How To Start Travel Hacking – What Should Be Your First Credit Card?

One of the things that initially held me back with the whole credit card and travel hacking game is that I didn’t really understand where to begin. There was a lot of information that I needed to know if I wanted to play the game right and when you come in with no knowledge, it can be pretty intimidating to get started.

Looking back, what I really wanted was for someone to just tell me what to do. If I wanted to start travel hacking today, from scratch, what was the exact credit card (or credit cards) I should get?

Up until recently, even that question wasn’t completely clear thanks to some nuances that muddied the waters. However, some recent rule changes from Chase – changes that were designed to make it harder to accumulate points – have actually come with the side benefit of making the beginning process much easier for the new travel hacker. Instead of a myriad of card choices, under the current credit card rules, there’s basically just one or two cards that everyone should start their travel hacking journey with. 

This post is the one that I wish someone had written for me back when I was first starting out on this whole travel hacking adventure. If you’re brand new to this world and you want someone to tell you what to do, this post will do just that.

What Should Be My First Card?

In my opinion, you’ve basically got five cards to choose from for your first card. These cards include: 

1. Chase Sapphire Preferred OR  Chase Sapphire Reserve
2. Chase Ink Preferred OR Chase Ink Unlimited OR Chase Ink Cash

The first two cards (the Sapphire brand of cards) are personal credit cards that are available to anyone. The second group of cards (the Ink brand of cards) are business credit cards, which are available to anyone who has a business or side hustle of some sort. In most circumstances, going for these cards first will put you in the optimal position to maximize your points and miles.

In the past, it was possible to get all of the above cards (and this was the best way to get started in the past), but a change to the One Sapphire Rule means that you can now only get one of the Sapphire brands of cards – either the Chase Sapphire Preferred or the Chase Sapphire Reserve. You can’t get them both now under the current Chase rules.

Along with either the Chase Sapphire Preferred or Chase Sapphire Reserve, most people should also be able to get the Chase Ink Preferred, Chase Ink Cash, or Chase Ink Unlimited. These are business credit cards, so there are some requirements to qualify for them (namely, you need to have a business). Still, most people should be able to qualify for these cards – in today’s world, we should all have a business, whether we know it or not.

Note, there are some prerequisites to think about. Travel hacking requires premium credit cards, and premium cards generally require a decent credit history. When I got into the whole travel hacking world, I already had ten years of credit history built up since I opened up my first credit card back in college. If you don’t have at least a year of credit history, take a year or two to build up your credit card foundation first before going for cards like this.

Chase Sapphire Preferred vs. Chase Sapphire Reserve

You’ve basically got three choices to go with for your first card.  I’m going to start with the Chase Sapphire Preferred and the Chase Sapphire Reserve first. 

Both cards are personal cards, which means that there are no special requirements to get them beyond having a good credit score. If you’re new to credit cards and travel hacking, then the 5/24 rule probably won’t apply to you, but be sure to read up on the 5/24 rule to make sure you can qualify for these cards. The rule basically says that if you’ve opened up 5 or more credit cards in the past 24 months, you will not be eligible for most Chase credit cards, including the Chase Sapphire Preferred or Chase Sapphire Reserve. 

As mentioned, in the past, it was possible to get both the Chase Sapphire Preferred and the Chase Sapphire Reserve. Chase then implemented a rule that said you could only get one of these cards. Thus, when starting out, you have to choose which card you want to get – the Chase Sapphire Preferred or the Chase Sapphire Reserve.

What’s the difference between these two cards? Here are the main things to know:

Chase Sapphire Preferred

• Annual Fee: $95 (not waived in the first year)
• Signup Bonus: 60,000 Chase Ultimate Rewards Points 

 

Chase Sapphire Reserve

• Annual Fee: $550 (not waived in the first year)
• Signup Bonus: 50,000 Chase Ultimate Rewards Points
• Other Benefits: $300 in travel credits each cardmember year; Priority Pass; $100 Global Entry Credit; $60 per year of DoorDash credit until 2021; Lyft Pink membership

My recommendation. I think that given the current rules, the Chase Sapphire Reserve is the best option to go for. Even though it comes with a hefty $550 fee upfront, the benefits, for me at least. make it worthwhile and cover the cost of the annual fee.

If you’re just absolutely terrified of the high annual fee, then you can go with the Chase Sapphire Preferred as your first card. It does have the advantage of offering more Chase Ultimate Rewards Points and is an easy beginner card to start with.

