So, now that we’ve a gotten secure card and improved our credit score (or had a good score that allowed us to skip a few steps), now it’s time for a “beginners card.”
If you’re just getting started, flexible/transferrable points currencies are the way to go. These points programs are going to allow you to transfer your points to any major airline alliance, thus giving you the most options for redeeming your miles, and will help protect you against major changes if any one airline makes major changes to the award program.
WHAT ARE FLEXIBLE/TRANSFERABLE POINTS?
One of the best tricks miles and points enthusiasts use is concentrating their efforts on collecting transferable points to use for travel (e.g. flight award tickets, hotel stays, etc.) instead of focusing on earning points in a specific frequent flyer (e.g. Delta Airlines) or hotel guest program (e.g. Marriott).
In other words, your transferable points are with the bank and not the airline (or hotel), thus you have MANY more options for how they use them.
For example, American Express Membership Rewards is a transferable points program that allows you to transfer points to, both, Delta and Air France. If you are interested in booking an award ticket to Paris, you can easily compare which program requires less miles, or is better for your schedule, and transfer your points to that program. With dozens of transfer partners, you are protecting your points from losing value sitting in a frequent flyer airline or hotel program.
SO WHAT CARD(S) SHOULD YOU START WITH?
If I were going to only open one new card, I would recommend the Chase Sapphire Preferred Card. It has great all-around benefits (e.g. double points on dining and travel, and no foreign transaction fees, etc.), and you earn Ultimate Rewards Points, which are valuable and incredibly versatile.
Alternatively, it could make sense to apply for the Chase Sapphire Reserve Card, which is the premium version of the Preferred. The card offers a $300 annual travel credit, triple points on dining and travel, airport lounge access, and many other perks that make this card a phenomenal card! If you’re worried about the $450 annual, and before you push the card to the “do not touch pile,” examine the perks. They may be worth more than the annual fee.
Important Note: Points programs change all the time so it makes sense to accumulate miles in a variety of programs. However, you want to be careful not to over-diversify your miles and points. It could make it more challenging to book a redemption with your points scattered across multiple programs.
The Citi Premier℠ Card is another great option. Not only does it have a big welcome bonus, but it offers triple points on travel and gas, and double points on dining and entertainment, all with a reasonable $95 annual fee that’s waived the first year.
If you prefer to earn cash back rewards towards travel, I recommend the Capital One Venture Rewards Credit Card. The card offers two miles per dollar spent, and each mile can be redeemed for one cent towards a travel purchase. In other words, the card offers about two cents of value per dollar spent. The card has a $95 annual fee that’s waived the first year, and it also offers a welcome bonus of up to 50,000 points.
If you are just getting started, I would choose one or two of the above cards, to learn more about how credit cards work.
BUSINESS CREDIT CARDS
Another way to build your mileage balances is by applying for small business credit cards. Business cards often have different bonus categories and benefits, and when paired with a personal card, the benefits can really add up.
I heard you just say “…but I don’t have a business.” You don’t have to have a company with a tax ID to apply. Any business — even a sole proprietorship — would make you eligible. If you sell items on ebay, you have a business. If you babysit, you have a business. If you’re a sole proprietorship without a tax ID, just enter your social security number in the tax ID field.
I received my first business credit card while I had limited income and was in the “start-up” phase. My business has grown significantly since that time but the point remains that I was honest about it being a startup during the application process and I was still approved.