The things to consider when picking a rewards card

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If you are making a decision about which card to apply for, you may be tempted to sign up for whichever card you last saw advertised on your favorite blog. But the thing is, the decision of which card to get can actually be quite specific to each person. The card I recommend for my dad, who has a great credit-score, does a lot of domestic travel, and already has a few rewards cards, is going to be different than the card I recommend for my sister, who isn’t sure what her credit score is, doesn’t have any rewards cards yet, and is interested in an international trip to Asia someday.

So rather than writing a post with a thousand different personalities and the cards that would suit those folks the best, I’m just going to outline a few things you may want to ask yourself to help determine which kinds of cards to go for.

1.) What kind of credit-score and credit-history do you have?

If you have a good credit score (around the 700 mark) and have had a credit card or two that have been with you for 5 years, you could probably consider just about any card knowing that it’s likely you’ll get approved.

But if you either don’t have a great credit score OR you have never really had a credit card before, you are going to have to aim for a credit-building kind of card rather than a lucrative rewards card. An example of a good credit-building kind of card (one that has no annual fee and therefore, one that you can keep for years) would be the Chase Freedom card. This is a card that has no annual fee, is a pretty reasonable goal for someone still building their credit-score, and yet can still help them earn Chase points that may eventually be used for travel. (These points admittedly become much much more valuable when your credit-score is strong enough to apply for a card like the Chase Ink Bold or Chase Sapphire Preferred, but for more information on how this family of Chase cards works, read this post.)

 

 2.) What kinds of cards do you already have?

There are a few kinds of miles/points that Drew and I like to always have available for earning. For instance, we see United miles and American Airlines miles as primary currencies for our travel needs. (Largely because of their lack of fuel surcharges.) But we also really like the “buy one get one” type perk of having the Club Carlson card.

But we will always prioritize miles-earning cards over hotel-points-earning cards. So we put cards like the Club Carlson card on the back-burner until we’ve already collected cards that will earn us American Airlines and United miles.

 

3.) What kinds of travel/rewards are you interested in?

If you are interested in primarily domestic travel, then I will probably recommend cards that help you earn SouthWest points. This would of course include the business and personal SouthWest cards (if they are offering 50,000 point bonuses as they now are). Though the Chase Sapphire Preferred card is also a good choice for earning SouthWest points as it transfers to Southwest 1:1. Southwest points can take you pretty far and it’s just overall a pretty great program for domestic flying.

But if you are aiming for international travel, then there are other cards for you. Again, we really like earning American Airlines and United miles, but there are lots of cards you might want to consider.

This leads to the next point…

 

4.) What kinds of sign-up bonuses are available?

One of the most important things to consider when you’re looking into applying for travel rewards cards is, of course, what the best current sign-up bonuses are.

This may require some familiarity with a program and with a credit card in general. For instance, you don’t want to get a card with a 40,000 mile bonus if it annually offers a 50,000 mile bonus. Then again, not all bonuses are predictable. Chase Sapphire Preferred for instance has a 40,000 point bonus, but sometimes that goes up to 50,000 points.

As a matter of fact, for those who aren’t familiar with what credit card bonuses can or have been in comparison to what they are now, we say that generally 50,000 miles or above tends to be a good bonus for the mileage-earning or bank-points earning cards.

And…for better or worse, when a card’s bonus goes up, you will see the blogs all going nuts about it.

 

5.) When was your last application for credit?

Of course, you don’t want to waste an application by getting denied for having applied for credit too recently. If you just applied for a credit card last week, you are likely going to get denied for whichever card you apply for this week. The applications are too close together and you look desperate.

Now…there’s some strategy to this, but generally we recommend that a person can apply for 1 card per bank every 3 ish months. ¬†There’s probably an exact science to this, but we haven’t refined it to a tee. We just stay fairly safe within 3 months between applications.

 

Now…I feel like there’s got to be something I’m missing. So please, if you have a question about credit-card application strategies that I haven’t covered in this post, please ask in the comments below and I’ll add what I can!

2 Comments on “The things to consider when picking a rewards card

  1. A very nice outline. Step 3 is one I really overlooked when I got started. I started with the most recommended cards before I realized that the award travel my wife and I wanted was a bit of a niche (business travel to Europe and willingness to pay fuel surcharges if it saved tons of points and/or increased availability). UA is rotten on business points required and AA business availability to Europe is a joke, so your best miles weren’t ours. Once I saw that ANA (thank you, Drew!) and Aeroplan were going to be better options for us, I realized the much greater value of MR and SPG points for us as opposed to UR (and, of course, TY) points. That has led me to focus on applying for Amex cards and to dig up the TD Bank Aeroplan card, which nobody mentions, for our Visa/MC backup.

    Since you’re not big on spending, you did leave out category spending bonuses as a reason to pick a card, but I would think that is important to some of the people making a decision. Someone who spends most of the year living in the US and buying gas and groceries will want to add an Amex EveryDay Preferred ASAP in spite of its uninspiring signing bonus, while someone who dines out a lot might hasten to get a Chase Sapphire Preferred regardless of the current offer.

    • That is a very good point you make about category bonuses. You’re right, we don’t do a whole lot of spending, and when we do, it’s all very travel and dining related so I would never have thought to mention that! Thank you for adding that insight!

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