The other day, a friend of mine had asked me if I would recommend a first reward credit card for her aunt (we’ll call her Debbie). Debbie was looking to do more traveling and wanted to earn rewards to make it more affordable. She wanted to earn miles, points, or cash back, but wasn’t sure which one would work best for her. Being that I love credit cards and their rewards, how could I say no? 🙂
Recommending To Someone Their First Reward Credit Card
There are many reward credit cards on the market. Some receive more publicity than others, but everyone’s goals are different. It is always a fun challenge to recommend a card to someone looking to travel for less money!
I reached out and introduced myself to Debbie, letting her know I’d be more than happy to help her pick her first reward credit card that she would help her to earn rewards. After asking a few basic questions:
What is your credit score?
- Anyone playing the points game should ideally have a credit score over 700.
What are your traveling goals?
- I think this is where most people get caught up in the “best card” talk from friends/bloggers. The best card is what works best for you.
- You should always have a goal in mind when applying for reward credit cards. It is always best to have a goal in mind and work backwards.
What airlines does she typically fly?
- I don’t want to recommend a card to someone with an airline or hotel chain they do not use. That would be a complete waste.
Does she want easiest redemption, or is she willing to learn some basics about award availability?
- Let’s be honest, it can be frustrating to search for an award seat on an airline, just to see it either isn’t available, or lack of saver awards.
- Some airlines are straightforward (Southwest, Jetblue), but if you want to get the most out of other programs, you should learn some basics about partners and award charts.
- Not everyone wants to take the time to learn those things, that is something I have learned along the way when people ask me questions.
I asked a few other questions, but I think these are questions each person should ask themselves when starting out in the points game (or anytime you get a new credit card).
Debbie was purchasing a ticket for an international trip (it would be about $1500) and she would be out of the country for about 3 weeks. I kept that in mind, because a card with a foreign transaction fee would be a terrible choice.
She is based out Boston and has a few options for airlines. I started thinking about the airlines she has access to, such as United, Jetblue, Southwest, Delta, and others. She doesn’t travel too often now, but would like to start. She also isn’t partial to a particular airline.
Debbie was also looking for a card with a nice bonus (aren’t we all 🙂 ). The bonus would be used for a future trip, since she was ready to pay for her current trip.
She also wasn’t interested in opening a lot of cards, but wanted a card she could use for everyday spending and earn valuable rewards.
Before we started digging deeper into what she wanted, I had some options in my head already, such as the Chase Sapphire Preferred, possibly the Chase Sapphire Reserve (for someone new $450 is a hefty fee to pay, even though it is worth it for year 1 IMO), and a few others.
Those possible recommendations went out the window when she mentioned she spends about $500 per month on her credit cards.
Based on her average spend, she would not hit the minimum spending requirement for either of the Chase cards. Which is pefectly fine, but I don’t want to encourage overspending to earn points. That’s how people get into trouble!
She also wasn’t interested in learning the award charts at this time. The more I questions I asked, the clearer things became.
I started to summarize the key points for Debbie:
- Big Bonus
- No Foreign Transaction fees
- In 3 months, she can realistically hit a $3,000 spend limit (since $1500 would be her airline ticket cost, plus $500 per month)
- Wanted easy redemptions, and was not interested in learning award charts.
- Wasn’t partial to any one airline
- Had credit score over 700 to play the game
- Goals were to earn points to use for future redemption on travel
- She wasn’t looking to churn credit cards
- She will earn miles on the tickets she purchases.
There were 2 cards that came to my mind when I started narrowing down options. They were the Barclay Arrival Plus and the Capital One Venture card.
Why did these 2 cards pop into my mind?
These 2 card hit all the big points for Debbie.
- The bonuses are large, worth $460 ($483 for Arrival Plus),after hitting the $3,000 requirement. She will hit this minimum with her upcoming and average spending
- These cards essentially make you a free agent, because you can book on any airline, at anytime. No need to worry about award availability.
- No Foreign Transaction Fees
- Easy redemptions as she just uses the points to erase the charges.
- Had proper credit score to get the cards
- Can use the points for a future redemption
The downside to these cards would be that you don’t necessarily get the same value out of flexible point cards. With transferring points to partners, it is possible to exceed 2 cents per point value. That said, 2% back isn’t a bad earning rate (it should be the minimum you earn).
These 2 cards fit the bill for Debbie, but there was one key factor that separated one of the cards from the other.
What card did I end up recommending?
Although the Barclay Arrival Plus, gives you 5% back on your redemptions, meaning you earn 2.1% back vs the 2% back on the Capital One Venture. To me that amount is small enough, that it is nice, but not a must have piece.
I recommended the Capital One Venture card over the Barclay Arrival Plus. It came down to the minumum amount needed to redeem your miles.
Capital One doesn’t have a minimum redemption amount! The Arrival Plus, you have a minimum redemption of 10,000 points ($100). I find it harder to recommend the Arrival Plus, since there are lots of travel cost that are below $100.
The Capital One Venture card also has a lower annual fee ($59) compared to the Barclay Arrival Plus ($89), but both are waived for year 1.
Debbie wasn’t interested in churning cards, the fact Capital One pulls from all 3 bureaus, doesn’t change my recommendation.
The next day, Debbie let me know she had applied and was approved for the Capital One Venture card with a nice credit limit. Happy travels Debbie and welcome to the world of traveling for less!
Do you agree with my recommendation for Debbie? What would you have recommended for her?
Ed: This post was originally published a few days early and so has been republished today.