Why To Not Shy Away From Credit Cards And How To Use Them To Travel More: Part One

*This post contains some affiliate links (refer a friend links) but at no cost to you. I also want to note this post is factual but is also based on my own personal experiences. I do not advocate making financial decisions that are not right for you. 

Utilizing credit cards means knowing how they work. This post talks about how to manage credit cards and use the benefits to travel more.

I know what you’re thinking. Credit cards? Snore, bye. But before you click out of here and leave, here me out. Credit cards have so many benefits that people don’t utilize and too many people don’t know how to properly use them or understand them in their entirety. Credit cards offer so much more than what’s on the surface so I want to help you understand it all so you can then go and use them to travel more, see more things and go to places you never thought you’d be able to, because yes, that is possible.

I will be talking about the different credit cards towards the end of this post so feel free to skip ahead, but I encourage you to read the whole thing. In this post, I’m going to talk about all-around useful credit cards, and in part two on Monday I will be discussing specific credit cards for specific companies.

So many people view credit cards as inherently evil when this couldn’t be further from the truth. I understand that sometimes it’s a necessity, but for most people, they think credit cards are a way to make you go into debt and bankrupt you and ruin your life forever, but that’s only if you’re completely incompetent. The thing with credit cards is, as long as you’re smart about it, you will never have a problem. Keep track of what you’re spending, set yourself a budget, make sure you know exactly when all of your statements issue and when the payment is due and then pay it off in full. Never spend more money than you have or are willing to spend. These are obviously the basics.

The next misconception about credit cards is that you should really only ever have one or two, no more. We’ve all heard that you should never cancel a credit card or apply to multiple ones because it hurts your credit score. This is all false. Yes, canceling a credit card is not exactly advisable and yes, applying for a credit card does affect your credit score in a sense, but not in the way you think. Let me give you myself as an example. I have had so many credit cards I sometimes forget which ones I even used to have, I have canceled, I have nearly a dozen active ones, I churn them, I reap in the benefits and then I discard. People would look at me as a prime example of someone who doesn’t have their life together and has no clue what they’re doing when in reality I have acquired zero debt and I have an excellent credit score.

So, in this post, I want to talk about how to be smart with your credit cards to maintain a great credit score but also how to get the best credit cards that will give you the best rewards in order to travel more.

Managing Credit Cards

I’m only going to go into this a little bit, but I feel like it needs to be said since, unfortunately, there are so many people out there who have no clue what they’re doing. As I mentioned, credit cards are not to be used for spending money you don’t have. They are simply a way to delay your spending and can help with cash flow purposes, however, for me, the biggest benefit is the rewards you get for spending on them. I will get to that later.

The next thing about managing credit cards is to have each card for a purpose and to keep track of them. We have a spreadsheet of our credit cards, which one’s what, which one’s have annual fees, when the statements issue, when the payments are due, how much credit line there is, etc. Keeping organized is key to managing everything and you will be in total control.

Lastly, you must know what every card has to offer. I have heard from countless friends who just go, “Oh, guess what I found out? My card has rewards!” Or people don’t know that their card offers cashback on certain products or offers at stores. You get these simply for having the card so why not utilize them?

Credit Scores

I am not a credit score guru and I won’t pretend to be, but I can give you a brief overview of how it works. Your credit score is essentially calculated by a few different factors, with some having more weight than others. So, what exactly is a credit score? It basically means how reliable you are and how likely you are to pay your bills on time. Essentially, if you’re in a good financial state and if you are responsible with your money. The higher the score, the better.

Your credit score is calculated by analyzing five different areas, each with a different percentage value.

Pie Chart

I’m going to briefly go into what each of these mean and how different things can affect your score in different ways.

Payment History

As the title states, this is based on whether you pay your bills on time and whether you pay them in full. It does take into account how many days your payment was late. If you pay a bill one day late it will affect your score far less than if you were to pay a bill an entire month late.

The best way to do this is to set yourself a reminder to pay your bill or to set up automatic payments. Paying your bills on time and in full is the best way to maintain a great credit score, which is why someone like me with so many and multiple canceled ones has such a high one, since this is weighted the most.

Total Debt

Going hand in hand with payment history, the second biggest factor in determining your credit score is how much debt you have. If you pay your bill off in full every month, you aren’t going to have debt and therefore this is going to increase your score significantly.

