I was chatting with my friend Katie Ledoux (@kledoux) a few weeks ago about travel type stuff. She was totally stoked that, for the first time ever, she had status on an airline. Remembering that, I saw that her airline had a bonus for flights going to/from NYC. Since she lives in Boston, it should be pretty easy for her to route through NYC airports and earn the bonus.
When I shot her a quick note this morning about the bonus offer, Katie got excited all over again. I asked her if she had a travel credit card, and she said that was next on her “being a grown-up” list of things to do. Thinking about what travel credit card to advise her to get, I asked if she was loyal to a specific hotel chain. After saying “wow, imagine being fancy enough to prefer a particular hotel chain”, then Katie said to me “please advise” ….. hence the new blog tags of “please advise”, “being a grown-up” and “doing adulting right”.
Millenials are the biggest group of new travelers, with cash in hand, that the airlines and hotels have seen since the Baby Boomers …. And travel was radically different in the 1960’s and 1970’s. And the airlines, hotels, credit card companies definitely are not going to help you with this topic. So, I thought instead of just texting Katie advise on this, I’d write a blog post about picking a hotel chain (which is a little complex right now). That’s coming next.
But first, back to that travel credit card. This should be fairly easy. The first thing is, you need to know if you have a good credit score. I could write a whole blog post on just that (and probably will). But here’s how to find out. Go to Discover’s credit scorecard and signup. You’ll get your FICO 8 score via your Experian credit report. You want your FICO score, which ranges between 300 and 850, to be in the “good” range for general ability to get a credit card without having to jump through a million hoops. If you have low/poor credit scores, that is an entirely different topic for another day. Meanwhile, if your FICO score is over 670, you have a great likelihood of being approved for a good travel credit card.
This infographic is a great review of the basics of how a FICO score works.
There are really two choices on travel credit cards that make sense.
The first is to get a credit card co-branded with your airline. I travel with Delta, so I have a Delta branded American Express. Every dollar I spend on that card gives me a mile on Delta. Every time I buy a Delta flight with it, I get 2 miles per dollar. Plus a slew of other benefits, like Delta SkyClub access, rental car insurance coverage, a concierge line I can call and have them book flights and hotels for me, etc.
The second choice is to get a general purpose travel credit card or charge card. These include choices like American Express charge cards (Amex Premier Rewards Gold is a great choice) or Chase Sapphire credit cards (with a FICO score above 670, reasonable income, low credit utilization, you can likely get a Sapphire Preferred card fairly easily).
What is the right choice? Well, a lot depends on you and your airline choice. That said, if you have committed to a single airline for travel …. Which early on in adult travel, you really should …. Then your best first option for a travel credit card is the one co-branded with your airline. It will give you mileage earning on purchases directly with the airline AND all your other purchases. Plus, likely, it gives you a free checked bag, early boarding, and more. Plus, accumulating all those frequent flyer miles will help you to take leisure travel for free while having your employer pay for your business related travel (that you book on your personal travel credit card). Most employers are totally okay with you double dipping this way, so you absolutely should.
I take my family on a large vacation pretty well every year. And the airfare is always covered, for a family of 4-5 (depending on which kids are around), by my Delta skymiles. This year, four of us are going to Europe for 2 weeks!
One important caveat – Credit cards are not “extra money” for you to spend and then make minimum payments to your credit card company. This will heavily impact your credit score, your ability to get more credit, and your opportunity to use that credit card appropriately. You need to commit to your credit utilization being 20%, or less, of your total credit line. If your credit card has a $5000 credit limit, you should never end a billing cycle with more than a $1000 balance on your card. If that doesn’t work for you, then a travel credit card strategy is not for you.
So …. First steps for a young person wanting to be “a grown-up”, as Katie would say, is to pick a single airline for all your travel, both business and leisure. Then figure out your FICO credit score and make sure it is over 670. Then get a travel credit card with your airline. There’s a lot more and this topic can get really advanced, but there’s the starting point. Have fun!