Best US Credit Card for Smart Traveler

It's well-known that credit card rewards in the United States can be quite lucrative, and many people prefer to have a US travel credit card to make their travel expenses more cost-effective. However, with a plethora of travel credit card options available, it can be overwhelming to choose the right one. Applying for cards solely based on their rewards can lead to accumulating points across multiple cards, which can be difficult to utilize effectively. Additionally, the value of points might get eroded by inflation or depreciation over time.

I have always been curious about which credit card is most commonly used to accumulate points for travel savings, apart from just sign-up bonuses. So I have spent much time researching credit card review websites and financial forums trying to find the most effective and sustainable strategies for maximizing credit card rewards for travel purposes.

My principle is that the essence of smart spending is not to be stimulated by promotions to spend more, if you do not often have a large regular expenses, it is the best to select a good credit card according to your lifestyle and banks you are likely to work with often. Here are two travel credit cards that I use most often after my own research.

Chase Sapphire Reserve

Feature Highlights:

  • 3 points for $1 spent on travel and restaurants. If you buy flight tickets or book a hotel on Chase Travel, you will get 10 points. It is easy to spend the points on airfare and hotels via Chase's travel site where the points can be redeemed at 1.5X value, resulting in at least 4.5% cash value at the end for the 3X categories.
  • Flexible-to-use travel points: Redeemable for miles and points at a wide range of airlines and hotels partners.
  • Additional Benefits: $300 annual travel expense waiver, access to free airport lounge access and travel insurance.
  • No foreign currency transaction fee for overseas purchases.

Annual fee$550, which is $150 after deducting $300 from the actual cost of travel reduction

Strengths and Weaknesses:

Chase Sapphire Reserve is a high-end travel credit card, one can easily get the best values from restaurants and travel expenses for at least 4.5% high return rate. Visa cards are widely accepted all over the world. The redemption options are suitable for all kinds of different styles of travel and may be even more efficient when exchanging for airline miles. Chase also has target deals that offer high rewards from time to time, making it easy to accumulate points.

In addition, the biggest advantage of the Chase Sapphire line is when it is used together with Chase's Freedom line of credit cards. If you have a Chase Freedom credit card that offers 5% in cash back per quarter in a specific category, the cashbacks can be converted to Sapphire Reserve points. This allows us to easily increase the Freedom's 5% per quarter to at least 5 * 1.5% = 7.5% in cash value. It is a huge plus owning Chase Sapphire Reserve.

The main drawback of Chase Sapphire Reserve is that the annual fee is higher, even after considering the benefits of long-term holding each year. In essence, you will likely have to pay a $150 annual fee. We have a little math to do here. If you spend enough that the 1.5X multipliers can offset the $150, Chase Sapphire Reserve is worth applying.

American Express Gold | Travel Credit Cards

Feature Highlights:

  • 4 points per dollar spent in restaurants worldwide and US supermarkets (first $25,000), 3 points per dollar spent on airlines.
  • Ability to redeem miles and points with multiple airlines and hotels.
  • No foreign currency transaction fee for overseas purchases.
  • $10 Uber Credit + $10 Dining Credit per month. Dining Credit can be used at certain places such as Grubhub. If you use them up, you'll get $240 value a year.

Annual fee$250. If you consider using up the monthly credits $240, the actual annual fee equals to $10/year.

Strengths and Weaknesses:

The main advantage of this card is it is especially easy for relatively infrequent travelers to earn points via regular expenses like restaurants and supermarkets. On travel expenses, the points earned from paying for airfares are also high. American Express from time to time offers high cash back targeted deals via their website, for example, $50 back if spending $300 at certain hotel brands, or 10% back up to $200 paying insurance premiums...etc. These targeted deals are often even more generous than Chase's targeted deals. Points redemption is very easy, and Amex also has many airline and hotel alliance partners.

However, Amex's ways of redeeming points is not as intuitive to me as Chase (though it is still fairly easy). To maximize the value of points I would have to use them on airlines or hotel partners and spend some time doing research on award tickets and room. Of course, if you don't care about maximizing point values, simply redeeming at a 1:1 value on websites like Amazon is always easy.

The biggest drawback is that Amex has a lower acceptance rate in some areas when traveling internationally, so it's best to keep a backup Visa or mastercard credit card on you.

Application Link: https://americanexpress.com/en-us/referral/CHIc2zaf?XLINK=MYCP

Which one to choose?

If you want to choose just one credit card as your main card, my simple advice is to consider the following:

  • If your monthly expense is high or travel frequently, use Chase Sapphire Reserve as your main spending powerhouse, taking into account the high acceptance of Visa cards and the ease of using Chase points. If you don't mind memorizing the 5% category every quarter, consider the approach to have two main credit cards and collect more points with Chase Freedom.
  • If you don't spend a lot and just want to be able to get a free flight every year, you can consider the Amex Gold Card. The return from daily expenses on restaurants and groceries add up quickly. The annual fee of $10 per year is minimal, and it is easy to utilize the points effectively if you do some research on your annual travel.