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It’s finally time to start talking about which credit cards are going to help you earn that almost-free travel you’ve been hearing so much about.
If you run a generic a Google search, you’ll find a whole bunch of advice on which rewards credit cards to apply for first.
As you can probably guess, we have our own opinion on which cards can help you earn the most travel rewards. So let’s get going!
There are various perspectives of the ideal card-application strategy, but most seem to agree that the Chase credit cards should be your starting point.
A Chase credit card should be your first pick, partly because of how valuable and versatile Chase Ultimate Rewards® are, partly because of the vast number of cards they offer, but mostly because of what has become known as the 5/24 rule.
The 5/24 rule is one whereby Chase will usually not approve any credit card applications if you’ve had more than five new personal (and some business) credit cards from any financial institution in the last 24 months (including authorized user cards on someone else’s account). If it shows up in your credit report, it counts towards 5/24.
Since Chase business credit cards do not show up in your credit report, they do not count towards the 5/24 rule, but the 5/24 rule is used as an initial filter when you apply for a business card.
If you’re reading this course, then chances are you’re new to travel rewards and are well under any 5/24 limitations. It’s still important information to know from the outset as it will help determine your strategy moving forward.
Always remember, this is a long-term strategy, and you want to make sure you give the bank a reason to want to keep your business.
As a side note, even if your chosen airline is not a direct Chase transfer partner, chances are, there is still an indirect way to get free flights.
For instance, you could get award flights on Delta through Virgin Atlantic, often at better values than on Delta’s program itself.
We’ve spent a lot of time on the Chase 5/24 rule, but we should also note that the other banks have rules as well:
American Express® is a CardRatings advertiser.
American Express® has a "one bonus per lifetime" policy on both their personal and business cards.
Once you earn that bonus, you will likely not get it again even if you close and open the card years later.
Occasionally, some offers are made without the “one bonus per lifetime” language. If you choose to try for a second bonus on a card you’ve had before, watch out for a notification by American Express® during the application process.
Citi is a CardRatings advertiser.
Citibank has an interesting rule where you have to wait 24 months after opening or closing a card in order to get a bonus on any card of the same brand, like ThankYou® point-earning cards or American Airlines.
However, in June 2019, the bank changed the rules on some of its cobranded cards with American Airlines, extending the wait to 48 months on some cards, but also simplifying the terms by removing reference to wait times being tied to when an account is closed for some cards.
It is likely that Citibank will be extending these rules to more cards – we’ll update when we get more clarity on how things go.
Capital One® has the strictest rules of all. You are only allowed two personal Capital One® cards at any time.
Also, you’ll only be able to apply for one personal or business card every six months.
The information related to the Chase Sapphire Preferred® Card has been collected by CardRatings and has not been reviewed or provided by the issuer of these cards.
The Chase Sapphire Preferred® Card (This card is not currently available on CardRatings) or the Chase Sapphire Reserve® are the cards most people new to travel awards should start with. They usually come with great bonuses, but more importantly, it opens up the Chase Ultimate Rewards® (UR) program to you.
Note: you can only earn a bonus on one of the Sapphire cards every 48 months. If you earned the bonus in September 2019, you will not get another bonus even if you closed a Sapphire card and got approved for another until October 2023.
From there, the Chase UR points you earn will position you to score award travel with:
Remember, if you are playing in two player mode, this should be your significant other’s first card too because the URs from either account can be combined if both of you are living in the same household.
Caution: The UR points can be transferred back and forth between members of a same household. But once they are transferred away from the Chase UR program to a transfer partner, there’s no transferring them back!
The Ink Business Preferred® Credit Card is a business card from Chase and should be among the first several cards you open during your travel award career. This is because:
1. Like the Chase Sapphire Preferred® Card, it comes with a large bonus.
2. When you apply for it, the 5/24 rule is used by Chase as an initial filter to decide if your application may be approved.
3. Conversely, after you are approved for it, the Ink Business Preferred® Credit Card does not get included in your 5/24 number.
You do have to have a business to apply for a business card, but think broadly about the definition of business. This card is designed for small businesses, even sole proprietor firms like dog-walking, cleaning, ride-sharing, Etsy retail, and more. If you have a side hustle, you probably have a business.
In this modern economy, you do not need a store or office, and lots of employees, to be considered a business. We talk more about business credit cards in lesson 8.
Many experts in the travel awards world would laugh at this idea, because the whole idea is to focus on Chase cards.
But we think this is a good time diversify a little.
