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As the world continues to recover from the COVID-19 pandemic and a vaccine is in sight, the thought of travel is slowly starting to trickle back in to the realm of possibility. Banks and credit card companies have redoubled their efforts in the home stretch of the year in an effort to make up for lost profits in Q1-3, which means increased welcome bonuses and a barrage of deals becoming available. If you plan to travel at all in the next 12-18 months (I know I am), now is the time to start building your points and miles balances so you can take advantage of these opportunities.
In the Award Travel Introduction, I went through some travel hacking terminology and explanations of transferable currencies, which are far and away the most powerful way to maximize your award travel options. As was initially mentioned, credit card signup bonuses are the most lucrative method of earning miles and points, especially transferable currencies, and so today we’re going to outline the first 5 credit cards you should consider opening to get the most free travel possible (hint: they earn transferable currencies!).
Credit Card Strategy
The consensus when opening credit cards is that you will generally not run into issues (e.g. denials) if you open one or two cards every four to six months. While it’s certainly possible to do more than that (I’ve done four cards in one week before), it’s recommended that you take it slow. Not only does this method make it easier to meet minimum spend requirements, but it spreads out the inquiries on your credit report and makes it easier to get approved for future cards because it’s a more normal-looking pattern.
Furthermore, it helps to to alternate your applications between personal and business credit cards and also to focus on offerings from Chase bank before moving to other cards and currencies. Let’s explore why that is.
Business Cards
As you will see in the list of recommended cards, two of them are Ink Business cards which perhaps you think precludes you from qualifying. However, I would recommend you consider your situation more carefully. Perhaps you don’t own a multi-national Fortune 500 company, but have you ever sold anything on eBay? Consulted friends or family on early retirement? Mowed someone’s lawn? The definition of a business is more abstract than many people realize. Even if you’re thinking of starting a business (like a blog), you can open a business credit card. In these cases you would be considered a Sole Proprietor, so when the application asks for your name and Employer Identification Number (EIN) you would enter your own name and your social security number. In the box asking for revenue, it’s acceptable to put $0 – most businesses do not make a profit their first year or two.
Not only do business credit cards offer the chance to separate your personal and professional expenses, but they also open up new card opportunities as well as their associated welcome bonuses. What’s more, business credit cards generally do not count towards your “5/24” status with Chase, so you can get them without pushing you over the threshold. Note here the difference between cards that count towards 5/24 and are subject to 5/24. In the former case, all personal credit cards and accounts for which you are an authorized user count toward your five allotted cards. The Chase business cards do not count toward your five cards, but you must be under 5/24 in order to be approved for them – so they are subject to 5/24. Other non-Chase business cards neither count toward nor are subject to 5/24. Clear as mud?
Chase 5/24 Rule
Previously I outlined Chase bank’s “5/24 rule”, which was put in place to limit the amount of credit cards the bank would approve people for based on how many accounts they had opened in the last two years. If you’ve opened five credit cards with any bank, not just Chase, you will generally not be approved for any more cards with them until you get under that threshold. There are a couple of nuances with this rule, such as the fact that most business credit cards to not show up on your personal credit report and thus are not counted towards your 5/24 limit, as I just mentioned, and also that not all of Chase’s cards are subject to the rule – although the best ones are.
Because Chase’s Ultimate Rewards points are extremely valuable and all of their UR-earning cards are subject to 5/24, it makes sense to get those cards first if you’re just starting out. If you don’t, you may not be able to get approved for them later on and would miss out on all the points and benefits of the most valuable transferable currency.
With all that in mind, here are the first five credit cards you should consider opening as you begin your award travel journey:
Chase Sapphire Preferred
- Current Welcome Bonus: 60,000 Ultimate Rewards Points
- Minimum Spend Requirement: $4,000 in 3 months
- Annual Fee: $95
- Notable Benefits:
- 2x points on travel, 5x on Lyft (through March 2022)
- No foreign transaction fees
- Reduced service fees with DoorDash
- Auto rental collision damage waiver (CDW)
- Travel insurance (trip cancellation/delay, baggage delay, etc.)
