Best Travel Point credit card?

FabulousMrs.P

My husband and I have no debt other than our mortgage. We have a few credit cards but none with travel miles that we can earn. We pay our credit cards off completely every month so I am not worried that they would be used to rack up debt. My brother lives in Atlanta, GA and we live in PA so we end up flying at least once a year to visit them. I was thinking of getting a credit card where we could earn miles and just use it for our gas and groceries. We have to pay for them anyway and I might as well earn some miles towards our trips.

Any suggestions on what credit card is good for earning miles? We usually fly Frontier Airlines as we live only a few miles from a local airport they fly out of. I saw they have a credit card, but it was a $69 annual fee and didn't get great reviews.

Thanks!

AprilZ81

With your brother living in Atlanta what about the Delta card?  I have no experience with it and don't know about fees...

Also, what about Southwest?  Do they fly out of your home airport?

littlemushroom

We recently did a lot of research about rewards cards. We found that, in general, we would be earning about 1 mile per dollar spent (taking caps into account) and that mile would redeem for around 1 cent in a travel purchase for a card that had no annual fee and wasn't restricted to one airline/type of travel. We don't travel much due to cost, so the more general travel miles cards were what we focused on as opposed to airline specific cards.

Based on how much we spend per year, we would never earn enough rewards to make it worth getting a card that has both an annual fee and a slightly higer reward rate (like 2 miles for every dollar spent). Basically, the annual fee would wipe out over half of the value of what we would earn in miles per year.

We ended up going with the Citi Bank Double Cash Card instead of miles. We earn 1% cash back on all purchases (no limit) and 1% back on all payments made for purchases done, so essentially 2% back on all purchases. There is no annual fee either. That reward rate met or exceeded the value of miles we would earn for the same amount of purchases. We could earn 1 or 1.25 miles per dollar spent (which when cashed in for travel was equal to $.01 or $.0125) or we could earn $.02 per dollar spent with Double Cash Card.

Basically, I am saying make sure you do the math based on your spending habits to see if it is better to earn miles or just straight cash back that you could use for your travel purchases.

als1982

How much do you anticipate charging every month? Are you looking to redeem flights on a regular basis? Or are you looking more at the one-time signup bonus?

hoffse

Sorry, this is going to be long.  It takes some explaining!

The best travel cards have a fee.  What makes sense depends on how much you spend in particular categories and which airline and hotel chains you tend to be loyal to, etc.

H and I use a suite of cards from Chase that earn Ultimate Rewards (UR).  The Chase Sapphire card has pretty quickly become my favorite card.  It has a sign-up bonus of 45,000 UR points if you spend $4,000 and add an authorized user in the first 90 days.  It has an annual fee of $99, but it's waived the first year.

The reason I like it so much is because you can transfer points directly to multiple airlines and hotel chains.  We live in Birmingham, and our closest airline hub is Atlanta/Delta.  But there's a reason people call Delta miles "skypesos."  They are hard to earn and you need tons of them to redeem anything.  So we aren't loyal to Delta, even though we live a couple hours away from a hub.

The nice thing about the UR points is that we don't have to be brand loyal. You can also cash them out for a statement credit if you really need some money (but it's not the most efficient way to use them).  

I actually transferred some points this morning for a hotel in Nashville.  Here's the breakdown of how it saved money:

Hotel

Hyatt is a transfer partner with Chase.  We are going to a wedding, which is going to be in downtown Nashville.  The downtown Hyatt costs a whopping $450 per night for the dates we are going to be there.  FYI, that's actually not super out of line for hotels in downtown Nashville, because there are often events or concerts that drive up prices in that vicinity.

That room also costs 12,000 points per night to book.  The UR points transfer 1:1 to Hyatt.  So I transferred 12,000 UR points to my Hyatt account and booked the room for free.

If I had cashed out those 12,000 points for a statement credit, I would have gotten $120 because they are worth $0.01 each in cash.

So I basically booked a $450 hotel for points that were only worth $120.  That by itself paid for another couple years of the annual fee.

Airline

Here's another example:

We have friends who are probably getting married in Miami next February.  I've been checking Kyak to get a sense of what flights cost.  They are a whopping $400 per person because it's one of those short-haul regional flights that charges out the nose.  The flights are on American.

So I could pay $800 for flights.  Or I can transfer 30,000 UR points to my British Airways account and book those exact same flights (on American), because British Airways and American are part of the same airline alliance.

Those 30,000 UR points have a cash value of $300.  Would you rather give up $300 worth of points or pay $800 out of pocket?  Yeah, me too. 

Earning Rewards

The other reason we use the Chase cards is because you can earn rewards across multiple cards and pool them all in the same account.  For instance, we've had great luck with the Chase Freedom card, which has rotating 5% back categories.  This quarter it's 5% back on gas.  Next quarter it's 5% back on groceries.  We can transfer those points to our Sapphire account and then send them to the Sapphire travel partners to travel on the cheap.  

Spouses can also send points to each other.

The Sapphire and Freedom cards also have shopping portals, which is kind of like ebates, only you are earning UR points instead of cash.  We use these a lot to boost our points.

So we earn points really quickly across multiple Chase accounts by maximizing category bonuses and using the shopping portals.  And then we have a really good redemption value when we send those points directly to the travel partners.  I'm almost always getting 2-3 cents per point out of them, rather than the $0.01 per point cash value.

Partners

The UR points transfer to many partners.  These are the ones I've used: United airlines, Hyatt, Southwest airlines, British Airways.  There are many others I haven't used yet.  The transfers are usually instantaneous, and points will appear in your United (or whatever) account within a couple of minutes. 