This also looks at how much of your credit lines you are actually using. Typically, you should be trying to spend around 9% of what you have available. Going above that is ok, but going over 50% will be detrimental to your score.

Between these first two factors you’re looking at 65% of your score, which hopefully now begins to explain why canceling and applying to more credit cards can have a smaller effect on your overall score than you may have thought.

Duration

This is another big one. It essentially looks at how long you have your accounts, the longer, the better. While I do churn credit cards, I have a few ones with no annual fees that I keep year after year to keep my credit card duration quite high.

Another thing I want to note that’s super important about duration is that it is not the duration of the credit card. It is, in fact, the duration of the credit line. As an example, I had a credit card with an annual fee with American Express and I wanted to cancel it, but I moved my credit line from that card to another American Express card with no annual fee, and as a result this didn’t affect my credit score at all because the credit line was still active.

With duration, it’s good to still be putting a bit of spending through it, even if it’s only $10 of Netflix.

This is where canceling credit cards can affect you, but the key thing to keep in mind is that it’s all relative. If you cancel one after a year, but you have one that you’ve had for three years and continue to have and use, then canceling this other card will have a very small effect on your score.

New Credit

A common misconception is that this means the number of credit cards you have, when in reality it means how many times you’re applying for a credit card. When you apply for a credit card, the bank does a credit pull to view your score. The more pulls you have, the greater risk you seem to be.

However, there is a way to avoid this. If you were to apply for a credit card and then apply for another a week later and another next month and another two weeks later, this is going to affect your score. Instead, apply to all the cards you want at the same time, that way it will only count as one pull.

Types Of Credit

This basically just means that it looks more reputable if you have credit cards from banks such as Bank of America or Chase, rather than a credit card through Macy’s or Nordstrom. These credit cards directly with banks have more prestige, and therefore having those types of cards will increase your score.

Now that you understand what goes into determining a credit score and how different actions can affect it, hopefully, you understand that not all credit cards are bad as long as you are diligent and responsible.

Choosing Credit Cards

Now the fun part, choosing credit cards to help you get points and travel more. There are literally so many card options out there this post would take you hours to read if I tried to include them all. It also depends on your style of travel, where you go, how you get there and what companies you use. If you fly Delta, one card might be better for you over others, but if you fly American you’ll want to look into a whole slew of other cards.

Instead, I’m going to try and focus on some of my favorite all-around cards then in part two on Monday I’ll be talking about specific ones for specific hotel chains or airlines.

P1070930

This is a selection of the various credit cards I own currently, full disclosure though, two of them are not American and I realize now I accidentally included my bank card! All of these cards have served me very well for one purpose or another.

Chase Sapphire Preferred

Chase Sapphire

This has been my go-to card for a long time now and it has some really great benefits that I’ll briefly share with you. It’s the one on the far right-hand side of the photo above. Chase Sapphire Preferred does have an annual fee of $95, but like most cards, it’s waived for your first year. Here are a few reasons why I love this card so much:

  • No foreign transaction fees. This means that when I travel I can use this card and I will get the product at the exact exchange rate rather than paying a fee to pay in another currency.
  • 50,000 points after spending $4,000 in the first three months. This is usually the hardest part about these cards, but with some creativity, it’s very possible. These points are amazing because you can redeem them for airline tickets and hotels, as well as transfer the points to airline programs. You can read more about Chase Ultimate Rewards here. This number of signup points is equivalent to $625 towards travel.
  • When redeeming rewards, you get 20% of the spent points back.
  • 5,000 bonus points after adding an authorized user in the first three months. This is great for me because I can just add Michael.
  • You earn 2x points on travel and dining purchases rather than just 1 point per dollar.
  • Primary rental car insurance coverage. This is probably one of the most useful things I’ve gotten out of this card. I never have to purchase rental car insurance because this card covers it entirely. If you were to get in an accident, you submit a claim to Chase and they will reimburse you whatever the extra charges were.

These are just the highlights on why I love this card, and this card has given me so many opportunities and has saved me probably hundreds in additional rental car insurance as well. If you choose to keep it after the first year like I have, the $95 is a bit high, but, in my opinion, it is totally worth it. This has been my main card for years and I don’t regret having it for a second.

