Credit cards are omnipresent in modern day society. People use them to pay for everything from cars to groceries to sticks of gum. The US 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 be advertised by come celebrity. (Note: this advice also works for Canada too!) There’s so many to choose from that it’s hard to know which one is actually good for travel and which one is total BS. 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, and even cash back. By using and signing up for travel credit cards, I have:
- Received over 400,000 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. I’ve redeemed for so much over the past few years that it would take a whole blog post to list all my perks!
And it didn’t take me years to accumulate these points either.
I earned a lot of points through sign up bonuses, special offers, maximizing my spending, and other bonuses 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 use an AMEX card for booking flights (3x per dollar spent), Chase Sapphire for my everyday spending (and sometimes a Starwood card), and a different card for my business! But I have friends who only want cash back and others who only want United miles. There’s no perfect card but there are cards that are better than others.
What to Look for in a Travel Rewards Card
I look for cards that offer the following:
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.
Category bonuses and special offers – 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. 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.
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. Most cards require between $1,000-3,000 in spending in the first 90 days to unlock the bonus. I wouldn’t look at cards with higher requirements unless you are a big spender or plan to use some of the more creative travel hacking ways to get there.
Have special perks – All of these travel credit cards offer great perks. Many will give you special elite loyalty status or other extra perks. I want cards without foreign transaction fees, free checked baggage, priority boarding, free nights, and much more. It’s not just about just getting miles; it’s about what else comes with the card that makes my life easier!
Annual fees – 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 transaction 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 simplest card for avoiding foreign fees is the Capital One Venture Card. There is no yearly fee but there’s also no rewards structure. This card is for people who want simplicity and don’t care about points (though that’s just crazy talk). However, if you decide you want points and see the value in the yearly fee (which is usually pretty low. See above), the best cards for avoiding overseas fees are the Chase Sapphire Preferred, Starwood American Express, any airline branded card, Barclay’s Arrival Plus, or Chase Ink. They are way better than the Capital One card but everyone’s spending needs are different, right?!
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. If you fly one particular airline, get their branded credit card. If you want to go to Taiwan and want to fly Qantas, get the American airlines card as AA is a partner of Qantas.
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. When you start out, you don’t want to spread yourself thin, especially if you’re a low spender. Stick with a couple of cards that help you reach your travel goals.
MY FAVORITE CREDIT CARDS (BESIDES BRANDED AIRLINES ONES)
- Starwood Card from American Express (This is my favorite rewards card)
- Chase Sapphire Preferred (My second favorite card)
- American Express Premier Rewards Gold Card (3x points on flights)
- Chase Ink Bold (Best business card)
- Citi Prestige/Premier (Great perks and transfer partners)
- Barclaycard Arrival Plusâ„¢ World MasterCardÂ®
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