In April 2022, the Chase Sapphire Preferred® Card raised its sign-up bonus to 80,000 points (a short-lived promotion, as it’s back to 60,000 points after spending $4,000 in three months). After a few days of pondering the idea, I applied, and within a few hours, was approved. I felt like I’d ascended into a higher tier of adulthood.

Why was it such a momentous moment? Well, I’m part of Generation Z (anyone born in the late 1990s to 2010s). I know, the term “Gen Z” brings to mind high schoolers in Y2K fashion and TikTok dances. However, older Gen Zers, like myself, are a few years out of college, spent the last couple years scrimping, and are now pondering our next financial move.

When do you know it’s time to let up a bit on saving and start spending some of your money on a travel card? And what should you do with your cash back card after adding a shiny new card to your wallet? I asked some experts and working-age Gen Zers to weigh in.

When is the right time to get a travel card?

I worked for around two and a half years and charged all my expenses to a single cash back card before considering a travel card. At that point, my savings no longer made me want to cry, and I was ready to travel a bit once working from home lost its novelty. Many Gen Zers feel the same, after working a few years and living through the COVID-19 pandemic.

“I recently switched from a cash back card to a travel card because I felt like I was in a better financial situation, and I started traveling way more than I previously expected,” says Lillian Wang, a premedical student and Gen Zer. “I thought, ‘Why not maximize my rewards?’”

A good indication that you’re ready to add a travel card to your wallet is if you’re already making regular, on-time payments on your cash back card.

“Someone who is successfully managing a cash back credit card and has a good credit score may want to consider adding a travel rewards card into the mix,” says Amy Maliga, financial educator with Take Charge America. “If [Gen Z credit card users] are mostly using the card for travel-related expenses, a travel rewards card can be an excellent option.”

Another good reason to apply for a travel card is an attractive sign-up bonus. A big reason why I applied for the Chase Sapphire Preferred was its then-welcome bonus of 80,000 points. Wang recently got the Capital One Venture X Rewards Credit Card for the same reason.

Should you keep or cancel your cash back card?

After you have a new travel card in your hands, what should you do with your reliable cash back card — keep it or cancel it? It all boils down to your credit score and the length of your credit history.

When you should keep it

Keeping your cash back card is a good idea if you have limited credit history or don’t have much credit to your name. Your credit utilization — or your credit card balance divided by your credit limit — accounts for 30 percent of your FICO credit score, and your score could drop significantly if you cancel your cash back card.

Essentially, the more credit cards open under your name, the more of a credit limit you have (effectively lowering your credit utilization ratio). Let’s say your travel card has a credit limit of $6,000, and your balance is $2,000. Your credit utilization ratio would come out to around 33 percent. If you keep your cash back card and its credit limit of, say, $3,000, your ratio would be 22 percent.

“It depends on whether the cash back card account was opened years versus months ago,” says Kassandra Dasent, founder and CEO of BridgeTech Enterprises LLC and certified financial education instructor. “The longer a trade line is open, the more weight it has on one’s credit history and score. Canceling a card that has been active for several years can cause one’s credit score to drop.”

As long as the card has no annual or maintenance fees, there is value in keeping your credit cards open — even if you don’t actively use them, says Ashley Parks, Gen Zer and credit card expert at CreditCards.com.

When you can cancel it

Even if you do close your cash back card, it’s not all doom and gloom. In fact, when I switched from my starter card to the Chase Freedom Unlimited® years ago, I canceled the starter card because I kept having to dispute fraudulent charges on its statements.

Another scenario is if you simply don’t plan to use the card any further, and its annual fee, however large or small, isn’t worth it anymore.

If you’re a responsible credit user and fully pay off your bills each month, you shouldn’t worry much about the effects of canceling your card.

“Typically, scores can drop anywhere between 25 to 100 points when an account is canceled,” says Dasent. “With time, and good management of the remaining trade lines, [a person’s] credit score will rebound.”

Plus, your payment history from the past few years does not go away as soon as you cancel the card. In fact, a closed account in good standing stays on your credit report for 10 years. Ten years later, you will likely have built up new credit history and raised your score in the meantime.

Another option is upgrading your cash back card, also known as a product change.

“Upgrading a card with the same credit card issuer may not cause any adverse impact to a credit score as they may be able to tie the old and new card trade line together,” says Dasent. “I would suggest confirming the latter with the credit card company before proceeding.”

When is the wrong time to apply for a travel card?

