There are tons of credit card options out there, and most provide good value. However, there are a select few that make for a great starter card. If you are brand new to the travel hacking game and are not sure where to begin, I suggest you start with one of these three great starter travel credit cards:
- Chase Sapphire Preferred – This is still the bread-and-butter travel credit card for many people. This Chase card earns flexible points that can be used for travel purchase, redeemed for cash back, or transferred to several different hotel and airline loyalty programs. The standard offer for the card is 50,000 points after spending $4,000 in the first 3 months of card membership. The Chase Sapphire Preferred card does have annual fee of $95 (waived the first year). The value of this card is found in Chase’s quality transfer partners, plus it earns 2x points on travel and dining.
- American Express Everyday Card – While the bonus of this card isn’t especially high (typically 10,000-15,000 Membership rewards points), this card is good starter card. It is one of the few cards that earns transferable points that does not have an annual fee. Membership Rewards can be transferred to several airline loyalty programs and a few hotel programs. While I don’t find the transfer partners as lucrative as Chase’s partners, there are still a few that offer great value. The EveryDay card earns a place here since it is a great way to ease into the world of transferable points, plus it can earn up to 2.4x at grocery stores.
- CapitalOne Venture – CapitalOne doesn’t get a lot of love from the travel hacking world since most of their products generally aren’t all that great. However, their Venture card is actually a decent product. While you can get a card with equal earning potential that comes without an annual fee (hint – Citi DoubleCash), the Venture card comes with a sign-up bonus worth $400, and the annual fee is waived the first year (then $59). Plus, the rewards can be used for any purchase that codes as travel, so there is a lot of flexibility. This is a great starter card, but not one that I would keep in my wallet for more than a year or two.
Which is the best?
Of these, my pick for the “best card” is the Chase Sapphire Preferred. If are willing to take some time to learn the the basics of a few hotel and airline loyalty programs, it will provide the best value of the three. The card also offers additional perks such as trip cancellation insurance, primary car rental insurance, and no foreign transaction fees (i.e. no extra fees when you use your card outside the U.S. in another country’s local currency).
If your interested in a first card to start earning rewards, consider one of these three great starter travel credit cards. If either the Chase Sapphire Preferred or Amex Everyday look like the one for you, leave a comment and I’ll send you a referral email!
If you are new to the travel hacking game, especially on how to use credit cards to earn oodles of miles and points, you may struggle to digest the huge amount of information available. There is so much on the internet that it may seem overwhelming. But don’t let that hinder you from getting started.
You may have lots of questions: how can I obtain free flights to [insert place]? What credit card is the best one to start with? How do I redeem the points and miles I earn? Should I be worried if a card charges an annual fee?
There are answers to all those questions, but they may be different for each person. For some, paying an annual fee simply won’t do. For others, it may be totally justified if the rewards are worth it.
You will need specific answers, but make sure you have some guiding principles in place. Here are my four beginner travel hacking tips for those just starting the miles and points game:
- Have a plan – Don’t apply for credit cards until you have a plan. It doesn’t need to be a fully developed plan, but you should have a goal in mind. It could be something like “travel to Hawaii in 2018 with my family of 4”. Having a specific trip or goal in mind allows you to focus your efforts on attaining that goal. Admittedly, I have sometimes applied for a credit card without considering how I will be able to use the points, but this isn’t the ideal strategy, and I certainly didn’t operate that way when I started out. I had a very specific goal in mind. Identify a goal, find a couple credit cards that will help you achieve that goal, and pull the trigger. Then, once you have the cards, learn the ins-and-outs of those specific programs.
- Start slow – Don’t rush into the travel hacking game. If you told me you got 27 credit cards your first year, I would probably raise an eyebrow. Maybe two. It has taken me years to be comfortable applying for a large number of cards, to understand the ins-and-outs of various loyalty programs, and to be able to earn and redeem hundreds of thousands of miles and points each year. Don’t rush. Learn the ropes first with a couple cards (that you’ve identified in your plan) before continuing down the travel hacking path. You’ll get better over time, trust me.
- Understand your financial situation and abilities – The travel hacking game isn’t for everyone. There is a lot to learn and understand. If you need simplicity, you may want to use a single good cash back card for a while before venturing further. Also, cards with annual fees aren’t for everyone. Personally, I keep several cards that charge an annual fee, but that is because the value they provide my wife and I is much greater than what we pay for them. But not everyone will see things the same way. Also, if managing your finances is generally a struggle and you do not have a budgeting system in place, credit cards may simply not be the thing for you.
- Do your research – Don’t apply for a credit card just because some blogger on the internet says it is the best card of the year. Some are paid commission to offer certain cards, and they’ll often sing their praises on a weekly basis. The card may or may not be something that is actually provides you value. I will recommend certain cards at times, and even then, do your own research to see if it is something that is a fit for your plan. There is also a ton to learn when it comes to redeeming points and miles. Make sure you research various programs. Also, the award travel world tends to change, so research is still imperative even once you have a basic handle on things.
These four beginner travel hacking tips will help you stay on track as you get into this game. Lots of people do crazy stuff with their points, and it’s easy to think either (a) it’s too difficult for me or (b) it’s too good to be true. I’m here to tell you that with a little planning, research, and practice, you can be doing amazing things with your own points and miles.
As a recap: have a plan, start slow, understand your situation, and do your research. You won’t go wrong.
If you live locally and are interested in a starter course in “travel hacking”, I’ll likely be offering one on a Monday evening in March or April. Details should be released this week!