Points Credit Card Strategy
A strong credit card strategy makes inexpensive and frequent travel much easier. You will earn many more free flights from credit card spending than you will from flying. You don’t have to open dozens of credit cards to improve your travel lifestyle. Sometimes, it’s just a matter of looking at how you pay for the things you already pay for, and adjusting there.
Basic steps
Get the right credit card. Look at the cards you have today and do a thorough analysis into the benefits they come with and the benefits you use. Compare those to the benefits from the two cards I’ll advocate for later, which are among the best travel credit cards.
Assuming my cards provided superior travel value to you, apply for the card that makes the most sense for you.
After your approval and its arrival, move all your spending to that card - grocery, utilities, insurance, doctor, cell phone, gas… you name it. Put it all on that one card. Anything you’re using a debit card for today, stop. Slap your own hand. Put it on the credit card if you can.
DO NOT GO INTO DEBT. I recommend you make a weekly credit card payment. Don’t buy things just because you’re excited about the points you’re getting from them.
Don’t spend more on something, just because you get points. I get 5% back on my Verizon bill each year by using the Chase Ink Business Cash, but that’s way less than the $50/month I get off my bill from Verizon if I allow ACH from my checking.
Your new credit card came with a sign-up bonus, provided you spend a certain amount in a set period of time. Make sure you meet the minimum spend to make the sign up bonus.
Collect all those lovely points and use them to either purchase travel directly (Chase Portal) or tranfer the points to the card’s partners to purchase air fare and lodging.
Of course, it can get a LOT more complicated, but that’s really the basic strategy.
Card recommendations
Some cards provide you cash back on your transactions, like 2% cash back on every day spending. Some offer benefits specific to the card provider, like 5% back at Amazon. Those aren’t your primary card for travel. The best travel credit cards have a transferable-point currency. Transferable points are better than single-use points.
The major transferable points currencies are Chase Ultimate Rewards and American Express Membership Rewards. Capital One and Bilt are other transferable points systems.
I use Chase Ultimate Rewards. I like the choice of transfer partners such as Hyatt, Southwest, United, and Air Canada. There are three Chase cards that can earn Ultimate Rewards - the Sapphire Reserve, the Sapphire Preferred, and the Ink Business Preferred Card for small businesses. We’ll focus on the Sapphire personal cards for this article.
My Recommendations
It’s really a choice between the Chase Sapphire Reserve and the Chase Sapphire Preferred. I have the Reserve, but the Chase Sapphire Preferred is a popular option if the Chase Sapphire Reserve annual fee freaks you out. It has the higher sign up bonus, and you can add authorized users for $0. You get 3x on groceries, 1x on general spend, and 2x on travel you don’t buy through the Chase Portal.
Why the Reserve?
The Reserve makes sense if you travel a lot, spend a lot, and use all the benefits. The annual fee is $550. This is a lot. BUT, it works for me, and here’s why.
Every year, the card offers $300 in travel credit right off the top, lowering the actual fee to $250.
Every 4 years, you get $100 off Global Entry, which is TSA Precheck plus speedy re-entry into the country when returning from international. Since Global Entry has to be renewed ever 5 years, call that a $20 annual benefit. Now, we’re at $230
When I got the card, the sign-up bonus was 80,000 Ultimate Rewards points. At a conservative valuation of 1.5 cents/point, that was $1,200 in flight credit. Split that over 5 years, I guess, is $240 per year. Now the card is $10/year.
Then, the card comes with additional benefits.
I get Instacart+ for free, plus a $15/month credit back. Since we use Instacart for some of our shopping, this benefit is valuable to us.
If you book hotels for cash through the Chase portal, you get 10x in points. I recently paid for a London hotel stay with cash through the Chase portal.
I do all car rentals with points through the Chase portal, so I get 1.5 on redemption.
2 years of Lyft Pink.
Priority Pass membership. Lounge access is a mixed bag; LAX doesn’t have a lounge we can use, neither does Burbank. San Jose has a nice lounge. SFO has lots of choices. I’ve used the lounge in Dublin twice. In New Orleans it was too full. Going to the lounge can be more comfortable than sitting in Heathrow and the food is free in the lounge. At Heathrow you can also get a $25 credit per pass. So, if Edna is with me, that’s $50 off our meal at Heathrow while we’re waiting.
You get complimentary DashPass for DoorDash and a $5/month credit back.
Insurance benefits are premium
The card comes with $10,000 in trip cancellation or interruption insurance. So, when Rahel got gallstones last summer, I got reimbursed for her flight to Nashville to visit a friend.
Baggage Delay Insurance - if an airline loses your luggage for more than 6 hours, you can be reimbursed for whatever you need to buy to fill in the gap, up to $500
Trip Delay insurance - if your plane is delayed more than 6 hours or requires an overnight, you get reimbursed for any expenses.
Travel Accident Insurance up to $1,000,000 - if you got into an accident anywhere more than 100 miles from your home, it pay for medical evacuation to the nearest place of treatment.
Purchase Protection - up to 1 extra year on top of the warranty that an item comes with. Drop your iPhone year two, it’s covered.
The Preferred has a lot of these benefits, just not as many of them.
Chase Sapphire Reserve
Sign-Up Bonus
60,000 points after $4,000 in first 3 months
Annual Fee
$550; $75 for each authorized user (It's a big number, but you get $300 back in travel credit and $100 credit for TSA precheck, and 3x on travel)
Benefits
Earn 5x total points on flights when you purchase travel through Chase Ultimate Rewards® after the first $300 is spent on travel purchases annually.
Earn 10x total points on hotels and car rentals when you purchase travel through Chase Ultimate Rewards® after the first $300 is spent on travel purchases annually.
Earn 3x points on other travel worldwide after the first $300 is spent on travel purchases annually.
Earn 10x total points on Chase Dining purchases with Ultimate Rewards®.
Earn 3x points on other dining at restaurants, including eligible delivery services, takeout and dining out.
Plus, earn 1 point per dollar spent on all other purchases.
Other Benefits
$300 Annual Travel Credit
Complimentary Priority Pass Select membership at 1,300+ VIP airport lounges worldwide
Up to $100 Global Entry, TSA PreCheck® or NEXUS fee credit
Special benefits during your stay with The Luxury Hotel & Resort Collection
No blackout dates or travel restrictions on flights booked through Chase Ultimate Rewards
1:1 point transfer
24/7 access to a Customer Service Specialist
Travel and protection coverage
Foreign Transaction Fee
None
Chase Sapphire Reserve
Sign-Up Bonus
60,000 points after spending $4,000 in first 3 months
Annual Fee
$95; $0 for each authorized user
Benefits
Earn up to $50 in statement credits each account anniversary year for hotel stays purchased through Chase Ultimate Rewards®.
5x points on travel purchased through Chase Ultimate Rewards®, excluding hotel purchases that qualify for the $50 Anniversary Hotel Credit.
Earn 2x on other travel purchases.
Earn 3x points on dining, including eligible delivery services, takeout and dining out.
Earn 3x points on online grocery purchases (excluding Target, Walmart and Costco).
Earn 3x points on select streaming services.
Plus, earn 1 point per dollar spent on all other purchases.
1:1 point transfer
Travel & purchase coverage
24/7 access to a customer service specialist
Other Benefits
None
If you put all your spending on the credit card, the Reserve can pay for itself pretty quickly.