Before you apply for your first credit card
First of all, opening credit cards does not hurt your credit score in the long run. What will hurt your score is if you miss payments and/or run up high balances that you cannot immediately pay.
I am not a financial professional of any kind but I encourage responsible credit card use. Travel credit cards tend to have high interest rates. But you should not even be looking at the interest rate because you should never keep a balance on your credit cards. If you cannot pay your balance in full each month, the amount of money you will pay interest will probably negate the value of the miles and points you earn.
If you have plans to buy a house or take out another large loan in the near future, wait until that is complete before you start applying for credit cards.
Determine your Chase 5/24 status
This is important because Chase limits the number of credit cards one can open in a 24 month period. Your 5/24 status is how many cards you have opened in the past 24 months. If you have opened 5 or more cards from ANY bank (not just Chase) in the past 24 months, you will need to wait until your 5th newest card is 25 months old before you can apply for any Chase 5/24 cards.
So on this blog, when I say that a Chase card is subject to 5/24, it means that you will not be approved for the card if you are at 5/24 (or more). Not all Chase cards are subject to the 5/24 rule. But many of the best travel cards are. If you start with cards from other banks, it affects your 5/24 status. But if you start with the Chase cards you want, you can still open cards from other banks after since other banks are not as strict.
Here is another recent post about 5/24.
Determine your travel goals and spending habits
Many of the best travel cards will have a minimum spending requirement to earn the sign up bonus. This can be anywhere from $1000-$5000, and usually must be completed in the first 3 months.
If you do not have a lot of living expenses, you may find it tough to meet minimum spending requirements. Here are a few tips, but do not take on more than you can handle. Also, if you cannot pay off the credit cards in full every month, this hobby isn’t for you!
If you have a business or lots of expenses that you can put on a credit card, minimum spending requirements should not be much of a problem.
It is also important to determine your spending habits because some credit cards have bonus categories and an extra point or 2 can add up quickly. For example, the Chase Sapphire Reserve earns 3 points per dollar or travel and dining. We spend a lot on travel and dining, so it makes sense for us to have a card that earns bonus points in those categories.
Your travel goals will also help determine which miles or points you need to focus on. The next step is to decide which credit cards are best for you. Knowing which miles or points you need helps determine which credit cards are right for you.
There are 4 different types of credit cards that earn points/miles that you can redeem for travel
Click here for more information.
- Airline co-branded cards
- Hotel co-branded cards
- Cards that earn bank points
- Cash-back cards
Cards that earn bank points are my favorite because I like having the option to transfer to multiple airline and hotel partners. I tend to use these cards for my everyday spending.
Airline and hotel cards are great for sign up bonuses and sometimes they’re worth keeping for benefits even if you do not put any spend on them.
Cash back cards are great for sign up bonuses but for everyday spending, I prefer cards that earn miles and points. Cash back cards eliminate the need to learn about loyalty programs because you just use your ‘points’ as cash to book travel however you please. The problem is, your points are worth a fixed value. Every card is different but most earn 2% or less. I can often get a much higher value with Ultimate Rewards or Amex Membership Rewards by transferring them to airline miles or hotel points. Click here for more info about cash-back cards.
Cards that earn transferable points are a way to increase your redemption options without having to collect multiple reward currencies
Keep in mind that programs such as Chase Ultimate Rewards and American Express Membership Rewards have transfer partners. This means that you can earn one type of currency (Amex Membership Rewards or Chase Ultimate Rewards) and then transfer to multiple airlines or hotel programs.
For example, you could open a United credit card if you typically fly United. But, you could open a Chase Sapphire card that earns Ultimate Rewards and transfer those points to United. This is possible because United is a transfer partner of Chase Ultimate Rewards. Why earn only United miles when you can earn points that can be transferred to United plus other airlines? This page has a list of partners.
Indirect transfer partners
The reason I stress diversifying your points and using cards that earn transferable points so much is because you will have lots of options when it comes to airlines. Even if an airline is not a direct transfer partner it still may be possible to book. I wrote about booking American Airlines flights indirectly here.
Here’s the best part! In many cases, partner redemption costs are lower than the airline itself. I’ll give you an example.