Chase Freedom

Chase Freedom

In case you can’t tell, I’m a big fan of Chase. The next card that is an all-around beneficial option is Chase Freedom. Rather than being solely based on points, this card works more as a cashback option. Here’s why I love this card.

  • The usual signup bonus is to get $150 when you spend $500 in the first three months. This is such an easy amount to hit and it’s basically free money.
  • When you spend you get 5% cashback on selected categories that change each quarter and 1% on everything else.
  • No annual fee, so it makes for a great card to keep to increase your credit line duration.

There is another card for Chase Freedom that’s called Chase Freedom Unlimited and it also has no annual fee, but you earn 1.5% on everything, rather than the bonus on selected categories. It’s best to look into which one works best for you based on what you spend your money on.

American Express Everyday

This card by American Express is really unique and has a really interesting concept that I had never seen before. With Amex you earn Membership Rewards that you can redeem for travel, hotels, and also transfer to specific airline miles. You can read more about them here. So what makes this card so special?

  • 10,000 points after spending $1,000 in the first three months.
  • Use your card 20 times in a month and you get 20% more points than what you would have earned.
  • Earn 2x points at grocery stores.
  • No annual fee.

This is another card that’s great for keeping for duration and longevity purposes and also is great because it’s American Express so it comes with Amex offers. These are offers on your account for certain stores or restaurants. These are awesome because they’re usually something along the lines of “Spend $50 at Target and get $20 off” if you use that card. This is something only Amex does and is another awesome and unique benefit you get with this card.

Barclaycard Arrival+

barclay arrival

Much like Chase Sapphire Preferred, Arrival+ is another one of my go-to cards for many reasons. This card has an annual fee of $85, but is again waived the first year. Arrival+ works a little bit differently than some of the other cards in that it’s not points redemption in the same way and it’s also not quite cashback. Essentially with this card you earn miles and each mile equals a certain amount of money and then you redeem those for a purchase after the fact.

As an example, you may hire a rental car and you put that charge on your Arrival+ card, then after it’s been approved you go into your transactions and click “redeem” and it will take that number of points out of your account and refund you the charge. So what else about Arrival+ is so great?

  • 40,000 bonus miles after spending $3,000 in the first 90 days. (This is the equivalent of $400 to redeem on anything travel-related.)
  • 2x miles on all purchases.
  • 5% back off every redemption. So you save 5% on everything you redeem.
  • Free access to your FICO score 24/7.
  • No foreign transaction fees.
  • Primary rental car insurance coverage.
  • Barclay Travel Community is something unique to Barclays that’s totally awesome. You log into the travel page and then you can write travel stories, and these can be about literally anything you want. A restaurant you went to, a beach, an experience, some people you met, absolutely anything. You can post up to five stories for every city, state, or country. So you could only do five about Malaysia, but then 5 more about Kuala Lumpur. Each story has to be at least 100 words with one unique photo and for each story, you get 150 points, which is $1.50 towards redemption. This is some of the easiest money you’ll ever make.

Arrival+ is another card I would strongly recommend as an all-around card because you earn well and you can redeem so easily for stuff. I also love that you can redeem after the fact so you don’t have to decide prior to purchasing what you want to redeem on.

Signup Bonuses

Signup bonuses are always changing slightly to offer you different things and this goes for the above cards, although these four are the most steady cards I know. Two other cards I won’t go into that have fluctuating signup bonuses are Venture by Capital One and Citi Thank You Premier.

I own both of these cards and in my experience Venture has a good signup bonus but I don’t love it because it hasn’t got as many benefits as the above cards, and I love my Thank You Premier card but at the moment it has no signup offer, so it’s not as great of an option right now.

The hardest part about achieving signup bonuses are the minimum spends, but it is possible. I linked to it above, but this post talks about various ways in which you can hit your targets, some of the ways without really spending any money at all.

Churning travel credit cards is a huge business and if you want more information about them there are blogs out there by people who have been doing it far longer than I have, such as The Points Guy. Credit cards are not something to shy away from and can give you so many opportunities you otherwise never would have had. Understanding how they work and being diligent about them are the keys to success. I hope this post was a great overview on travel credit cards and be sure to come back to the blog on Monday for part two on company-specific credit cards!

