A simple three-digit number can have a significant impact on your life. 

It’s called a credit score, and it’s like a grade that gets applied to your financial profile.Your credit score represents your creditworthiness—how likely you are to pay back a loan, whether it’s a mortgage, mobile phone bill or credit card balance. 

Companies use your credit score to make all kinds of decisions about you as a customer. That includes which credit cards you qualify for, which can eventually impact the rewards you earn. Generally, the cards that earn the most rewards and have the best perks require the highest credit scores. 

So your credit score is undeniably important. At the same time, it’s not *necessarily* something you should obsess about. Here are the basics you need to know. 

Where do credit scores come from? 

Your credit score is based on your credit report. Many people confuse the two, but they’re actually different aspects of your financial profile. 

Your credit report is a record of your borrowing activity—accounts, payments, delinquencies, bankruptcies, foreclosures, and more. There are three main credit reporting companies that collect and manage this information: Experian, TransUnion and Equifax.  

Companies apply different scoring systems to the information in your report, to figure out how big a credit risk you are. The resulting number is called a credit score. There are many scoring systems out there, which is one reason you don’t have a single definitive score. The most commonly used and best-known one is the Fair Isaac Corporation (FICO) score. A competitor, VantageScore, was created by the trio of big credit bureaus as an alternative. 

What goes into a credit score?

The way credit scores are calculated evolves over time. But there are five major factors that consistently come into play. We’ll use FICO’s breakdown as a model, because it’s so widely used. 

• Most important is your payment history—basically, whether you’ve paid your bills on time. This accounts for 35% of a FICO score. 
• 30% of your score depends on how much money you owe. The system doesn’t just consider the total dollar amount, but how much of your available credit you’re using. It also looks at how many accounts you owe money on, how much debt you’ve paid down, and other aspects of your financial record. 
• 15% depends on how long you’ve had your accounts. The longer, the better. 
• 10% of your score is based on your mix of credit. 
• 10% of a credit score is determined by new credit—basically recent account openings, including new credit cards. 

This factor can make even people with excellent credit hesitate before applying for a new card.  It is true that opening several new accounts around the same time can lower your credit score by a few points. But that shouldn’t deter you from, for example, getting a card that will pay you better rewards—especially if you’re not spending more as a result. Your credit utilization will go down and eventually be reflected positively in your score. 

What’s a good score?

FICO and VantageScore have slightly different score formats. Both categorize scores into ranges, and in both systems, a higher the number equals a better score. VantageScore has a bigger range for “excellent” scores. 

How much should you care about your credit score?

Your credit score is one of the most accessible markers of how responsible you are with money. Credit card issuers use it to decide whether to let you open a new account—and what your interest rate will be. Because it’s a factor in determining whether you can get one of the better reward cards, it can impact how much value you get from the cards in your wallet.  

Keeping your score strong will give you access to more financial tools. But that doesn’t mean you should worry about every little dip or shift. 

A credit score isn’t static. Your credit report is constantly being updated as accounts are opened and closed, money is spent, bills get paid (or not), etc. Even people with very consistent behavior—and excellent credit—find that their scores shift frequently.

Those small changes don’t matter much unless you’re on the very edge of a range, where five points could mean the difference between a Fair and Good score. 

By law, you are entitled to a free credit report each year from each of the three credit bureaus. You can get your annual report at AnnualCreditReport.com. There are also plenty of online services that will provide your credit score for free or for a fee. 

The Bottom Line

Your credit score can play a significant role in your financial life, whether you’re applying for a credit card or trying to rent an apartment. But credit scores are also fluid. If you’re concerned about your score, request your credit report from one (or all) of the credit bureaus.

The biggest advantage of having a Chase Sapphire Preferred credit card is the rewards you can earn on spending. Ultimate Rewards are valuable and versatile—they can be used with more than a dozen travel partners to pay for flights, hotel rooms and more. 

The card also gives cardholders a handful of other benefits, including discounts on food delivery, cash back on certain purchases and more. You have to activate these perks to take advantage of them, though. 

Here are the four to activate when you get a brand-new card. 

1) Add it to DoorDash ($120)

Chase Sapphire Preferred cardholders get discounts on food-delivery service DoorDash, with a complimentary one-year subscription to DashPass (normally $10 a month). Delivery fees are waived and service fees are reduced for orders over $12 on DoorDash and its sister app, Caviar. Activate DashPass by making your card the default payment method in your DoorDash account by Dec. 31, 2021. 

