Kate's on a Plane

Given the plethora of travel credit cards on the market, it’s somewhat surprising that there is almost universal consensus among points and miles people about how people new to the hobby should begin. I’m leaving out a lot of detail and nuance here, but to simplify:

• Chase Ultimate Rewards are widely considered to be among the most valuable and easy-to-use points, because they transfer to a high-value hotel partner (Hyatt) and familiar domestic airlines (Southwest and United).
• Chase is famous for its 5/24 rule: You are automatically ineligible for any Chase credit cards if you have opened five or more personal credit cards in the last 24 months. (Note that business credit cards don’t count.)
• So, conventional wisdom dictates that someone new to the hobby should always start with Chase cards, and then branch out to other issuers once they have exceeded the five cards in 24 months and are ineligible for Chase cards anyway. 
• The Chase Sapphire Preferred is almost always recommended as the starter card.

I didn’t do it this way! Here are the three cards I started with, and why I chose them:

1: Chase Ink Business Preferred

This card has many of the same advantages of the Chase Sapphire Preferred, but with a higher sign-up bonus. Most importantly, like the CSP, the Ink Business Preferred confers the ability to transfer points to partners. Since the annual fee is the same, and I was able to meet the (higher) minimum spend requirement, I opted for this business card to get the juicier bonus. 

The travel insurance on the CSP is a bit better in that the primary rental car insurance on the IBP only applies to business travel, but since I also get travel insurance from my card #3, this wasn’t a consideration for me.

2: American Express Gold

I originally got this card because I finished the minimum spend for the Ink Business Preferred quickly and needed to kill time before I could apply for another Chase card. The Amex Gold earns 4X on dining and groceries, so I thought it would be a good long-term keeper card to use for these expenses. This was somewhat of a rookie mistake, as I now know that I’m almost always putting our groceries and restaurant meals on whatever cards I’m currently working on a minimum spend for. BUT, I quickly realized that this card granted me access to another powerful vehicle for accumulating points: Rakuten. 

Rakuten is an online shopping portal that allows you to earn rebates on online purchases. Unlike other cashback shopping portals, however, Rakuten provides the option of earning your cashback as American Express Membership Rewards points at a rate of $.01 per point. You must hold an American Express Membership Rewards-earning card in order to be eligible to do this.

Earning rates vary across merchants and by the day, but these points really add up. In six months, I earned more Membership Rewards points just from using Rakuten than I got from the sign-up bonus for the Gold card. In my view, gaining access to the earning potential of Rakuten is well worth giving up a 5/24 slot, even early in the game. (You could achieve the same thing with an Amex business card, but these are not particularly beginner-friendly, as they come with both high annual fees and high minimum spend requirements.)

3. Capital One Venture X

I will admit, this was not a strategic move on my part. I opened this card for two reasons: I had a trip coming up where I’d be traveling through an airport with a Capital One lounge, and I learned that my mom was sitting on a pile of Capital One Venture miles (Capital One calls them “miles” instead of points) and I wanted her to be able to transfer them to me. Capital One is unusually liberal with their miles transfer policy; you can transfer their miles to literally anyone as long as they have a Capital One miles-earning card. 

Although these were short-term considerations, this has come to be my favorite long-term keeper card, for the following reasons:

• Venture X provides travel insurance, which gives me peace of mind that I’m covered if things go sideways on a travel day. 
• Lounge access has been a game changer for me. I now route my travel through airports where I can visit lounges, because it makes the experience so much better! I love having a quiet place to sit, and often access to free drinks and/or food. If I’m parked in a Capital One lounge, I do not care if my flight is delayed. Heck, I don’t care if it’s canceled. I’ll live there.
• At $395 per year, the sticker price for the card is high, but you can recoup 100% of this cost for travel. That’s because the card comes with a $300 travel credit that you can redeem through the Capital One travel portal (cash value = $300, obv) and an anniversary bonus of 10,000 points. Those 10,000 points can be used to “erase” $100 worth of travel purchases, effectively serving as a $100 statement credit for travel. So actually, Capital One pays me $5 per year to hold this card. That doesn’t take into account benefits like lounge access, travel insurance, and a $120 global entry application fee credit once every four years.
• This is not generalizable, but Capital One dropped a whole bunch of tickets to the Eras Tour for Venture X cardholders, and I GOT ONE. I will now love Capital One forever. 

I think this card is especially well suited to beginners for the following reasons:

• Capital One has been known to be pretty picky in their approvals. They do not like to see applications from people with many inquiries on their credit reports. So, it’s going to be much easier to get approved for this card early on in your points and miles journey when you (likely) have fewer inquiries on your credit report.
• Transferring points out to airline partners like Virgin Atlantic or Air France is going to yield the best value, but the Capital One purchase eraser feature is probably one of the most beginner-friendly ways to redeem points for travel. You just book whatever travel you want with your Venture X card, just as you would for a regular ol’ cash ticket, and then “erase” the cost with Venture miles at a rate of $.01/mile.

So, what would I suggest to others as their first three cards?

• Chase Ink Business Preferred OR Chase Sapphire Preferred: If you’re comfortable jumping right into business cards, you’ll get more points from the Ink, but if you want a lower spend or a personal card, the Sapphire is good too. (Okay, so I guess I’m not really bucking conventional wisdom here.)
• American Express Gold, paired with Rakuten. Download the Rakuten browser extension and you won’t even have to think about it. You’re welcome. 
• Venture X. Happy lounging.