Which travel rewards credit cards for beginners do I need?
Miles and points beginners often ask which travel rewards credit cards to get first. It’s understandable. First, there are so many travel rewards credit cards available. Second, many people believe credit card myths which can make applying for them stressful.
The major banks have their application rules and Chase, by far, has the most restrictive. If you’ve been approved for more than 5 credit cards in the last 24 months from any bank, Chase will deny your application even if you have a stellar credit score. Travel hackers affectionately refer to this rule as 5/24.
Combine this with the fact that Chase offers some of the best travel rewards credit cards, in terms of sign-up bonus and long-term spending value, and you can begin to see the problem this rule can unknowingly pose to miles and points beginners.
This post will highlight the Chase credit cards you should start out with and when to apply, as well as discuss some of the possible exceptions to the 5/24 rule in order to help travel hacking beginners formulate their credit card strategy.
Before I continue, though, it’s important to point out that you’ll need a credit score of 700+ to qualify for most travel rewards credit cards. Use a free service like Credit Sesame to find out your credit score and always pay off your credit card balances in full at the end of the month.
Travel Rewards Credit Cards for Beginners: The First 5 to Get + a Strategy
I’ve outlined a step-by-step strategy for beginners getting started with travel rewards credit cards. Keep in mind this strategy is the ideal in order to maximize Chase’s travel rewards given their 5/24 rule. No matter what, you should always do what’s best for your travel goals and finances.
Step 1- Choose 1 of the 2 credit cards below.
Chase Sapphire Reserve
This premium credit card made its debut in August 2016. Since then, it’s been dubbed the best travel rewards credit card ever and for great reason.
The Chase Sapphire Reserve comes with a 100k sign-up point bonus (ending 1/12/17, after which it’ll be 50k) after spending $4k in 3 months. The card has a $450 annual fee but comes with a $300 travel credit. Chase’s definition for what counts as travel is quite generous. So, in addition to flights, hotels, and car rentals, the $300 credit is good for things like highway tolls, commuter transportation, and parking expenses.
Cardholders get free Priority Pass membership which has over 900 airport lounges across the globe offering amenities like free drinks. snacks/food, wifi, and more. There’s also a $100 credit to apply for Global Entry and no foreign transaction fees.
The card earns 3x the points for every dollar spent on travel and dining. These points can be transferred to 11 airline and hotel partners or used with an added 50% bonus within Chase’s travel portal.
The Sapphire Preferred is the next best bet if you can’t get approved for the Sapphire Reserve.
Chase Sapphire Preferred
The Sapphire Preferred offers a 50k point sign-up bonus after spending $4k in 3 months. The $95 annual fee is waived the first year. The card has no foreign transaction fees making it good to use while traveling.
In addition, the card earns 2x the points on travel and dining and has access to the same 11 travel partners mentioned above with the Sapphire Reserve.
Step 2- Choose 1 of the Freedom Cards
This No-Fee card comes in 2 varieties, Freedom and Freedom Unlimited. On their own, the Freedom cards offer typical cash back rewards and the option to book travel solely through Chase’s travel portal. The cards come with a 15k sign-up bonus after spending $500 in 3 months.
However, merge those Freedom points with your Sapphire Reserve/Preferred point totals and your points are now worth a lot more!
You’ll get more value when you transfer points to Chase’s travel partners instead of being stuck with a fixed 1 cent per point return value with Freedom. Even better, with the Sapphire Reserve, those points earned with your Freedom are worth 50% more in Chase’s travel portal.
The Freedom card offers 5% or 5x the points for every dollar spent within specific bonus categories. These categories rotate each quarter and cap out at $6k for the year or $1,500 per quarter. All other purchases earn 1% or 1 point per dollar.
The Freedom Unlimited card does not have bonus categories. Instead, it offers 1.5% or 1.5x the points on all purchases all the time.
Both cards do have foreign transaction fees so this is not the credit card to use outside the U.S.
Start with a Freedom card if your credit score is low and you won’t get approved for the Sapphire Reserve or Sapphire Preferred right now. By spending responsibly and paying off your bill in full each month, you’ll help your credit score and build a relationship with Chase for the future.
Not sure and don’t want to be denied? Visit a Chase bank and ask a representative about the offers you’re already pre-qualified for and apply in the branch.
Step 3- Learn how to get approved for Chase’s business card, the Chase Ink Preferred.
Beginners often don’t realize they can apply and qualify for business credit cards. Side jobs like selling items on Ebay, tutoring, plowing snow, consulting, even having a blog with affiliate links can all qualify as businesses. The key is knowing how to honestly explain your business to the bank. Via Million Mile Secrets, you need to fill out the application properly and possibly provide the bank with additional information.
Chase Ink Preferred
This Chase business credit card replaces the Chase Ink Plus. As of writing this, the Ink Preferred comes with an 80k point sign-up bonus after spending $5k in the first 3 months. The annual fee is $95. This is surely an introductory limited time sign-up bonus so make the most of it while you can.
You’ll earn 3x the points on travel, shipping, internet, cable, and phones services, as well as on social media and search engine advertising costs. All other purchases earn 1x the points. The card has no foreign transaction fees and returns a 25% bonus on points redeemed within Chase’s Travel Portal. All points earned can also be transferred to Chase’s travel partners.
