America is a credit card loving country and you’ve probably seen all the ads for bonuses if you sign up with this or that credit card. Credit cards are omnipresent in modern day society. People use them to pay for everything from cars to groceries to sticks of gum. Travel credit cards offer a great opportunity to earn free points that can be redeemed for airfares, hotels or cold hard cash. In the race to get customers, credit card issuing companies partner with various travel brands (or just simply offer their own card) that entice consumers with sign up bonuses, loyalty points, special discounts, and more. Their desire to get you, the consumer, is really your gain. By milking the system, you can get tons of free air tickets, hotel rooms, vacations, or even cash. By using and signing up for travel credit cards, I have:
- Received over 300,000 America Airlines miles
- Received over 100,000 British Airways miles
- Received over 50,000 Virgin Atlantic miles
- Received 4 free nights at the Marriott
- Redeemed Citibank points for two free flights to Europe and $300 USD cash
- Received Hilton Honors Gold membership and 60,000 Hilton Honors points
And that’s only a partial list! That has translated to free first class flights, free nights at hotels, free upgrades, and free money. And it didn’t take me years to accumulate these points either. I received a lot of points through sign up bonuses and special offers that allowed me to get lots of points within only a few months. With so many options to choose from, it’s hard to know which card is the best out there. And the truth is that there is no perfect travel card – they all offer different benefits that fit different people. I personally use two credit cards: Citi AAdvantage card and a Capital One card. I use the AA card for all my US purchases so I can earn frequent flier miles as American Airlines and their alliance partners are the airlines I tend to fly most. I use the Capital One card not because I want any of their points but because there is no foreign transaction fee when I use it overseas so I save money.
What to Look for in a Travel Rewards Card
A huge sign-up bonus – Most of the time, the points are worth at least a free domestic flight. The American AAdvantage card offers 35,000 miles just for joining. That’s a free round trip domestic ticket or miles that can be used for an upgrade. United Airlines gives you 40,000 miles for signing up. Delta offers miles AND elite status miles when you sign up. Those alone are enough miles for a free plane ticket in the United States. Don’t join one that doesn’t, otherwise it will take you ages to get a free flight. Lately, in a bid to get more people to join their card programs, many airline and hotel-specific cards are offering bonuses between 60,000 and 100,000 points, which can help get you tons of free flights. I simply won’t sign up for a card that doesn’t at least give me 30,000 points when I sign up. Otherwise, it takes too long to get to a redemption.
Points per dollar – Most credit cards offer one point for every dollar spent. However, the good credit cards will give you extra points when you shop at specific retailers, or, if it is a branded credit card, with a particular brand. This will help you earn points a lot quicker. I don’t want just 1 dollar to equal 1 point. I want the ability to get two or three points every time I spend a dollar.
Low spending minimum – Unfortunately, in order to get the great bonuses these cards give, there is usually a required minimum spending before you’ll be eligible to receive the bonus. But sometimes the spending requirement is too high. I love the Starwood AMEX card but you must spend $5,000 USD before you get the reward bonus. I want to be able to get the bonus using my normal, day to day spending. Only sign up for cards that have a spending requirement of less than $1,000 USD. Moreover, all of these travel credit cards offer great perks. Many will give you elite loyalty status or other extra perks. This will help you earn points a lot quicker. You’re going to shop anyway, so why not earn something for doing it? These cards are meant to get people to be loyal so they throw in lots of perks in hope you stick with them and not a competitor. I got 5,000 AA miles by opening a Citi checking account. I got triple miles by buying some clothes from Gap just by seeing it in their mailing list. Many cards also offer elite status with their credit cards, which is great for free upgrades and priority benefits.
No one likes paying annual fees for credit cards. Many of the fees for company branded credit cards range from $50-$95 per year. I pay an annual fee. For those who travel a lot and fly a lot, I think it is worth it to get a card with a fee. Fee-based cards tend to give you a better rewards scheme, where you can accumulate points faster, get better access to services and special offers, and get better travel protection. With these cards, I have saved more money on travel than I have spent on fees.
Foreign Conversion Fees
The majority of credit cards charge a 3% fee when you use them overseas. Credit cards are great to use because you get a good exchange rate from them but if you are paying a fee every time you use the card, then it doesn’t become as good. The best card for avoiding foreign fees is the Capital One No Hassle Card (this card has none). You get some rewards (one point for every dollar spent) with it but the rewards structure is really, really awful. Between this card and my Charles Schwab ATM card, I never pay any bank fees when traveling outside the United States. Some other good cards that don’t have overseas fees are the American Express Platinum card, United Mileage Plus Card, and the Chase Sapphire Preferred or Ink Cards.
Will this hurt my credit?