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  • Credit Cards are always paid in full every month here in Germany. Which means if I pay something with my credit card it will automatically be deducted from my bank account the next month. So I will not be able to pile up credit card debt. We Germans usual don’t need credit cards and most people I know don’t even have one, but you do need one for travelling which is the sole purpose of me having mine.
    It’s unfortunate that in the US it’s so easy for people to pile up credit card debt so fast and the fact that you can get one in about any store.

    • Yeah I know exactly what you mean, Chrissy. I’ve never acquired any debt in the US but paying off credit cards in full as a must in Germany when I moved here was so strange to me. Even though it’s something I do anyway in the States, it was odd with that being the only option. But I do agree it of course makes things worse because it’s so easy for people to acquire debt, which is why they really need to understand the system.

  • We have a few credit cards, and used them regularly for rewards/cash back in the USA but where we live now…there’s not much that you can use a credit or even a debit card for, so many places don’t have the equipment to process cards. It’s really a cash-based lifestyle. We still use them when we buy the occasional plane tickets or something, but given how rarely we’re buying anything that we can use a credit card for…I’m really glad we opted to just keep our free cards instead of getting the cards that have better rewards but fees to go with them. They are great if you can maximize the benefit of using them!

    • That makes total sense, Rachel! It’s actual the same for me at the moment since I’m living in Germany. In Germany cards are used so rarely, but I still get a lot of benefits out of my cards from their signup bonuses so I plan it when I’m in the States and it’s worked out well so far.

      I totally get why it wouldn’t work so well for you though. Thanks for dropping by!

  • Samantha

    Great tips! Credit cards are so helpful when traveling, especially.

    • Oh definitely, Samantha! They really are. It’s definitely given me some amazing opportunities.

  • All great information! I’m recovering from money flow issues and have been slowly working on repaying debt and increasing my credit score. I’ve just started to use credit cards for rewards, and I love it! I got my first travel credit card, which I am using on my trip to Europe next month. It’s such a great way to aid travel!

    • Thank you! That’s great! I’m so glad that you’ve opened yourself up to this world! That makes sense you would hold off until now, but I hope you now get to experience the wonderful world of points 🙂 I hope you have an AMAZING trip to Europe!!

  • Yes! I always try to advise my friends to not shy away from credit cards. They’re a bit weary at first, but eventually, they get it!

    • Absolutely!! I’m the same way, I’m alway trying to convince people to get various cards haha. Not for my own benefit, but because I truly think they’re amazing and I think everyone should be given the same opportunities to utilize points and benefits. It’s especially awesome with no foreign transaction fees for travel.

  • Ashley Stephenson

    It took my husband a year to convince him to get a credit card with me. He was so afraid we would use it too much and go in debt. Well 6 months later and he is glad we got one! Especially when we bought her new truck and he put the down payment on it!

    • I’m so glad that you convinced him, Ashley! That’s amazing news, congratulations! So glad it worked out for you 🙂

  • Such great info! I have the Sapphire Preferred card too and love it! I’m fascinated by the churn and burn stuff but haven’t tried it because I don’t want to mess it up and end up with a terrible credit score!

    • Oh that’s awesome, Rachel! I literally just upgraded to the Sapphire Reserve yesterday and I don’t regret it for a second. With all my other cards I was unsure if I wanted to keep Sapphire, even though it’s been my favorite card for so long, but upgrading to Reserve has been an awesome decision because with the global entry application credit, travel credit and lounge access it is SO worth the slight premium price.

      That makes total sense you wouldn’t want to mess it up! I was hesitant at first when my husband and I started doing it because I felt the exact same way, but once you research it and start doing it more and more it becomes second nature and then it’s awesome to get all the benefits. It’s hard now though because the concept of manufactured spend is changing almost daily, which makes it a bit more complicated.

  • Credit card food for thought. I’ve definitely paired down my cards over the years. I think having one or two, with great benefits for travel or perks is the smartest way to go.

    • That’s a good way to look at it Blythe! Although I’m sure it works for some people, for me I like getting the benefits from all my various cards and I think as long as your diligent and organized with it there’s no harm to it.

  • I love my credit card perks and points! I have the Capital One Venture card and love how easy it is to save money on flights with it.

    • Yes absolutely, Becky! My favorite thing about the Capital One Venture was they let me use my own design hahaha. I uploaded a photo I took of a koala in Australia and they printed it on my card and it was so exciting haha. That plus benefits = a win.

  • Greta Hollar

    All of this information is so helpful! Thanks for sharing!