The Capital One® Venture® Rewards Credit Card and the Capital One® VentureOne® Rewards Credit Card are interesting cards because they work like fixed value cards, but they also work like flexible points that can be transferred.
So, you could use the points you earned to erase various travel expenses like car rental, transfers, and booking fees, or, send them to a Capital One® transfer partner like Singapore Airlines.
The second most valuable flexible travel currency is American Express® Membership Rewards® points. My all-time favorite use of these points is by transferring them to ANA and Virgin Atlantic for flights to Asia, Europe, and Australia. Other great transfer partners include Singapore Airlines, British Airways, Aer Lingus, Iberia, and Air Canada.
An easy way to starting earning these points is with the American Express® Business Gold Card.
The Ink Business Unlimited℠ Credit Card is another business card from Chase. It may not come with the biggest bonuses, but it does have a few things that make it a great card:
1. The points earned can be transferred and combined with the URs in the Chase Sapphire Preferred® Card or the Ink Business Preferred® Credit Card.
2. You earn 1.5x on non-bonus spend, which means for every $2 you spend, you actually earn three Chase URs.
3. There is no annual fee.
If Southwest Airlines is an important carrier for your travel plans, the co-branded Southwest Rapid Rewards® Premier Business Credit Card or the Southwest Rapid Rewards® Performance Business Credit Card needs to take pride of place in your wallet.
This is especially so if you are trying to score the vaunted Companion Pass, which lets a family or friend fly free with you, regardless of whether you paid for the flight with points or cash. Even more amazing is that the Companion Pass is good not just for the year you earn it, but all of the following year too.
Make sure you wait till around end-October/early-November to apply, and then, earn the bonus points in early January. That way, you’ll get the Companion Pass for almost two years.
To earn the Companion Pass, you’ll need to earn 125,000 Rapid Rewards points. You can do this by flying 125,000 miles in a year, or, the easier path would be to pair of co-branded Southwest business credit card with a personal card to get you closer.
One way is to get the Southwest Rapid Rewards® Performance Business Credit Card, which comes with a bonus of 70,000 points after you spend $5,000 on purchases in the first three months plus an additional 30,000 points after you spend $25,000 on purchases in the first six months (note: there is a $199 annual fee). Then pair it with any of the personal co-branded cards (mentioned further below), which come with bonus point offerings of their own to get you easily over the finish line with no additional spending.
The other way is to get the Southwest Rapid Rewards® Premier Business Credit Card which comes with a 60,000 Rapid Rewards bonus with a $3,000 minimum spend in 3 months (the annual fee here is $99). Then pair it with one of the co-branded personal cards to get you closer to the required 125,000. Note that you still have to spend a several thousand more to get pass the 125,000 hurdle.
The Southwest co-branded personal credit cards are:
You will only get the bonus on one of the personal cards, so pick the one that you like based on annual fees and benefits, and stick with it.
You’ll still need to earn several thousand Rapid Rewards points by flying on Southwest or using the credits cards before scoring the Companion Pass, but these cards can truly help you to get there.
The information related to the Chase Freedom® has been collected by CardRatings and has not been reviewed or provided by the issuer of the card.
Either card would be a great way to add to your arsenal of Ultimate Rewards® points.
See our full Chase Freedom® review.
See our full Chase Freedom Unlimited® review.
United is a great airline co-branded card to have in your purse or wallet, especially with the Excursionist Perk and access to the Star Alliance partners (more on this later in lesson 11). If United and the Star Alliance factors into your Why of Travel, consider getting either the United℠ Explorer Business Card (This card is not currently available on CardRatings) or United℠ Explorer Card. Note that these are both Chase cards.
If your experience with American Express Membership Rewards® was, well, rewarding, consider adding to your stash of Membership Rewards® points by applying for the personal version of the American Express® Gold Card. Occasionally, American Express® might offer an increased bonus, so if you aren’t in a hurry to amass points, you should hold off until you see a great offer.
If your "why of travel" sees you flying a big family to far away places, you’re going to need a generous amount of points to cover all that travel. At some point, you’ll be grateful to have some ThankYou® points to transfer to partners like the Singapore Airlines Krisflyer or Jetblue TrueBlue loyalty programs, making the Citi Rewards+℠ Card a great addition to your travel rewards strategy.
Now that we’ve gotten a handle on the various rules around timing and number of cards, it’s time to figure out how to apply for them.
We’ll take this up in the next lesson.
If you found this course on travel rewards helpful, you may also enjoy this free illustrated guide, packed with many other ways to get more for your buck and win back your financial independence.
Course content originally produced by ChooseFI was edited/updated by CardRatings for this lesson.