Choosing the Right Credit Card(s) For Your Travel Needs

I don’t think it can be stressed enough. You should be making just about all of your purchases using credit. Debit is a sucker’s game. Credit is the way, you are leaving money on the table, otherwise. The benefits and rewards that credit card companies offer, in hopes of you carrying a balance month over month with them, is in-line with just about any other investment you can make (except maybe real estate, but that’s someone else’s blog). The trick is two-fold:

1. know which credit cards provide the best rewards for your needs, and…
2. never carrying a balance month over month.

Number 2 is relatively easy. Don’t spend money you don’t have. Even if you need to start small, just make sure it is within your financial means. Pay off your balances every month and you are essentially getting money lent to you for free. Using a credit card is essentially taking a loan from the bank. They make their money with interest which accrues on lingering balances. They make so much money doing this, in fact, that it benefits them (quite a bit) to lend the money. So much so, that they are willing to go to great lengths to get you to LET them lend you money. With no balance month to month, there is no interest. With no interest, the loan was free. The kicker is, you get to still keep and use all of the benefits and rewards the credit card offered you in hopes of collecting interest from you.

That brings us to Number 1: Know Which Credit Cards Provide The Best Rewards For Your Needs. This can be significantly more challenging than just not spending money you don’t have. With hundreds of cards out there, offering hundreds of benefits, how is anyone to know?

To Thine Own Self Be True (know who you are and what you want)

A friend of mine once said that it was easier to make decisions based on how you tend to act vs. change your behavior based on the decisions you make. I get his point, but I am not in the business of taking the easy route. I specifically look to challenge myself to do more. In either case, and whichever person you are, I think the most important step is self awareness.

The fact is, like many aspects of traveling, choosing a credit card is not “one size fits all”. There are things to consider for every individual, including (but not limited to) travel style, budget, credit score, family size, etc. It’s a lot to consider. So, I am not here to tell you the “best” credit card to get for travel. Anyone who tells you that, is trying to sell you something. The best I can hope to do, is inform you enough to make good decisions based on the particular boat you’re in. As well as arm you with a community of folks who are in boats of all shapes and sizes and want to share their best practices with you, in hopes you may come across some of your own and return the favor.

So, lets start with the basics. Points vs. Miles. The differences are relatively simple;

Points are awarded as a varying percent of total spend using a particular credit card. They are often pretty flexible, capable of being used on an array of items and brands and often transferrable. The percent you receive is often based on category of spend (ie “groceries = 3x”, or “3 point for every dollar spent on groceries”). You can typically expect a value of at least $0.012USD per mile (or $1200 per 100k points), but if you play your cards right you can bring that up significantly.

Miles are also awarded as a varying percent of total spend using a particular credit card. However miles are not as flexible, as they are designed to be utilized on a brand that you are loyal too. The tradeoff being that with miles you can typically earn faster (you can often earn miles for both spending with an airline card and flying with the airline) and some have reported a slightly higher starting value for miles, at roughly $0.014USD.

Both type of cards offer additional benefits like lounge access, free checked bags, etc.

For me, it is (almost) exclusively points that I seek out. I do not have any major preferences when it comes to airlines or hotels, I am often just looking for the best deal and interesting travels. If you are dead-set on flying, say, Delta…A SkyMiles card might be best suited for you.

It occurred to me a while back, that the concept of “value” was wildly misunderstood, and has been for quite some time. When people hear “value”, they think “cheap” (either in cost or in construction). Value does not mean, and has never meant, “cheap”. In fact, it is far more important than “cheap”, in that the concept of value is relative to each individual person. Value is the idea that something is important to you. More specifically, that the something’s worth (again, to you) exceeds its cost. This is entirely unique to each individual, so the idea of someone assigning a value for a particular thing for someone else, just doesn’t make sense.

Look For Benefits and Rewards That Fit Your Needs

Now that you know what you find value in, let’s start looking at the offerings that you will typically find while researching cards.

1. Large Sign Up Bonus (SUB) – This is typically the highest on the list of what folks find valuable in a travel credit card. Relatively speaking, it probably provides the most “bang for your buck”. With points ranging in cash value of anywhere between $0.012-$0.03 USD each (and sometimes even higher), its no wonder. This means that if you do your research and find a SUB of 150k points, you potentially just put $5000 towards your travel budget.
2. Additional Benefits and Perks – This can range from waived baggage fees to lounge access to Global Entry or TSA Pre-Check. Each of which can make a break an experience, depending on your personal preference.
3. No Annual Fee – Some cards offer no yearly fee for keeping the card open. Keep in mind, this typically is a tradeoff for strong perks like above.
4. Spend Multipliers Based on Purchase Category – Do you have a family of 4 and spend hundreds of dollars a month on groceries? Are you regularly commuting so gas is a large spend for you. Find out what you are already spending on and find offers that have high point multipliers for those categories.

