What Card is Right for Me?

what credit card is right for me

There are several factors which go into choosing which card(s) is right to start with. Those factors include:

  • What is the minimum spend requirement? – Most cards have a requirement that you spend a certain amount on the card within a given timeframe before they will award you the sign up bonus. That can range from $500 in three months to as much as $10,000 in 5 months. There are cards that do not have minimum spend requirements, but those often have an annual fee which brings me to…
  • Annual Fee – Some of the cards with fantastic sign up bonuses have an annual fee. This fee is most often well worth the expense for the miles that you get in return. For example, last year, Chase Bank was offering a British Airways card with a 100,000 mile sign up bonus. There was an annual fee of $95 that was not waived for the first year. The general consensus is that 100,000 miles for $95 is well worth the expense. But determining whether or not the fee is worth it to you is a decision that you need to make.
  • Is the sign up bonus worth it? – Sign up bonuses among banks and cards vary widely. Most believe you should hold out for a bonus of at least 50,000 points/miles before signing up for a card because most banks only allow you to get a bonus once. For example, United was marketing a 40,000 mile card that many signed up for only to find out 6 months later that United started offering a 60,000 mile card that they, in turn, were no longer eligible for. There are exceptions to this threshold, however. For example, Alaska Airlines and US Airways both offered cards for 40,000 miles with no minimum spend requirement. That can be a significant factor for many who do not spend a lot each month. Additionally, both of these cards are known to be “churnable” which means you can get several bonuses by signing up for the cards multiple times. You need to take into account your personal situation when determining the best card for you.
  • Lastly, you need to determine what your immediate/short term goals are. Maybe you already have a lot of miles in one program and you want to add to that balance. Or maybe you’re just starting out and want to sign up for the best bonuses out there. I think it makes most sense to put down a list of a few places you’d like to visit in the next handful of years and then work towards accumulating miles/points to make those trips a reality.

This brings me to my recommendation for the best cards out there. For those of you who live in a Southwest served area and have plans for domestic travel, there is no better card out there than the Southwest Card. This card gives you 50,000 Southwest points after making just one purchase. There is an annual fee of $69 but 50,000 Southwest points gets you $833 worth of travel. For those of you who live in an Air Tran serviced area, according to this article. Southwest will be taking over most Air Tran routes in August. This news makes this card that much more valuable. Some example of the new routes that you can achieve for free with this card include Portland, ME – Aruba, Bahamas, Bermuda, Jamaica, Puerto Rico, and Cancun. The number of Southwest points required for these routes is still uncertain, but my guess is that you would be able to get at least two roundtrip tickets to one of these destinations with the bonus points from this card. For our family, these points are coming in very handy for our trip to Las Vegas in the coming months.

If you have plans/dreams to travel to Europe, the Caribbean, Hawaii, or South/Central America, the best cards for you is the American Airlines cards. I say cards here because it is well known that you can sign up for both the Visa and American Express version of the card at the same exact time and get the bonus twice. You do need to meet the minimum spend requirement on both cards ($2,500 in 4 months per card, $5,000 in 4 months for both) which can be a deal breaker for many, but if you are able to meet this requirement, you can get 100,000 miles. To put that in perspective, that’s 2.5 roundtrips to Europe during non-peak season. American miles are especially useful because they have award routing rules that allow you to “stopover” which can allow you to add on an additional destination for little or no extra miles, but the details of that are for a different post. It is important to note that if you do not apply for both the American Express and Visa at virtually the same time, the system will recognize you as already received the bonus for the second card and you will not get the second bonus. I recommend filling out the application in two different browsers and hitting “apply” one right after the other.

So, those are my recommendations for cards for domestic and international travel. Please let me know if you have a specific destination in mind and I’d be happy to recommend a card for your situation.

Source: ourfrugallife.com

Category: Credit

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