Beginners signing up for travel credit cards make their worst mistake before they ever tap the plastic, according to Brian Kelly, founder of The Points Guy. The error, he told MarketWatch, is chasing a big sign-up bonus without a plan to actually use the rewards.
Kelly walked the publication through a crash course on annual fees and redemptions as travelers face rising costs. His core message: a bonus is only worth what you can redeem it for.
"The No. 1 mistake beginners make is they get a card, they get the bonus, and then they don't know how to use the points," Kelly said in the MarketWatch interview. He described the pattern as collecting rewards without a redemption strategy, which leaves value sitting unused.
The problem compounds when cardholders pay an annual fee on top of it. Kelly's advice centers on matching a card to a specific trip or goal before applying, rather than grabbing whatever offer looks largest.
Travel costs have climbed sharply in recent years, making points and miles more attractive to budget-conscious consumers. That demand has fueled a crowded market of premium cards, many carrying fees of $95 to $550 or more per year.
Kelly said the fee itself is not the dealbreaker. A card with a high annual fee can pay for itself if the holder uses its credits, lounge access, or transfer partners. The same card becomes a money loser for someone who never redeems the rewards.
Beginners also overlook transfer partners, according to Kelly. Points moved to an airline or hotel program often stretch further than points redeemed directly through a card issuer's portal. That gap can mean the difference between a coach seat and a business-class ticket.
He recommended that new cardholders start with a single card and a clear target, such as a specific flight or hotel stay. Stacking multiple cards before understanding one program only multiplies the confusion, he said.
The advice lands as issuers compete aggressively for new customers with ever-larger welcome offers. Those offers typically require spending thousands of dollars within a few months, a threshold some applicants cannot meet.
Missing that spending requirement forfeits the bonus entirely, a second trap Kelly flagged. He urged readers to calculate whether their normal spending can hit the target before signing up.
Kelly founded The Points Guy in 2010 and built it into one of the most-read travel rewards sites in the country. His guidance carries weight with consumers who treat points as a way to offset airfare and hotel bills.
