Consult with Cards: Future graduate student who wants to travel in the new year
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Editor’s note: Consult with Cards is a weekly series where the TPG cards team helps our readers decide what their next card should be. If you would like to be a part of this series and receive a personalized consultation, email us.
As we approach the end of 2021, many travelers are already strategizing for the new year. TPG reader Nicholas Stern is dreaming about his summer 2022 travels but will be attending graduate school in the fall, so he knows that the right travel credit card can help him save money by using points and miles and maximize his travel purchases accordingly.
Here are our recommendations for Nicholas as he’s shopping around for a new credit card.
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Nicholas is in his mid-20s and is returning to school in August 2022. He currently lives in Miami, so naturally, American Airlines is his go-to airline for all of his domestic flights.
He considers himself a frugal person, so paying top-tier annual fees can be harder to justify — unless the perks make sense for him and his lifestyle.
Current credit cards
Before considering any new credit cards, it’s crucial to look at the cards that Nicholas has opened in the past. That’s because credit card issuers have their own set of application restrictions. Namely, Chase’s unofficial 5/24 rule is among the most restrictive, which will likely deny applicants any Chase-issued cards if they’ve opened five or more credit cards in the past 24 months.
Luckily, it looks like Nicholas has only opened three credit cards in the past 24 months, opening up eligibility for two more new Chase cards in particular. Here’s a look at the cards he carries in his wallet:
|Card||Welcome bonus||Earning rate||Annual fee|
|Wells Fargo Active Cash® Card (rates & fees)||Earn a $200 cash rewards bonus
when you spend $1,000 in purchases in the first three months of account opening.
|Unlimited 2% cash rewards on purchases.||$0|
|Citi® / AAdvantage® Platinum Select® World Elite Mastercard®||Earn 50,000 American AAdvantage miles after you spend $2,500 on purchases in the first three months of account opening.||2x on eligible American Airlines purchases, restaurants and gas stations, and 1x on all other eligible purchases.||$99, waived for the first 12 months|
|The Platinum Card® from American Express||Earn 100,000 bonus points
after you spend $6,000 on purchases on your new card in your first six months of card membership.
|Earn 5x on flights booked directly with airlines and through Amex Travel (on up to $500,000 in purchases each calendar year), 5x on prepaid hotels booked through Amex Travel and 1x on other eligible purchases.||$695 (see rates & fees)|
|Apple Card||None.||Earn up to 3% daily cash on Apple purchases, 2% on Apple Pay and 1% on all other eligible purchases.||$0|
|Capital One SavorOne Cash Rewards Credit Card||Earn $200 after you spend $500 on purchases in the first three months of account opening.||Earn unlimited 3% cash back on dining, entertainment, popular streaming services and at grocery stores, plus 1% on all other purchases.||$0|
|Chase Sapphire Preferred Card||Earn 60,000 bonus points after you spend $4,000 on purchases in the first three months from account opening.||Earn 5x on travel purchased through Chase Ultimate Rewards, 3x on select streaming services and online grocery purchases, 2x on all other travel and 1x on all other eligible purchases.||$95|
The information for the Citi / AAdvantage Platinum, Wells Fargo Active Cash and the Apple Card has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.
Card recommendations for Nicholas
While Nicholas currently carries the Amex Platinum in his wallet, it’s the corporate version through his company, so he gets significant savings on his annual fee. However, Nicholas will be leaving his company in the new year and is hesitant to open the card independently with the $695 annual fee.
He’ll want a card within the Amex Membership Rewards ecosystem as he’ll need to transfer his existing points balance to a new card before he loses his corporate Amex Platinum Card. As a result, the American Express® Gold Card is a must-have as his spending will likely shift considerably from travel expenses to everyday spending once he returns to school.
There’s a $250 annual fee (see rates and fees), but it’s almost effortless to take advantage of the card’s ongoing benefits to recoup the vast majority of this cost. For starters, this card comes with a monthly $10 Uber Cash credit, valid for U.S. Uber rides and Uber Eats orders. In addition, there’s a monthly $10 dining credit for eligible partners, with popular options like Grubhub, The Cheesecake Factory, Goldbelly, Wine.com, Milk Bar, and select Shake Shack locations. Both of these credits add up to $240 annually, and since Nicholas lives in a big city, maximizing both of these credits should be a breeze. (Enrollment is required for these benefits.)
The Amex Gold’s earning rate is the best for foodies, with 4x on groceries at U.S. supermarkets (on up to $25,000 spent per calendar year, then 1x) and at restaurants, 3x on flights booked directly with the airline or through Amex Travel and 1x on other eligible purchases. However, the only consideration before applying for the Amex Gold is that Nicholas already has the Capital One SavorOne, a no-annual-fee cash-back card that offers a similar return at grocery stores and restaurants (3x earning rate). But the Amex Gold is superior since TPG values Membership Rewards at 2 cents apiece, yielding a high 8% return toward travel.
