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There are a lot of options for credit cards for beginners and shopping for that first travel rewards card can be a daunting task simply because there are so many factors to consider. If I had to narrow down a single travel credit card that I think is best for beginners, I’d probably go with the Chase Sapphire Preferred and here are a few reasons why.
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Great sign-up bonus
You can earn 50,000 Ultimate Rewards after spending $4,000 plus an additional 5,000 when you add an authorized user. 55,000 Ultimate Rewards can easily be worth over $1,000 at around 2 cents per point. You see a lot of “mid-tier” premium cards offering standard bonuses to the public anywhere from 25,000 to 30,000, so the ability to pick up 55,000 Ultimate Rewards is a great opportunity.
The Chase 5/24 rule states that you cannot be approved for certain Chase cards if you have opened up 5 or more credit cards within the past 24 months, subject to certain exceptions. This rule affects some of the most valuable Chase cards like the Chase Sapphire Preferred, Sapphire Reserve, and Freedom cards.
For that reason, it’s often the best strategy to apply for these cards before you open up accounts with other banks. Otherwise, by the time you realize you much you could use a card like the Sapphire Preferred, you might have already excluded yourself from eligibility for it.
Although cards like the Barclaycard Arrival Plus World Elite MasterCard® allow you to redeem their miles in simple fashion with no black out dates, the benefit to the Chase Sapphire Preferred is that you can transfer your Ultimate Rewards at 1:1 ratio to a variety of transfer partners including:
- British Airways Executive Club
- Flying Blue (Air France/KLM)
- Korean Air SKYPASS
- Singapore Airlines KrisFlyer
- Southwest Airlines Rapid Rewards
- United MileagePlus
- Virgin Atlantic Flying Club
- Hyatt Gold Passport
- IHG® Rewards Club
- Marriott Rewards
- The Ritz-Carlton Rewards
Some of these partners allow you to redeem for substantial value. For example, I’ve booked Singapore Suites before and that cents per point value was somewhere around 10 cents per point. I’ve also been able to book Korean Air first class at around 9 cents per point with Ultimate Rewards to capitalize on tremendous value.
In both of those cases, the value taken from the 55,000 sign-up bonus would’ve approached $5,000. I wouldn’t ever say I “saved” that much money, but it’s still pretty phenomenal to experience that kind of value in premium cabins.
And it’s not just about the value, having the flexibility to transfer your points to different partners can be invaluable for beginners who may not know about how to utilize partners and may not know what kind of miles they want to earn at the moment.
While I’m a big fan of both the Chase Freedom and Freedom Unlimited, both of those cards don’t allow you to transfer your Ultimate Rewards to partners unless you have a card like the Sapphire Preferred or equivalent. Thus, while those cards are better options for those with lower credit scores, I’d put the Sapphire Preferred above those cards for beginners who want to get serious about maximizing value for travel rewards.
The Sapphire Preferred earns 2X on both dining and travel. This offers solid bonus earning potential and the travel category is one of the broadest available, offering 2X on a broad range of expenses from hotels, tolls, parking, bus fairs, train tickets, airline tickets, and even some random travel expenses like scuba diving. While not as great as 3X on dining and travel earned by the Sapphire Reserve, as discussed below, the annual fee is significantly lower.
You should always do the math to see which Sapphire card is better suited for you based your spending. This article here can help you with running that equation.
Annual fee is waived and only $95
While the Sapphire Reserve is a heavy hitter with a $450 annual fee, the Sapphire Preferred only comes with a $95 annual fee and it’s waived for the first year. For many people, especially newcomers, paying $450 for a credit card sounds insane and is simply not reasonable. For those people, jumping on the Sapphire Preferred can be a introduction to utilizing perks for rewards cards and eventually they might cross over to the Reserve when they see how much value can be had.
Primary rental car insurance
The Sapphire Preferred offers primary rental car insurance usually covering the full lost value of the automobile (subject to certain exceptions, of course). This means you typically won’t have to file a claim with your insurance company and risk paying a higher premium along with other fees or deductibles. Even if you only rent a car a couple of times a year, this perk can save you a lot of money (not to mention stress).
Applying for the Sapphire Preferred
While I recommend this card for travel rewards beginners, I don’t necessarily recommend it to beginners who are still building up their credit score. You will likely need to have a strong credit score (I’d recommend at least 700) along with some decent credit history to get approved for this card. If your score is hanging somewhere around 670 and you’ve got a thin credit profile, you should probably focus on building up your credit profile before applying.
The Sapphire Preferred is a great option for newcomers looking to get more serious about their travel rewards. It’s got a great sign-up bonus, decent earning potential, great transfer partners, and a low annual fee to go along with all of that. So while it’s not the perfect card for everyone, I’d highly consider applying for the card if you’ve got a worthy enough credit score.
H-Town based Attorney turned credit card rewards expert. Founder of UponArriving.com.