The world of points and miles can be confusing. Knowing where to start, what credit card can help you earn free travel the fastest and how to maximize the points can be difficult. When considering a travel card there are several factors to consider:
- What is the annual fee?
- What is the welcome bonus?
- In which spending categories will you earn 2x- 5x the points?
- How do you redeem your points?
Annual fees can vary greatly. They can be anywhere from $0 to $700. It is important to analyze what you are getting for your annual fee. Some credit cards will offer a credit towards travel booked in the portal, TSA precheck/ global entry credits, lounge access, credits for Uber or streaming services rental car coverage, no foreign transaction fees and more. It is important to determine what benefits you will utilize when choosing a card. Often these benefits can negate the annual fee. It is important to determine what benefits you will take advantage of to determine if the annual fee is justifiable.
Many cards have welcome bonuses that range from $200 cash back (often given in the form of points) up to 150,0000 points. These welcome bonuses come with a inimum amount that you have to spend on the card in a predetermined amount of time (often 3-6 months). It is important to figure out if your “daily spend” will allow you to reach the minimum amount you have to spend. You don’t want to buy items that you wouldn’t buy otherwise only to meet your minimum spend.
Most cards have certain categories that earn extra points, for example, some credit cards earn extra points on dining, travel, gas, groceries, and office supplies. When choosing a card, it is important to evaluate which categories you spend the most money in and choose a card that will give you 2x-5x points in that category. There are some cards that will allow you to choose a few categories to earn extra points.
There are multiple ways to redeem points. The first way is to have a co-branded credit card where you earn points for a specific airline or hotel. These cards are great for people who travel for business, always fly the same airline and stay at the same hotel. They build points and earn loyalty. However, for the rest of us who don’t, it is better to get a card where you can earn points and transfer them to many different airlines or hotel groups. That way you have the flexibility to transfer them to the airline that requires the least number of points for the chosen route. With these cards, you have a choice to redeem your points in the portal for the credit card which often will give you a 25-50% bonus on points, however, will sometimes cost you many more points to book the same ticket then you would booking directly with the airline. You can also transfer your points directly to the airline or hotel that requires the least number of point for your chosen destination. It is important to consider both options.
My next blog will dig into some of the advantages of one of my favorite cards- the Chase Sapphire Preferred. Why is it my favorite? Low annual fee, lots of benefits, and lots of options to transfer your points.