    Greta | http://www.gretahollar.com

  • Mimi Rose

    Helpful post! I just started researching credit cards more, both personal and for my business. I’m a travel blogger so I’ve been looking into cards that will really benefit and give back with how much I travel. I just signed up for Chase Sapphire, I’ve heard that the SPG card is a great one as well. Thanks for the great write up!

    • I’m so glad it was helpful, Mimi! Sapphire is such an awesome card and has been my go-to for ages so you definitely made a great decision there. I literally just upgraded to Reserve yesterday and I think it was such a great decision because with all the credits you get and the lounge access it’s totally worth the slight premium. But Sapphire is an awesome place to start and I’ve had mine for two years now and don’t regret it for a second.

      SPG is definitely a good card too! I actually have the British SPG card (since my husband is a Brit and we live in Europe right now), not the US one, so I’m not as familiar with the counterpart in the States.

  • Neely

    We use airline cards and pay them off monthly!

    • That’s great, Neely! I always love to hear when people utilize cards and benefits 🙂

  • Allie Bigoness

    I really enjoyed learning about this. I’m a newbie with credit but I’ve found managing it like a debit card works for me, meaning I don’t put things on there that I can’t afford. My parents definitely scared me about debt but I know to start building credit. I want to look into getting a card with JetBlue!

    • That’s the best way to manage it, Allie! I’m the same way in that I’ll never put something on a credit card that I can’t afford. Dipping your toes into the world of credit cards and points can be daunting, but it’s great to find one that you think will work best for you and start with that! I don’t know much about JetBlue’s card, but it would be great if you fly them a lot!

  • I love this post! We have a mileage credit card and my husband and I travel to hawaii every other year for free because of it!

    • I’m so glad you enjoyed it! That’s amazing! It’s really incredible what you can do by wisely choosing what to put your spending on.

  • Kelsie Kleinmeyer

    This is great!! We are huge travelers who use travel credit cards to pay our bills. We have really made them work to our advantage with points, and travel all over the place for free or nearly free!

    • That’s great, Kelsie! It’s really amazing what these cards can do for you. People are always asking how I can travel quite as much as I do and stay in these awesome places, and the truth is credit card points!

  • Sondra Barker

    Thank you so much for posting this! It’s so true that many people shy away from credit cards, but if you use it the right way there are copious benefits that we all can take advantage of.

    • That is so true, Sondra! I’m glad you liked it. I definitely think more and more people are afraid of credit cards than ever before and it makes me sad to see that!

  • Taylor Smith

    Hubby and I have a credit card in his name and a credit card in mine. We have great credit and use it when we travel and it aids in buying a house too!

    • That’s great, Taylor! It’s so wonderful to hear people utilizing the awesome benefits credit cards have to offer 🙂

  • I was so afraid to use credit cards for travel at first, but it ended up being so worth it! This is a great post for those who are just starting out and need the info to get started with reward travel 🙂

    • I’m so glad you chose to! It really can make a world of difference and allow you to do so much more, and isn’t that really what we all want? 🙂

  • homemom3

    Credit cards have been so evil in my life, but only because I was never taught about them growing up. I didn’t know about the monthly charges, interest, fees, etc. Knee deep in debt now. I can honestly say this post would’ve been helpful when I was younger. You have great tips right here. I have taught my kids about credit cards and how important it is to build up their credit. I always thought you took credit cards on vacations. I can see why getting one that has lots of rewards would be beneficial.

    • I understand that, and I think honestly it is something that should be taught in schools. I wasn’t really taught much about it either, but I’ve always been really careful about credit cards and what I did with money and taught myself, but it would be amazing if schools would implement a course that taught kids about this, because it really is so important to their futures!

      • homemom3

        Yes I wish they did teach this in schools, it should be a class in either junior or senior year.

  • Credit cards have always had a negative reputation for my parents, yet for my husband and I, they’ve been a blessing. They allow us more time to come up with money for things or plan family trips every couple of years. The rewards are amazing!

    • I’m so glad you have found benefits in credit cards! I think a lot of people think negatively on credit cards, but I don’t think it’s entirely fair since they do offer some great benefits, as long as your careful and smart about them.

  • Great tips! Using a credit card most certainly are a great way to improve your credit!

  • I want to get the Sapphire Preferred as my next card. It has so many good upfront benefits.

    xoxo, Jenny

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