2) Link to Lyft (5x points)

The Chase Sapphire Preferred automatically earns 2 points for every dollar spent on ride-share service Lyft, because it’s considered travel spending. But if you connect your card to your Lyft account, you’ll earn bonus points, for a total of 5 points per $1 charged. 

3) Get Going With Peloton ($60)

Peloton is best known for its expensive exercise bikes. But you don’t have to spend thousands of dollars to take advantage of a Peloton workout. The Preferred card gives you up to $60 back on Peloton Digital Memberships (no equipment necessary) or All-Access Memberships (if you have the company’s gear) through the end of 2021.

4) Check for Offers (varies)

Chase gives cardholders statement credits on purchases from a constantly-changing roster of brands. Recent offers include 10% back from a well-known restaurant chain and 20% flower delivery service. You have to add the offers before making a purchase to get the credit; log in to your Chase account to see current deals. 

The Bottom Line

If you want to maximize the value you get from your Chase Sapphire Reserve, make sure to enroll in or activate the various perks and benefits that come with the card. Also remember that those benefits can change over time—for better or worse. 

What Is Delta SkyMiles?

Delta SkyMiles is the loyalty program for Delta Air Lines, the world’s second-largest airline by passengers. With destinations in more than 50 countries and participation in the SkyTeam Alliance, Delta also has major reach. That partly makes up for the fact that Delta’s points don’t go as far as some other airlines’. 

Like with most carriers, the main way to earn miles is by flying with the airline. You earn 5 SkyMiles per dollar you spend with Delta, and more if you have elite status. Delta’s Medallion program has four tiers, with associated increasing benefits; you reach those tiers through a complicated system that has both flying and spending requirements. For each mile you fly with Delta, you earn one (sometimes two) Medallion Qualification Miles. You can’t trade those miles for anything—they only count toward your elite status. And you have to spend a certain amount of money each year. 

Here’s a rough guide to Delta’s Medallion levels: 

• Silver. Top benefits include earning 7 SkyMiles per dollar spent on Delta tickets and complimentary upgrades starting the day before departure. To reach Silver, you have to rack up 25,000 qualifying miles or 30 qualifying segments, and spend $3,000 or get a waiver by spending enough on a Delta credit card. 
• Gold. Top benefits include earning 8 SkyMiles per dollar spent on Delta tickets and complimentary upgrades beginning three days before departure. Getting to Gold requires earning 50,000 qualifying miles or 60 qualifying segments and spending $6,000 or getting a waiver. 
• Platinum. Top benefits include earning 9 SkyMiles per dollar spent on Delta tickets, complimentary upgrades beginning five days before departure, and one “choice benefit,” with options such as bonus points, vouchers, gift memberships, and lounge access. Platinum requires 75,000 qualifying miles or 100 qualifying segments and spend $9,000 or get a waiver. 
• Diamond. Top benefits include earning 11 SkyMiles per dollar spent on Delta tickets, complimentary upgrades beginning five days before departure, and three choice benefits. Reaching Diamond means accruing 125,000 miles or 140 segments and spending $15,000 or getting a waiver. 

You can also earn SkyMiles by using a Delta credit card. Delta offers four levels of its credit card, with most non-Delta purchases earning 1 SkyMile per dollar spent and Delta purchases earning more. Some credit cards offer bonus points in additional categories. And you can transfer American Express Membership Rewards to Delta at a rate of 1:1. 

Delta partners with other companies to offer even more ways to earn miles. You can collect SkyMiles when you book through Airbnb and ride with Lyft, and stay at hotel chains including Marriott and Hilton. In addition, you can earn miles when renting cars, shopping with selected stores, and dining at certain restaurants. Keep in mind that if you choose to earn SkyMiles when booking with a partner, you may be foregoing the points you would earn through that partner’s program. 

Which Cards Earn SkyMiles

• Delta SkyMiles Blue American Express
• Delta SkyMiles Gold American Express
• Delta SkyMiles Platinum American Express
• Delta SkyMiles Reserve American Express

Ways to Use Delta SkyMiles

Delta offers quite a few options for redeeming your miles, but the smartest way to use them is for buying flights. Most other redemptions will offer a maximum value of 1 cent per mile.