Why It’s Great
The Sapphire Preferred is without a doubt the best first card you can get. With a nice welcome bonus, excellent benefits, reasonable minimum spend, and low annual fee this should be everyone’s first travel credit card (it was my first one in 2013). The 2x on travel is nice, but where I have gotten a lot of value from this card is through the rental car and travel insurance which are easily worth more than the annual fee. The big brother to this card is the Sapphire Reserve, but its hefty $550 annual fee may be too much for beginners to swallow right off the bat. Unfortunately Chase limits you to one “Sapphire” bonus per 48 months, so it may be a while before you can get it, but the Preferred is an excellent first choice.
Learn more here.
Chase Ink Business Preferred
- Current Welcome Bonus: 100,000 Ultimate Rewards Points
- Minimum Spend Requirement: $15,000 in 3 months
- Annual Fee: $95
- Notable Benefits:
- 3x points on the first $150k spent on travel and select business categories
- No foreign transaction fees
- Cell phone protection
- Trip cancellation and interruption insurance
- Auto rental collision damage waiver (CDW)
Why It’s Great
The Ink Business preferred is a no-brainer for anyone eligible for a business credit card (see above). With a hefty welcome bonus to pad your Ultimate Rewards stash and 3x points on travel, shipping fees, internet, cable, phone services, and advertising it can really be a useful card to have in your wallet. Although it has similar benefits to the Sapphire Preferred, do note that the rental car insurance only covers “business” trips.
Learn more here.
Chase Ink Business Cash
- Current Welcome Bonus: $750 (or 75,000 Ultimate Rewards Points if you have a Sapphire Preferred, Reserve, or Ink Business Preferred card)
- Minimum Spend Requirement: $7,500 in 3 months
- Annual Fee: $0
- Notable Benefits:
- 5% cashback (or 5x points) on the first $25k spent at office supply stores, cell phone bills, and Internet/TV
- 2% (2x) on first $25k spent at gas stations and restaurants
- Auto rental collision damage waiver (CDW) for business rentals
- Purchase protection (for 120 days, up to $10,000/claim)
Why It’s Great
On its surface, this may not seem like a great choice. Cash back? I thought we were doubling down on transferable currencies?! Even Chase’s website is confusing on this topic, but let me set the record straight: if you have a “premium” (e.g. annual fee-charging) Ultimate Rewards earning credit card such as the Sapphire Reserve, Preferred, or Ink Business Preferred, you can pool points together from other accounts like the Ink Business Cash into a single Ultimate Rewards pot. In that way, this card’s excellent 5% “cash back” on office supply stores turns into 5x Ultimate Rewards which are twice as valuable. While some of the other benefits are duplicative of others in this list, this is one of the best no-fee options available for earning Ultimate Rewards points.
Learn more here.
Chase IHG Rewards Club Premier
- Current Welcome Bonus: 140,000 IHG Points
- Minimum Spend Requirement: $3,000 in 3 months
- Annual Fee: $99
- Notable Benefits:
- 25x points at IHG properties
- IHG Rewards Club Platinum status
- Annual Free Night certificate (usable at properties requiring 40,000 points per night or fewer)
- Fourth night free on award redemptions
- $100 Global Entry or TSA Precheck reimbursement
Why It’s Great
This card doesn’t earn Ultimate Rewards, but it is subject to 5/24 and is definitely a card you want to have in your wallet. The 140,000 point welcome bonus is substantial (up to 14 free nights at lower-tier properties, more if utilizing the fourth night free benefit). Even if you don’t use any benefit except the annual free night (what I do) it still pays for itself year after year. Although IHG Platinum Status won’t get you much–no free breakfast at most properties–it does ensure your points don’t expire. Pairing this card with the others mentioned will have you both flying and sleeping for free.
Learn more here.
Chase United Explorer
- Current Welcome Bonus: 60,000 United miles
- Minimum Spend Requirement: $3,000 in 3 months
- Annual Fee: $0 first year, $95 thereafter
- Notable Benefits:
- 2x miles on restaurants, hotels, and United purchases
- $100 Global Entry or TSA Precheck reimbursement
- First checked bag free (must purchase ticket with card)
- 2 one-time United Club Lounge passes each year
- Priority boarding
- Expanded award availability on United flights
- Auto rental collision damage waiver (CDW)
- Purchase protection (for 120 days, up to $10,000/claim)
- Travel insurance (trip cancellation/delay, baggage delay, etc.)
