by John Terry |
Last Updated: February 18, 2019 It can be intimidating to figure out which starter travel credit card to start with. There are hundreds of different cards – all with different perks. But finding the best starter credit card for earning points and miles is crucial to building a good foundation of cards in your wallet.
Understanding Your Credit Score
The one downside to travel credit cards is that you will need a good credit score, typically over 690. Thankfully, there are many different ways to check your credit score. We have an entire article about the details of what makes up your credit score, but in general, it is payment history (35%), how much you owe (30%), length of credit history (15%), new credit (10%) and types of credit (10%).
If you don’t have a high enough score, there are a handful of credit cards that are good for people building their credit. While these won’t earn travel points, they usually will have perks that make it more lucrative than paying with cash or debit card.
And remember, using a credit card responsibly – paying off in full each month – will actually increase your credit score. Many people think more credit cards equals a lower credit score – that just isn’t true.
What makes a great card
No credit card is created equal. Finding the best starter credit cards to earn points and miles isn’t easy only because there really are quite a few options.
When considering a starter credit to earn points and miles, it’s best to consider cards with transferable points such as Chase Ultimate Rewards or American Express Membership Rewards.
We are not believers in churning credit cards to earn sign-up bonuses, so we’re more apt to consider cards that steadily earn everyday through perks and earning potential.
For our best starter credit cards, we will consider the following: annual fee, sign-up bonus, and earning potential.
Annual Fee
There are starter credit cards with annual fees and those without. In general, the better the card, the higher the annual fee.
For premium travel cards, like the Chase Sapphire Reserve, the annual fee can be as high as $400-500. But, premium travel cards carry the most benefits and you actually “earn back'” much of the annual fee.
The key to being successful with points and miles is making sure you get value from the annual fee. With all that said, there are some great starter cards with no annual fee.
Sign-up Bonus
The sign-up bonus is what many consider the most important factor when opening a new credit card. By spending a minimum amount in a certain number of months, the new cardholder generally earns thousands of points or miles.
Sign-up bonuses change constantly and aren’t the same for everyone. In order to encourage more credit card applications, companies will make sing-up bonuses more lucrative. For example, the Chase Sapphire Reserve card had a 100,000 point sign-up bonus when it was released, but now it’s nowhere near that high. Similarly, when American Express released its new Hilton co-branded cards, sign-up bonuses were as high as 150,000 points. Check out the best ways to meet minimum spend requirements.
These bonuses are not the most important thing in my opinion, but they are definitely another way to maximize point value when opening a new credit card.
Earning Potential
For the everyday person, the earning potential is the most important thing when finding the best starter credit cards to earn points and miles.
Slow and steady when’s the race. Yes, you can go out and churn credit cards to earn as many sign-up bonuses as possible, but that could negatively impact your credit score and also anger credit card companies. Opening up too many credit cards can also really limit you because of the Chase 5/24 rule.
Getting cards that earn bonus points in categories where you spend the most is key to maximizing points and miles. Earning 3x points on restaurants or 4x on groceries is going to add up faster than you think. So, when picking the best starter credit cards to earn points and miles, consider where you’re spending money and choose a card with the bonus categories for you.
Best starter credit cards to earn points and miles
1. Chase Sapphire Preferred
The Chase Sapphire Preferred is one of the most popular travel cards out there. The value of Chase Ultimate Rewards, due to its redemption flexibility, makes it one of the best starter travel credit cards to earn points and miles. The flexibility allows cardholders to transfer points to hotel and airline transfer partners or redeem through an online travel portal.
- Annual Fee: $95 (waived for the first year)
- Sign-up Bonus: 50,000 points after spending $4,000 in the first three months. This equates to $625 when redeemed through the Chase Travel Portal.
- Earning Potential: 2x on restaurants and travel; If you eat out or spend money on travel, points can add up quickly. The “travel” category is very broad and includes things like parking and rideshare apps.
- Other: Also includes perks such as travel and purchase protection and no foreign transaction fees. A similar option, with a higher annual fee but also more perks, is the Chase Sapphire Reserve card.
2. Chase Freedom Unlimited
The Chase Freedom Unlimited card is our favorite suggestion for someone who wants to start earning points and miles, but doesn’t want to jump straight into the deep end. While this is just a cash back card, once it’s paired with the Chase Sapphire Preferred or Reserve, the cash back can be turned into Chase Ultimate Rewards and redeemed for travel.
