Getting Started with Travel Credit Cards: A Casual User’s Guide
At this point in my life I’ve been to 20 countries, have used a travel credit card for almost 4 years, and happen to be a person who works full time in finance... and to be honest, I'm still intimidated by some of the blog posts I read about travel credit cards.
Researching travel credit cards online is a bit like researching investing. If you don’t know really know how to open a brokerage account (or what a brokerage account even is) and you find yourself halfway through a blog post about dividends and capital gains taxes, you may just give up the idea of investing entirely. And if you find yourself halfway through a blog post about travel credit card point valuations, transfer partners, application limitations, and initial point bonuses... you may feel the same way.
We’ve all been there (pretty sure I’ve been there within the past week, actually).
Despite what many blog posts about travel credit cards led me to believe when I was starting out, there are real people who use travel credit cards casually. And they benefit from those cards, even though they don’t know all the things that die-hard travel credit card bloggers know. And I know that this is true, because I happen to be one of those casual travel credit card users that is far from being a travel credit card pro.
In the interest of providing a bit of a different perspective on the travel credit card game (think more general confusion and less actuarial science), I thought it was time to write a post about my own travel credit card journey. As is true of everything I write, but I like to emphasize when we talk finance in particular: this post is intended for entertainment purposes only and does not constitute financial advice of any kind. This post also does not replace the need to talk to a financial professional if you need help getting your financial life in order.
With that out of the way: let’s talk travel credit cards.
First Things First: To Benefit from a Travel Credit Card, You Have to Get Approved for a Travel Credit Card.
Funnily enough, I never see the serious travel credit card bloggers talking about this little detail. Believe it or not, you actually have to apply and get approved to get a travel credit card these days. This isn’t 2007 my friends: they aren’t handing credit cards out like Skittles anymore. Which is probably a good thing, but can also be a bad thing if you are like me and end up getting declined.
But let’s back up and start at the beginning of my travel credit card story.
I’m not sure if I was just generally oblivious in college, exhausted from the schedule I was trying to maintain, or some combination of both, but it never really occurred to me that I could get my own credit card. Looking back on my own personal situation, this was a good thing. Because if I had had the ability to call out of a double shift at work and just use the credit card that week instead... things could have gone bad very quickly. So, I broke even: I graduated college in 2013 with no credit card debt and no money. I started working full time as soon as possible after graduation, and within a few months I applied for my first travel credit card... and was promptly declined for having zero credit history whatsoever.
In the U.S., whether or not you can get a credit card doesn’t usually depend much on your cash flow (paychecks from a job) or your assets (not that I had any at the time, but still). The American credit card game is built on credit scores. And ironically, credit scores are built on the ability to pay down debt on time. You’re probably already picking up on the conundrum here, but I’ll point it out just in case: in order to get a good credit score, you need debt you can pay down on time... and in order to get debt, you need a good credit score. If you are like I was at age 23 and don’t have either of those things, you’re probably looking at an auto-decline. As in, they won’t even read your application, they will just decline it.
It took me over 2 years from that initial application to finally get approved for my first travel credit card at the ripe old age of 25. I started by getting a tiny credit card from my local bank (I kid you not, the limit on that card was less than a tenth of my monthly bring-home salary), then graduating to a larger limit on a credit card with that local bank, then ultimately getting approved for my Chase Sapphire Preferred credit card in December 2015.
Not all travel credit cards are created equal, but many of them are not what I would describe as starter credit cards: they tend to have relatively high minimum credit score requirements. I don’t include this journey to finally getting the travel credit card I wanted to be discouraging (quite the opposite, in fact.) I just want to point out that depending on your personal credit history, you may have to work up to the travel credit card you really want... and that’s ok. This is just how the system works right now, so we work with it.
Travel Credit Card Rewards Are Never Worth Going Into Credit Card Debt
I don’t want to come down too hard on the elite travel credit card bloggers out there, but this is another aspect of the discussion that I don’t think we can skip over if we are going to write about benefits of getting a travel credit card. Because this is a disclaimer that we all need to be making clear.
If you can’t use credit responsibly, you shouldn’t get a travel credit card.
But what do we mean by “responsibly”?
Contrary to some questionable advice I’ve read in various places online, you do not need to accrue interest on a credit card to build credit or maintain a good credit score. In fact, credit card interest rates tend to be very high, so if you are running a balance on your card and paying interest on that balance it will quickly negate any benefits you might be getting from travel rewards. Put simply: travel credit cards may allow you to fly for free occasionally, but flying for free occasionally is not worth going into debt. Also, the fine print on some of these cards indicates that if you get behind on payments, you may not be able to use the travel rewards you have accrued. Travel rewards are cool, but they aren’t worth messing up your financial life (they aren’t that cool.) At the end of the day, you know yourself better than anyone, so you have to be the one to decide if you can manage paying your credit card balance down to zero every month.
