I've spent a lot of time researching and refining my strategy related to credit card signup bonuses this year. I've shifted away from a mostly cashback approach in favor of travel rewards after realizing I was leaving a lot of money on the table. I took the time to research how credit cards affect my credit score and learned that signing up for new cards can actually help my credit score in the long run.
I saw that I was able to refinance our mortgage without incident even though I'd recently signed up for a bunch of new credit cards. After racking up a bunch of points and miles in my first round of card applications I realized it was important to build a foundation in points programs that have flexible redemption options because you never know how your travel interests might change in the future and it's good to keep your options open.
When I talk to friends and family about this interest I get mixed responses. Some people just don't want to bother with it. They've had bad experiences trying to redeem miles for free flights when they want to travel or they're just not interested in interacting with their finances in this way. Others really are interested and quickly catch the bug and are just a few steps behind me exploring this space. And finally there's the rest of you who are interested in "getting 80% of the benefit for 20% of the effort". They want the condensed summary: Just tell me what one thing I should do right now.
For this group, I think a "once a year" churn strategy is in order. Each year sign up for one or more new cards and then re-visit whether the card is working well for them when the annual fee comes due.
And if you're going to sign up for one card this year I think the best card to get is the Chase Sapphire Preferred. The card comes with a 40,000 "point" signup bonus after spending $3,000 in the first 3 months. The best way to use those points is to transfer them 1:1 to airlines like United, Southwest, or British Airways. Or to hotel partners like Hyatt and Marriott. Or even Amtrak. So rather than locking yourself into one airline or hotel partner you have access to many.
And if you can't find reward availability on the dates you want to travel you can redeem them for travel on any airline at a 20% discount. Or you can just cash out at a penny a point. It's really the best of all worlds.
Here's 10 reasons why I think the Chase Sapphire Preferred is the best travel credit card...
You never know what life is going to throw at you. You may be living in one city where there's a dominant air carrier then unexpectedly move to another part of the country. You might have a new baby in the family and want to take it easy on the travel for a while. That's why I like this card - you can find a reward option that suits your needs. The best way to use the points is towards international airfare. But even if you can't use the points for that you're still getting good value out of them.
2. Transfer Partners
Their list of transfer partners isn't the longest, but they've established relationships with key partners: United, Southwest, and Hyatt. They're each great partners because they have some of the best award availability in terms of being able to redeem award travel at "saver" levels with reasonable advanced notice. For the most part, their partners haven't devalued their award redemption schedules. And their partners are well diversified for international and domestic travel.
3. Sign-up Bonus
40,000 Ultimate Rewards are, conservatively, worth 1.5 cents per point so the sign-up bonus here is worth $600. If you book a flight from the US to Europe on United worth $1,500 for 60,000 that's 2.5 cents per point which would make the sign-up worth $1,000. The key here, on top of the generous sign-up bonus, is flexibility. At minimum this sign-up is worth $400. If you're into travel it could be worth $1,000+.
4. Bonused Spend Categories
The card earns 2x at restaurants and on the broad "travel" category. 2x at restaurants is really nice in itself plus airfare, hotels, taxis, parking and more are included in the travel category so this is much nicer than just "airfare" (like the AmEx Preferred Rewards Gold car) or "hotels" (like the Chase Ink business cards).
5. Access to the Ultimate Rewards Shopping Portal
Certain Chase cards are included in the Ultimate Rewards shopping portal where you can earn extra points on top of the regular points you'd otherwise earn on the card for initiating online shopping transactions through the Ultimate Rewards portal. Check http://cashbackholic.com and http://evreward to make sure you're maximizing your value when shopping online.
6. No Foreign Transaction Fees
When using your credit card outside the US some cards have foreign transaction fees and others do not. This card does not. That's a good thing.
7. Turbo Charge your Chase Freedom Ultimate Rewards Points
If you happen to already hold a Chase Freedom card, the Chase Sapphire Preferred makes an excellent partner. Whereas with the Chase Freedom card you can only redeem your points for gift cards and cashback, once you have a Chase Sapphire Preferred card you can redeem all of your Ultimate Rewards at maximum efficiency. Specifically you can transfer the points earned on the lucrative rotating 5x Freedom categories towards airline/hotel transfers.
8. 3x at Restaurants on the First Friday of Each Month
This is a recent addition but a tasty one. On the first Friday of each month you'll earn 3x points (instead of the usual 2x points) at restaurants. This is a great reason to enjoy a special dinner out once a month. You can earn this more than once each first Friday - breakfast, lunch, dinner and even gift card purchases at restaurants can qualfify!
9. Heavy Duty Metal Card
This is totally subjective but everyone who receives this card notices - it's really substantial. All things equal I'll take it as a card benefit. When/if you cancel they send you a postage-paid return envelope to safely dispose of the card because it cannot be shredded. It's kind of like a really heavy bottle of wine - it doesn't guarantee a superior product but it does suggest that the producer wants to denote quality.
10. Provides Multiple Ways to Rack Up United and Southwest Miles and Points
One of the best things about Chase's tie-ups with United and Southwest (they issue their cards exclusively) is that points earned through the Sapphire Preferred card can be stacked with points earned through the United and Southwest cards. So if you want to fly a family for free you can sign up for both the Chase Sapphire Preferred and the United/Southwest cards. This isn't possible with programs like JetBlue and Virgin America where it's hard to earn miles through credit card sign-ups beyond their own card.
Conclusion and Recommendations
So there you have it - 10 reasons why I think this is the best travel rewards credit card to get.
The $95 annual fee is waived the first year. After the year is up see whether the card benefits outweigh the annual fee. I think they do - but be sure to call and ask for a retention bonus after about 11 months. If you don't like the card benefits you can downgrade to a no annual fee version of the card and the 40,000 Ultimate Rewards points - and all the bonused spend you've racked up - will be yours to keep.
Key Link: Get 40,000 Ultimate Rewards points after spending $3,000 in 3 months on the Chase Sapphire Preferred card
Looking for other cards to sign up for in conjunction with this one? I'd go for the AmEx Starwood card for 30k (usually 25k) and the Barclays Arrival card for 40k.
Questions or comments? Let me know by dropping me an email.
Further Reading: Maximizing the Value of the Chase Sapphire Preferred and Chase Freedom Credit Cards