Reward credit cards can be fantastic for travelers. You can earn and redeem credit card points for hotels, airfare, car rentals or even “erase” travel transactions on your statements. These cards typically offer a lucrative sign-up bonus and can come with some high annual fees. So before signing up for one here are some tips:
#1
Make sure you can pay off the monthly balances in full. These cards have high interest rates, so if you’re not paying them off in full or are in credit card debt, you definitely want to consider cards with lower interest rates. The high interest rate will NOT outweigh the reward benefits.
#2
Have a plan on how to meet the sign-up bonus before applying. One of the best perks of these cards is that they will offer a lucrative sign-up bonus. However, in order to qualify you will likely need to meet a dollar spend in a small window, for example: spend $4,000 in the first three months. Depending on your current spending this may be easy, or it could be a stretch. Consider paying bills in advance such as phone or insurance to help meet the spending challenge. Another way to do this is by buying flights in advance, say flights for the holidays you may not have purchased until a few months later. This can be an easy way to meet the dollar threshold and also start accumulating those extra travel points. Just don’t sign up for a card with a sign up challenge that you won’t be able to meet or will get you in financial trouble doing so.
#3
Figure out which card works for you. Let’s say you get an offer for a Delta credit card, but you live near an American Airlines hub and have status on American, it may not make sense to get the Delta credit card if you’re pretty much only flying American. Or, let’s say you have no airline allegiance, and you’re usually booking the least expensive flight, it may make more sense to apply for a card that offers point transfers like an AMEX or Chase card. Don’t get shiny plastic credit card syndrome and start applying for cards without a plan. Make sure the card works for YOU.
PLUS some cards have limits to how often you can apply for cards, such as Chase (5/24 rule). So be strategic about which cards you apply for and when. Since Chase only allows you to apply for a max of 5 cards in a 24 month period, perhaps you want to apply for all Chase cards before moving on to Capital One or Amex cards.
#4
Make sure the annual fee will pay for the card! Annual fees will vary by card and can get pretty expensive. Chase actually just increased their annual fee for the Reserve to more than $500 per year. This seems high but if you can take advantage of the benefits like the Peloton credits, Door Dash, Lyft as well as all the $300 annual travel credit, the fee may pay for itself right away. But for some it may not be worth the $550 annual fee and instead a Chase Preferred card with a $95 annual fee may make more sense even if it means less points per dollar earned and no free Priority Pass lounge access. Annual fees come in all “shapes & sizes” so don’t feel pressured to get a card with a high fee if it won’t give you the benefits. At the same time, don’t discount a card without looking at all the benefits it offers!
#5
Use a referral link from a friend! Ask your friends on social media if they have a referral link they can give you for the card you’re applying for. This will likely earn your friend bonus points! BUT make sure the referral link you receive from your friend will give you the same if not more number of sign-up bonus as the public or personal offer. Sometimes referral links can get you lower intro bonus offers, and sometimes they can be higher. Check the links before applying.