Chase Ink Preferred vs. Chase Ink Cash vs. Chase Ink Unlimited

Once you’ve got one either the Chase Sapphire Preferred or the Chase Sapphire Reserve, I highly recommend getting a business credit card – either the Chase Ink Preferred, the Chase Ink Cash, or the Chase Ink Unlimited. In order to qualify for any of these business credit cards, you obviously need to have some sort of business.

Luckily, in today’s world, everyone should have a business. A business doesn’t have to be a big thing or a brick and mortar business. Nor does it have to be something that earns a ton of income. In fact, if you’re earning any income outside of your day job, that makes you a business. That includes things like reselling stuff on Craigslist or eBay, doing gig economy stuff like Uber or DoorDash, or anything that even has the potential to make money, such as having a blog. If you really don’t have any side hustle that qualifies you for a business card, I highly recommend picking up some side hustle because it’s well worth it to have one, if for nothing else than to open yourself up for business credit cards (I think of these business credit cards as the ultimate tool for travel hackers).

When you apply for the Chase Ink Preferred, Chase Ink Cash, or Chase Ink Unlimited, apply as a sole proprietor (unless you have some sort of incorporated business). On the application, the name on the card is your name, and the business name is just your name. So, if you deliver food with Postmates, your card name is your name, and your business name is your name. Your business ID would be your personal social security number (you don’t need a special tax ID to be a sole proprietor). 

Which business card you pick will really depend on how many points you are trying to earn and how much spending you can do. The Chase Ink Preferred offers the most points, at 100,000 Chase Ultimate Rewards Points, but it has a hefty minimum spend requirement of $15,000 in three months. This will make it difficult for a lot of people to earn the bonus on this card. 

The Chase Ink Cash and the Chase Ink Unlimited both offer 50,000 Chase Ultimate Rewards Points for $3,000 worth of spend in three months. This makes these two cards much more realistic for most of us. 

Below is a comparison of the three cards: 

Chase Ink Preferred

• Annual Fee: $95
• Signup Bonus: 100,000 Chase Ultimate Rewards Points
• Other Benefits: 3x points on first $150,000 spent in combined purchases on travel, shipping purchases, Internet, cable and phone services, and on advertising purchases made with social media sites and search engines (downside to this card is that it has a high minimum spend requirement of $15,000 in first 3 months)

 

Chase Ink Cash

• Annual Fee: $0
• Signup Bonus: 50,000 Chase Ultimate Rewards Points
• Other Benefits: 5x points on first $25,000 spent at office supply stores and on internet, cable and phone services; 2x points on first $25,000 spent at gas stations and restaurants

 

Chase Ink Unlimited

• Annual Fee: $0
• Signup Bonus: 50,000 Chase Ultimate Rewards Points
• Other Benefits: 1.5x points on all purchases

My Recommendation. In the past, the obvious choice was the Chase Ink Preferred because of the high signup bonus it offered. Unfortunately, due to the high minimum spend requirement, this is now a tougher card to recommend unless you have a lot of spending that you can put on a credit card. If you can hit the minimum spend requirement, then I’d recommend going for the Chase Ink Preferred. Otherwise, I’d likely go with the Chase Ink Cash or Chase Ink Unlimited, with a slight edge to the Chase Ink Cash due to the bonus categories it offers.

Note that business credit cards have the added advantage of not appearing on your credit report, which means that if you’re one of those people that think opening up new cards will hurt your credit, you can go with one of these Chase business cards and all it’ll do is show up as a hard inquiry on your credit report. The actual account won’t appear on your credit report and can’t be seen by anyone. 

If you want more information about how business credit cards work, you can check out this post: Business Credit Cards: The Ultimate Tool For Travel Hackers.

Continue On Your Travel Hacking Journey

If you’re a new travel hacker, these are generally the cards that you should be starting out with in order to optimize your entry into the travel hacking world. If you start with these cards – either the Chase Sapphire Preferred or Chase Sapphire Reserve, plus the Chase Ink Preferred, Chase Ink Cash, or Chase Ink Unlimited – you’ll put yourself in a great position to fly for free using travel rewards.

To recap, if you’re brand new to the world of travel hacking and aren’t quite sure what to do, these should be your first two cards: 

1. Pick either the Chase Sapphire Preferred or the Chase Sapphire Reserve.
2. Get the Chase Ink Preferred, Chase Ink Cash, or Chase Ink Unlimited if you earn any income outside of your day job or do anything on the side with the potential to earn income. Which card you pick will depend on the level of spend you think you can hit and which bonus categories are more useful to you.

After starting with these two cards, you’ll have a lot of options to choose from. If you need more advice, please feel free to take advantage of my free credit card consultation where I’ll gather some information from you and provide you with personalized advice specific to your situation.