• Delta and partner flights. SkyMiles are worth 0.9 to 1.5 cents each. 
• Upgrades. Use SkyMiles to get a better seat. 
• Marketplace. Redeem your miles through the SkyMiles marketplace for merchandise, travel, and more. 1 mile =  0.6 cents
• Experiences. Use SkyMiles to bid on exclusive opportunities. 
• Gift Cards. Buy cards from a range of major retailers, for 0.4 to 0.9 cents per point. 
• Transfer. Give points to friends, for a fee. 
• Donate to charity. 

Delta and Partner Flights

The best way to use your SkyMiles is for flights on Delta and its partner airlines. Delta has done away with its award chart and its prices for flights—in cash and miles—change constantly depending on demand and other factors. But it’s relatively easy to compare points, cash and points-and-cash prices when searching for a flight—you can toggle between them in search results. Delta also provides a chart that shows the price of a flight in miles for different departure and return dates. If you’re flexible, this can really help maximize your miles. 

If you are getting over 1.2 cents per mile in value, you can be confident that you are getting a good deal. 

You also have to pay fees for award flights, but within the U.S., they’re less than $6 a ticket. 

Upgrades

Delta allows you to use points to upgrade flights that you’ve booked with cash. To see if an upgrade is available, look in the My Trips section of the Delta app or Delta website at the flight in question.The upgrade cost varies depending on the flight, but 1 cent per mile is a pretty typical value. 

Marketplace

You can use Delta SkyMiles to pay for hotel rooms, rental cars, merchandise, and more, through its marketplace. This typically will not be as good of a use of miles as redeeming for flights, but the value you get will vary.

We checked the cost of a two-night stay at the Novotel Madrid Center in Madrid, Spain, and found that booking the hotel with points would cost 46,128 points. The cash rate for the same dates was $267. That means your miles have a value of almost 0.6 cents each. 

Since the portal doesn’t show the cash value of bookings, it’s wise to do a separate search for whatever you’re considering booking, and then divide the retail price by the points price to make sure you’re getting a decent deal. 

Experiences

One unique way that Delta allows you to use your miles is by bidding on unique experiences. These are experiences that money can’t buy and you can’t even flat-out buy them with your miles—you have to place a bid. Some examples of experiences include Billboard Music Awards After Party Access, dinner and kitchen tours at various restaurants, and a four-night vacation to Scottsdale AZ. Depending on how you personally value the experience you are bidding on and what the final price ends up being, this can be an okay use of your miles.

Gift Cards

Delta allows you to use your points to pay for gift cards from many different companies including Delta, Starbucks, and Airbnb. You can get a value of 0.4 to 0.9 cents per mile. Delta gift cards typically offer the highest redemption value.

Transfer to Friends and Family

You can transfer points to other SkyMiles members, but it will cost you 1 cent per mile with a minimum transfer of 1,000 miles, plus a $30 processing fee. The high cost means it’s not a good use of your miles. 

Donate to Charity

Delta allows you to donate your SkyMiles to charity. There’s a wide variety of charities available including those that assist veterans, help children struggling with illness, assist with disaster relief, and more. There are no tax breaks for donating miles. 

Bottom Line

While Delta’s SkyMiles aren’t known to be the most valuable frequent flyer currency available, they are relatively easy to earn and offer the ability to book flights around the world. It’s also possible to redeem SkyMiles for hotels, experiences, and more, though you typically won’t get as much value for your miles with this type of redemption.

At some point in your financial life, you will probably consider canceling a credit card.

Maybe you don’t use it very much—or at all. Perhaps you don’t want to pay a high annual fee for perks you never use. Maybe you’re a one-card kind of consumer, and just got a new one that earns you a lot more rewards.

First, it’s worth considering the pros and cons of closing a credit card account. Canceling might streamline your life and save you a little money, but it could also ding your credit score or cause you to lose hard-earned rewards.

Here’s what to think about before you call customer service.

What’s your rationale?  

There are plenty of reasons someone might want to dump a card. Your particular reason determines how you should go about making the decision.

Perhaps the card encourages you to overspend. You might share your card with someone who no longer shares your life. Maybe you’re fed up with an issuer’s terrible customer service. If you’re canceling for personal reasons like these, you mainly want to:

1. Be aware of the potential impact to your credit score
2. Make sure not to lose any of the rewards you may have earned. 