Hawaii flights on Delta booked with KLM/AirFrance FlyingBlue miles:
- Delta is not an Ultimate Rewards transfer partners
- Delta is in the SkyTeam alliance with AirFrance/KLM
- AirFrance/KLM is an Ultimate Rewards partner
- I cannot transfer AirFrance/KLM miles to Delta, but I can use AirFrance/KLM miles to book Delta flights
- I can transfer Ultimate Rewards to AirFrance/KLM and use those miles to book the Delta flight.
Update: The price with AirFrance/KLM FLyingBlue miles seems to be 17,500 each way now. But this is still a better deal than Delta.
AirFrance/KLM requires 15,000 points each way or 30,000 points for a roundtrip economy ticket on a Delta flight from the mainland US to Hawaii. The exact same flight booked through Delta is 22,500 miles one way, or 45,000 round trip. That saves 50% of the miles required!
Click here for more creative ways to get to Hawaii with Chase Ultimate Rewards points or Amex Membership Rewards!
Which credit cards should I open first?
For almost everyone, I recommend starting with Chase Sapphire cards that earn transferable Ultimate Rewards. In addition to Ultimate Rewards being one of my favorite currencies, the cards that earn Ultimate Rewards are 5/24 cards. Remember, it is important to open any Chase 5/24 cards early in your miles and points hobby.
Chase Southwest cards are also subject to 5/24. If you plan to open Southwest cards because you want to earn the Southwest Companion Pass, you should open those cards first. Then get a Sapphire card.
There are 3 Chase Sapphire cards that earn transferable Ultimate Rewards points. I suggest starting with one of these 3. Note that you can have the Ink Business card and one of the Sapphire cards. But you cannot have both Sapphire cards.
After you have the Chase 5/24 cards you want, the next best cards depend on your travel goals and spending habits.
After you have your Chase 5/24 cards, there are a few ways to decide your next best move
If you are over 5/24 and/or have all of the 5/24 cards you want, the next best cards will be the best current sign up bonus offers and/or cards that earn the miles and points needed to book your vacation goal! If you do not have a specific goal, American Express Membership Rewards is another good reward currency to collect.
American Express Membership Rewards is another good program to focus on because there are several airline transfer partners. The Platinum Cards (business and personal) often offer targeted high sign up bonuses. Don’t be so quick to throw away those things you get in the mail because you may get an offer for 100,000 points or more! That is definitely a 100,000 sign up bonus I would highly encourage you to take. There is a high annual fee, but it is pretty easy to justify the fee, especially for the first year when you are earning a large sign up bonus. 100,000 Amex points can get you a round trip business class ticket to Europe if you use the right airline transfer partners!
American Express Membership Rewards points and Chase Ultimate Rewards points are the two credit card currencies I value the most. But other award currencies aren’t as valuable. Keep that in mind when you see 100,000 point sign up bonuses.
Not all miles and points have equal value
It is important to remember that not all miles and points are equal, so do not let large sign up bonuses deceive you. A 100,000 point sign up bonus doesn’t always mean it’s a great deal (looking at you, Hilton). A good way to decide the value of a sign up bonus is to figure out the redemption potential. For example, 100,000 Hilton points can get you one night at a Hilton property that is in the highest category. On the other hand, 50,000 Chase Ultimate Rewards points can get you 3 nights at the Andaz Costa Rica (a potential value of over $1800). Chances are, 1 night at even the most expensive Hilton property will not cost $1800.
I keep a list of sign up offers that I find most valuable on the current offers page.
Annual fees-don’t let them scare you!
Many of the best credit cards for travel will have an annual fee. This can be anywhere from $75-$550. I know $550 sounds crazy, but for some people, the benefits and credits that come with these premium cards more than offset the fee. Plus, the sign up bonus alone is often worth more than the annual fee. Click here for more information about why I can justify paying a premium annual fee.
Some cards waive the annual fee for the first year. As your anniversary approaches, you have to decide if the annual fee is worth paying. Sometimes it makes sense to close the card after the first year to avoid paying another annual fee. Other times it is beneficial to keep a card, even if you never use it.
For example, the annual fee on the Citi American Airlines card is $99 a year. One benefit of this credit card (and most airline cards) is a free checked bag on domestic flights. The cost of a checked bag is usually $25+ each way, so if you take 2 domestic round trips in a year, that covers your annual fee. There are also other benefits, so I keep this card even though I never use it.
