New airline rules… New credit card?

Time for a new credit card? (Chris McGinnis)

Time for a new credit card? (Chris McGinnis)

It’s time for a reassessment. As we all know, airline programs are changing. And as frequently happens when things change, there are winners, and there are losers.

As airlines refine the focus of their frequent flyer programs on big spenders, it’s probably time for small or medium spenders to reconsider the cards they carry in their wallets.

Why? Because earning points via credit card sign ups and spending is one of the easiest (if not the easiest) way to earn enough points to take free trips.

For small and medium spenders, who will likely start choosing their flights based on price, convenience and service instead of blind devotion to frequent flyer program, it’s probably a good idea to consider new cards tied to flexible programs that offer broader benefits and not just airline miles. That means it’s time move to a multi-purpose card tied to a rewards program that can be used across a wide variety of airlines and other parters.

I did just that last year…and have been reaping the rewards ever since.

Last year I signed up for a Chase Sapphire Preferred Card last year, spent $3,000 in the first three months and earned a tidy 40,000-point bonus.

Then I used the card frequently for the rest of the year, eventually earning 65,000 points. Then, using the Chase Ultimate Rewards booking tool, I redeemed those points for an Air Canada trip to Ottawa for my mom’s big 80th birthday party this summer. Flying to Canada during the summer is expensive, and that ticket would have cost me dearly—about $800. But since I played my cards right, it didn’t cost a dime. (Except that Air Canada took a $35 fee for a specific seat reservation.)

Later in the year I signed up for the popular new Barclaycard Arrival Plus World MasterCard. I spent $3,000 in the first three months and earned another 40,000 point sign up bonus. Using the card frequently, I was able to redeem the points to help reduce the cost of a price ticket to Puerto Rico over Christmas. I did that because when redeeming Barclaycard miles, there are no blackout dates.  If a seat is available, you buy it, and then use your miles to pay the bill.  The number of miles you use is based on how much the ticket costs. Easy!

I still hold on to my American Express Platinum card, but my relationship is getting tenuous. What’s great about the card is that it’s tied to the robust Membership Rewards program. It also reimbursed me for my Global Entry membership, provides $200 a year in statement credits for airline ancillary charges, and gets me into Delta Sky Clubs and Centurion Lounges. But every year that $450 bill comes around, I keep thinking… do I really need it this much? Maybe I could just pay the $50 fee for club access? Hmm.

There is no such thing as the “best” credit card for frequent flyers. But there is a best one for YOU based on your travel and spending habits. (Here’s our list of top credit card picks.)

If you are convinced it’s time to change some things in your wallet, here are two of the best general purpose cards to get right now due to their generous signup bonuses, reasonable spend requirements, and waived fees for the first year.

>Chase Sapphire Preferred Card

This is probably the best choice for TravelSkills Readers because of Chase’s close ties to United and ability to easily transfer points. (Plus, the card is made out of metal and has a nice heft to it!)

  • Annual fee of $95 waived the first year.
  • Points can be transferred to airline partners including United, Southwest, British Airways, Korean Air, and or hotel partners like Hyatt or Marriott among others.
  • Redeeming points for travel (instead of transferring them to airline mileage programs) gives a rate of 1.25 cents per point. With a signup bonus of 40,000 points, that equals $500 worth of travel. (Hello! No brainer here. Sign up!)
  • The card now comes with a built in microchip that makes it easier to use overseas where chip cards are more prevalent
  • Earn TWO points per dollar spent on travel (fares, fees, inflight purchases, hotel, taxi, rental car, tolls, etc.) and dining, and one point for everything else. On the first Friday of each month, you earn three points per dollar spent on dining.
  • Book your trips via the Ultimate Rewards website and you earn three points per dollar spent.
  • No foreign transaction fees—a savings of 2-3%, which means a savings of nearly $100 on an overseas trip where you spend $3,000.

>Barclaycard Arrival Plus World MasterCard

This is one of the best of a new crop of cards that came out last year, with many of the benefits of the Chase Sapphire Preferred card, plus, it offers two points per dollar spent on ALL purchases. The Barclaycard Arrival Plus World MasterCard also made Nerd Wallet/Money Magazine’s list of best credit cards for 2013-2014.

  • Annual fee of $89 waived the first year.
  • Earn two “miles” per dollar spent (on everything).
  • Spend $3,000 in first 90 days and earn 40,000 miles (which equates to $440 toward travel purchases)
  • There are no foreign transaction fees, and the card has new chip & PIN technology, which means you can use it in Europe at unmanned subway and train kiosks.
  • Redeem miles via the card’s program for travel (one mile equals one dollar), and also receive a 10% mileage rebate on points spent on travel during your first year.
  • In an unusual twist, miles earned are redeemed for statement credits on almost any travel related purchase such as airline tickets, cruises, rental cars, and hotels. Basically, you buy travel using your card, then use statement credits to reduce or eliminate the travel charge.
  • The Barclaycard Arrival Plus World MasterCard offers a free subscription to TripIt Pro (typically $49), which helps you to organize boarding passes, travel itineraries, and flight notifications in one convenient app.

What cards do you carry in your wallet? Why? Please leave your comments below. 

(Please note that TravelSkills earns a small commission when you sign up for credit cards via links posted here. So please use those links! It helps us help you.)

– Chris McGinnis

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