I have been fortunate enough to start building a solid credit history with a typical nine to fiver’ type job over the past few years. This is via both regular, full monthly payment and by avoiding a high utilization rate throughout the month. For anyone unaware, the utilization rate is basically how much you owe on your credit cards against the total credit limit of all your cards. Check this NerdWallet debrief and you might discover that despite paying off your balance each month, you could be swiping that plastic a little too much.
Why is this important? Your credit score could help (or hinder) your ability to be approved for some awesome credit cards that offer awesome perks.
Most credit cards operate in direct relationship with airlines, hotels, car rentals and other travel essential businesses. This is focused on travel specifically, but great signup bonuses exist which can be redeemed for cool stuff other than travel.
Although I do not consider myself a hardcore travel hacker or anything close to the sort, I have become familiar enough with the way these cards work. The benefits of opening a card can be in the thousands of dollars depending on signup bonus and spend. Early in 2017 Chase was running a pretty wicked promo on their Sapphire Reserve card and I took full advantage of it.
Rundown of highlights (spoiler: I will net about $1,350 in travel from this card this year!)
- Signup bonus 100,000 points
- Minimum spend of $4,000 in the first three months
- $300 annual travel credit (auto applied after you spend accordingly in Travel category)
- Complimentary access to 900+ airport lounges worldwide via Priority Pass™ Select
- Credit for Global Entry/TSA Pre
- Annual Fee $450
I told some friends and family about this and the first comment was always about the seemingly high annual fee. While it is $450/year, if you plan to do ANY type of travel—fly, take Uber, stay at an Airbnb, use E-Z Pass tolls, use street parking—the $300 travel credit can be used here as total spend, and will essentially knock the annual fee down to $150. Hell, I’ve even heard of payments for electrical vehicle charging stations falling under the Travel category. Bottom line: Chase’s Travel category is very broad and you undoubtedly will have no trouble receiving that $300 credit.
The value of the airport lounge pass is good for more frequent travelers, and although difficult to calculate on an individual level as redemption varies, most passes typically run at least $40/visit.
Although it may be difficult for some to hit that initial $4,000 spend, I was able to meet this amount by using it as my primary credit card for three months’ expenses. If the three months was nearing expiration and I still had more to spend, my original backup plan was to buy a few hundred dollars in Amazon gift cards, as I know I would use these eventually. The real goal should be to use this to strategically pay for ordinary expenses, not to invent things to buy.
Bonus: my wallet felt light as a feather while carrying only one credit card.
If you already know you spend at least $1,333 per month ($4k spend requirement) across your cards on monthly expenses, the 100,000 bonus is seriously great. Those 100k points transfer to multiple airlines, can be pooled together with other Chase credit cards, and also be redeemed through Chase Ultimate Rewards shopping portal. The kicker is that if you book travel through Ultimate Rewards, the points are worth 1.5X, making those 100k points worth about $1500.
So, booking travel via Ultimate Rewards gives me about $1,500 with essentially a $150 fee this year. If you canceled the card after the first year, you would net about $1500-$150 or $1,350 in travel monies.
Keep the card for two years, and net $1,500-(2*$150) or $1,200. Five years net is $1,500-(5*$150) or $750. And so forth.
At this rate it would take 10 years for you to net zero and “break-even”. I say that in quotes because throughout those 10 years you’ve would’ve been continuing to earn pretty good rewards points, using the airport lounges and such, so the break-even would be even further than 10 years away.
For the semi-frequent traveler who otherwise might be unaware that such benefits exist, my intent with this was to provide information from personal experience to show that serious money can be had in exchange for a few hours of research and a credit card application.
I’m not affiliated with Chase (I’m my own hombre)
And as of now, sadly the signup bonus is at 50,000 points 🙁