A misconception about travel hacking is that the best way to start is applying for a bunch of credit cards. As many have found out, that could be a big mistake.
It’s better to start slow and be very strategic about everything you do.
In this post you’ll learn the five questions you need to answer before applying for a card. Then, specific recommendations for the best travel credit cards for beginners.
Question # 1 – Will this card help me achieve my goals?
Imagine you’re holding a 10-hole punch card where each hole represents a credit card application. Once you’ve punched through all the holes, you can’t apply for another card over your lifetime. With this in mind you’d think very carefully about every card you applied for.
This is how you should approach applying for a new credit card.
And not just because some credit cards only allow you to take advantage of a signup bonus once in your life. More so because life changes fast. As such, the goal isn’t to accumulate points but to use points for meaningful experiences.
That’s why rule # 1 is to make sure you’re applying for a card that will allow you to achieve your goals.
Not sure if a card can help you achieve your goals? Read 4-Steps to Booking your First Awards Trip. In this post I go over a step-by-step example of choosing a travel goal and finding the best way to accomplish it.
This post is part of a mini-series on travel hacking. You can get the entire free series, delivered in order, by entering your email address below.
Question # 2 – Will I keep this card long-term?
One of my rules is that the travel hacks I take advantage of should have a positive impact on my credit score.
And with the knowledge of how my credit score is calculated, I know that the length of my credit history is an important part of my credit score.
That’s why I find it important that the first card someone applies for they should plan on keeping long-term. Over time this will have a very positive impact on your score.
Question # 3 – What is the average credit score for the card?
A hard inquiry on your report, which is what happens once you apply for a card, has a short-term negative impact on your score. A hard inquiry stays on your credit report anywhere from about 3-6 months.
That’s why you want to make sure you only apply for cards where approval is highly likely.
A good tip is to compare the top travel credit offers at CardRatings, which has a “Credit Needed” section for every card.
Question # 4 – Can I hit the minimum spend on the card without any long-term financial harm?
Most credit cards have a minimum spending requirement in order to get the signup bonus. For example, you may have to spend $3,000 inside of the first three months of account opening.
Keep this in mind when applying for any new card(s).
You want to avoid going over budget to hit a minimum spend requirements. It makes no sense to pay interest on credit cards, no matter how great the rewards are.
Question # 5 – What is my time frame for booking my trip?
Rewards take time to hit your account. If it takes you three months to hit a minimum spend to book a trip, it may take four months for that bonus to hit your account.
That’s a lot of time, where a lot of things can change. Plan accordingly and be flexible.
And when you’re ready to take a trip, make sure to get the best deal possible on a hotel.
Best Travel Credit Cards for Beginners
With those questions answered, you’re ready to apply for a card.
The best card to apply for depends on your situation. In other words, there’s no one best travel hacking rewards card.
Below I list three cards, ideal for beginners.
Each of the cards listed below:
- Have long-term benefits
- Offer a quality sign up bonus
- Have reasonable minimum spend requirements
Note: Sign up bonuses, annual fees, benefits, and terms change constantly. So I’ll leave those details to CardRatings, where you can easily compare the top travel rewards cards, with up-to date information.
Option # 1 – Chase Sapphire Preferred Credit Card
The Chase Sapphire Preferred Card is my top choice for beginners.
Chase Ultimate Reward points are very flexible. They can be transferred to many airlines and hotel programs. So not only can this help you achieve your short-term goals but long-term, it’s a great card to have.
The current sign up bonus is enough to book two domestic round-trip tickets or one international flight.
For those who already have a Chase credit card like the Freedom or Freedom Unlimited, Chase Ultimate Reward points can be combined. This is true for both you and your spouse. Although to combine points you have to have a premium Chase Credit Card, like the Chase Sapphire Preferred.
One last reason I like this card for beginners is Chase has what’s known as the 5/24 rule. This says that if you’ve opened five or more credit card accounts in the past 24 months, you won’t be approved for a new Chase card.
While this is a fairly strict rule with Chase, other credit card companies have no such rule. Although, depending on the company, your chances of approval may decline with that many new inquiries.
Option # 2 – Chase Sapphire Reserve Credit Card
Take what’s to like about the Chase Sapphire Preferred, add a few benefits and you get the Chase Sapphire Reserve.
These extra benefits include:
- $300 in statement credits for travel purchases charged to the Chase Sapphire Reserve each account anniversary
- Earn 3X points on travel (after receiving $300 statement credit) and dining purchases
- Get 50% more value when you redeem these points for travel through Chase Ultimate Rewards (The Preferred Card allows you to redeem points for 25% more value).
There are other benefits to the card as well, which you’ll want to check out.
The big downside though to the Chase Sapphire Reserve is the $450 annual fee. With $300 in travel credits, you can say that fee is more like $150 a year. Nonetheless, you’re paying this fee upfront so it may impact your cash flow.
The card also requires an excellent credit rating according to CardRatings.
Option # 3 – Chase Ink Business Preferred Credit Card
If you run a business you can apply for the Chase Ink Preferred Business Card. This card currently has one of the best sign up bonuses available.
To apply for a business card you only need only to have any source of income outside of your salary. This can mean anything from freelancing, starting a blog, to renting out a room on Airbnb.
Also, a Tax ID isn’t required. You can use your social security number to apply.
Business cards tend to have a higher minimum spending requirement, as is the case with the Chase Ink Business Preferred Credit Card.
Some planning then may need to be in store in order hit the minimum requirements.
One tip is to know what is and what’s not a business expense. To many’s surprise, expenses many consider as personal are deductible when running a business. For example, if you sell on eBay, buying a new computer may count as a business expense.
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