Education of a Points Freak, Q7 – What are some good credit cards to start with?

• Education of a Points Freak – Introduction
• Question 1 – Is accumulating points and miles for everyone?
• Question 2 – Won’t applying for credit cards hurt my credit?
• Question 3 – What are the pros and cons of different airlines’ mileage programs? (US Legacy Airlines)
• Question 4 – What are airline alliances and how are they useful?
• Question 5 – How can I keep track of all my account balances?
• Question 6 – What are other useful tools I can use?
• Question 7 – What are some good credit cards to start with?

Apologies for taking so long to finish this series, been busy with life and planning for our upcoming trip! The best way to get started in the points game is applying for credit cards with lucrative sign up bonuses. As I mentioned before, you should only be doing this if you can pay off your balance in full every month. If you can do that the question is: what credit cards are best to start with?

I think the easiest way to do this is to divide credit cards up into types. I’m going to highlight three types of credit cards in this post and what I feel are some of the best cards in their categories. The three types are transferable points cards, airline cards, and hotel cards, and I’ve given a brief description of some of my favorite cards in each section.

Transferable Points Cards

Transferable points cards give you the ability to transfer points you earn on your credit card to lots of different programs. What this means is the points you earn have a lot of flexibility – you can save them until you need to transfer them to a specific rewards program. This keeps you from being “locked in” to one program with your miles and points. I think transferable points cards are the most powerful specifically because of the flexibility they offer.

Chase Sapphire Preferred

I consider the Chase Sapphire Preferred to be the best transferable points card out there. Chase’s Ultimate Rewards program allows you to transfer points to powerful airline partners such as United and hotel programs such as Hyatt. You earn 2x points on all travel and dining expenses and earn a 7% dividend on miles earned every year. Right now you can sign up for the card with a 40,000 point bonus after spending $3000 within the first three months. Another nice feature is that if you have the Chase Freedom card you can transfer points from that card to Ultimate Rewards (instead of getting cash back). This greatly increases your earning power and opens up even more possibilities. Oh, and I forgot my favorite feature: no foreign transaction fees! An absolute must if you are planning to travel a lot. The card has a $95 annual fee that is waived the first year.

American Express Premier Rewards Gold

The American Express Membership Rewards program used to be the gold standard of transferable points programs. It has a litany of transfer partners, including Delta, Singapore Airlines, and British Airways (which is also a transfer partner for Chase). The Premier Rewards Gold card has one of the best earning structure of points cards out there: 3x points on airfare, 2x points on gas and groceries, and 1x points on everything else. Membership Rewards has a nice feature where they will forward points to you that you haven’t earned yet if you need to transfer them. You just need to earn them back within a year to avoid paying for them at the market rate. The card has an annual fee of $175 waived the first year.

Airline Specific Credit Cards

I’m sure you’ve received many offers for airline specific cards. Even before I got into the game, I’d get one once every month. What most people don’t know is there are often better offers out there. Airline specific cards aren’t as flexible as transferable points, but they do come with nice perks that are in line with the lowest level of elite status – which are worth it if you aren’t a frequent traveler but like a comfortable trip when you do. Almost all airline cards offer free checked bag, priority boarding, and sometimes one or two other benefits.

Citi American Airlines Cards

Citi’s AA cards are noteworthy because you can apply for two at once. I won’t go into too much detail here, but the best part of Citi AA cards is the two-browser trick, which has been written about at length elsewhere. The cards keep changing, but the two-browser trick remains, meaning you can net 100,000 miles with one application cycle. There is a slight risk involved, and you need a little bit of faith, but I just applied for these cards no problem two months ago. Citi’s AA cards come with the usual: priority boarding, free checked bag, etc.

Chase United Mileage Plus Explorer Card

Chase’s Mileage Plus Explorer card has a much better sign-up bonus than when I got it last year: 50,000 miles plus 5000 for adding an authorized user. That link is to an application with 30K bonus miles, but you can find the 50K link by logging in to your Mileage Plus account. United miles are some of the most useful miles out there, making this a great bang for your buck type of card: especially since you only need to spend $1000 to earn the bonus. One nice added perk is 2 club passes per year, though that’s not that big of a deal to me.

Hotel Cards

Hotel cards are like airline specific cards, except they offer benefits in hotels. Some of them are really nice, like elite status. At a hotel that can make a big difference – things like free wi-fi and breakfast can really cut costs. I don’t find them as lucrative as the other types of cards, but they still can be pretty useful. I’m gonna have a little bit less to say about these – instead I’m just going to highlight the card I’m thinking of getting.

American Express Hilton Surpass Card 

This is one of the cards to get, because it comes with Hilton Gold membership as long as you have the card, which is great – free upgrades, free wi-fi, and free breakfast. To me, it’s the best mid tier elite status in hotel programs, and the only one that I have. Thanks to this card, you no longer need to stay in hotels a billion nights a year for status – you just need to pay $95 a year for the annual fee!

Final Thoughts

These are just a few of the many cards out there. For my money, I think Chase Sapphire Preferred is where to start, especially if you already have the Freedom card. In the end, for non-frequent fliers like me who want to fly in premium classes, credit card bonuses are the way to rack up miles and points quickly. Plus, you can rack them up even faster by applying for multiple cards at once – so called “app-o-rama’s”. I’ll be talking about how to do that in another post by highlighting my last round of credit card applications and what I’m thinking about for the future. Stay tuned.