I’ve started this post, deleted, restarted and deleted again… rinse and repeat 5 times. There’s so much to write about points and miles and knowing where to start is tough. But after a lot of thought (and deleting, ugh) the best place to begin is with the credit cards that get you the most bang for your buck.
In this post I’ll cover Chase Credit cards and then American Express in a separate post. Lastly, I’ll do a post on co-branded cards (ex: Hilton Amex). Buckle up, this is a lot to digest. But it’s worth it!
Let me diverge for just a second into the most important rule of travel points and credit cards. Do not, I repeat, DO NOT, get into credit cards for travel unless you can be disciplined to pay them off pretty much every month. While there may be the occasional moment where you hold a balance on a card, every time you do so, you detract from the value you’re earning off your cards. You might have earned yourself half a million points, but if you are paying hundreds of dollars a year in interest, it will cancel out all your hard earned points. I won’t say it again in these posts, we are all big kids here. But one last time, this is not for you unless you can pay off your card every month.
I also feel compelled to tell you that if you’re in the process of buying a home, do not apply for any credit cards. This kind of thing can really screw up your mortgage application and possibly cost you your home purchase. I’ve had clients who opened a new card to buy furniture and then couldn’t purchase the home – I don’t want to see this happen to you. Yikes.
About Card Sign-up Bonuses
One more thing about credit cards. One of the best ways to maximize your earnings is to achieve the new customer sign-up bonuses. That means there is a minimum required card spend to get a huge chunk of points. For example on a Chase business card, you can earn 100,000 points but need to spend $15,000 within the first 3 months to get that bonus. That is a HUGE spend, but for a business, it might not seem so big. Those 1oo,00o points could be worth $1000-2000+, depending on how savvy you are at spending them.
The personal Chase card I recommend below requires $4,000 of spend within the first 3 months. Because of this, you really need to plan when you’re going to apply for that new card. Make it make sense before you apply. It would be a huge waste of an opportunity to apply and then fall short of the bonus. Again, I am not recommending reckless spending here. If you have a few big bills coming up, verify ahead of time that they can be put on a credit card! I’ve heard stories of people who planned to use the card for things like paying their taxes, but that’s not always a viable/easy option. Most mortgages don’t allow you to use a card, so that’s out. Some utilites will allow, but not many. Things like gas, groceries, school books, holidays, travel, home improvement, hoa dues, health insurance (sometimes allowed), other insurances like your car/house, a weddings or large party are a few great examples. You’ll have to do a bit of homework, but it’s very wise to have a spending plan so you can achieve that bonus before you apply for a card.
About Valuing Credit Card Points
You’ll see bloggers and points gurus talking about the valuation of points. This assigns a monetary value to each point you earn, which helps you know how to spend them wisely. Chase points are valued between 1 to 1.5 cents on average (anything higher than that is an awesome deal). If you know that they’re worth this much money, then this hopefully makes it obvious to you why using them to buy stuff on amazon for .8 cents per point is a bad idea. When you go to spend your points, you should do the math every single time, to determine if you’re getting the full worth out of the points.
Let’s crunch a few numbers. Our flight to Honolulu, if I paid cash, was costing $1200 round trip. I spent 45,000 points. To get the value of my points, I would take 1200 and divide it by the 45,000. That means I obtained 2.6 cents per point valuation. We call that an excellent deal and say Book ’em, Dano! You use this same formula every time you consider spending points. If it’s less than 1 cent per point on a Chase point, then you really need to re-think it. I try not to use mine on anything valued at less than 1.5 cents. (An update to this post, I didn’t use Chase points to book my flight, I used AMEX DELTA RESERVE points. And thanks to free upgrades for our Hawaii flight, the value of the flight for each person came out to 5.3 cents per point which is an AMAZING point valuation.)
Credit Card Fees
One last general point about credit cards. Cards that cost money, generally have more valuable benefits. You need to evaluate the benefits before looking at a card fee and just saying “no”. We will discuss this more when we get to the American Express post. I’ll give you some real life examples of expensive cards that provide a lot of value. A great example of added value on the Chase Ink Biz Preferred card that I have are in the card benefits like insurance on rental cars (saves you a ton of money as this can be $10-20 a day on most rentals), free insurance coverage of bigger purchases like computer equipment, tv, etc. so you don’t have to buy extra expensive coverage policies. Those are just a couple examples, but there many – like free global entry application fee worth $100.
Chase
Chase is the place that you need to start if you want to get into serious travel rewards. Mainly because Chase has a 5/24 rule. This just means that you can’t be approved for most Chase cards if you’ve opened five or more personal credit cards (from any card issuer) within the past 24 months. Whoa. 5 or more personal credit cards in 24 months??? Let’s not get crazy. But to be honest, to most serious points players, having 20 or more credit cards at any given moment is not out of the question – if you know what you’re doing.
Because of this rule, Chase cards are really where you should begin if you’re going to apply for credit. Chase Ultimate Rewards points are also some of the most valuable currency when it comes to booking travel. Here’s a few reasons why:
- They transfer at a 1:1 ratio to several airline and hotel partners.