Which Cards I Tend To Use, And Why

All that being said, here’s a brief synopsis of the best cards (as I see it) based on type of travel reward:

Chase Sapphire Preferred	Best for Flexibility, Point Transfers, SUB
Chase Sapphire Reserve	Best Well-Rounded Premium Travel Card
American Express Platinum	Best Sign Up Bonus and Benefits
Chase Flex Freedom	Best No-Fee Credit Card for Travel Rewards
Delta SkyMiles Gold	Best Airline Loyalty Rewards

Chase Sapphire Preferred (CSP) / Chase Sapphire Reserve (CSR)

The Chase Sapphire Preferred is my number one favorite card. It is the card that I find myself pulling out most often, to both my regular purchases and my point redemption. It is also the card that I am adamant, is the card you should probably start with. Chase has really made a stand when it comes to Travel Rewards. Not only do they have some of the top cards that work great together, but they offer a very user friendly reward portal and relatively easy transfers of their proprietary Ultimate Rewards. It offers a strong (and sometimes amazing) SUBs and all for a relatively low annual fee of $95.

The Chase Trifecta is a strategy of using Chase cards in conjunction with one another to boost point potential. It is powerful. I am a believer. You can read all about my thoughts in my upcoming post on it. That being said, Chase has a 5/24 rule that states that they will hard reject any applications if the applicant has had 5+ cards approved within the last 24mo.

Why is that important? If you choose to employ the Trifecta to its highest earning potential, you are going to want to start with a Chase card. This card is the most well rounded of the lot (maybe of all the cards mentioned) and will have you hitting the ground running with 3x bonuses on things like grocery and dining.

The Chase Sapphire Reserve, while a very close 2nd place for me, might be a better fit for folks. It comes at a higher annual fee ($550) but with that comes a slew of additional benefits as highlighted below. It can also replace the Sapphire Preferred in the Chase Trifecta with no reduction in benefit.

Some Highlights of the Sapphire Preferred:

• Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening.
• Earn up to $50 in statement credits each account anniversary year for hotel stays purchased through Chase Ultimate Rewards®
• Earn 5x total points on travel purchased through Chase Ultimate Rewards®, excluding hotel purchases that qualify for the $50 Annual Ultimate Rewards Hotel Credit.
• Earn 2x on other travel purchases.
• Earn 3x points on dining, including eligible delivery services, takeout and dining out.
• Earn 3x points on online grocery purchases (excluding Target, Walmart and wholesale clubs).
• Earn 3x points on select streaming services.
• Plus, earn 1 point per dollar spent on all other purchases.
• Each account anniversary you’ll earn bonus points equal to 10% of your total purchases made the previous year. That means if you spend $25,000 on purchases, you’ll get 2,500 bonus points.
• Get 25% more value when redeemed for travel. For example 60,000 points are worth $750 toward travel when redeemed through Chase Ultimate Rewards®.

Some Highlights of the Sapphire Reserve:

• Earn 80,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening.
• Automatically receive up to $300 in statement credits as reimbursement for travel purchases charged to your card each account anniversary year.
• Earn 5x total points on flights when you purchase travel through Chase Ultimate Rewards® after the first $300 is spent on travel purchases annually.
• Earn 10x total points on hotels and car rentals when you purchase travel through Chase Ultimate Rewards® after the first $300 is spent on travel purchases annually.
• Earn 3x points on other travel worldwide after the first $300 is spent on travel purchases annually.
• Earn 10x total points on Chase Dining purchases with Ultimate Rewards®.
• Earn 3x points on other dining at restaurants, including eligible delivery services, takeout and dining out.
• Plus, earn 1 point per dollar spent on all other purchases.
• Get 50% more value when you redeem for travel through Chase Ultimate Rewards. For example, 80,000 points are worth $1,200 toward travel
• Rest and revive before your flight at one of the 1,300+ VIP lounges in over 500 cities worldwide after an easy, one-time enrollment in Priority Pass™ Select.
• Receive one statement credit of up to $100 every four years as reimbursement for the application fee charged to your card towards Global Entry, TSA Pre-Check or NEXUS.

The Bottom Line

Clearly the theme here has been “find what works for you”, but don’t you hate it when you look for advice and the answer you’re given is “whatever works”? It’s like a verbal shrug, in the worst way. Instead, I will say this…