This is a marathon, not a sprint
A few years ago, it was possible to dive into this pretty aggressively. Many people (including me) would apply for multiple credit cards on the same day. The rationale was that since credit reports aren’t updated in real time, the subsequent inquiries would not show up after the first application. For that reason, you could open multiple cards, earn large amounts of miles and points, and repeat. It was also easier to get repeat sign up bonuses on credit cards you have previously held. While this is still possible with most banks, there is usually a waiting period. For example, you can earn a sign up bonus for most Chase cards even if you have already earned a bonus on that card if: 1.) The card is closed-you can’t have 2 of the same credit card products open at the same time and 2.) The bonus was earned more than 24 months ago.*
*As of 8/2018, Chase has added language to Sapphire card applications that state the bonus can only be earned every 48 months rather than 24 months. As of right now, this seems to be Sapphire cards only.
American Express cards are the most limiting. You can only earn a sign up bonus once in a lifetime for any given product**. This sounds strict, and it is, but remember that there are so many credit cards on the market and they are always introducing new credit card products.
**I have seen a few recent data points that suggest Amex may be relaxing this policy. I’ll update when I get more information, but for now it’s safest to assume that Amex bonuses are once per lifetime.
Can I still open 2 cards on the same day?
You probably can. But I would be careful, especially with Chase. I suggest spreading your Chase applications apart by 3 months.
Since beginners should be starting with Chase cards due to the 5/24 rule, it may take a little longer to get your points and miles balances high enough to book your first trip than it would have taken a beginner a few years ago. But I promise, it’s all worth it when you book your first trip on points!
Can my husband and I each open the same card?
Yes, and I highly encourage it, provided you can meet the minimum spend. Banks do not care about marital status when deciding credit worthiness.
This is called 2 player mode. 2 player mode doesn’t have to be a married couple. It is when 2 people work together for a miles and points goal. In 2 player mode, each partner earns his or her own points, so obviously you will earn twice as fast. 2 player mode is also good for other situations. For example, in 2 player mode, 1 partner can get back under 5/24 if needed while the other partner continues to earn sign up bonuses from other banks!
Even if you or your husband are authorized users on the other’s account, each of you can still open your own card for a sign up bonus. BUT…
Be careful about adding authorized users
Many credit cards will offer a bonus for adding authorized users. For example, you can earn 5,000 Ultimate Rewards bonus points for adding an authorized user when you open your card. This is great if the authorized user is past 5/24.
The problem is, if you add your husband as an authorized user and he also wants to open the card, it may jeopardize his 5/24 status. Chase may see authorized user accounts as primary accounts. This means that it may affect his 5/24 count. You can usually have this taken off and then have Chase reconsider his application if it is denied for too many accounts open.
After you’ve opened your first credit card(s):
This is obvious, but use your credit cards for your everyday spending!
Start putting all of your spending that is possible to put on credit cards, on credit cards
You do not have to be as neurotic about it as I am, but try to remember to use cards with category bonuses when making purchases in that category. For example, I earn 3 points per dollar at restaurants with my Chase Sapphire Reserve card, so I use that card to pay. There are cards that earn bonuses in grocery stores, gas stations, and others. So try to learn your bonus categories.
Minimum spending takes priority over bonus categories, though.
If you are working towards meeting a minimum spending requirement, put all spend on that card until the requirement is fulfilled.
If you are not working towards a minimum spending requirement, I suggest putting your everyday spending on cards that earn transferable currency such as Chase Ultimate Rewards or Amex Membership Rewards.
Stay organized. Make a master spreadsheet.
If you don’t already have an account with the airlines and hotels you’re most likely to use, now is also a good time to sign up for those. It’s free. Make a spreadsheet of your airline and hotel loyalty accounts. Include loyalty account number, username, and password.
Also, for each credit card, you should put information such as username, password, annual fee, and date the card was opened in the spreadsheet. This is important because it will help you keep track of anniversary dates. Remember, the annual fee is charged every year in the month of your card anniversary. If the benefits outweigh the annual fee, keep it. If not, you can cancel before the fee is due but make sure you do not lose your points.
Redeeming American Express Membership Rewards or Chase Ultimate Rewards
VERY IMPORTANT: Never transfer points to an airline or hotel before confirming availability for the dates you need. Transfers are one-way (meaning they are permanent!) so if you transfer 65,000 miles for a business class ticket on Singapore Airlines without confirming availability and award seats are not available for your dates, you’re stuck with 65,000 Singapore Airlines miles that you cannot transfer back to whichever program you transferred from. Holy run-on sentence batman. Sorry.
