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September 10, 2017 6:19 PM   Subscribe

Can you recommend a credit card for travel rewards? or a new car?

I have a Wells Fargo credit card which would credit 1% of purchases towards my mortgage. So I've paid off my mortgage. Yay! and I'm looking for a new reward schema. I travel a fair amount so that's an option. Also, a new car, likely a Subaru Outback, is in the future. Is there a credit card for something like that?

For travel, I see web pages like this and that. Lots of these of annual fees in the hundreds of dollars. That does not make financial sense to me.
posted by falsedmitri to Work & Money (16 answers total) 5 users marked this as a favorite
Annual fees can make sense depending on the specifics of the card and the situation. I think you're going to be doing yourself a huge disservice by dismissing cards with large annual fees out of hand, especially if you do a lot of travel. Do the actual math on the value of the points (including bonuses), your expected spending, and any benefits included. For example, I have the Chase Sapphire Reserve which gives me a $300/yr travel credit. That's trivial to use if you travel any amount at all, so right there you've reduced the effective annual fee to $150. Whether the other stuff that card comes with is worth $150/yr to you or not depends on a lot of things, but I find that it does for me (since I spend a huge amount on travel and dining every year, and I use some of the other benefits like Priority Pass).
posted by primethyme at 6:39 PM on September 10, 2017 [5 favorites]

There are a couple of specific options but IMO, the top contenders are:

1. Chase Sapphire Preferred or Reserve. Reserve has an insane annual fee ($450) but rebates $300 worth of travel and has a whole bunch of random benefits. Also, the points you accrue can be transferred to many partner airlines as miles which is amazing for travel.

2. Fidelity Rewards Signature Card. 2% cash back. Simple. No annual fee.
posted by bsdfish at 6:42 PM on September 10, 2017 [3 favorites]

It's an unusual choice, but Amex Platinum has an annual fee, though you can get it waived the first year, and you get a matching credit back anyway to spend on travel-related expenses (airline fees, luggage, hotel meals, whatever), so it can be no-fee, in the end. Plus you get the very nice concierge service.

Points transfer to weird things like Qantas, BA or even Amazon. I haven't paid actual money for any Amazon purchase in many years.
posted by rokusan at 7:06 PM on September 10, 2017 [1 favorite]

Lots of these of annual fees in the hundreds of dollars.

It depends on what benefits they provide. I have a credit card from the airline that I do the most travel with when I have checked bags because it provides a free checked bag for me on every flight. Two roundtrip flights a year more than covers the fee. Whether a specific card will be worth it to you will depend on your specific travel needs.

I find cards with straight cash back easier to deal with than mileage programs. Most mileage cards don't tend to offer a better value than what I can get by shopping around and I'm not locked into redeeming the benefits just on airfare or being locked to a single airline.

If you're traveling internationally a lot, you should consider a card with no foreign transaction fee (or at least a low one). The Fidelity on bsdfish mentioned has a 1% fee. Capital One's cash back card has a 0% fee but provides 1.5% cash back rather than 2%.

If you travel to Europe a lot, getting one with Chip and PIN will make your life easier.
posted by Candleman at 7:22 PM on September 10, 2017 [2 favorites]

Go to and fill in your desired travel destination and they will match you with the best credit card for you.

They update all the latest sign-on bonuses and promotions every day, so you can find some really great deals -- I got 60k miles for a sign-on bonus on one of the cards they recommended, and the card has no annual fees.
posted by ananci at 8:28 PM on September 10, 2017 [1 favorite]

The United Mileageplus Explorer Credit Card is one to look at. The annual fee is $95 and you will get that back with the free baggage allowance if you fly with them once a year. The return rate is variable based on how expensive the flights you trade your miles in on are, but for me the flights are often $1800-2500 roundtrip, so if I can use 25,000 for that ticket it can be 10% or more. If you are travelling to cheaper destinations, the return will not be as high. You get a 10,000 bonus fi you spend $25k each year on the card.
The reason I like United for airline points is that as a member of StarAlliance, I can use the points for a lot of the best airlines in the world, including my home country. They also have an app called Mileageplus X that gives multiple miles at many shops and restaurants with a bonus if you use the Explorer card.
posted by Yorrick at 8:46 PM on September 10, 2017

You need to break down your travel habits a bit. Is there an airline you use most frequently? How about a hotel chain? International vs. domestic?

I'm fairly hard-core about insisting on cash back (so I usually use Chase Freedom Unlimited (1.5% all the time) and Chase Freedom (5% on rotating categories, which is worthwhile for the quarter they do Amazon or groceries)). I think for most people, extracting better value requires too much time and too many compromises, and you are always vulnerable to devaluations. But it's convenient for me that the Chase points transfer over to BA, which means that if I do happen to put together a great whack of them I can get BA, AA, or CX tickets. Anyway, when you're looking at your options, it's worth weighing the possibility of transferring to your mileage or hotel program of choice, if you have one.

