Essential Guide to the Perfect Starter Travel Credit Card

Danielle Jul 09, 2024

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Always Start with the Lowest Card in a Co-Brand Group First to Maximize Travel Points

Embarking on the exhilarating journey of travel hacking using reward credit cards is akin to stepping into a treasure trove of benefits and free travel. So you picked a hotel chain or airline to get a co-branded travel credit card with, that's great! But there is often more than one card affiliated with each brand. So which credit card in that co-branded group do you start with? While the allure of starting with higher-tier cards is undeniable, there is a strategic advantage to starting with the lowest-level reward card in a co-branded group. In this blog post, we'll delve into the world of travel hacking and explore the reasons why applying for the lowest-level co-branded credit cards first is a savvy move that can significantly enhance your overall travel lifestyle. Many types of credit cards earn travel rewards and various reward points to earn you a dream vacation. There are many types of travel cards, but today, we are talking about co-branded credit cards. Co-branded is a type of card that is affiliated with a particular brand. Some co-branding partners include hotel chains, airlines, and various loyalty programs. If you are suffering from analysis paralysis, decide on a co-branding partner that fits your travel goals such as your favorite hotel chain or airline.

Lake Placid - free trip

Is there a hotel chain you prefer? Do you have a dream vacation in mind? Find out which hotel in that location you would like to stay at, and make that brand your first co-branded travel card. Do you need to fly to your vacation goal location? Find out which airlines from your home town to your dream destination and make that airline your first co-branded.

card. There is no right travel reward card to start with. Everyone's travel goals are different. Make sure to sign up for the loyalty program for the co-branded card you select. My suggestion would be to sign up for the loyalty program before signing up for the rewards cards. You will be able to enter your loyalty program number on the credit application.

Part 1: Sign-Up Bonuses to Maximize Travel Points

One of the fundamental principles of effective travel hacking is to keep applying for sign-up bonuses for new cardholders. While using existing cards will earn you points, substantial chunks of reward points often come from a welcome bonus which is only available to a new customer for a new credit card. Starting with the lowest level co-branded cards allows you to capitalize on these lucrative bonuses each time you apply for the next level-up card in a co-brand group, kickstarting your journey with a considerable boost in points.

Beautiful Lake Placid

To keep getting approved by credit card companies, your credit score must be in check. A key element of travel hacking is to make sure you are not spending beyond your means. Keep track of your credit reports and make sure to pay your cards on time to avoid late fees and high interest rates on balances. Cards that have higher rewards or larger welcome bonuses may require an excellent credit score. That isn't to say that you cannot travel hack with an average credit score, but you may be subject to lower credit limits or the type of credit card you can get approved for (such as ones with lower rewards points).

Check out Our YouTube Video on Maximizing Sign up Bonuses

Part 2: The Level-Up Advantage

Commencing with a lower-level reward card provides the flexibility to progress to future mid and high-level cards from the same credit card company. Certain credit card issuers, including the likes of American Express, restrict sign-up bonus points for low-level cards if you already possess a mid or high-level card of the same line (e.g., all 3 Hilton cards). However, they often permit a sign-up bonus when moving from a lower-level card to a higher one. So using American Express Hilton as an example, there are 3 level of Hilton cards. If you sign up for the lowest level first, then the mid-level, and then the highest you can earn the sign-up bonus for all 3 cards. If you start with the highest level Hilton card first, you will not be eligible for the mid or low-level card sign-up bonuses. Starting with the lower level card in a co-branded credit card network will bring you the most value for earning points as you level up the cards.

Part 3: Do Not Accept an Upgrade on Your Existing Credit Card

An important caveat is not to upgrade your lower-level credit card. Instead, apply for a separate credit card to receive the sign-up bonus. For example, apply for the Hilton Honors American Express Card first, earn the sign-up bonus, then apply for the mid-level Hilton Honors American Express Surpass, and subsequently, the high-level card Hilton Honors American Express Aspire card.

This strategic progression allows you to maximize your rewards while maintaining separate sign-up bonuses. If you simply upgrade your existing card, you may not be eligible for the signup bonus for the upgraded card. On the other hand, sometimes you will receive a targeted upgrade offer from American Express or another credit card company. If the targeted upgrade offer has a higher bonus reward than applying for a separate card, then go ahead and accept the upgrade.

Last Summer we Travel Hacked a Trip to England

Part 4: Travel Cards Bonus Points Catagories and Various Info

Bonus rewards can be earned for some categories depending on the card. Popular bonus categories for eligible purchases include grocery stores, gas stations, and restaurants. Be sure to learn about the card program you are applying for to find out the bonus categories. Some reward cards have an annual fee, which is often offset by additional benefits. Examples of rewards offered on high-fee reward cards include statement credits on restaurants, lounge access, and discounts at a specific store or various merchant partners. Some reward cards offer discounts or cash back at a specific retailer. Make sure to read all the fine print provided by the financial institution.

Example of My First Travel Rewards Card

Example: My first travel reward card was the Hilton Honors American Express Card. Currently, this card is offering a 100,000 sign-up bonus if you spend $2,000 in the first 6 months.

After earning the signup bonus on this card, I opened the Hilton Honors American Express Surpass. This card is currently offering 170,000 sign-up bonus after spending $3,000 in the first 6 months. To learn more about the Amex Surpass check out "Unlocking Rewards: Look At The American Express Surpass Card".

This allowed me to obtain 270,000 Hilton honor points and earn points on my spending. If I had signed up for the Hilton Honors American Express Surpass first, and then the Hilton Honors American Express I would not have been able to earn the sign-up bonus for Hilton Honors American Express, leaving me a combined sign-up bonus of only 100,000 instead of 270,000.

I have both cards still. The Hilton Honors American Express doesn't charge yearly, so I don't need to cancel it. Below is a chart of the American Express Hilton sign-up bonus example. After you have applied for each of these cards you can repeat the process for your person 2. To learn more about how to use a partner to get the max amount of travel points check out our post "How Partnering Up Boosts Your Credit Card Travel Hacking Game."

Example 1: Sign up for Hilton Honors American Express Card - lower level card first

Card	Sign up bonus	Min spend
Hilton Honors American Express Card	100,000	$2,000
Hilton Honors American Express Surpass	170,000	$3,000
Total Sign up bonus	270,000	Total Spend $5,000

Example 2: If I signed up for Hilton Honors American Express Surpass – Mid-level card first

Card	Sign up bonus	Min spend
Hilton Honors American Express Card Surpass	170,000	$3,000
Hilton Honors American Express	0	$3,000
Total Sign up bonus	170,000	Total Spend $5,000

If the higher-level card is applied for first, the sign-up bonus for the lower-level card may be forfeited, resulting in a reduced total sign-up bonus.

For a step-by-step guide on how to start travel hacking be sure to check out our article here

Epcot on our travel hacked Disney trip

Choosing the lowest-level reward card as your starting point in the world of travel rewards is a strategic decision that pays dividends in the long run. By strategically navigating sign-up bonuses you set the stage for significant travel rewards.