes I need to encourage myself to be less frugal and spend more freely and have more fun with money, instead of saving every dollar for "future me."

If you struggle with budgeting, if you have credit card debt, if you are juggling multiple credit cards where you cannot afford more than the minimum payment -- then rewards credit cards are probably not right for you. Don't put yourself in a position of being vulnerable to more spending. But for people with good incomes and high credit scores, using rewards credit cards can be a winning strategy for your everyday personal finances.

5. "I won't get enough value out of the cards to be worth the effort"

I never was super excited about cash back credit cards because getting 1% or 2% cash back doesn't feel like a big enough deal. Like if I was at a store and someone said to me, "Hey, this product is on sale – for 1% off!", that would not motivate me to buy.

But travel rewards credit cards, especially premium cards like the Chase Sapphire Preferred® Card, offer much more intriguing upside. For example, the Chase Sapphire Preferred® Card gives you extra buying power when you redeem your points for travel: a 25% multiplier. For example, for every 10,000 points (worth $100 of cash back), you can buy 12,500 worth of travel ($125).

And different categories of purchases will get you extra value. For example, the Chase Sapphire Preferred® Card offers 3X points on restaurants. That actually translates to 3.75x points if you use them for travel -- so every $100 restaurant meal is earning me the equivalent of 375 points, or about $3.75 of future travel purchases. This just "feels" like a bigger discount that's worth making the effort to earn, instead of 1% cash back. I want the complexity, I want the game, I want the upside!

Bottom line

I'm having a great time with my new travel rewards credit card and going deeper into the hobby/lifestyle/subculture of credit card reward points. All of my fears were unfounded -- this doesn't feel like an extra chore. Instead, it's a fun, profitable way to manage my everyday spending and enjoy better experiences with shopping and travel.