The First Credit Card To Apply For If You’re New To Miles & Points

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I don’t think there’s a single “one size fits all” credit card. It all depends on what categories you spend most in, how much you spend, and what kind of rewards you’re looking for.

There are certainly cards that offer a compelling return for a vast majority of consumers, like The Amex EveryDay® Preferred Credit Card from American Express, which offers triple points on U.S. groceries (on up to $6,000 of spend per year), double points on U.S. gas, and a 50% points bonus when you make at least 30 transactions per billing cycle. Cards like that help points add up quickly for the average household.

Groceries-6

Then there are cards that offer perks that more than justify the annual fee for a vast majority of consumers. For example, the IHG® Rewards Club Select Credit Card offers an annual free night certificate valid at any of IHG’s 5,000+ hotels, which more than justifies the card’s $49 annual fee, in my opinion. You’d be hard pressed to not get $49 of value out of that.

InterContinental-Hong-Kong

But in addition to applying for the right cards, there’s also a method to the timing of applications. There’s such a thing as applying for the right card at the wrong time. If you’re not new to miles & points then by all means skip this post, but I get questions from beginners all the time about this stuff.

The Chase 5/24 rule

Chase has what’s commonly referred to as the “5/24 rule.” As a general rule of thumb, this means you won’t be approved for many Chase cards if you’ve opened for than five accounts in the past 24 months. There are a couple of things to be aware of regarding this:

So while a vast majority of consumers aren’t impacted by this restriction, it’s at least worth being aware of it if you’re new to applying for credit cards, and want to maximize your rewards.

The first card you should apply for

With that in mind, one of the most well rounded mid-range credit cards out there is the Chase Sapphire Preferred® Card. The card offers a very generous sign-up bonus, double points on dining and travel, and other benefits that make this a must-have card for travelers.

The card offers a sign-up bonus of 50,000 Ultimate Rewards points after spending $4,000 within three months, plus an additional 5,000 Ultimate Rewards points when you add an authorized user to the card that makes a purchase within three months. So essentially the sign-up bonus offers up to 55,000 Ultimate Rewards points. I value those points at ~1.7 cents each, so to me that sign-up bonus is worth ~$935.

Those Ultimate Rewards points can be redeemed as cash towards travel purchases, or can be transferred to one of the excellent Ultimate Rewards airline and hotel transfer partners, which include the following:

Aer Lingus Aer ClubIHG Rewards ClubSingapore KrisFlyerWorld Of Hyatt
Air France KLM Flying BlueKorean Air SkyPassSouthwest Airlines Rapid Rewards
British Airways Executive ClubMarriott RewardsUnited MileagePlus
Iberia PlusRitz-Carlton RewardsVirgin Atlantic Flying Club

The Chase Sapphire Preferred® Card has a $95 annual fee, though it’s waived the first year.

In addition to offering double points on dining and travel, the card offers great customer service, primary collision damage waiver coverage on rental cars, and all kinds of great travel coverage, including the following:

Visa Signature BenefitsDetails
Baggage Delay Benefit• You can be reimbursed up to $500 when some or all of the cost of a common carrier ticket is charged to your card (therefore award tickets should be eligible if the taxes are charged to the card)

• You can be reimbursed a maximum of $100 per day for emergency purchases of essential items at a destination other than your current residence
Lost Luggage Reimbursement• Receive reimbursement for lost or damaged checked or carry-on bags and personal property

• Maximum reimbursement is $3,000
Trip Cancellation/Interruption Insurance• Receive the non-refundable amount of the passenger fare or $5,000 (whichever is less) in the event of a trip cancellation or interruption

• The cancellation or interruption must be caused by death, accidental injury, disease, or physical illness of the passenger or immediate family member

• This also covers you if your airline goes out of business or tickets are otherwise cancelled by the carrier
Trip Delay Reimbursement• Receive up to $300 if your trip is delayed for more than 12 hours

• The trip has to be delayed by an equipment failure, inclement weather, labor strikes, or hijacking
Purchase Protection• Receive up to $500 for personal property that has been stolen, damaged, or lost within 90 days
Return Protection• Receive up to $500 per item if you are dissatisfied with a purchase and the retailer won’t return the item

• There are lots of exclusions, including items purchased overseas, and all items have to be returned to Chase as part of the process
Price Protection• Receive up to $500 if you purchase a product and find it advertised for for less within 90 days of purchase (the difference in price is refunded to you)

• The advertisement has to be printed, and doesn’t include internet retailers, so this won’t be useful for many of us
Warranty Manager Service• Extends the free repair period under the original manufacturers repair warranty up to one additional year

• Motorized vehicles (boats, cars, aircraft, etc.) aren’t included

The alternative card to consider

If you don’t mind paying a $450 annual fee, I think lots of people would potentially get a ton of value out of the Chase Sapphire Reserve℠ Card. The card offers a $300 annual travel credit (which is worth pretty close to face value), triple points on dining and travel, and expanded opportunities to redeem your points as cash towards the cost of a travel purchase.

