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Update: This offer for The Blue for Business® Credit Card from American Express is expired. Learn more about the best available offer here.
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.
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.
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:
- Generally opening non-Chase business cards won’t count towards this limit; this includes applying for a card like The Blue for Business® Credit Card from American Express
- The 5/24 rule doesn’t apply to all Chase cards — for example, it doesn’t apply to the IHG® Rewards Club Select Credit Card
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:
|Air France KLM Flying Blue||IHG Rewards Club||Singapore KrisFlyer||United MileagePlus|
|British Airways Executive Club||Korean Air SkyPass||Southwest Airlines Rapid Rewards||Virgin Atlantic Flying Club|
|Hyatt Gold Passport||Marriott Rewards||The Ritz-Carlton Rewards|
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 Benefits||Details|
|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, cards, 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.
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.