Credit Card 101 for Beginners

If you plan to be a travel hacker, then you are in the right place! Consider this one of your introductory classes, Credit Card 101! The secret ingredient to travel hacking and free travel is credit card points. Primarily we get these points in the form of credit card signup bonuses. As we told you in our beginner’s guide, travel hacking is the process of getting a credit card,  collecting bonus points by meeting minimum spend, and then using these points to travel for free or extremely cheap.

In the last three years, I have racked up over 3 million points among many different credit cards.  We are fortunate that so many credit card companies are willing to give us points just for trying out their credit cards, paying an annual fee (some are waived the first year), and meeting minimum spend.

There are many different types of credit cards. In an effort to make it a little easier to understand, we are breaking it all down for you in this introduction to credit cards, Credit Card 101. This will be a pretty extensive list but may not account for some diverse cards. We’ll be discussing three types of credit cards that can help you earn free travel. It is important to know what they are and what they do so you can make sure you are getting the right card for your travel needs. These cards include transferable point cards, co-branded cards, and cashback cards.

 

TRANSFERABLE POINT CREDIT CARDS

First up in Credit Card 101 are our very favorite travel reward cards – ones that award you with transferable points. Transferable point cards include the following cards:

 

Each program has partners with various airlines and/or hotel groups that you can transfer your points to. That is why they are called transferable point cards. Some also have their own travel portals, but most of the time you will get more value out of your points by transferring them into one of their airline or hotel partners.  We are going to talk about each of them in a general way but click on their links to learn more about them.

 

Chase Ultimate Rewards Credit Cards

The cards that fall in this group are all sponsored by Chase.  They give you Ultimate Rewards as a bonus when you obtain the card and meet the minimum spend requirement.  The amount of the bonus varies with the offer and the card. We love Ultimate Rewards and transferring these rewards is easy to do.  You can learn more about why these are our favorites by reading our article- 7 Reason Why I Love Chase Ultimate Rewards by Alex.

 

Chase Sapphire Preferred Credit Card

Chase Sapphire Preferred-One of our favorite cards!

 

Chase Ink Business Credit Card

Chase Ink Business Preferred-A great business card!

 

Because of the Chase 5/24 rule,  we recommend getting the Chase Sapphire Preferred Credit Card as one of your first cards.

 

American Express Credit Cards

These cards are all sponsored by American Express and you earn Membership Rewards.  Membership Rewards can be transferred into many airline and hotel programs.  They are great points to have and I have used them for many flights.

Here are the main cards that they offer and that I have in my wallet:

American Express Gold Card

American Express Gold Card-I use this card for groceries and eating out for 4 points per $1 spent!

 

Both of these cards have higher annual fees but offer great benefits.  You can always try them out for a year and see if they work for you.  You can basically get two years of benefits for one annual fee that will pay for itself easily.  Read more about why I keep them in my wallet here.

 

Citibank Credit Cards

Citibank credit cards earn ThankYou points when you complete their minimum spend offers or for daily spending.  They have a portal where you can then transfer these points to airline miles or hotel stays.  I used ThankYou points for a business class seat on EVA airlines to Vietnam and it was amazing!

 

 

There is also a Citi Prestige card that carries a high annual fee but has had great benefits.  It currently isn’t accepting applications but should be back next year.  We’ll tell you more about it then.

 

Capital One Venture Miles

The Capital One Venture card is a great card for beginner travel hackers. The card earns 2 miles on every dollar spent, everywhere.

This card is unique because it can be used in two ways. The easiest and most common way people use the card is to apply their “miles” (each mile is worth 1 cent) towards statement credits on travel purchases. It is very easy to do, just log into your account and open your statement. Next to your travel purchases, you’ll see an option to redeem points. You can choose the number of points you would like to use and just like that it is like you never made the purchase! When used in this manner this card is a fixed-value card. The points are always worth 1 cent.

The second way people use their points is to transfer to their airline partners. Unfortunately, the points don’t transfer to partners 1:1, most transfer 2:1.5 and a couple 2:1. Another drawback is the only major US airline that you can transfer to is JetBlue, the rest are international airlines. The upside to transferring to airline partners is that your points have the potential to be worth much more than 1 cent each.

I like this card for paying for travel purchases that I can’t use points from my other cards on like Airbnb and Disneyland tickets.

 

 

CO-BRANDED AIRLINE CREDIT CARDS

Next up in Credit Card 101 are co-branded airline credit cards. Prior to really travel hacking, these airline credit cards were the only way I got free or discounted travel.  I have had a couple of airline credit cards for 20 years or so.  Every time I got a free ticket, I thought I was pretty smart.  Sure, they were only domestic trips and they didn’t happen very often, but it was a thrill anyway!  Little did I know that I would one day fly in business class around the world and only pay taxes and fees!

