Which Credit Card to Get?

Many of my friends have asked me recently for the easiest and quickest way to accumulate miles/points. Well, if you are based in the USA then you are in luck – the easiest and the fastest way to accrue miles/points is via credit card sign up bonuses. Banks or credit card issuers will give you miles/points just for signing up for their credit cards. Depending on the card, there is usually an annual fee (sometimes waived for the first year) that you need to pay but I would argue that sign up bonuses and additional perks offered by some cards far outweigh the annual fee. Just by getting one or two credit cards it’s possible to get a couple of nights at hotels that run $1,000+ per night, take a few flights in the States or even fly first class on the world’s top airlines.

The next question I get asked is “which credit card should I get?” or “which credit card is the best?” And my answer to that question always is…it depends. Everyone’s situation and travel preferences are unique – what may be an ideal vacation for one person, could be a disaster for others. Some people like luxury travel, some like backpacking; some like to take a few weeks off once per year, others (like me) like quick weekend trips; some like to fly in the front of the airplane in flat beds, others prefer road trips…

In the States, the main players offering credit cards are Chase, Citi, American Express, US Bank, Bank of America, Discover, Capital One and BarclayCard. There are some others, but if you are just starting out I would suggest sticking to the big ones – they offer plenty of products that should accommodate various needs. So, which credit card to get?

Cash Back Credit Cards

Pretty self explanatory – you spend money on your credit card and you get a certain percentage (these vary from 0.5% to 5%) back. Some cards have specific/rotating categories (grocery stores, gas, restaurants etc.) for higher cash back percentages, others have the same return for all purchases. Usually you can use your cash back in a number of ways – apply towards your credit card statement, redeem for gift cards or cash. If you are a budget traveler, don’t travel often, don’t care about luxury, enjoy staying at hostels or airbnb, this type of card could work for you.

Travel Rewards Credit Cards

These types of cards are similar to the cash back cards – you can redeem your miles/points towards any travel related expense. Although there are some variations, usually they advertise as “no blackout dates” and offer $0.01 value per 1 mile/point. Basically if you have 50,000 miles/points, you can redeem it for $500 worth of travel related expenses (flight, hotel, hostel, car rental, etc.). I’d say these type of credit cards are ideal for the same type of travelers as above – occasional budget travelers who don’t care about luxury.

Hotel/Airline Affiliated Credit Cards

Simple – this type of credit card will be affiliated to a specific hotel chain or an airline (also could be a train/cruise line). There are some caveats (like redeeming your miles/points for gift cards, travel partners or converting to other types of miles/points), but basically you will be able to redeem your miles/points towards free nights at a specific hotel chain or free travel on a specific airline and its partners/alliance members. For example, Southwest points can be used to book flights on Southwest airlines only; United miles on the other hand, can be used to book flights on United airlines and any Star Alliance member airline. If you usually fly the same airline or stay at the same hotel chain when you travel, this type of credit card might be the right one for you. Also, since there are so many credit card choices in this category, I’d say both, budget (Southwest airlines fans) and luxury types of travelers (free nights in Maldives or Tahiti?) should be able to find a card that fits their needs.

Credit Cards with Transferable Points 

These are my favorite! The beauty of these type of points is that in addition to the usual way to redeem them for cash back, gift cards, statement credit, etc., you can book your travel directly with these points through affiliated travel booking sites or transfer them to participating airline/hotel programs. For example:

• Chase Ultimate Rewards points – if you have Chase Ink or Chase Sapphire card, you will get 20% off when booking your travel (hotels, flights, car rentals, cruises) directly through Chase Ultimate Rewards. That means that $500 flight/hotel/cruise will cost you 40,000 ultimate rewards points. However, the biggest benefit of the UR points is the ability to transfer them to airline (British Airways, Korean Air, Singapore Airlines, Southwest Airlines, United Airlines, Virgin Atlantic Airlines) and hotel (Hyatt Hotels, InterContinental Hotels Group, Marriott, The Ritz-Carlton) loyalty programs. In some cases you can get a significantly better value by transferring your points to the above mentioned programs.
• Citi Thank You points – very similar to Chase UR points, you get 25% off when booking your travel directly through the Citi Thank You portal or you can transfer points to the Hilton Hotels loyalty program or one of the 12 participating airline loyalty programs: Cathay Pacific, Etihad, EVA Air, Air France KLM, Garuda Indonesia, Malaysia Airlines, Qantas, Qatar Airways, Singapore Airlines, Thai Airways, Virgin America or Virgin Atlantic.
• American Express Membership Rewards  – you can book your travel directly through the American Express travel site, redeem  your points for shopping on Amazon, Uber rides, Airbnb or transfer them to airline (AeroMexico, Air Canada, AirFrance/KLM, Alitalia, All Nippon Airways, Cathay Pacific, British Airways, Delta Airlines, El AL Airlines, Emirates, Etihad, Hawaiian, Iberia, JetBlue, Singapore Airlines, Virgin America, Virgin Atlantic) and hotel (Choice Hotels, Hilton Hotels, Starwood Hotels) loyalty programs.
• SPG (Starwood Preferred Guest) points – these points can be redeemed for hotel stays at participating Starwood properties, rental car certificates from Avis or Sixt; can also be transferred to the Amtrak Guest Rewards program or to one of the following airline loyalty programs: Aegean Airlines, AeroMexico, Air Canada, Air Berlin, Air China, Air New Zealand, AirFrance/KLM, Alaska Airlines, Alitalia, All Nippon Airways, American Airlines, Cathay Pacific, Asiana Airlines, British Airways, China Eastern Airlines, China Southern Airlines, Delta Airlines, Emirates, Etihad, Gol Airlines, Hainan Airlines, Hawaiian, Japan Airlines, Jet Airways, Korean Air, LAN Airlines, Lufthansa, Qatar Airways, Saudi Arabian Airlines, Singapore Airlines, Thai Airways, United Airlines, Virgin America, Virgin Atlantic and Virgin Australia. Also, If you transfer your points in 20,000 point increments, you will get an additional 25% worth of points – 20,000 SPG points will become 25,000 miles/points of the loyalty program you are transferring to.

If you don’t have any particular travel plans in mind, I would say the above mentioned points are probably the best option because they are transferable to so many loyalty programs. Also, as the famous saying goes – don’t keep all of your eggs in one basket! Therefore, “flexible” points give you the ability to diversify your miles/points accounts.

Bottom Line

Credit card signup bonuses are the easiest and the quickest way to get a head start in the miles/points game. With a bit of planning you can easily get your flights, hotel stays or even your dream vacation at a fraction of the cost. Even if you aren’t interested in travel, there are some lucrative opportunities to get cash back and as Yogi Berra says, “it’s just as good as money!”