This post is directly intended for all of my friends out there who are still not taking advantage of credit card points. It is my guide to travel hacking for beginners, like me. If you follow this ONE piece of advice, you will walk away with $500 in travel credit – good for an international flight to Europe, or enough points for almost a full flight to Asia. I just revealed my travel plans for 2014-2015, which will require a handful of long haul, expensive flights. This budget traveler will be depending greatly on getting some of those flights covered with points and miles. If I can do it, you can do it, and you have to start somewhere!
Now, let me give you some background on my own travel hacking story before I convince you to apply for what I think is the best credit card for travelers.
I scour travel hacking blogs. I have credit card reward systems memorized and I know all the things I should be doing to earn points. But as of six months ago, I had never opened a credit card and had no credit history. I had maybe 5,000 points in my United Mileage Plus account and about 100 in my American Airlines account. I was starting from ground zero.
Ding. Ding. Ding.
But, as stubborn Emily does, I made the educated decision to apply for a few credit cards. Southwest card? Ding. Chase United Explorer? Ding. Barclaycard? Ding. I could not get approved for anything. I needed to take a few steps backwards and prove to these people that I was credit-worthy.
So, I made friends with my banker. He, firmly but kindly, told me to stop applying for credit cards and that I needed to build up my credit first. I finally listened to him and we opened up a Chase Freedom card, a card I had actually been pre-approved for the entire time.
The plan was to build up some credit with my Chase Freedom, then open up a Chase Sapphire Preferred. He thought it would probably take about a year as due to my lack of credit history. I was pretty bummed as I would definitely not be able to use the Preferred points to buy my ticket to Bangkok. But, after my immediate approval and a $3,500 limit (much higher than he expected), he retracted that opinion and said I should be good to go after just three months. Weeeeee!!
Now, let me say, I wasn’t that excited about the Chase Freedom when I first got it, but it actually was a really great choice. By opening up Chase Freedom and spending $500 in the first three months, I was awarded 10,000 bonus points. This, coupled with the points I earned from just putting my daily expenses on the card, left me with $189 in credit that I could either a) get cash back b) use towards a flight. Since flight prices to Bangkok were starting to increase, I decided to go ahead and use that credit towards my flight. I ended up using 18,997 points and $484 out of pocket for my one-way flight from JFK to BKK. For this beginner travel hacker, I felt pretty satisfied with my purchase. But, there’s so much more potential with the Chase Sapphire Preferred.
The Best Credit Card for Travelers: Chase Sapphire Preferred
Now, you may be asking, why am I so into the Chase Sapphire Preferred card? The Chase Sapphire Preferred is THE best card for travelers. Here’s why:
1) 40,000 bonus points for spending $2,000 in the first three months
2) 20% off of all travel booked through Chase Ultimate Rewards (this means that your 40,000 points actually is worth $500 when booking)
3) No foreign transaction fees
4) Double points for travel and dining purchases (what else do I spend money on?)
5) No fee for the first year ($95 after that)
There are other advantages, but those are the ones that matter most to me.
I will have a few other long haul flights to take this year. One will be my flight to Mexico from Southeast Asia to zip up my best friend in her wedding dress and the second will be back home from either Mexico or wherever I end in Central America. I plan to use points from my new Chase Sapphire Preferred (which I finally just got approved for) to get those flights for free (or at least one for free!).
Book with points + dollars.
Another reason I love the Chase Ultimate Rewards program is because booking through their system is so much better than doing it directly through airlines: you can combine points with cash, meaning you can use SOME points and SOME cash to offset the cost of your flight. Whatever points you have – you receive a dollar amount that can be directly applied to a flight purchase. To differentiate, when you try to book a seat directly through an airline, like through United’s Mileage Plus program, you must have enough points to cover the entire flight. Finally, Chase points are deposited right after the billing cycle in which you earn them. This is a much faster timeline than many of the other reward programs out there.
For you travelers, there’s no reason you shouldn’t be working towards getting some free rewards. Whether its taking the first step and opening up a card to build some credit or applying for a signature card that has a significant sign-up bonus (30K points or more), I encourage you to get started now!
And, if after you earn the sign-up bonus and you decide you don’t want to pay the annual fee, you can either call to ask them to wave it for year two, or cancel.
My next financial planning steps for six months in Southeast Asia:
1) Open up a Charles Schwab Checking Account
NO foreign transaction fees; this is the only account I’ve seen that will reimburse those brutal foreign ATM fees.
2) Apply for the Chase United Explorer Card
50,000 points for spending $2,000 in three months. I plan to use these points towards my long haul flights this year.
3) Apply for the Starwood Preferred AMEX
10,000 points after first purchase, 15,000 points after spending $5,000 in six months. I’ve had zero luck getting approved for a card outside of the Chase network, so I’m going to wait until I have a few payments on the Sapphire Preferred before I apply. I plan to use these points toward a hotel in Bangkok when my friends come to visit!
4) Keep saving!
I want to put a few thousand away for when I get back, so these next few months I’ll be saving for that.
I’m definitely going to need to spread out #2 and #3 and I’m not confident I’ll be able to put 5K on a credit card after I start traveling (most of my purchases will be cash only while traveling through Southeast Asia), but even the initial bonus of 10K points will be a couple free nights in hotels. And, you may notice the overall only gets you to 25,000 points. I like this card because you can redeem these points at an incredible value, particularly at the SPG hotels in Southeast Asia (4,000 points a night for the Aloft in Bangkok).
You’d think I’d be paid by Chase for this gushing review. Maybe one day…
What’s your favorite travel credit card and why?
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Curious for some more resources on travel hacking? Here is a short list of my go-to’s.
1. The Flight Deal – Daily email with GREAT flight deals
2. The Points Guy – Expert on all things points
3. Picking a travel credit card (Nomadic Matt) – Simple resource for more credit card options
4. Flyer Talk Forum – Forum to get all your points questions answered
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