Step 4- Decide on your travel goals. Choose 1 of the following options.
Option A: Southwest Credit Cards
Southwest’s Rapid Rewards program offers a companion pass once you earn 110k Rapid Rewards points in a calendar year. What makes this deal so phenomenal is that your companion flys with you for free (except for the tax) as many times as you’d like for the rest of that calendar year AND the whole following year! You get to keep the 110k points so while your companion flys for free, you can use your Rapid Rewards points for award flights. It’s a super sweet deal!
If your travel goals include domestic travel and destinations in the Caribbean and Central America, then the Southwest companion pass just might be your new best friend. To earn the pass, apply for 1 personal and 1 business Southwest credit card.
Throughout the year, Chase periodically ups the sign-up bonus on its 3 Southwest credit cards from 40k to 50k points each. At the time of publishing this, all 3 cards had the increased 50k sign-up bonus!
- Southwest Rapid Rewards Plus and Premier credit cards each offer the 50k point sign-up bonus for spending $2k within the first 3 months. The $69/$99 fees are not waived the first year.
- Southwest Rapid Rewards Premier Business credit card also comes with a 50k point sign-up bonus for $2k in spending over the first 3 months. Again, the $99 fee is not waived.
Bags fly free on Southwest, but the cards let you check an extra one at no cost. You’ll have priority boarding, too, which is great considering Southwest’s A, B, and C boarding positions. You also get 3k anniversary points for renewing the Rapid Rewards Plus card and 6k points for renewing the Premier cards.
Option B: United MileagePlus Explorer & Chase Sapphire Preferred
If your travel goals include more international travel than domestic, a United miles/Chase points combo will be more useful than the Southwest companion pass.
United miles are great for domestic and international travel on United or any of their Star Alliance partners. Even with United’s stopover rule changes, these miles still offer a good deal of flexibility and solid value. Additionally, United is one of Chase’s travel partners. You’ll be able to transfer Chase points earned with your Sapphire Reserve, Sapphire Preferred, and Ink Preferred directly to United at a 1:1 ratio. Assuming you apply for or already have the Sapphire Reserve from Step 1 above, the Sapphire Preferred offers another way to grow your Chase points balance.
The United MileagePlus Explorer card typically has a sign-up bonus of 30k miles for spending $1k in the first 3 months. But, the sign-up bonus usually increases to 50k miles publicly and has gone as high as a 70k mile targeted offer for specific Chase and United customers. The minimum spend also increases to $3k over the first 3 months.
If you think the United Mileage Plus explorer card is right for your travel goals, wait until the higher 50k offer comes around.
As with many co-branded airline credit cards, you’ll get priority boarding and a free checked bag. United also sends you 2 United Lounge passes each new year.
Exceptions to the Chase 5/24 Rule
There’s a saying within the miles and points community. “Your mileage may vary.” Essentially, just because others have had success or failure with something doesn’t mean your experience will be the same. So, take this next bit with that in mind.
- Chase IHG
- Chase Hyatt
- Chase British Airways
- Chase Fairmont
- Chase Ritz-Carlton
That being said, do not start out with these credit cards. Chase can make changes at any time to which cards are and aren’t counted towards the 5/24 rule. Play it safe. Start with the travel rewards credit cards for beginners described above because they offer better all-around travel rewards.
When to Apply
By now, I hope you realize your first 5 travel rewards credit cards should be a combination of the travel reward credit cards described above. However, you cannot apply for all of them at once!
- First and foremost, Chase will deny you because that’s just way too many applications at once!
- Second, you need to make sure you can make the minimum spend on each credit card. There’s no point in applying for a card and not getting the bonus.
Chase will typically only approve you for 2 credit card applications every 30 days. Each time you apply for a new credit card, banks do a hard pull of your credit score. In general, you want to limit the number of hard pulls that show on your credit report. Via Doctor of Credit, if you apply for 2 personal credit cards on the same day, the hard credit pulls may combine on your credit report to look like 1. The same goes for applying for 2 business cards on the same day.
Remember, your mileage may vary! Others have applied for a business and a personal credit card on the same day and have had them combine as well. While others have had a completely different experience.
Again, play it safe. Follow the majority consensus in the data.
Apply for whichever Chase Sapphire (preferably the Reserve) and whichever Freedom you have selected.
2a. Wait 31 or more days depending on your ability to handle minimum spend amounts. Then, apply for the Chase Ink Preferred and the Southwest Rapid Rewards Premier Business cards.
2b. Apply for the Chase Ink Preferred.
3a. After another 31+ days, apply for 1 of the personal Southwest credit cards.
3b. Apply for the United Mileage Plus Explorer and the Chase Sapphire Preferred cards.
No matter which options you choose, you should have applied for 5 Chase credit cards. This is a critical key to success when starting out in order to maximize your miles and points earnings as a beginner. Don’t lock yourself out of earning these bonuses and the travel rewards they continue to bring with every day spending.
So, which travel rewards credit cards for beginners will you apply for? What tips do you have for beginners?
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