If you are new to the world of travel rewards, everything might seem a little overwhelming at first. You hear people throwing around words like “redemption”, “sweet spot” and “positioning flight”. The terminology travel rewards enthusiasts use might seem like a foreign language at first. But no worries, you'll be a pro in no time!
Here are some of the most commonly asked questions every travel rewards beginner should consider when they start to dabble in travel reward.
Resource: Learn more about Travel Rewards with the free ChooseFI Travel Rewards Course.
Where To Start
A good place to start is to apply for Chase Sapphire Preferred Card or Chase Sapphire Reserve credit cards. Because of Chase' strict application rules, I always recommend you start your travel rewards journey with Chase Ultimate Rewards earning cards. Ultimate Rewards are the most flexible currency and can be used in many ways to provide free or almost free travel.
You should always have a credit card opening strategy. Avoid applying for cards just because it is being touted as the “best card ever” and don't get distracted by the shiny objects in the form of “increased, limited-time offers” and other buzz words. Lots of credit cards earn rewards that are hard to use or are not as valuable. Keep your eyes on the prize, remember not all points and miles are created equal.
Travel Rewards Cards To Consider
As a beginner, you want to have a stash of travel rewards points that are flexible, easy to use, and provide excellent value, such as Ultimate Rewards points. If you aren't sure yet where you want to travel, or can't travel because of family circumstances etc., that is OK too. Start collecting points by using Chase cards for your everyday spending.
You can earn Chase Ultimate Rewards by opening one or more Chase personal and business credit cards:
- Chase Sapphire Preferred Card
- Chase Sapphire Reserve
- Chase Freedom
- Chase Freedom Unlimited
- Ink Business Preferred Credit Card
- Ink Business Cash Credit Card
- Ink Business Unlimited Credit Card
Destination And Optimization
There are a couple of ways to approach this. You can start with a destination in mind, or you can take a stock of points and miles that you have and look for the best ways to use them.
Southwest Companion Pass Possibilities
If you have a family and anticipate traveling a lot to the places that Southwest Airline flies, then pursuing a companion pass might be a good idea. A companion pass allows one passenger to travel for free with a person who travels on a paid or award ticket. It is really one of the greatest deals in the world of travel rewards.
You can earn a Southwest companion pass by opening Southwest Rapid Rewards Plus Credit Card or Southwest Rapid Rewards Premier Credit Card. If you have a business, you can get Southwest Rapid Rewards Premier Business Credit Card. You can't have two personal cards at the same time but you can get a personal and a business card.
Another term you might see being used a lot is “two-player mode”. When both spouses can open the same cards, you can accumulate a good chunk of points. Some credit cards offer bonus points when you refer family and friends. For example, one spouse could open a card, let's say Chase Sapphire Preferred Card, and after they have met minimum spending requirements, refer the other spouse. This way you are earning the referral bonus and both spouses are getting the sign-up bonus. This will allow you to earn enough points and miles for the whole family!
Actual Travel–Domestic And/Or International
Another important question you need to ask yourself, is “Where do I want to go?” The answer will help you when you are trying to figure out your card opening strategy. As I mentioned above, if you have a lot of domestic travel, and have easy access to Southwest, then getting a Southwest companion pass for you and your family might be a great idea. Keep in mind that Southwest cards are subject to Chase's 5/24 rule.
If you are planning an international trip, you will need airline points or transferable currencies you can transfer to an airline of your choice. AwardHacker is a great resource–plug in your departure and arrival airports and the site will show you the best rates, which airline you can book with, and how many miles you will need for an award ticket.
Living near major airline hubs like New York City, Chicago, Atlanta, etc., means the travel options are open with possibilities. But if you have one or two dominant airlines that serve your home airport, it is good to consider which airlines you will use the easiest and most frequently. For example, United is a major airline where I live; American has some presence, but there are very few Delta flights. In order for me to optimize my dollars, points, and miles; I need to figure out a way to earn points that I can use on United and its partners.
Keep in mind that airlines will sometimes allow partner operated flights for use with travel rewards. And sometimes, it is an even better deal. I don't have to use United miles to fly on United operated flights. I can use partner airlines to book flights on United and partners and sometimes it is even cheaper than booking directly with United!
If, for example, there are no good international options from your home airport, you can get a so called positioning flight to a bigger hub. If you have good options with Southwest, use your companion pass to get yourself and one other person to a hub airport.
Travel Rewards Are For More Than Just Flights
If you prefer to drive rather than fly, then you want enough points to cover your hotel stays. If, at first, you are sticking with cards that earn Ultimate Rewards points, Hyatt is a great chain that offers incredible value. It is very easy to transfer Chase Ultimate Rewards points to Hyatt and you might need just 5,000 points for Hyatt Place or Hyatt House hotels! Lower tier Hyatt hotels are perfect for families because they offer more space and often include free breakfast.
You can also open The World Of Hyatt Credit Card, and note that this card can be opened even if you opened more than five cards in the last 24 months.
If you prefer to stay at Airbnb then you should consider “eraser” cards like Barclaycard Arrival Plus or Capital One® Venture® Rewards Credit Card. You will book your stay and after the charge has posted you will log in and apply the points to your booking and “erase” the purchase with your points.
The points on these “eraser” cards are worth 1 cent each. I don’t recommend applying for these cards if you are under 5/24 but if your travel plans only include Airbnb stays, this might be a good option.
I hope this helps you get started on your travel rewards journey. Let us know in the comments where you would like to go and which cards you are going to open first.
- How Chase Ultimate Rewards Actually Work
- My Five Biggest Travel Rewards Mistakes And How To Avoid Them
- Podcast Episode: Travel Rewards/Marla Taner
If you really want to maximize your travel rewards check out ChooseFI's free travel rewards course.