We cover those topics more below. 

The calculus is a little different if you want to cut up your card for practical reasons: You don’t use the card, you got a new one you like better, or you’re paying an annual fee for perks you don’t use. 

Should You Keep a Card You Don’t Use?

Just because you own a credit card doesn’t mean you have to use it. In fact, there are some cards that are worth holding on to just for the perks they can afford, but not worth putting much spending on. At GigaPoints we call these “drawer cards” and “wallet cards.” 

The decision to keep an underused card mostly depends on whether it has an annual fee. If not, you should probably keep it. The card isn’t costing you anything, while canceling it could ding your credit score. (More on that below.) 

If the card does have an annual fee, the next question is whether any benefits you get from the card outweigh that cost—and keep in mind that some of those benefits may not be obvious. 

Let’s take an expensive example: the Chase Sapphire Reserve card, which charges a hefty $550-a-year fee. 

Reserve cardholders get an array of fancy perks, including access to airport lounges and credits for Peloton memberships. If you’re not making use of those, the card may or may not still be worthwhile, depending on how you use it. The Chase Sapphire Reserve pays generous rewards (3x) on travel and dining charges, for instance.

GigaPoints can provide personal data points that are useful for making a decision. Our AI-driven Analyzer tells users what rewards they can expect to earn from different cards, based on their past spending patterns. Plugging in your accounts will help reveal which cards are worth using. 

But what if you’re not using the perks or the card? It still might be worth keeping, if you’ve racked up a lot of rewards. Let’s say you have 50,000 Chase Ultimate Rewards—the loyalty points the card earns. You could cash them out and get 1 cent per point, or $500. But you can also use them to pay for travel through the card’s booking portal, at a value of 1.5 cents per point. That’s the equivalent of $750, or $200 more than the annual fee. Once you cancel the card, that’s no longer an option so make sure you…. 

Don’t Lose Your Rewards 

If you’ve accumulated points, miles, vouchers, statement credits or other rewards with your credit card, canceling your card could void them. 

Third-party rewards—like hotel points or airline miles—generally won’t be affected. They’re held in your hotel or airline loyalty programs, completely separate from your credit card. 

If you have points that are specific to a credit card or bank, like Chase Ultimate Rewards, American Express Membership Rewards, or Capital One Miles, make sure to use, cash out, or transfer them before you cancel. 

There’s often a lag between when you use your card and when the points for that spending are credited to your account. It’s smart to keep your card for a couple of months without using it, sweep out all your accumulated rewards, then close the account.

Canceling Can Hit Your Credit Score

It’s completely counterintuitive, but having one less credit card can have a negative effect on your credit score. These scores rate customers’ creditworthiness, and can determine everything from whether you get approved for a card to how high the interest rate is on your mortgage. 

Because of the way credit scores are calculated, you could take a hit on two fronts by canceling a card: 

• Age of accounts. The average age of all your financial accounts makes up about 15% of your credit score, according to Experian, one of the world’s biggest credit reporting companies. If you cancel a card that you’ve had for several years, it could lower your credit score. 
• Credit utilization. This is a bigger one, making up about 30% of your credit score. It’s a ratio of how much you borrow to how much credit you have access to. The more credit you have access to but don’t use, the better. Canceling a card with a high credit limit, in particular, could ding your credit score. 

How much does all this matter? It depends. If you have excellent credit, small changes aren’t likely to affect your score very much. And if you’re not looking to take out a mortgage, sign a lease, or apply for a bunch of credit cards soon, it might not matter anyway. 

But if you’re trying to boost or maintain your credit score, it makes more sense to keep that card and try to eliminate the fee. 

Try to Go Fee-Free

If you’re planning to cancel a card with an annual fee, it’s worth calling your issuer first. Some companies will waive annual fees for loyal customers. Or, they may counter-offer with a discount or credit. 

Alternatively, you can switch to a no-fee or lower-fee card from the same issuer. Your account will stay open, which can help maintain your credit score. (But your credit limit may be lower.) 

Keep in mind: You don’t normally get a welcome bonus for a card you’re downgrading to. And if you’ve been earning points with your card, be aware that in some cases they won’t be as valuable after you downgrade. If you have the Chase Sapphire Reserve card, Ultimate Rewards points are worth 1.5 cents in the company’s travel-booking portal. With the cheaper Chase Sapphire Preferred card, they’re worth 1.25 cents each. 