Why It’s Great
This is the second non-UR earning card on the list, but it’s valuable in many ways. Because Ultimate Rewards points can be transferred to United miles, this card has synergy with its UR brethren as you can combine the welcome bonuses into your MileagePlus account for an excellent premium-cabin trip. What’s more this card offers expanded award availability on United flights, meaning you’ll see more options at possibly lower redemption rates than others who do not have this card. The priority boarding and free checked bag can be a nice benefit as well.
Learn more here.
Final Thoughts
While these are not the only great credit cards to choose from, they rank among the first you should consider applying for when beginning your travel hacking journey. Because of Chase’s strict 5/24 rule, if you wait to open these cards later you may be above the limit and unable to do so. As such, you should aim to maximize your five slots by opening these accounts over a period of time that will allow for you to meet minimum spends and learn more about how to redeem their points for maximum effectiveness.
Note that two of the cards mentioned above are business credit cards which, in all likelihood, you do actually qualify for. Not only that, but since most business cards do not count toward 5/24 (although they are subject to it), by opening the five cards recommended you would still have two open slots in your quiver – but let’s not get ahead of ourselves.
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I like the IHG one for the free phone insurance as well. As for hotel chains I prefer Hyatt. Agree that Chase has the best cards.
Yes, that’s a great benefit that not many cards offer. I love it for the yearly free night certificate and the large overseas footprint. My best redemption ever with this card was using me and my wife’s certificates for two nights at the Intercontinental Hong Kong, where we were given an upgrade to a room overlooking the harbor (paid rate was $500/nt). Not bad for a card with a $49 annual fee! Sadly the certificate is now capped, but we always get more value from it than the annual fee.
This was super handy –especially the description of the chase 5 in 24 rules and how they apply to business cards as well or don’t apply as the case may be :-).
Glad it was helpful, MI! Business credit cards can be used strategically to keep the coveted “Under 5/24” status while also providing a fountain of points. We’ll be writing more about them soon and why just about everyone qualifies for them.
P.S. I hope you are adjusting well to post-FSO life. I found it a wrenching adjustment to be honest and miss our former whip-smart colleagues often.
It’s definitely been a strange adjustment – and at only 3 months out I have to keep reminding myself it’s not just another PCS! I miss our friends and colleagues a ton but we’re doing our best to stay in touch and are planning to visit some of them at their nice new posts next summer if the world allows!
Yep. I’m still tight with tons of FSOs–including several that were posted with you in Islamabad. Have a good one and we should probably connect off this sight sometime as we are traveling very very similar paths. Cheers!
Agreed! I’ll send you an email to connect :)
Chase has the best sign-up bonuses!
For me personally, I’ve never liked paying annual fees. My spending isn’t high enough to justify it. These cards are great if you have a big international trip planned in 6-12 months (Chase ink paid for my flight to Japan!).
Otherwise, for every day spending, I like to use a combination of no-fee credit cards strategically for my highest spending categories: groceries, gas, Costco, and Amazon.
The Toolbox on my blog lists which cards I use if anyone is curious.
They sure do! That and the fact that Ultimate Rewards points are so valuable are why Chase dominates in this post, but that’s not to say no-fee cards can’t be valuable as well. I use the DoubleCash, Freedom, and Amazon Prime cards heavily for bonused (and non-bonused) spend, but there are serious benefits to be had from fee-carrying cards like the Sapphire Preferred like the better welcome bonus, ability to transfer to partners, rental car insurance, travel insurance, and no foreign transaction fees to name a few.
Everyone needs to do their own calculation to determine which benefits they value most, but for most people the aforementioned cards all provide way more value than they cost, at least for the first year. If you find you’re not using the card or don’t want to pay the fee, simply cancel it the next year.
(When we were flying…) I was fan of SWA’s companion pass. Pickup one personal & biz card, complete the minimum spends/requirements late in the year for 23-24months of bonus. Alternate this pattern with your spouse every second yr for near continuous privilege.
Southwest moved the goalposts this year to 125k miles – which will much harder for us “poverty level” FI’rs to complete – we just don’t spend that much per year (even if we could leverage health insurance payments via cc’s).
Correcting myself: current sign-up bonuses will get you all the way to 125k (65k personal, 60k biz), even easier than before.
https://millionmilesecrets.com/guides/southwest-companion-pass/
The Companion Pass is one of the best deals ever! I’m actually surprised it has been around this long without them making it significantly harder to get, but given the pandemic I can image they could probably use the business.