- Annual Fee: No Annual Fee
- Sign-up Bonus: $150 dollars after spending $500 in the first three months.
- Earning Potential: 1.5x on every purchase; For a starter, this is great because there’s no thinking involved.
- Other: Cash back can turn into Chase Ultimate Rewards when the cardholder also has a Chase Sapphire Preferred or Reserve card.
3. American Express Gold Card
The American Express Gold Card is similar to Chase Sapphire Preferred – it’s a mid-level travel credit card. While it does have a higher annual fee, it’s earning potential is unheard of among other cards. If the annual fee can be recouped through the dining and airfare credit, this makes it one of the best-valued travel credit cards for earning points and miles.
Having access to the Membership Rewards program also gives cardholders a ton of flexibility with the ability to redeem points through amextravel.com or transfer to many different airline and hotel partners.
- Annual Fee: $250
- Sign-up Bonus: 35,000 points after spending $2,000 in the first three months.
- Earning Potential: 4x on U.S. Restaurants and U.S. Supermarkets up to $25,000 per year, 3x on airfare booked with airlines, 1x on every other purchase; For the everyday person, being able to get 4x on groceries and restaurants can’t be topped on any other credit card.
- Other: $120 dining credit, $100 airfare credit; Both of these have restrictions, but they help recoup some of the $250 annual fee.
4. American Express Everyday Preferred
If eating out or traveling isn’t your thing, the American Express Everyday Preferred card might be the better card for you. The lower annual fee makes it more attractive to starters and the unique earning structure is a runway to earn points quickly.
Like with the American Express Gold Card, cardmembers earn Membership Rewards, which offer the flexibility to redeem points through amextravel.com or transfer points to different airline and hotel partners.
- Annual Fee: $95
- Sign-up Bonus: 15,000 points after spending $1,000 in the first three months.
- Earning Potential: 3x on U.S. Supermarkets up to $6,000 per year, 2x at US Gas Stations, 1x on every other purchase; This card also earns a 50% bonus on all points earned in a billing period after 30 transactions in a month.
- Other: Limited purchase protection. A similar option, with no annual fee but with slightly less earning potential, is the The American Express Everyday card.
5. Barclaycard Arrival® Plus World Elite Mastercard®
The Barclaycard Arrival Plus World Elite Mastercard is different than every other card on this list – the points cannot be transferred to airlines and hotels. Instead, points can be used to redeem for travel at BarclaysUS.com or to wipe out travel charges on the billing statement. Even taxes and fees on an award flight ticket could be wiped out. We’re including it on this list of the best starter credit cards to earn points and miles because it has unique redemption options.
The minimum spend of $5,000 and three months isn’t the easiest, but the flexibility for travel redemptions is attractive.
- Annual Fee: $89 (waived for the first year)
- Sign-up Bonus: 70,000 points after spending $5,000 in the first three months. This equates to $700 when redeemed through the Chase Travel Portal.
- Earning Potential: 2x on every purchase; It’s simple to understand and there’s no annual limit. Each point is worth a cent, however, cardholders get a 5% rebate on all redemptions.
- Other: Chip-and-Pin capability; no foreign transaction fees
Honorable mentions
Chase Freedom: The Chase Freedom, which has no annual fee, earns 5% cash back on quarterly categories and 1% on everything else. The current sign-up bonus is $150 back after spending $500 in the first three months. Similar to the Chase Freedom Unlimited, that cash back can turn into Chase Ultimate Rewards when the cardholder has a Chase Sapphire Preferred or Reserve card.
Capital One Venture Card: The Capital One Venture card has a $95 annual fee (waived for the first year) and earns 2x on every purchase as well as 10x on all purchases with Hotels.com. It currently has a 50,000 bonus after spending $3,000 in the first three months. This card also comes with a $100 credit for TSA PreCheck or Global Entry. These points can be redeemed through their portal or transferred to a limited number of travel partners.
Final Thoughts
One of the most important things to consider when trying to identify the best starter credit card for earning points and miles is the redemption options. What’s the point of earning a ton of points that you can’t use? That’s why we recommend getting a card with transferable points such as Chase Ultimate Rewards or American Express Membership Rewards. Even points from the Capital One Venture card or credits from the Barclay Arrival Plus World Elite Mastercard can give the cardholder maximum flexibility.
The other important thing to consider is your current spending habits. What’s the point of getting a high bonus on travel spending if you don’t travel frequently? The best starter credit card for you to earn points and miles will allow you to maximize point earnings through your everyday spend.