Wednesday, May 15, 2024

Seeking the Mythical 'Best' Travel Credit Card

Sometimes people mistake us for travel experts. We’re not. Every time we travel we learn something new, and we also learn by reading websites like FlyerTalk and travel blogs, and sharing information, experiences, and tips with other travelers. Maybe that makes us students of travel.

Recently a young man we encountered asked us “What’s the best travel credit card?” We gave him a quick answer, the Chase Sapphire Preferred, and told him we’d email him with more detailed information. This is a lightly edited version of what we wrote. Sadly, the information applies only to US residents. Our frequent flyer friends in Canada, Europe, and Australia are generally envious of the multitude of credit card offers available in the US.

If you want to use one or more credit cards to accrue miles (frequent flyers call them "points"), your first choice is between an airline-specific credit card, and a credit card that allows you to transfer points to a number of airlines.

Gary Leff posts a useful summary of airline credit cards here in his View from the Wing blog. We ourselves currently hold a Chase British Airways Visa. We signed up because of a big bonus of Avios points, but we've found it of very limited use. We do get a modest discount when using the card to book a BA flight. That, coupled with the $200 AARP discount on business class fares, can add up to a reasonable deal. In some circumstances, a dollar credit is available to offset the ridiculously high British taxes, but we haven't as yet utilized that.

We also hold a Bank of America Alaska Airlines Visa. The Alaska card was useful because it featured an annual $99 Companion Fare.

However, Alaska recently introduced a minimum spend requirement ($6,000?) to "earn" that companion fare, now $129. It otherwise doesn't earn enough points, even through Alaska Airlines purchases, to satisfy us. Ours is grandfathered in so we'll keep it for now, but we seldom use it. An airline-specific card can be okay if you know you're largely going to fly, for example, United Airlines. Airline credit cards commonly include perks like free luggage or boarding with an earlier group, but the points you earn are of course largely limited to the one airline.

Just for fun, we checked several sites for comparisons of the travel credit cards that transfer to a variety of airlines. The Chase Sapphire Preferred is featured in Forbes, Nerd Wallet, View from the Wing (halfway down the page), The Points Guy, and One Mile at a Time, with useful comparisons. Those last three are among our favorite travel blogs. 

They all spend a fair amount of time touting credit cards (they earn a small bonus for links from readers who sign up for a card), but they'll also announce when there's an extra-special bonus offer, and are generally entertaining and well worth reading if you're interested in travel. We therefore still feel comfortable in recommending the Sapphire Preferred as a good "starter" card.

Credit cards are used (some would say misused) in other ways. 

There are travel fanatics who for years have used spreadsheets to keep records of the credit cards they "churn,” signing up for cards, scooping up the bonuses, then cancelling the cards as soon as they’re allowed, only stopping when their credit ratings take too big a hit. That got so popular that big outfits like Chase have put a limit on how many credit cards an individual can sign up for within a two or three year period.We've never involved ourselves in that. We’ve definitely signed up for a few of our credit cards because they were offering a big bonus.

Another way to accumulate miles is known as "manufactured spend." It involves activities like buying gift cards or other commodities on a points-earning credit card and then cashing them in and using the funds to pay the credit card bill. There have been a few famous schemes over the years. For a hilarious example, look up Pudding Guy, who achieved fame and fortune in 1999 by exploiting the fact that the value of the mail-in-offer on each serving exceeded the cost of the pudding.

People also took advantage of a poorly thought-out US Mint promotion 20 or so years ago to buy coins with a credit card, deposit them in their bank account, pay off the credit card bill, and earn a lot of frequent flyer miles in the process. Other transactions, such as buying large quantities of gift cards and immediately cashing them in to earn credit card points, can skirt the border of legality and don't interest us. To each his or her own.

As for us, we've certainly signed up for a number of cards with good bonuses, but we haven't churned them. Most of the miles we earn are what frequent flyers call BIS or Butt in Seat miles.

In the search for the mythical "best" travel credit card, we'd still consider Chase Sapphire Preferred to be a good starting point, especially if you can find a 75K-100K opening bonus.

Be aware that Alaska Airlines, our own preferred airline, is NOT a transfer partner.  We use our Chase points (its program is called Ultimate Rewards) when we want to go someplace that Alaska doesn’t fly, or doesn’t offer good deals.  Don’t transfer them until you find a flight, though.  Once you've transferred the points into your airline frequent flyer account, you can't transfer them back out. We have mainly used United Airlines or Air Canada as transfer partners, but you can look for others.  

You can compare the Chase program to those offered by Capital One and CitiBank to see which will best fit with your travel preferences and patterns. 

We earn the vast majority of our Alaska points by flying.  Other than the BOA Visa, the only credit card that transfers directly to Alaska is the Bilt MasterCard.  We don’t know much about it, as we don’t have it, but some frequent flyers use it for rent payments, which we don’t have at this point in our lives.  

The Alaska credit card does award Alaska points (including some percentage as status miles), but we don’t use it much either, mainly because we don’t need status miles and it doesn't include delay/lost bag insurance.  It does, however, cover free bags, if you tend to check them.  The Chase Sapphire is one of a growing number of credit cards that doesn't charge foreign exchange fees. It also include “primary” car insurance, which can save a lot when renting cars. We always decline the insurance offered by the rental outfit. Fortunately we have never had to test it.

We haven't touched on hotels. We carry a Chase IHG Mastercard. For a relatively modest annual fee, we get IHG Platinum status (of generally only modest use and perhaps no longer offered), a free hotel night annually, points accumulation, and for us a Mastercard that has worked a couple of times where a Visa wouldn't (a train ticket vending machine at a small German train station comes to mind).

We also carry a Hilton Amex Surpass card, which gives us reasonable bonus Hilton points when paying for stays. It comes with Gold status, but since Kathy is now a Lifetime Diamond, that's of little use. It also recently dropped with little notice the 10 annual guest passes it had offered into Priority Pass airport lounges (we discovered that with chagrin early one morning this past February at YVR when trying to access a PP lounge), and we'll probably drop the card for a cheaper Hilton Amex card at some point. 

We pay everything we can with credit cards, and every card is set up to be automatically paid in full monthly from our bank account.

Ultimately, the most important task in choosing one or more travel credit cards is learning what works best for you, which may be quite different from what works best for us.

Happy travels!





Daz said...

The Avios earned from Chase's BA Visa card can be used with OneWorld alliance partners.

I've had some wonderful flights this way: a couple of first class trips to/through Hong Kong; a business class trip to Singapore via Doha; and an upcoming business class flight (on BA metal) to Munich (avoiding London and its fees).

It is absurd that the UK charges such high taxes (including on award flights) and so my solution is simply to avoid redeeming miles to fly to London.

Kathy and Brian said...

It's good to know you've used them so effectively. We've checked sporadically without much success, but you've encouraged us to keep trying.