While it’s true that “churning and burning” i.e. opening an closing a lot of credit cards at once can hurt your credit, applying for a few credit cards over a period of time won’t kill your credit score. Your credit score will slightly dip every time there is an inquiry into whether that is a credit card or home loan or car loan. It’s how the system is set up. But so long as you space out your applications and maintain good credit, you won’t find any long term damages to your credit. Your credit rating rises over time as long as you maintain it, you aren’t going to have a bank officer tell you years from now “sorry, because you cancelled three credit cards in 2012, your loan is denied.” I once cancelled 4 credit cards in one day and the impact on my score? Nothing.
Which Credit Card Should You Get?
To answer that question you need to think about why you want to use the card. Are you interested in loyalty to a brand, free rewards, or avoiding fees? Do you want to milk the rewards and bonus system to get free flights or do you just want a card that won’t charge you a fee for using it at that restaurant in Brazil? Is elite status the most important perk for you?
If you are on the road for business a lot, then getting a hotel card, like the Starwood AMEX card, would be perfect for you. You would get a lot of hotel points, free stays, discounts at other retailers, and you could also transfer those points to airlines for free flights. It’s all purpose.
Start with a goal and get the cards that help you reach it.
Read more: Expert Brian Kelly talks more about travel credit cards and how to pick the perfect card in my interview with him.
Start with a goal and look for the cards that get you too that goal. There is always a card that will help you get there but without starting with a goal, you’ll be too spread out. When you start using travel rewards credit cards, focus on the couple that help you reach your goal and then expand from there.
This keeps way you’ll never run out of cards and always flush in frequent flier points and traveling for free.
HERE ARE THE CURRENT BEST PROMOTIONS AND CARDS TO SIGN UP FOR:
- Starwood Preferred Guest Credit Card from American Express – This is my favorite rewards card. You can earn up to 30,000 bonus points when you get the card (10,000 after your first purchase, 15,000 more after you spend $5,000 in 6 months) as well as a 20% transfer bonus when you move 20,000 to over 30 participating airline (my favorite feature)! There’s no annual fee the first year ($65 per year after that). I use this card for all my day-to-day spending. In my opinion, it’s one of the best cards out there.
- Chase Sapphire Preferred – Another great card with a 40,000 Ultimate Rewards spend $3,000 on purchases in the first 3 months from account opening. That’s $500 in travel when you redeem through Chase Ultimate Rewards™. Plus, you can transfer those points to companies like United, Hyatt, Amtrak, and more. This card comes with no overseas transaction fee and an introductory annual fee of $0 the first year, then $95. This is my second favorite rewards card after the Starwood card and the one I use when I’m overseas.
- Barclaycard Arrival World Plus MasterCard® - This card is one of the best credit cards out there. It gives you 40,000 points after spending $3,000. That’s worth $440 in airline credit. There’s no foreign transaction fees, you get two points per dollar spent and 10% back on redemptions. If you aren’t loyal to any specific travel brand, you should get this card. It’s one of the best.
- American Express® Premier Rewards Gold Card – You can earn 25K Membership Rewards® points after you spend $2K during your first three months of Card membership and you get double points on groceries and triple points on flights booked with airlines. Highly recommended.
- The Frontier Airlines World MasterCard – This card gives you up to 50,000 points (40,000 after $500 in purchases, 10,000 after a balance transfer). That’s enough for two round-trip domestic tickets. With the low minimum spending requirement, this would be a good card to get for some quickie domestic tickets. There’s no annual fee the first year ($65 after that).
- The US Airways Premier World MasterCard – With this card, you get up to 40,000 bonus miles with your first purchase and the payment of the $89 yearly fee, reduced reward redemptions, annual companion passes and free checked bags. This is a good card to get because when US airways mergers with American, your frequent flier accounts will get combined. Plus, the easy to get bonus miles are worth a free domestic flight.
- American Airlines Citi Card – Loyal to American Airlines? Get their credit card. You get up to 35,000 bonus miles when you sign up, priority access, and free checked bags.
- United Mileage Plus Chase Card - Loyal to United? Get their credit card. You get with 30,000 bonus miles after you spend $1,000 in the first 3 months, free checked bags, no foreign transaction fees, priority boarding, and two United club passes. There is a $0 intro annual fee for the first year, then $95 each year after.
- Chase Ink Bold - The best business card to have (if you own a business). You earn 50,000 bonus points after you spend $5,000 in the first 3 months. You can earn 5X points per $1 on the first $50,000 spent annually at office supply stores, and on cellular phone, landline, internet, and cable TV services. There’s no foreign transaction fees, you can transfer the Chase points to various travel partners and the $95 fee is waived the first year. This is my primary business card.