Many of the cards in this category have more than one credit card and also include business cards, as well as personal cards. The airline credit cards that we use most often include:

 

The points you earn through these cards are used to redeem flights with that particular airline. They lack the flexibility of transferable points cards but come with benefits like free checked bags, priority boarding, etc. They also frequently come with generous welcome offers.

Make sure you sign up for their loyalty programs, if you have not already, before you sign up for the credit card.  Also, check out the expiration dates for earned miles.  You don’t want to lose those miles. United, Southwest, and Delta miles never expire but the rest do.

 

United Airlines Explorer MileagePlus Credit Card

The first travel credit card I ever got a United Explorer card.  I lived in a small area where there was only one airline.  United.  I still have it.  The average age of accounts is an important factor of your credit score so it is smart to keep those cards you’ve had for a long time.  This is one of my forever cards.  A great perk about this card is that it comes with 2 passes to the United Club Lounge.  Because I have a lot of cards that give me airport lounge access, this is not that important to me, but still is a great feature for others. This card also includes a statement credit if you purchase TSA Precheck or Global Entry!

United Explorer Credit Card

It comes with two airport lounge passes!

 

Delta American Express SkyMiles Credit Cards

Delta Skymiles cards have been very profitable for me.  My spouse and I have both had personal and business cards.  The miles we’ve earned by meeting spend on these has allowed me to travel on a few business class seats internationally and several domestic economy seats.

I always take advantage of Delta’s Flash Deals where I can use fewer points to book my travel.  When you sign up for their frequent mile account, be sure and sign up to be notified of these deals too.

They frequently have flights to London for 57,500 one-way in business.  These are great to use when visiting my daughter.

Delta American Express Credit Card

Delta Gold Card-This credit card’s annual fee is waived the first year!

 

Delta American Express Platinum Card

Delta Platinum Card-Annual fee of $195 but $100 credit with first purchase

Southwest Rapid Rewards Credit Cards

If you travel a lot in the United States and live near an airport that Southwest flys into then this is the card for you.  It is one of our favorites primarily for its Companion Pass which is relatively easy to get, just earn 125,000 points in a calendar year. The Companion Pass lets another predesignated person fly for free with you for the rest of the year in which you earn it and all of the following year!  Use your points to book your ticket and then add your companion to your reservation for free! Two free tickets!! How insane is that?

You do need to get a personal card and a business card to have enough miles for the Companion Pass but then you have a ton of bonus points too!  This is a travel hacker’s dream! So many free flights!

Southwest Airlines Rapid Rewards Plus Credit Card

Get the business credit card too and you’ll have the Companion Pass!

 

American Airlines Credit Cards

American Airlines has credit cards through Citibank and Barclays. Both my husband and I have had the personal and business cards in these.  I have canceled them but will reapply in 24 months from that cancellation and get them again. I have found good value with these miles with business seats to London.

 

American Airlines Credit Card

Annual fee waived the first year!

 

Alaska Airlines Credit Card

My Alaska Airlines card is one of my oldest credit cards too.  My husband and I both have it and every year we use the annual Alaska Companion Fare to take grandchildren with us to Hawaii.

I have also had good luck finding international business class seats for a lower redemption than a lot of other airlines. The minimum spend requirement is also lower than most cards so it is a favorite for many.

Alaska Airlines Credit Cards

Get Alaska’s Famous Companion Fare with this credit card!

 

There are many other airline cobranded cards one can apply for.  Some of them include:

 

CO-BRANDED HOTEL CREDIT CARDS

Hotel cards are another important part of Credit Card 101. We love getting a free flight somewhere but we also want to pair that with free accommodations. Earning hotel points through credit card signup bonuses allows us to do just that! As an added bonus, many hotel cards often offer a free night by paying the annual fee each year.  This almost always makes the annual fee worth paying as we usually get a room that is worth 2-3 times the annual fee. Like airline co-branded cards, the points from these cards are used to book nights at that particular hotel brand.

Most of these cards have several cards in their group. Some of our favorite Hotel Credit Cards are:

  • Marriott
  • IHG (Intercontinental Hotel Group)
  • Hyatt
  • Hilton

 

Marriott Bonvoy Credit Cards

Marriott’s credit cards are unique because they are cobranded by two companies.  Chase offers the Marriott Bonvoy Boundless and Bold credit cards and American Express offers the Marriott Bonvoy Brilliant and Business Card.

I have many Marriott credit cards. I keep them year after year because they offer a free night when you pay your annual fee.  I really like the Marriott brand and what I pay in annual fee is usually only 1/2 or less of what I would pay to stay at their hotels. Another thing I like about Marriott is when you book 5 nights on points you’ll only pay for 4!  There are some rules about holding both Chase and Amex issued Marriott cards so make sure to check out this post.

