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Points and Miles Beginner’s Guide: Rewards Credit Cards

Points and Miles Beginner’s Guide

#7. Credit Cards

  • Intro
  • Credit card churning
  • Which Card is The Best?

NOTE: Check the Credit Card Database for a comprehensive list of point and mile-earning AirlineHotel, and Business credit cards, along with their sign-up bonuses and features.

If you live outside of the US, check out the Foreign Credit Cards page. I do not earn a referral fee if you use any of the credit card links.

Intro: If you’re just starting out in the points and miles game, I recommend setting goals before you start applying for credit cards. Where do you want to go and which airlines will get there? When I began collecting miles, I made the mistake of focusing on American Airlines AAdvantage miles. I was planning my trip to Dubai and Istanbul a year in advance and thought any airline could get me there. What I didn’t realize was that American Airlines does not fly to Dubai or Istanbul, and the only partner airline with decent availability to these destinations was British Airways, which tacks on huge fuel surcharges of over $1000 roundtrip! I’ll explain in a later post how I was able to pull it off regardless, but be sure to do your research before you begin collecting points to avoid this kind of dilemma. Once you know where you’re going and which hotels you want to stay with, outlining your credit card strategy will become much easier.

Credit cards are the primary way to earn the majority of your points and miles. Credit card sign-up bonuses range from 10,000-100,000 points. A good personal credit card sign-up bonus should be 50,000 points and above, while business credit cards are often limited to 25,000 points. In the next post, I will cover how to qualify and apply for a business credit card, along with a list of business card offers.

I highly recommend starting with a credit card that lets you earn points with a flexible rewards program, like American Express Membership Rewards or Chase Ultimate Rewards. These programs allow you to transfer your points to different frequent flier and hotel loyalty programs. This way, you are not restricted to a single airline or hotel program when its time to redeem your points.

Generally, you earn more points with flexible reward programs than with airline branded credit cards. For example, American Express Membership Rewards often offers a 50% bonus for transferring your points to certain programs. Despite being a co-branded card, the Starwood Preferred Guest American Express card also falls into this category, as it offers 5,000 bonus points for every 20,000 points transferred to an airline program, increasing your earnings to 1.25 points per $1.

The Chase Ultimate Rewards Mall also tends to offer higher bonus point earnings per $1 spent than any of the airline shopping portals.

Credit Card Churning refers to the act of signing up and obtaining the bonus for a single card more than once. In some cases, churning involves getting two versions of the same card (i.e. getting a Mastercard and a Visa version). While many cards restrict applicants from earning a bonus on the same card twice, there are still a few cards that are in fact churnable: The US Airways Premier World MasterCard, the Citi American Airlines AAdvantage cards, and some American Express cards are among the few left. The US Airways card can be re-opened immediately after closing, and there are reports that you can get two of the same version (including the bonus!) by explaining that you want to separate some of your spending. The Citi AAdvantage card can be churned every 18 months. The American Express Gold Delta Skymiles card can be churned every 24 months.

So which card is the best? There is alot of debate among travel hackers about which card is the absolute best. While its difficult to pinpoint to a single card, it is generally agreed that the following cards are among the best for earning miles, mainly because of the flexibility they offer in redeeming miles and their bonus spending categories:

1. Chase Ink Bold. This business card is a favorite among point chasers for the 5 points it offers in some very valuable bonus categories: cable, internet, phone, and office supply stores. You can use this card to purchase Visa giftcards from Office Depot, then use the giftcard for everyday purchases. This trick enables you to earn 5 points per $1 on ALL spending! The best part is that the Ink card comes in 3 versions (Ink ClassicInk Bold, and Ink Plus Business Cards), and you can get the sign-up bonus for all three!

2. Chase Sapphire Preferred. The highlight of this card is the 2 points per $1 it earns on dining and ALL travel, not just airfare or hotels booked directly through the airline or designated rewards program. The best part is that you get access to the Chase Ultimate Rewards Mall, which offers lucrative bonus points when shopping online. The 7% annual dividend on all points earned isn’t too shabby either.

3. Starwood Preferred Guest American Express. This card earns 1 point per $1 on everything and lets you transfer your points at a 1:1 ratio to many airline programs. Not only that, but you earn 5,000 bonus points on every 20,000 points transferred, which brings your earnings up to 1.25 points per $1!

Disclosure: I will earn a referral for the US Airways Premier MasterCard link in this post.

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Ariana Arghandewal

4 Comments

  1. Chase Saphire used to give out 100,000 miles, then 50,000 and now it’s down to 40k. But still seems to be a good option out there. Thanks for all the info.

    • @ Sam, I would definitely wait for the 50k offer on the Sapphire Preferred. You can wait it out or call Chase and see if they’ll bump the offer up for you. It never hurts to try!

    • @ Rawash, glad you found it useful! “Making better use of my credit” is a great way to put it. Your credit is an asset in a financial sense, but it can also give you travel opportunities that most people just can’t afford. If you’re going to use it, it’s best to get rewarded!

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