Brandon, great intro–I just received my IHG card and am psyched for the future benefits. My question pertains to the “free night certificate”. Where do you find it and how do you use? Thanks in advance.
Hi Wade – the free night certificate will show up in your IHG account under “My Account”. Just sign in and look for the “1 Free Night(s)” link on the lefthand side underneath where it says “Missing Points? Let us know”. Click on the “1 Free Night(s)” text and it will bring you to a page where you can book using the certificate.
And just to be clear, the free night award is on the first anniversary of the account opening?
Correct, you won’t get it when you initially open the card but it will appear about 12 months later. The big welcome bonus should get you a few free nights in the meantime :).
I agree with you, but there’s something about someone named Chase promoting a whole list of Chase cards :)
They owe me some serious kickbacks :)
I feel like if you’re going to go big and hit your 5/24 with Chase in the first year, it almost certainly makes sense to get the Reserve.
Yea, the fee is high but you get to multiply the value of the UR points on all the other cards by 1.5x instead of 1.25x and it’s easier than ever to use with groceries and home improvement being a redemption option instead of just travel. That bumps the value of your Ink/Business card signup bonuses significantly.
As some other commenters noted, if Southwest is an airline you can leverage, the Chase SW cards are an excellent way to get into the companion pass—might be a good alternative for United.
It depends on how you plan to redeem the UR points. If you transfer the points to a partner (to get much greater than 1.25cpp-1.5cpp) then the Reserve didn’t provide any advantage over the Preferred. (It still may if you spend more on dining/travel/3x categories – which is why we have the Reserve.)
I’m married so working with Chase’s 5/24 is even easier. Between the 2 of us we get 5 cards a year. Each time one of us drops to 4/24 I look around for the best available card and bonus that fits with our needs.
Even when getting Citi, Amex or other cards we stay around 5/24 so that if a great Chase bonus comes out we can jump on it.
For no-fee cards (e.g., Citi Double Cash, Chase Freedom) I generally product change to them from a fee-ed card rather than using up a slot.
I think you’ve mentioned this before, but I want to emphasize the importance of keeping enough records so you know what cards you’ve had, when you got them, when you got the bonus, when you cancelled them, etc. You think you’ll remember but you won’t.
Two-player mode definitely makes life easier! And yes, keeping good records is absolutely crucial. All it takes is one extra fee to significantly reduce the value of your rewards.
Brandon,
This is a well-written article regarding credit cards. My go-to card is the Chase Sapphire Preferred (I have one now) and the ink card as well. I’ve seen many small business owners use the Ink card.
Do you have another go-to card for individuals other than the Chase Sapphire for maximum travel points or is this really one of the best ones out there?
Thanks again for everything!
Fiona
Thanks, Fiona!
In terms of other cards, there are many options depending on things like your willingness to pay annual fees, 5/24 status, points balances in other programs, and what you intend to use the points for.
That being said, one of my favorite no-fee cards to pair with the Sapphire Preferred is the Freedom Flex. Not only does it come with a reasonable Welcome Bonus ($200 or 20,000 UR pts after $500 in spend), but it has some great earning categories for points like 5x on grocery spend, 5x on quarterly rotating categories, and 3x on dining. When paired with the Sapphire Preferred, you have the ability to combine the points earned from both cards and transfer them to Chase’s airline and hotel partners which is the most valuable way to use them.
Hope that helps!
Hi Brandon,
Loved the post! Question for you about business cards ending up on your personal credit report. If you used your own name and social as a sole proprietor in order to get the business cards, wouldn’t they end up on your personal credit report? I’m not sure where else they could end up. I would also like to know about the reverse – if you do have a business with an EIN and you use that – does your business have a credit report of some kind? I’m wondering where these lines of credit end up flowing to in the long run in both cases. Thanks so much!
Glad it was helpful, Jay! To your question: the cards will show up on your “business” credit report, not your personal report – even if you use your own name and SSN as a sole proprietor. Please note that this is how MOST banks work (Amex, Chase, Barclays, Chase, Citi, etc) but there are exceptions such as Capital One and TDBank, which do report business cards on personal credit reports.