For someone just starting out in this hobby, the number of rewards credit cards available can be overwhelming. Cash-back rewards, airline miles, hotel points… How does one decide which card is the best?
The beauty of credit-card rewards, though, is that there’s no 100-percent right answer. Different airport hubs, destinations and spending habits mean that the cards that work for me might not be as rewarding for you. However, there’s still a general list of credit cards one should apply for when looking for heavily discounted travel. Let’s review your best options if you’re new to travel hacking.
Chase Sapphire Preferred / Chase Sapphire Reserve
If travel rewards are what you’re after, the Chase Sapphire-branded credit card would be my first choice, no matter your geographical position in the United States. These premium cards earn flexible points with every dollar spent that can be transferred to an array of travel partners, such as United Airlines, Southwest Airlines, Air France/KLM and Hyatt, among others. The options to redeem Ultimate Rewards points are plenty and flexibility is key.
Related: Chase Sapphire Preferred or Chase Sapphire Reserve: Which Card Is Right For You
Which card you decide to apply for is up to you. You can hold only one Chase Sapphire card at a time, so make it count. The Preferred version of the card has a lower annual fee of $95 (waived for the first year) than the Reserve’s fee of $450 (applied to the first statement), but the benefits you receive with the Chase Sapphire Reserve Card can make the high fee worth it. Either way, you can’t go wrong by starting with one of these travel credit cards.
Chase Freedom / Chase Freedom Unlimited
Again, because not everyone spends their money in the same chopping categories, there are choices for the right card for you. Both the Chase Freedom and the Chase Freedom Unlimited have no annual fees and earn cash back, but the earning structure is different.
Related: Cash Back Smackdown: Chase Freedom vs. Chase Freedom Unlimited
The Chase Freedom earns 5 percent cash back in quarterly rotating categories (on the first $1,500 each quarter), and the Chase Freedom Unlimited earns 1.5 percent flat on all purchases. Which card is more beneficial for you depends on your spending habits.
Fortunately, if you hold one of the Chase Sapphire cards mentioned above, you can combine the points earned with the Freedom cards and transfer them to travel partners instead of earning cash-back rewards.
Southwest Airlines Rapid Rewards Plus Credit Card / Southwest Airlines Rapid Rewards Premier Card
The reason that all these Chase-issued credit cards are first on the list is the bank’s 5/24 rule. The rule means that if you have opened five or more credit cards with any issuer in the last two years, you likely will not be approved for another Chase card. Most Chase credit cards fall under this rule, including co-branded Southwest Airlines credit cards. Applying for both of Southwest cards while you’re still under 5/24 can get you access to a Companion Pass when the bonuses are high enough to reach 100,000 points total.
Related: Why Southwest’s Companion Pass Is Not for You
A Companion Pass gets you and friend flights for the price of one for as long as it’s valid. Earning the Pass early in a calendar year means you can buy BOGO tickets for the duration of that year and the following calendar year. You can save some serious cash or points by maximizing the perk. However, keep in mind Southwest’s limited reach. The Companion Pass won’t do you any good unless you travel to destinations serviced by Southwest.
Starwood Preferred Guest Credit Card from American Express
So, you now have a cash-back card, a flexible travel card and an airline card. You now need to throw a hotel credit card in your wallet, and the Starwood Preferred Guest Card is a great choice. The Starpoints earned with this card can be redeemed for hotel stays at any Starwood hotel or transferred to Marriott at a rate of 1-3 and used toward free stays at Marriott chains.
Related: 5 Reasons the SPG American Express Is Worth the Annual Fee
Additionally, SPG program partners with dozens of airlines, and you can transfer Starpoints to these airlines to redeem for free flights. In most cases, every 20,000 Starpoints transferred will result in a 5,000-mile bonus from the airline. With so many options to redeem Starpoints, the SPG Amex card is a must for any beginner.
What other credit cards do you recommend to get early when starting out in this hobby?
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