While Nicholas already has the Citi / AAdvantage Platinum Select card, the Citi® / AAdvantage® Executive World Elite Mastercard® is likely the better card since its primary benefit is that it offers a complimentary Admirals Club membership for you and your immediate family, or up to two traveling guests that accompany you. If Nicholas wants to share this perk with any of his close (and trusted) friends or family members, cardholders can add up to 10 authorized users and they’ll also enjoy Admirals Club access.
Miami International Airport (MIA) can get quite busy, so the card lends itself to some valuable perks on the ground, too. When flying American Airlines, cardholders will enjoy priority check-in and airport screening (when available) and early boarding.
It’s worth discussing that Citi has some strict application restrictions, especially on its cobranded credit cards:
American Airlines AAdvantage® bonus miles are not available if you have received a new account bonus for a Citi® / AAdvantage® Executive account in the past 48 months.
Since it’s been about two years since Nicholas opened his current Citi / AAdvantage Platinum, he likely won’t be eligible for the sign-up bonus (50,000 bonus miles after spending $5,000 within the first three months of account opening). However, he can call Citi to upgrade his card if he chooses to go for the Citi / AAdvantage Executive. Upgrading cards will also not affect his Chase 5/24 status.
On another note, American Airlines has recently revamped how it will allow flyers to earn elite status starting in 2022. It just got much more valuable to hold a cobranded credit card with the new “Loyalty Points” program since cardholders will earn 1 Loyalty Point per dollar spent. If Nicholas wants to work toward elite status in 2022, another reason to upgrade to the Citi / AAdvantage Executive is that cardholders can earn an additional 10,000 Loyalty Points by spending $40,000 in eligible purchases between Jan. 1, 2022, and Feb. 28, 2023.
These bonus elite points can help him move up the ranks of AAdvantage status thanks to credit card spending.
Last but not least, we recommend that Nicholas apply for the Chase Freedom Unlimited. It’s virtually a must-have card to pair with his Chase Sapphire Preferred, which he applied for when it was recently offering its best-ever 100,000-point sign-up bonus (now, it’s 60,000 bonus points after you spend $4,000 on purchases in the first three months from account opening).
It’s worth opening the Freedom Unlimited in tandem for several reasons. First, its earning rate is fantastic for non-bonus purchases:
- 6.5% on travel purchased through Chase Ultimate Rewards.
- 4.5% on drugstore and dining purchases.
- 3% on all other purchases (on up tp $20,000 spent in the first year).
- 1.5% on all other purchases.
While Nicholas already has the Wells Fargo Active Cash that earns 2% on purchases, switching to the Freedom Unlimited will align better with his award travel goals since each Ultimate Rewards point is worth 2 cents. All of the points earned through the Freedom Unlimited can be instantly transferred to his balance on the Chase Sapphire Preferred, unlocking many redemption possibilities with his Ultimate Rewards points.
Although Nicholas will be returning to school in the fall of next year, he still has the majority of 2022 to travel, build up to elite status and earn bonus points on thousands of dollars of his living expenses. Although summer is more than six months ahead, we applaud Nicholas for being proactive as he’ll be able to redeem his points toward his summer travels by opening the right credit cards soon.
Featured photo by Juan Ruiz/The Points Guy.
Welcome to The Points Guy!
Earn 90,000 bonus miles after you spend $3,000 in purchases on your new Card in your first 3 months. Offer ends 8/3/2022.
With Status Boost™, earn 10,000 Medallion Qualification Miles (MQMs) after you spend $25,000 in purchases on your Card in a calendar year, up to two times per year getting you closer to Medallion Status. Earn 3X Miles on Delta purchases and purchases made directly with hotels, 2X Miles at restaurants and at U.S. supermarkets and earn 1X Mile on all other eligible purchases. Terms Apply.
- Limited Time Offer: Earn 90,000 bonus miles after you spend $3,000 in purchases on your new Card in your first 3 months. Offer ends 8/3/2022.
- Earn up to 20,000 Medallion® Qualification Miles (MQMs) with Status Boost® per year. After you spend $25,000 in purchases on your Card in a calendar year, you can earn 10,000 MQMs up to two times per year, getting you closer to Medallion® Status. MQMs are used to determine Medallion® Status and are different than miles you earn toward flights.
- Earn 3X Miles on Delta purchases and purchases made directly with hotels.
- Earn 2X Miles at restaurants worldwide including takeout and delivery in the U.S., and at U.S. supermarkets.
- Earn 1X Miles on all other eligible purchases.
- Receive a Domestic Main Cabin round-trip companion certificate each year upon renewal of your Card. Payment of the government imposed taxes and fees of no more than $80 for roundtrip domestic flights (for itineraries with up to four flight segments) is required. Baggage charges and other restrictions apply. See terms and conditions for details.
- Enjoy your first checked bag free on Delta flights.
- Fee Credit for Global Entry or TSA PreCheck® after you apply through any Authorized Enrollment Provider. If approved for Global Entry, at no additional charge, you will receive access to TSA PreCheck.
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- No Foreign Transaction Fees.
- $250 Annual Fee.
- Terms Apply.
- See Rates & Fees