How to Choose the Right Credit Cards for You

We're half way there now. Now that you understand a bit about the different types of cards and rewards programs, it's time to choose the cards you want.

The right card for you needs to provide value. It should earn you points AND you should be able to use the points to do what you need.

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Here are some factors to consider:

Which Airlines You Often Fly With

Of course, you only want to apply for cards that can be used with airlines you'll fly with.

First, look at what airlines are at your local airport. Also look at where they fly to. Essentially, you want to know your travel options for both domestic and international trips.

If you live in a small town with a tiny airport, see how far away the nearest larger airport is. You will have a lot more options.

If there is an airline you fly often with, it's a good idea to apply for the airline's co-branded card.

For example, let's say you live near a JetBlue hub and you like their domestic options, as well as their direct flights to Mexico, Costa Rica, and the Caribbean. You may consider a co-branded JetBlue card.

Or let's say you live near a huge Delta hub. In that case, you may want to apply for both a co-branded Delta card (from American Express, a CreditDonkey partner) and an AMEX Membership Rewards card that allows you to transfer points to Delta.

But we generally only recommend applying for airline co-branded cards if you fly with it often. Otherwise, transferable cards will give you more flexibility.

Here are some card options for your favorite airlines:

• Delta
  
• American
  
• United
  
• JetBlue
  
• Alaska Airlines
  
• Frontier Airlines
  
• Hawaiian Airlines
  
• Spirit Airlines

But keep reading, and we will show you why transferable cards are the way to go.

Where You Want to Go

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Where is your dream vacation destination? You want to get a card that helps you get there most efficiently.

For example, let's say your goal is to take your family of 4 to Hawaii. You live near an airport that has direct American Airlines flights to Honolulu. You can book 4 flights from Los Angeles to Hawaii for 100,000 points on British Airways Avios (with partner American Airlines).

In that case, you probably would want to look into one of the Chase Ultimate Rewards credit cards, which has British Airway as one of its transfer partners.

Remember that when you sign up for an airline program, you can fly with it AND its partners.

Or let's say you want to go to Europe with your partner. You would need a total of 120,000 miles with either United or American. In that case, you can combine the United MileagePlus Explorer Card and Chase Sapphire Preferred® (which has United as a transfer partner).

How Often Do You Travel a Year?

If you only plan on traveling once a year, maybe start with a travel rewards card with no annual fee and see how you like it. However, these cards don't have as good rewards in our opinion.

Here are some rewards cards with no annual fee:

• Discover It Miles
  
• BankAmericard Travel Rewards
  
• Capital One VentureOne Rewards Credit Card

Do You Want to Get the Most Value?

You'll have do some homework, but transferrable cards will allow you to use your points for the most value. You can transfer them to airline partners and trade the points in for a flight that would normally cost a lot more.

Here are our favorite transferrable cards:

• Chase Sapphire Preferred
  
• AMEX Gold

Do You Value Flexibility and Simplicity?

If you just want something easy to use, you'll like the ease of general travel rewards cards. You just use the card normally and later redeem points toward statement credits against recent travel purchases. No homework required.

Plus, these cards give you 2x points on ALL purchases. So your points will rack up fast. And you can use them for a wider selection of options, including trains, cruises, car rentals, Airbnbs, and more.

Here is our favorite fixed value card:

• Capital One Venture Rewards Credit Card

Do You Plan on Traveling Internationally?

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If so, make sure your card has no foreign transaction fees. You don't want to pay an extra 3% on all your purchases abroad.

Luckily, most travel reward cards have no foreign transaction fees, so you wouldn't have to worry about it. But some of the smaller, airline co-branded cards do.

Why It's a Good Idea to Have a Mix of Cards

Ideally, it's a good idea to have a mix of transferrable cards, fixed-value cards, and even co-branded airline cards.

Here is how having a mix works to your advantage:

• Using a transferable card, you can transfer points to an airline to get your tickets. Since airfare is often expensive and there aren't many cheaper alternatives, this is the best way to use your points for the most value.
  
• Then using a fixed-value card, you can redeem the points for your accommodations expense. There is a lot more flexibility to find cheaper accommodations. Even things like Airbnb and hostels may count as travel expenses, which you can then redeem for.

See how with this strategy, you can fund most of your vacation with points.

Our Favorite Trio

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To give you an idea, here is our favorite trio of cards.

• Chase Sapphire Preferred: Chase Ultimate Rewards is our favorite travel program, and the Sapphire Preferred card is a great one to get started with. You get a large sign-up bonus and great travel benefits, such as primary car rental insurance.

• Capital One Venture: This is a great fixed-value card to have in your stash. You get 2x points on every purchase. It's also useful that you can redeem your points for travel expenses other than flights.

• American Express Gold Card from American Express, a CreditDonkey partner: American Express Gold earns 60,000 Membership Rewards® points after you spend $6,000 on eligible purchases with your new Card within the first 6 months. This card earns 4x points at restaurants, including takeout and delivery in the U.S., and 4x points at U.S. supermarkets (on up to $25,000/calendar year in purchases, then 1x). 3x points on flights booked directly with airlines or on amextravel.com. You can earn up to $10 in statement credits monthly when you pay with the American Express® Gold Card at Grubhub, The Cheesecake Factory, Goldbelly, Wine.com, Milk Bar and select Shake Shack locations. Enrollment required. There is a $250 annual fee (See Rates & Fees). Terms apply.

We think these 3 cards are a great starter combination for most people. Together, they give you a wide range of airline transfer partners to work with. And options to redeem for a variety of travel expense.

Key Takeaways

• Research your travel options at your local airports and think about where you want to go.
  
• Start with a no-annual-fee card if you're not sure how often you'll travel.
  
• It's a good idea to have a mix of transferrable and fixed-value cards.

In tomorrow's lesson, we will talk about some additional things to consider when applying for cards. And how to come up with a card strategy.