Growing up, I was a cash only, debit card fiend because my immigrant parents had taught me that if I can’t afford to pay for it outright, then I can’t afford it at all (and then I’d end up spending all my money, but at least I wasn’t in debt). So when that time came for me to start financially adulting, I figured credit cards had something to do with building credit. I got my first travel rewards credit card after I went on my first big girl trip to Okinawa in 2016 without my family. I already had a credit card with my main financial institution, but earning gift cards just wasn’t cutting it anymore. I mean, if I’m going to spend money, I might as well earn points towards free flights, right?

So, credit… do I need it?

Credit card debt is a financial fear if you have it and that really only happens when you spend money before you have it. (Let me repeat: Don’t spend money you don’t have.) Using credit cards responsibly has helped me build and maintain excellent credit, qualifying me for rewards programs like the Chase Sapphire Rewards Credit Card and the reason how I can call up my credit card company to have them increase my credit limit instantaneously to improve my credit score. And when it comes to big purchases like getting a mortgage where my credit score is what will help me get larger loans with lower interest rates as well as a higher chance of approval.

Pay all your bills on time and in full each month. If you’ve got credit card debt, then pay at least the minimum due to count as an on-time payment. Your payment history is the bulk of what makes up your credit score because it shows lenders and credit bureaus how well you’ve used credit in the past, including any missed or late payments .

This is the amount you owe.

Type of Travel Cards

Now, back to credit cards. How can you pick the travel rewards credit card that’s right for you? Determine what your personal travel goals are and analyze your spending habits to determine what rewards currency you should earn. Do you want free flights and hotel stays? Then look for credit cards that racks up transferrable points. Or, maybe you want a free stay at vacation rentals like Airbnb or redeem points for camping and safaris. Then you’ll want to collect fixed-value points. I personally picked the Chase Rewards Sapphire Reserve Credit Card because I’m brand agnostic and want the flexibility to transfer my points across different airlines and hotels.

Here’re the different travel rewards cards:

Airline/Hotel Co-Branded Cards

Airline and hotel co-branded cards are brand exclusive since you earn miles specific to that airline or hotel chain. For example, the Hawaiian Airlines World Elite Mastercard can only be redeemed for Hawaiian Airlines flights and its partner network.

General Travel Cards

General travel cards allow you to transfer your points into different programs since its not linked to an airline or hotel chain. For example, with the Chase Sapphire Reserve Credit Card, you can transfer your Chase Ultimate Rewards points to its partners.

Cash Back

Cash back cards give you actual cash back rather than collecting points or miles. Some cards offer bonus points for spending in certain categories. This means rather than earning the standard rate of one point or one mile per each dollar you spend, you can earn three miles per dollar spent.

Types of Rewards Currencies

• Airline Miles/Hotel Points
  Airline miles and hotel points can only be used to book flights or a free stay with that specific airline or hotel chain.
• Transferable Points
  Transferable points are the most flexible because you can use them as fixed value points or transfer them to a partner airline of hotel and get one mile or hotel point for every one credit card point.
• Fixed-Value Points
  Each point is worth a fixed amount, typically 1 cent per point. They’re brand and category agnostic which means you can use them for any type of travel. Simply use your card to book travel and use points to pay the bill.
• Cash Rewards
  Cash back rewards are in the form of actual cash, not points. A percent of every purchase is automatically refunded to you.

What if I already have credit?

If you already have credit, stop putting stuff on credit. Whether you’re making the necessary sacrifices to minimize your spending or finding ways to make extra money to pay more than the monthly minimum balance, focus on paying down that debt. I’m not financial advisor, but I don’t recommend applying for another credit card at this time.

Swipe Responsibly

Whether you’re earning points from purchasing flight tickets, collecting one-time sign up bonuses from multiple cards (aka travel hacking) or using your everyday purchases to earn points for every dollar you spend, the right travel rewards credit card will help you earn free travel. Remember, you never want to spend money just to earn rewards or the credit card bonus, just pick one good card and charge everything on it.

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