Chase Marriott Credit Card

Marriott Bonvoy Boundless-Annual fee is only $95 and you get a free night with renewal every year

 

Marriott Bonvoy

American Express Marriott Bonvoy-Marriot luxury card with great benefits!

 

 

World of Hyatt Credit Card

I really like the World of Hyatt Credit Card because of its reasonable award chart. Nights start at 5,000 points and go up from there. Some of their nicest hotels, like the Grand Hyatt Kauai, are 25,000 points a night. Another thing I love about Hyatt is that they are partners with Chase Ultimate Rewards. What this means is I can transfer points from my Chase Sapphire Preferred or Ink Business Prefered into my Hyatt account. The World of Hyatt Credit Card is a great choice for those who have and love their Ultimate Reward Cards.  Additionally, you receive a free night on your anniversary and I’ve used that free night on some pretty nice stays. Another thing I love about Hyatt is they don’t charge resort or parking fees when you book with points! Check out this post to learn more about the Hyatt card.

Chase Hyatt Credit Card

Bonus points from this card will get you quite a few nights for free!

IHG (International Hotel Group)

Another great card is the IHG card. There are lots of hotels in this group but the Intercontinental Hotels are my favorite.  They are found internationally and I’ve used pointed to stay at ones in Hanoi and Dubai.  Other hotels in this chain include:

  • Kimpton Hotels
  • Crowne Plaza
  • Holiday Inn
  • Staybridge Suites
IHG Credit Card

Low annual fee with free night every year!

 

With this card, you get Platinum Elite Status.  This status got me a great suite in Dubai!  If you book with points you get the fourth night free too!  The annual fee is a low $89.00 and includes a free night on your anniversary.  I just love this card and plan to keep it forever.

 

Hilton Credit Cards

There are three different Hilton credit cards you can apply for and a business card so that means a lot of Hilton stays!  They range from one with no annual fee to a luxury card with benefits. We like that with Hilton you get the 5th night free on award stays.

American Express credit card

Hilton cards are a great addition to your wallet!

 

Other co-branded hotel credit cards include:

  • Choice Hotels
  • Wyndham Hotels
  • Radisson Hotels

 

These points from co-branded cards can be used to book directly on the airline or hotel site. They don’t have the flexibility of a transferable point card but offer a lot of value, especially if you can be flexible with your dates. These cards also come with additional benefits like free anniversary hotel nights, elite status, etc.

Co-branded cards and transferable point cards pair very well together. For example, I opened the United Explorer Card and then transferred Ultimate Rewards into my United Mileage Plus account. I then had all the points necessary to fly roundtrip business class to Greece.

Co-branded cards are great for the signup bonus, if you exclusively travel with that airline or stay at that particular hotel chain, and for the benefits that come with the card like free checked baggage. As far as everyday spend, you will usually earn more points per dollar with a transferable points card.

 

CASHBACK CARDS

Credit Card 101 wouldn’t be complete without mentioning cashback credit cards. Many people think that cashback credit cards are the way to go.  In fact, prior to travel hacking, that’s all many of our friends did.  It’s hard to wrap your head around the fact that 2% back is not as good as points and miles.  Getting 2% back on a $3,000 spend is $60.  If I sign up for a credit card and spend that $3,000, I can get at least 50,000 points.  That could buy me a business class international ticket that would be worth over $3,000! Alternatively, the signup bonus on many cashback cards is around $200, like I got with the Wells Fargo Cash Wise credit card.

I still use that card if I can’t get 2% on daily spend with my travel reward cards and am not trying to get a meet the minimum spend on a credit card.  Those 2% rebates can then pay for some of my tours or car rentals.  They definitely have a place in a wallet but only in certain circumstances.

Wells Fargo Cash Wise Credit Card

 

The cashback credit cards I do love are the ones issued by Chase Bank. These include the Chase Freedom Flex and Freedom Unlimited, as well as their business cashback cards. What is so great about these cards is that while they are cashback cards they actually earn Ultimate Rewards. The Freedom Unlimited earns 1.5% back on everything and others have certain categories where they earn up to 5% back! These cashback cards pair perfectly with your other Ultimate Rewards Cards. Combine the points you earn from your Chase cashback cards into either your Sapphire Preferred or Ink Business Preferred and your points will start to rack up much quicker!

 

Chase Freedom Credit Card

Chase Freedom Unlimited-No Annual Fee – Earns 1.5% back on everything

BOTTOM LINE

Congratulations! You just finished your introduction to travel rewards credit cards, Credit Card 101! It was a lot of information so reach out if you have any questions. We will continue to let you know when the best offers for these cards come out.

 

 

 

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different travel reward credit cards

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