- Their travel portal is easy to use for beginners and has some great deals
- Depending on what card you have, the points are worth 25-50% more on the chase portal.
The ability to transfer makes any credit card point worth more than one that can’t be moved. Obviously it makes the point so much more versatile. Sometimes booking directly with an airline gives you a greater valuation on your points. And when you learn to dive deep into airline alliances, you’ll understand this better. But for now, just know that those transferable points are valuable currency.
The Chase Ultimate Rewards portal is super easy to use. I believe it’s powered by expedia, and sometimes the deals through the portal are pretty good. Here’s an example. The hotel we booked in Hawaii is the Hilton Hawaiian Village® Waikiki Beach Resort. If booked through the Hilton site, the points per night would’ve cost me 56,000 points. But booked on the Chase portal I paid 14,000 points per night. Even if you take into consideration the transfer rate of Chase points to Hilton of 1:1.5, I basically got two and a half nights for the price of one on Chase, than if I had booked on Hilton. The chase portal gave me WAY more value per point. (Side note: Hotels often aren’t a wonderful way to get that 1.5-2 cents per point value. We had a lot of points and wanted to keep our cash on hand, so we went ahead and used them for the Hawaii trip. Not everything is about getting the most value out of your points – sometimes you take less value because it’s what’s right for you at the time.)
How to pick a Chase Card
Quick note on Chase cards, you might want to verify your credit before applying. Chase generally requires a good to excellent credit score, especially if you’re going for any of the three cards I recommend below. In the interest of full disclosure, my score jumps around between 680 and 720 because of the 10 credit cards I currently carry. If I don’t pay one off before the reporting date that month, it can drag my score down a few points. When I applied for my Chase cards, my score was over 700. I do believe on the business card you can apply with a slightly lower score and possibly get approved.
*Shameless plug, I’ve spent hours learning this information and am glad to be a resource for my friends. If you do decide to apply for any of the cards I suggest in these posts, the links I provide will give me a small point boost. It’s not a lot, but I appreciate the support. And in thanks, I’m here to answer any of your questions – just ask!
Chase Sapphire Preferred Card/Chase Sapphire Reserve
This card has a $95 annual fee. You receive 2x points on travel and dining. They’re currently offering a 2x points on groceries as well, through April 2021. There’s a 60,000 points bonus earned when you spend $4,000 on the card within the first 3 months. This is one of the best beginner cards to start with. The annual fee is low and the 2x bonus categories are really broad, for example, Uber counts as travel with this card and earns 2x points for every dollar.
Chase for Business Cards (click here to apply)
If you’re in business, this is an essential first card. Rumor has it that the chase business cards don’t count for the 5/24 rule against you personally so that’s a great way to get around the rule if you have a legitimate business or sole proprietorship.
Chase Ink Business Preferred (click here to apply)
This card is one of two in my business wallet right now. $95 annual fee and a whopping 100,000 bonus points earned when you spend $15,000 on the card within the first 3 months. That’s a lot of money, but we run all our business expenses and advertising through this card and we achieved the bonus within the allotted time frame. The reward categories on this card are FIRE HOT for us in our real estate business. For example, every dollar I spend in online advertising and search engines (google, for example), earns me 3 pts/per dollar. Same with internet, phone and cable services, shipping costs and travel purchases. I run all my rental property internet, cable, phone through this card, as well as my cell and home internet/cable since we have a home office. We are averaging 30,000 points earned a month through this card right now, thanks to the bonus categories. That adds up fast for travel!
Maximize your points in the Chase Portal
All Chase cards except the three I mention here give you a flat 1 cent per point value on the Chase portal. The Sapphire Preferred and the Ink Business Preferred give you a 1.25 cents per point and the Reserve points are worth 1.5 cents. Sounds pretty minimal but look at this example. If you went to book a $1000 flight with one of the non-bonus Chase cards, you’d need 100,000 points. If you had the reserve card, you would only need 66,000 points for that same $1000 flight. Big difference.
The other thing about these three cards is that they’re the only three Chase cards that allow you to transfer to a partner which is where some real magic happens. Remember my flight example from above? By transferring my points directly to Delta, I was able to get 5.3 cents per point value out of my points – I only needed 45000 points for a $2400 flight (that includes free upgrades I received by also having a Delta branded Amex card). Much more value than the Chase portal alone offers.
Last, but not least, always, always, always use a shopping portal. There are several to choose from, but the easiest thing here would be to shop through the chase portal. They have tons of online retailers with point bonuses available. We purchased new tires last year from The Tire Rack and there happened to be a 5x point bonus on any purchases at the Tire Rack. I buy my dogs meds through the portal. My contacts, clothes, etc. The retailers and offers change frequently so you need to check often. It’s an extra step but a few thousand points here and there can really add up!
Yall, that’s pretty much it for an intro to Chase points. We did it! If you have questions, feel free to ask. I am definitely here for you. Look for the next post about American Express to come up within a week.