Earlier this week, I wrote about two amazing credit card offers, one by Chase and another by Amex. You can read that blog post here. However, are all offers created equal? Should you jump on an offer just because it’s an all time high offer? How do you decide which card to get once you plan to get a brand new travel credit card?
Also Read: What’s the real value of your miles and points?
Credit Card Offers
Friends and family members often ask me about the best and fastest ways to earn miles and points. My answer usually is that they should apply for a miles and points earning credit card. However, while the answer seems simple, it’s more complicated to implement. Given the plethora of cards available in the market, which is the one card that you should apply for? If you look around on the internet, you’ll find umpteen pieces of advice.
IDEAL OPTION(S)
So what’s really the best option? There’s no definitive answer as every traveler is unique and his needs and requirements vary. I’m going to walk trough the different steps that you can go through in your mind before you actually select a card and decide to apply.
STEP 1: HAVE A CLEAR TRAVEL GOAL
This is extremely vital as it dictates next steps in the process. You need to be very clear about what you need to use your miles and points for. Do you want an ultra luxurious beach vacation? Do you want to fly business class? If you want to fly business class, then a simple cash back card would be of no use to you whatsoever.
STEP 2: YOUR FINANCIAL SITUATION
You need to keep your financial situation in mind before you apply for a card. While huge sign up bonuses are great, if you can’t afford hefty annual fees, then you’d be much better off going for a card that has no annual fee in the first year or has a lower annual fee going forward.
STEP 3: BANK APPLICATION RULES
Each bank has different application rules. For example, American Express only gives you a credit card bonus once in a lifetime. Similarly, Chase doesn’t approve you for a card if you have bene approved for more than 5 cards in the last 24 months. Please keep the specific bank application rules in mind before you apply.
STEP 4: YOUR SPENDING PATTERN
Do you spend a lot on dining? Are you the kind of person that takes your team out for lunch. Then the Chase Sapphire Reserve (3x Ultimate Rewards points on dining) or the Amex Gold Card (4x Membership Rewards Points on dining) might be the best for you, provided you’re able to pay the steep annual fees. If you travel frequently for business and are loyal to an airline or a hotel, then a co-branded card might be the best option.
STEP 5: DON’T FALL FOR THE HYPE
I’ve written previously about limited time offers and how they’re created in order to generate a buzz. Not all limited time offers are created equal and not all will be beneficial to you. If a card has 100,000 points as a sign up bonus, should you sign up for it if you never intend to use those points in the near term? I’d say no. Hoarding a lot of miles/points doesn’t make sense as the currencies devalue over a period of time.
For example, I’m primarily loyal to Hilton, followed by Hyatt. Co-branded Marriott credit cards are currently running two welcome bonuses, each offering 5 free nights. While these bonuses may be fantastic for those who stay frequently with Marriott, I still plan to sit this out out.
STEP 6: PLAY THE LONG GAME
This is more of strategy than tactics. I’m a strong proponent of playing the long game and not just earning and burning. While churning may be in vogue, I’d suggest that you stay in the good books of the banks by intending to stay in the game long term. Airlines and hotels make billions of dollars selling miles and points. The game is not going away. If you adopt a crash and burn approach, you’ll eventually sink. Banks have sophisticated algorithms in order to track anyone attempting to game the system. So, take it easy. Have a sound plan and be a good customer.
THE PUNDIT’S MANTRA
Loyalty is a two way street. While I abhor the sudden changes that are often made with little or no notice period to loyalty programs, I always advice people to tread cautiously while applying for miles and points credit cards. The allure of a beachfront villa or a seat in first class is tempting, but it shouldn’t come at the cost of being shut down by a major credit card issuer. So, have a sound plan and achieve your travel goal with your favorite miles and points credit card.
I always suggest that you apply for cards that allow you to earn flexible points which can be transferred to airlines and hotels whenever you need them. These currencies act as a hedge against possible airline or hotel currency devaluations.
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2 HOTEL CREDIT CARDS ARE OFFERING WELCOME BONUSES OF 5 FREE NIGHTS EACH!
CLICK HERE TO KNOW MORE ABOUT THE 5 FREE NIGHTS OFFER FROM AMEX
CLICK HERE TO KNOW MORE ABOUT THE 5 FREE NIGHTS OFFER FROM CHASE
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