One thing you will have to learn is which airlines partner with each other.  For our flights to Germany and Belgium we flew Lufthansa (awesome airline), but we booked the flights through our United account using points. I sent $1200 worth of points to United and booked $3000 worth of flights for that one.  It was a pretty sweet score.  

There's a learning curve to it, but there are tons of blogs telling you how to best leverage UR points if you are traveling to specific destinations/parts of the world.

**************

The only other card I might mention is the Barclay Arrival card.  It's not a true points card the way the Chase cards are (you can't transfer points to travel partners), but it has a pretty high redemption rate when using it to "erase" travel purchases.  The nice thing about this one is apparently many things are categorized as "travel."  So if you want to book train tickets or tours or something, you'll be able to get a statement credit for those items.  Your UR points are amazing for certain airlines and hotel chains, but they aren't very useful if you want to stay in B&Bs or pay for incidentals.

I haven't gotten the Barclay card yet, but it's on my list.  I think the best combination is probably using the Chase cards for category bonuses so that you earn UR points that you can redeem directly with airlines/hotels, and then using the Barclay card for all other spending so that you can defray your incidental expenses (cabs, parking fees, etc.).  The Barclay card also has an annual fee.

LillibetteV

We have a Southwest card, but I think there is a small annual fee. We got a very large sign up bonus so we basically used the card for four free flights (and counting...) and will cancel in another year or two once we've used them all up. 

My preferred card is American Express Blue Cash. No fee, 3% on groceries, 2% on gas, 1% on everything else. My one pet peeve is you can only cash-in in $25 increments. Otherwise we have Chase Freedom as our Visa (since not everywhere takes Amex) and it get 1% on everything and 5% quarterly bonus categories (usually groceries, gas, restaurants, Amazon, stuff like that). 

We pay for everything on cash back cards, including having bills like cable and cell phones auto-pay to the cards. We pay them in full every month so we never pay interest - this is key and we are militant about it. Credit cards are a tool not an excuse to spend more than we have. We earn tons of cash back and have an easy record of our spending. Whenever we have cash we wonder "hey wait... I had $50 last week, where did it go?" hahaha. 

hoffse

als1982 said:

How much do you anticipate charging every month? Are you looking to redeem flights on a regular basis? Or are you looking more at the one-time signup bonus?

These are good questions you need to answer.  I gave you a really long-winded explanation of how the Chase cards work, but they may not be the best for you depending on what you use them for.  H and I have started flying 2-4 times per year (not reimbursed by our jobs), and that's why the Chase cards have worked so well for us.  Our destinations are varied, and we use multiple airlines.  We do not have access to low-cost carriers without driving a few hours to Atlanta.

FabulousMrs.P

We would probably only be charging about $600 a month to them (groceries, gas, etc.). I will have to sit down and do the math to see if the travel cards would be worth it. I appreciate all of the input!

als1982

FabulousMrs.P said:

We would probably only be charging about $600 a month to them (groceries, gas, etc.). I will have to sit down and do the math to see if the travel cards would be worth it. I appreciate all of the input!

I wouldn't say that's enough spend to keep a card with an annual fee after you've used the signup bonus.

Southwest is my personal fave for domestic travel. The annual fee is applied to your first billing statement. It would still be worth it the first year, but I'd cancel after you use the signup bonus and before the second annual fee hits.

Or, if you'd be willing to take a very small ding to your credit, try and find a card that doesn't require an annual fee until the second year, use the signup bonus in the first year and then cancel the card.

foxygirl346

We have the american express blue sky and it has no fees.

Xstatic3333

If you do the math and an annual fee card doesn't make sense for you, you could look at the Capital One VentureOne.  It's 1.25 "miles" per dollar, but it works similar to the Barclay's card that @hoffse mentioned.  You can use it to erase purchases, anything from a campsite rental on Reserve America to a hotel stay to some public transportation costs to Uber and AirBnB.

Most people who do the math don't find they get the best value from the CapitalOne cards, but it works well for us because I don't want to deal with an annual fee, I like the flexibility of the "miles" becoming available immediately, I don't want to be tied to a certain airline, and when we do travel it is often international so I want a card with no foreign transaction fees.  It's a small thing, but I also like their customer service and website interface.

I'll probably sign up for Chase Sapphire at some point, just waiting for the right time to take proper advantage of the sign up bonus.  

hoffse

Yeah I agree you may not spend enough for the fee cards to make sense.  Most of them have high sign-up bonuses, but you have to spend a lot to get them.  I wait to open them until I know I can hit the minimum spend with planned/budgeted things (house projects, work trips, etc).  The point is to not spend more than you would without a credit card.

You also have to have a pretty high spend per month to know you are earning points at a rate where the annual fee pays for itself, preferably many times over.  When we max out categories correctly, H and I usually earn around 5,000 points per month, sometimes more when we have very large expenses. 

We certainly don't spend $5K of our own money on cards each month, but between category bonuses, shopping portals, and employer-reimbursed expenses... it adds up quickly for us.

JoanE2012

We have the United Mileage Plus credit card (we're 40 minutes from a major hub).  We charge everything we possibly can (and pay it off).  There is a shopping link through United that connects to many online retailers which gives bonus miles too, so I'll try and order online when possible rather than going to the store to get the extra miles.  

It has an annual fee, but it also gives you the first checked bag free for both DH and I.  We've flown for free to Europe, the Caribbean, South America, two trips to Hawaii and have enough miles for another couple of trips to Hawaii or Europe.