Some airlines will allow you to put an award ticket on hold. I always do this if possible so I can make sure the seats do not get snatched before I can get the points transferred. Ultimate Rewards and Membership Rewards transfers tend to be instant, so this should not be a problem. But I like to play it safe.
This brings me to another very important point that I think a lot of people do not understand.
Award ticket availability
Award seats are not always going to be available on any given flight (except maybe Southwest), but that’s fine. While it’s always good to plan ahead and book as soon as you have the points and the seat is available, not all airlines release their award space at the same time. Click here for more info. That post is specific to American Airlines, but the general principles about award ticket availability apply to almost every airline.
For example, last year I was helping a friend book tickets to Europe and the dates were about 5-6 months out. We were searching for business class tickets. Generally, business class and first class tickets are more difficult to find than economy tickets. We searched just about every European city that American Airlines flies into from DFW and found nothing. Since they also had AMEX points, we had a backup plan on hold with Singapore Airlines (I know, Singapore Airlines from the US to Europe? Yep. I will talk about that soon). Then a few days later, American Airlines released lots of business class award space to several European cities and she was able to get those tickets.
Do not get discouraged if you see no availability when you first start looking, especially if your desired dates are several months out. But if you do see space, book it ASAP. I wish I had a timeline for when airlines release award space, but the truth is that there is usually no rhyme or reason. When people ask what the best time to book is, my answer is “as soon as you find availability”. If you find flights that work for you, do not procrastinate. Especially for premium cabin seats.
Award seat availability is probably the most limiting factor of award travel
I can teach you how to earn points all day. I can go through all of the airline partners of Chase Ultimate Rewards and American Express Membership Rewards and tell you the best partner to get the lowest redemption cost for any given destination. But at the end of the day, if there are no award tickets available, I cannot make airlines release more award seats. It is very important to keep that in mind.
There are no magic tricks to make more award seats available, but here are a few tips:
- If you have transferable points, check other airline partners
- Start your search as early as possible. You’re a lot more likely to find tickets if you are 6 months out vs. 2 months out.
- Check alternate dates if possible
- Consider flying into/out of other cities. For example, if Dallas to Paris is not available, try Dallas to another European city. Then either take a train or a cheap intra-Europe flight to Paris.
- Wait it out. This is risky, but sometimes airlines open more space as the departure date approaches.
- If you are looking for business or first class and only economy is available, some airlines will allow you to change to the premium cabin for only the difference in points (so no change fees) IF an award seat becomes available. I know American Airlines will allow this.
If you have been thinking about opening your first travel rewards credit card, you have come to the right website! After you have checked your credit score and 5/24 status, plan your credit card applications wisely.
- Determine your ability to meet minimum spending requirements
- Open the Chase 5/24 cards you want first
- Then focus on the cards that have the best bonuses and/or the cards that earn the miles and points needed to make your trip happen!
After you earn your points, check out some of our posts about redeeming and as always, contact us if you have any questions.
Earn your first 50,000 (or more) Ultimate Rewards points!
Chase Sapphire Preferred® Card
If you’re torn between Chase Sapphire Reserve and Chase Sapphire Preferred, click here for more information and a comparison.
- Bonus: 50,000 Ultimate Rewards points
- Minimum spend for bonus: $4,000 in 3 Months
- Annual Fee: $95, but waived the first year
- Bonus Categories: 2 points per dollar on travel and dining
Chase Sapphire Reserve
- Bonus: 50,000 Ultimate Rewards points
- Minimum spend for bonus: $4,000 in 3 months
- Annual Fee: $450
- Bonus Categories: 3 points per dollar on travel and dining
- Notable benefits: $300 travel credit per calendar year, $100 reimbursement for TSA or Global Entry enrollment, airport lounge access
Chase Ink Business Preferred credit card
- Bonus:80,000 Ultimate Rewards points
- Minimum spend for bonus: $5,000 in 3 Months
- Annual Fee: $95
- Bonus Categories: 3 points per dollar on the first $150,000 spent in combined purchases on travel, shipping purchases, internet, cable and phone services, and on advertising purchases made with social media sites and search engines each account anniversary year