When you should diversify your points is a huge topic of discussion in the points and miles world. Whether you should diversify depends on how much you spend on your cards and your willingness to get new cards. Other indirect factors include income, credit score, credit history, and risk aversion. These indirect factors could influence how much you can spend on your cards and your willingness to get new ones.

Your mileage may vary as different people have different financial circumstances. That’s why the post is divided into four parts. Each part represents a potential circumstance given the two main criteria. The terms “higher”, “lower”, “fewer”, and “more” used in this post are relative. There are no exact numbers attached to them because your mileage may vary.


I: Higher Spend, Fewer Cards

Should you diversify your points when you have a few cards and spend a lot on them? The short answer is “no”. You should select one points currency and collect as many points as possible within that currency. This way, your earning will be more efficient, and your points will accrue faster.

The best type of points for this group are transferrable points. All you have to do is pick one based on your travel needs. Chase Ultimate Rewards (UR) Points are the best for domestic flights and hotel redemptions. American Express Membership Rewards (MR) Points are best for domestic and international flights. And Citi Thank You (TY) Points are my favorite for international flights. I fall into this category and I have chosen Chase UR points as my primary currency.


II: Lower Spend, Fewer Cards

You are either just starting out or you want to keep things simple if you fall into this category. A lot of people start off in this category but move to another one later in their credit journey. There are a few strategies those you can take if you want only a few cards and have little expenses:

The most simple strategy is to use one card for everything. High-earning flat rate cards are the best options. The Citi Double Cash or the American Express Blue Business Plus are two excellent options.

Furthermore, another strategy is to earn cash back. Cash back is simple to understand and you do not need many cards to optimize your earnings. Plus, most cash back cards have no annual fee, making them great long-term keeper cards. You should pair a flat rate card with a 5x rotating card like the Chase Freedom to increase your rewards. That’s a total of three cards if you get one from each category.

Alternatively, you can collect transferrable points as long as there are downgrade options. Chase and Citi have two great “ecosystems” that have both downgrade options for their premium cards. These downgrade options all have no annual fees and earn cash back (unless you have a premium card). You can have as many or as few cards as you want from one “ecosystem”.


III: Higher Spend, More Cards

You have money to spend and don’t mind getting more cards if you fall into this category. This makes you akin to many travel bloggers, writers, and YouTubers. You may have seen other posts around Travel Update and the internet about credit card inventories. Many of these bloggers have at least 20 cards for various reasons. Nonetheless, there are two strategies for large spenders who do not mind having lots of cards:

The first and best strategy is to collect more than one type of transferrable points. More transferrable points means more options for travel. Just be sure not to overlap your cards’ bonus categories too much.

Conversely, another strategy is to hunt for sign-up bonuses. Your spending will be most efficient trying to earn bonuses instead of collecting one points currency. Therefore, you should diversify your points because you will get more value from sign-up bonuses than normal spend.


IV: Lower Spend, More Cards

You might not have much in expenses, but you have a lot of credit cards if you fall into this category. Therefore, you should carefully diversify your points. There are two strategies you can take:

The best strategy is hunting for sign-up bonuses. However, you should only look for bonuses with low minimum spends. There are many credit cards out there with bonuses that have minimum spend requirements of either $500 or $1,000. Look for cards with those minimum spends depending on what type of travel you want to do. For example, the American Express Hilton Honors Card has a bonus worth 75,000 points that can be earned after spending $1,000.

Alternatively, most cash back cards have minimum spend requirements of either $500 or $1,000. These cards won’t get you points and miles, but they have bonuses that are easy to hit. Most of these cards also have no annual fee, making them great foundation cards for your credit history.


Final Draw

Whether you should diversify your points ultimately depends on how many cards you want and how much you can spend. Your mileage may vary as everyone’s financial situation is different. But there is always going to be a strategy in play. The key is to find one that works for you and create a plan to get the right cards.

Special thanks to Sebastian from Ask Sebby (H/T) for inspiration.