If you can… read on.
Choosing a Travel Credit Card
When it comes to figuring out which credit card to apply for, the best place to start is by determining what you are looking for in a travel credit card. I was personally looking for three primary criteria: I wanted a Visa card, I wanted no international fees on the card, and I wanted a card with rewards that were not tied to any specific airline or hotel chain (points that could be used on a variety of carriers). The reason I wanted a Visa with no international fees is that I travel a lot internationally, and Visa is widely accepted internationally. If you are primarily a U.S.-based domestic traveler, you may have different criteria for your travel credit card than I do. Figuring out what card fits the type of travel you prefer is the first step in choosing the right card for you.
After spending a significant amount of time digging through blog posts that I barely understood, I luckily came to the conclusion that the Chase Sapphire Preferred was the best card for me. I know that I made the right decision applying for this card, because I still use it today and it is the only travel credit card I have. If you don’t know what travel credit cards are available that fit the criteria you want, start by doing some research. The Points Guy has some posts that are very technical, but they also have some posts comparing general travel credit cards that were very helpful to me when I was figuring out which card I wanted.
My Travel Credit Card Rewards Story
The Chase Sapphire Preferred card is not a travel rewards card that is tied to any specific hotel or airline. The points accrued from this card are called Ultimate Rewards points. You can use these points to book flights on a variety of airlines through Chase’s own website. You can also do more complicated stuff that I haven’t done yet, like transfer these Ultimate Rewards points into other airline-specific points. I’ve been looking into that a bit and will link a follow up post here if I ever try transferring points, but so far I’ve just used Chase’s Ultimate Rewards website to book several flights using points.
After getting my Chase Sapphire Preferred card in December 2015, I made sure to hit the spending minimum in the first 3 months so I could get the initial points bonus. In the fall of 2016, I was planning a trip with a friend who was dragging her feet on purchasing the flight. This caused me to have to purchase an international flight much later than I would have preferred (so it was more expensive than my normal flights). I booked the flight on the Chase Ultimate Rewards website and used all the points I had been able to accrue up to that point, then paid cash for the remaining cost. Because of the points, I ended up spending less than half of what I normally spend on international flights when I am able to plan further in advance.
After that initial points bonus was gone, I continued to accrue points the same way I do today: through regular monthly spending. Because I don’t have any other authorized users on my card, accruing points is a bit slower for me than it may be for others. However, the Chase Sapphire is my primary credit card, and since I’m not trying to split my spending between multiple travel credit cards each month, I’m able to use this card for virtually all of my spending and accrue as many points as possible. I don’t accrue points fast enough to cover every international trip I take, but I am generally able to cover at least a portion of one international flight every year. Since that initial trip using points in 2016, I’ve been able to cover over half of a pricier flight I took from Nashville to London to Montreal (in Premium Economy, no less) and completely cover the cost of a last minute flight from Rome to Berlin on my recent six week sabbatical trip in November 2018. I recently purchased a discount flight from Boston to Spain for a trip this fall, and I intend to use my Chase Ultimate Rewards to cover the connecting domestic flight from Nashville to Boston.
My Future Travel Credit Card Plans
I have been considering a second travel credit card for awhile now, but I haven’t decided exactly which one I want to get. I’m torn between a Southwest card (because I have been doing a bit more domestic travel than I did at the time I originally got my Chase card) and a British Airways Visa. My home airport in Nashville, TN finally got one nonstop flight to Europe last year: Nashville to London on British Airways. The problem with there only being one carrier flying to Europe from Nashville is that there is currently no competition, and therefore no reason for British Airways to ever put this flight on sale. Since it appears that I’ll be an annual regular on this London flight, I’ve been looking into a British Airways card to see if it might help offset my costs a bit. The obvious downside to someone like me getting a second card is that I’ll have to figure out how to split my spending between the Chase Sapphire and my new card in a smart way. I’ll definitely follow up with a new post when I determine which travel credit card I want to try out next.
Even if your travel credit card only helps you offset the cost of flights occasionally, that’s still a win.
The reason I wanted to write this post about casual travel credit card usage and my experience with travel credit card points is that I’m able to offset the costs of flights pretty regularly, but I’m not able to completely cover the costs of international flights all the time. I’m ok with that, because I can pay for flights out of pocket when I’m able to find really good prices and offset the costs of flights that are too expensive using my points. In this way, the points help me stick to a more standard budget for flights and limit the number of times I have to scramble because a flight comes in more expensive than I was expecting.
Maybe not as glamorous as flying around the world for free all the time, but I like not having to scramble when it comes to my budget.
Are you a travel credit card user? Do you want to know more about travel credit cards? I’d love to hear from you in the comments.