You Ask, We Answer: Busting Reward Credit Card Myths

You Ask, We Answer: Busting Reward Credit Card Myths

What holds you back from getting travel reward credit cards? It’s something I ask almost everyone I meet these days.

I feel like it’s a no-brainer free money and free travel! I’m increasingly impressed when I talk to friends and they’re already wise to the benefits of point cards, even if they’re pretty conservative with their reward card applications.

During a recent conference, I was fortunate enough to have a captive audience of folks who:

  1. Are very, very frequent travelers (but not in the travel industry)
  2. Have high incomes and good credit scores
  3. Love a good deal and researching things online

So imagine my surprise to discover they don’t generally use points and miles credit cards.

When I dug into why, it turned out that they all had plausible reasons, but ones that are easily solved by the right card.

The Busy Professor

“I’ve idly collected miles when I fly for decades, but I rarely end up using them. Mileage flights are impossible to book less than two months in advance, when I’m usually planning my trips.”

Intriguing. I wonder if he’s looked in recent years when airlines have been opening more award seats closer to take-off than when seats for a flight first open or if he primarily is looking for high season or holidays. Since I met him in Barcelona at the start of summer vacation, that’s a strong possibility.

Starwood Preferred Guest from American Express
Starwood Preferred Guest from American Express

The main issue with this excuse is that these days you actually have far better award availability closer to departure, as I mentioned above, but you can’t be sure which airline or dates that availability will be on.

Here, the best bet for using miles is to have flexibility, which means stocking up transfer points with a lot of options, rather than miles with a specific carrier.

That means the Starwood Preferred Guest American Express, which has points that transfer to 32 different airlines typically with a 25 percent bonus when you transfer in 20,000-point increments, is perfect. Use a site like Kayak to see who has the flights you want and who has seats, check the award availability, then transfer Starpoints.

The Uber-Frequent Flyer

“I fly a lot, both for work and for fun. I probably should be using points, but the people who do seem to pursue it like a part time job.”

“I don’t have the time  to research the right cards to use, to keep up on all the right ways to use it, or find flights that let me use those points when I need to book quickly last minute how I usually travel.”

This guy needs a card with no foreign transaction fees and extra points on travel expenses. When I heard this, I couldn’t believe how much money he must be leaving on the table paying for all of his flights in cash and not getting points or even cash back for his expenses.

Chase Sapphire Preferred Visa Signature
Chase Sapphire Preferred Visa Signature

In general, I recommend the Chase Sapphire Preferred Visa Signature card for people who just want a general card to use for points and miles. It’s got a great starting bonus (40,000 points but sometimes 50,000) and double points on dining.

It really shines for frequent travelers though, who have the option to either transfer their points to a variety of airline programs, including partners in all three of the main alliances, or get 20 percent off and flexible redemption options for using points towards travel like cash back through the Ultimate Rewards travel portal.

On top of that, you get double points on travel and no foreign transaction fees.

The Family Man

“I have a rewards card, but not a travel card, a cash back card. One percent cash back from these standard award cards is easy and convenient.”

I can understand this point completely. Its basic delayed gratification, right? Why amass points or miles that I’ll use someday when I find a flight available, when I can just get cash back without doing any other work?

It totally makes sense unless you travel already. If you are an occasional traveler saving up for a big vacation, you’re not already spending on travel. But if you travel regularly and only get 1 percent cash back on a general reward card, you are missing out.

Barclaycard Arrival World MasterCard
Barclaycard Arrival World MasterCard

The Barclaycard Arrival World MasterCard gives you double miles on all purchases, regardless of category, so there’s no need to manage your spending.

But I said miles, not cash back, right? Not exactly. The way the Barclays system works is that you can use those miles for any kind of travel expenditure, from airlines to hotels to cruises and more, essentially like cash back.

Then, at the end of the year, you get 10 percent of the miles you spent back. So you are getting 2.2 percent cash back on everything you spend, rather than 1 percent, with no extra effort to find the right flights to redeem.