The card offers a sign-up bonus of 50,000 Ultimate Rewards points after spending $4,000 within three months if applying online, though if you go into a Chase branch, you can get a bonus of up to 100,000 points. So if you can go into a branch, that’s the best option.

For a further comparison on these two cards, see this post.

Bottom line

While I don’t think there’s a single “best” credit card out there, there’s definitely logic regarding the order in which you should apply for cards. Chase is generally the most restrictive in approving people for new cards, so you’ll want to have the Chase Sapphire Preferred® Card be among the first cards you apply for. Or the Chase Sapphire Reserve℠ Card. Or both.

Getting approved for Amex and Citi cards later on should be no issue, even if you’ve applied for a few Chase cards. And there are some Chase cards that are pretty easy to be approved for even if you’ve opened more than five new card accounts in the past 24 months, like the IHG® Rewards Club Select Credit Card.


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Comments

  1. For a first card I think the chase freedom would be better. Average length of account is something that’s taken into account for your credit score, plus not everybody is willing to hold an annual fee card. If somebody starts out with the freedom, and earns points without redeeming, that individual can decide whether they want to get an annual fee card down the line and increase the value of those points already earned or just stick to having a few no annual fee cards (citi double cash and discover it).

  2. Look at that impressive lists of benefits you won’t use. churn, churn, churn those cards you newbies, and be sure to click on the right links when you do {wink, wink}

    Go compare CSP’s earning to Lucky’s review of the no annual fee Citi Doublecash and then come back and we’ll talk.

  3. I agree with this post 100%. The Chase Sapphire Preferred and Amex Everyday Preferred are the perfect one-two punch for beginners. For ~$200 in annual fees, you get:
    1) All your major bonus categories covered
    2) The travel benefits of the Chase Sapphire Preferred
    3) A diversified point portfolio, with ability to consolidate into some programs (i.e. British, Singapore, Air France)
    4) A fallback for places that don’t accept Amex

    For beginners, the biggest drawback is that lucrative Chase/Amex redemptions require transferring to partners, which can be complicated/overwhelming. However, you have to learn the game somehow.

  4. Already had CSP for 5+ years and downgraded to the Freedom last month after recently getting the CSR. How long would I have to wait before re-applying and getting the bonus? Flyertalk says Chases rules are 24 months from receiving bonus, but since I just downgraded should I wait a few weeks?

    I am in compliance with the 5/24.

  5. @Joseph N.

    Do you mean the review where he says “So for a vast majority of people I would argue something like the Citi® Double Cash Card is virtually impossible to beat”?

    It seems pretty clear that this post is targeted towards people just getting into the miles game, but as Ben said in that same review:

    “Can you achieve a better return on another card if you’re invested in the hobby and like to redeem for disproportionately valuable redemptions? Absolutely. And that’s why I don’t use the Citi® Double Cash Card personally. But we also don’t really reflect the earning and redemption patterns of the average consumer, and it’s perfect for someone like my brother who just wants a solid return on his spend.”

    Here’s the link: http://onemileatatime.boardingarea.com/2015/07/31/best-credit-card/

  6. No no those two should not be the first card to apply for. Credit newbies would be amazed by those perks and forget that they are newbies. They will apply to every card that pleases their eyes and get rejected everywhere. If aiming for CSP or CSR, they should first get a student card or secured card first to build credit, then get Chase Freedom after about 1 year as it really combines well with CSP or CSR, and finally apply to CSP or CSR after they get about two years of good history. You One Mile has been doing good but should try to have more accurate posts. Thanks.

  7. Quick story. I have had my Chase Sapphire Reserve card for just 5 weeks now. I got in just in time to get the 100K bonus and achieved that in the first month. In fact that meant 115K points and I used them to book a 5-star hotel in Europe in May for 12 nights, basically for points and no cash.

    Given that I also got a $300 credit for other charges, I have gotten about $1,800 in value for a $450 outlay in just 5 weeks.

    Not bad huh?

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