If you're planning to make a large purchase or two, you can take advantage of offers that require you to spend [x] in [y] months for a larger initial bonus. Look out for those. Chase Sapphire (not Reserve) was just offering 50,000 points for $3000 in four months, with the first year's fee waived. That's $500, and then if you don't think the math works out under ordinary circumstances, you can cancel the card the next year.
posted by praemunire at 9:03 PM on September 10, 2017

The United Mileage Plus Explorer card is amazing if you actually fly United (as I do, since I live close to a United hub) since it gets you a free bag on each flight, priority boarding (eeh, but nice on flights where the overhead bins fill up) and two lounge passes (meh) and extra miles on tickets booked with the card. It also opens up more options for cheap flights that you can buy with miles. For flights I take, last-minute flights which are absurdly expensive with money are very cheap with miles (I'm talking about round-trips which are $900 in cash or 25k miles) though the various Sapphire cards can also generate United miles as well.

However, if you don't actually fly United, all these benefits are pretty worthless to you. If your primary airline is, say, Delta, then you'll need to figure out whether the Delta credit card is worth it for you which can depend on the minutia of the credit card and Delta's frequent flyer program. That's why the two cards I recommended are both pretty flexible and universal.

Couple more notes about reward credit cards. Some people get really into opening lots of accounts for sign up bonuses, optimizing card usage, etc and it's fine but if that's not what you're into, getting one or two simple cards is still totally fine. Also, there are a lot of websites which promise to help you pick the best reward card and while those give decent advice, the sites make money through affiliate programs so cards which pay a good kickback for referrals end up on the top of the list; furthermore they focus a big more on sign-up bonuses than on ongoing benefits.
For example, the Fidelity 2% which I listed (which IMO is the best general purpose card out there, unless you have some niche needs such as miles for a specific airline, etc) tends to be absent or low on those lists.
posted by bsdfish at 9:13 PM on September 10, 2017 [2 favorites]

Subaru used to have a rewards credit card through Chase but it looks like they discontinued it a few years ago. It was 3% back on purchases and maxed out at $500 per year.
posted by Short End Of A Wishbone at 10:01 PM on September 10, 2017 [1 favorite]

If you travel to Europe a lot, getting one with Chip and PIN will make your life easier.

Now that the USA has just about caught up to the rest of the world, technology-wise, there isn't much choice left, here. Which is good, because the whole swipe-and-sign system should have died in the 1970s, anyway.

Meanwhile, the UK just celebrated the 10th (!) anniversary of their chip and PIN changeover.
posted by rokusan at 7:22 AM on September 11, 2017

Just to add one more thing about the Chase Sapphire Reserve, you get $300 travel credit PER YEAR. So if you get the card now, you will get $300 now, then $300 again on January 1st. That's $600 you can spend on any travel expenses, which already covers the $450 annual fee. You can cancel the card in a year if you don't want to pay the fee again, but the first year is the best deal IMO.
posted by monologish at 8:16 AM on September 11, 2017

Just to add one more thing about the Chase Sapphire Reserve, you get $300 travel credit PER YEAR. So if you get the card now, you will get $300 now, then $300 again on January 1st. That's $600 you can spend on any travel expenses, which already covers the $450 annual fee.

I don't think this is true anymore, unfortunately. I think lots of folks were grandfathered in on this system, but if you apply now, it will only be one $300 bonus for the cardmember year.
posted by geegollygosh at 10:29 AM on September 11, 2017

We've used a variety of cards over the past 5 years and the Barclaycard Arrival + is the best one we've found.
posted by GoldenEel at 11:24 AM on September 11, 2017

oh bummer! sorry for the bad info.
posted by monologish at 11:25 AM on September 11, 2017

You're going to hear Chase Sapphire Preferred/Reserve a lot, as that's the program that still has the best overall rewards for many people--even though they've dialed it back since launch. It's the one I have and have noticed that half of the people in San Francisco have it too.

I would say it's good for people who already travel--the aforementioned travel credit, it pays for global entry/tsa pre, gives you lounge access, and depending on what airline/hotel you collect on, you may be able do a 1:1 transfer on points.

If you don't already travel, it might be less attractive than other cards. There are auto manufacturer credit cards but I don't feel the rewards are worth locking yourself into any one manufacturer.
posted by danny the boy at 11:50 AM on September 11, 2017

If you do the math, cash back is almost always better than airline miles once you've used the signup bonus. Therefore, I recommend the Citi Double Cash (2% cash back on everything), the Bank of America Cash Rewards (3% on gas, 2% on groceries and warehouse clubs, 1% on everything else), the Chase Freedom (5% cash back on categories that change every quarter, 1% on everything else), and the Discover it (similar to Chase Freedom, but with different quarterly categories). Some of these cards give you even more of a bonus if you redeem your rewards to a checking account at the same bank.

Some airline cards do have nice perks. The Delta AmEx lets you use miles to pay for any flight, for example; you don't have to accumulate enough miles to pay for a specific reward flight.
posted by kindall at 12:16 PM on September 11, 2017

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