Cancel at the Last Minute

It doesn’t make sense to cancel a card with an annual fee six months into your membership year. Most credit card companies won’t refund the annual fee if you cancel your card more than 30 days after it’s charged, so you’ll just be losing money. But if you downgrade to a no-fee card from the same issuer, you can probably get a prorated refund. 

Keep that Drawer Card Safe

One risk of hanging onto a card you don’t use: losing track of it. You don’t need the hassles that come with fraudulent charges or identity theft. So stash that card somewhere secure. 

You also might want to use it to auto-pay a small monthly bill; there have been cases of cards being closed by issuers for being inactive for too long. And you always want to be the one who cancels, not the one who gets canceled. 

With most credit cards, getting started is a simple process: Open envelope, activate card, insert in wallet. 

The Chase Sapphire Reserve isn’t like most credit cards. It’s costly, with an annual fee of $550 a year. For the right spenders, it can pay off big in terms of rewards. And it comes with a number of benefits—from ride-share credits to airport-lounge access to hotel perks—that can be far more valuable than that $550 fee. 

Some of those benefits are automatically activated when you open your account; others require enrollment, activation, or other kinds of light work on your part. In many cases the sooner you turn those features on, the more valuable they are. 

These are the seven steps to take with that new Reserve card. 

1) Sign Up for Priority Pass ($429 per year)

Priority Pass gives members access to private airport lounges around the world. Instead of hanging out in a crowded boarding area, you can retreat to a (generally) quieter, calmer space with complimentary snacks and drinks, free Wi-Fi, and sometimes even amenities like showers, work areas and day beds. To use this benefit, you have to activate it through the Chase Ultimate Rewards site. Since membership cards can take a couple of weeks to arrive in the mail—and your membership gets renewed every year—it’s smart to get it rolling right away. 

2) Add it to DoorDash ($180+)

Reserve customers get two benefits with food-delivery service DoorDash: $60 in statement credits for orders for the 2021 calendar year, and a complimentary DashPass subscription for at least 12 months. DashPass (normally $10 a month) gives you $0 delivery fees and reduced service fees for orders over $12 through DoorDash and partner app Caviar.  Activate DashPass by making your Reserve card the default payment method in your DoorDash account. When you use it to pay, the credits will be automatically deducted from your statement. 

3) Get Rolling with Peloton ($120)

You don’t need to buy a Peloton bike or treadmill to take advantage of the workouts. The Chase Sapphire Preferred card gives you up to $120 back on Peloton Digital Memberships (no equipment necessary) or All-Access Memberships (if you have the company’s gear) through the end of 2021. You also get 10x points for bike and treadmill purchases. 

4) Activate Lyft Pink ($240)

Lyft’s membership program, Pink, gives ride-share customers up to 15% off rides, priority airport pickups, and up to three free bike and scooter rides a month. It normally costs about $240 a year, but Reserve customers get it for free for one year—as long as they activate it before March 31, 2022. Enter your card for payment in the app, and you should be prompted to set up Pink. Cardholders also get 10x points on Lyft rides through March 2022. 

5) Enroll in Global Entry or TSA PreCheck ($100) 

Spend less time in airport lines by signing up for expedited security screening and clearance at U.S. immigration checkpoints. Just use your Chase Sapphire Reserve to pay the fees, and you’ll automatically get a $100 credit on your statement. The credit is good once every four years, so the sooner you use it, the better. 

6) Spend on Gas, Groceries and Travel ($300)

Normally, Chase gives Reserve customers a $300 credit on travel purchases; because spending has changed so much during the pandemic, grocery and gas charges count for that credit through Dec. 31, 2021. The credits automatically appear on your statement. 

7) Activate Chase Offers (varies)

Chase gives cardholders statement credits on purchases from a constantly-changing roster of brands. Offers can range from $5 off a streaming subscription to hundreds (sometimes thousands) of dollars in credits on travel and jewelry purchases. You have to add the offers before making a purchase to get the credit; log in to your Chase account to see current deals. 

The Bottom Line

If you want to maximize the value you get from your Chase Sapphire Reserve, make sure to enroll in or activate the various perks and benefits that come with the card. Also remember that those benefits can change over time—for better or worse.