If you’re in a traveling mood but bad with credit, you shouldn’t be too eager to apply for a travel card. If you can’t manage your expenses properly on one card, you’re likely to find yourself drowning in carried-over balances and interest rates in no time. Don’t forget, credit cards are generally high-interest products. In fact, the average credit APR is currently above 16.80 percent.

“If a Gen Z consumer is already carrying credit card balances month-to-month, it’s not a good time to add another card,” says Maliga. “Focus on paying off current balances before adding more opportunities to take on debt. Using credit cards to supplement your income or buy things you otherwise couldn’t afford is a path to financial hardship.”

Be honest with yourself. If you miss payments or frequently pay your bills late on your current card, you should not apply for an additional one. For now, focus on paying off your balances regularly and slowly building your credit.

How a travel card can help you reach your next financial goal

For young cardholders with good financial habits, a new travel card for beginners can feel like opening a door to luxury. In many ways, it does. If you play your cards right, you could certainly finesse your way to a free flight or free hotel stay for your next vacation.

Already thinking about which travel card to apply for? Here are some recommendations:

  • Chase Sapphire Preferred Card: 5X points on Chase Ultimate Rewards travel and Lyft rides (through March 2025); 3X points on dining, select streaming services and online grocery purchases; 2X points on other travel and 1X points on general purchases
  • Capital One VentureOne Rewards Credit Card: 5X miles on hotels and rental cars booked through Capital One Travel; 1.25X miles on all purchases

How to utilize your travel card and maximize your rewards as quickly as possible largely depends on the card. There are several tricks to rack up more points faster.

Pair a cash back card and travel card

If you can pair your cash back card with your travel one, that’s even better.

A crowd-favorite combo is the Chase Freedom Unlimited and Chase Sapphire Preferred. Let’s do a quick rundown of each card’s complementary rewards structure. The Chase Freedom Unlimited gives you 5 percent cash back on Lyft purchases (through March 2025), 5 percent back on travel purchased through Chase Ultimate Rewards, 3 percent back on dining and drugstore purchases and 1.5 percent back on all other purchases. The Chase Sapphire Preferred mainly differs in earning 3X points on dining, select streaming services and online grocery purchases as well as 2X points on general travel.

Though there’s some overlap in the cards’ bonus categories, the main takeaway is that you should use the Chase Freedom Unlimited at drugstores and on all your general purchases thanks to its attractive 1.5X rate. For all other purchases, like travel, dining and select streaming services, stick to the Chase Sapphire Preferred.

The real advantage of the Chase Sapphire Preferred is its 25 percent points-value boost if you redeem for travel through the Chase Ultimate Rewards portal. Essentially, each point would be worth 1.25 cents, instead of the usual 1 cent. Since the Freedom Unlimited’s rewards are actually earned as Ultimate Rewards points, you can easily transfer them to your Sapphire Preferred Card to further stretch their value.

Other tips to quickly earn travel rewards

Of course, there are several ways to maximize your credit card rewards, but try to factor in these tips when spending on your travel card:

  • Earn your sign-up bonus. Sign-up bonuses often attract the initial application, but some cardholders sometimes forget to meet that spending requirement to obtain the sign-up bonus. Keep in mind, it’s one of the fastest ways to rack up so many points at once, so you should really take advantage of it while you can.
  • Spend according to your bonus categories. It seems like a no-brainer, but it’s worth mentioning: Be sure to use your cards according to their bonus categories. If your new travel card gives more rewards on streaming sites than your cash back card, don’t forget to change the payment method on your Spotify account.
  • Maintain healthy credit habits. No matter the card, you should continue to practice good financial habits such as paying your bills in full and on time every month. Accrued interest on carried balances can quickly eclipse any rewards, so try to avoid that as much as possible. That way, your travel card will be working for you rather than you working to pay off any credit card debt.

Whatever your next financial goal is, however small or large, having a travel card in your pocket could certainly benefit you. In fact, if you already have a vacation destination in mind and do your research, a  travel card can help you fund your next trip.

“My most concrete upcoming goal is to do a birthday trip to Italy with my mom,” says Parks. “I’m hoping to use everyday purchases and small travel purchases to build up enough points to get a pretty solid discount on that trip in the future!”

Wang hopes to use her different cards to maintain a good credit score and hopefully leverage it for a lower interest rate on her student loans.

The bottom line

Should you switch to a travel credit card? Long story short, it depends. It’s a good idea for responsible cardholders who want to add new credit and earn rewards. For Gen Zers who regularly carry over balances, you should focus on making regular payments on your existing card.

And be sure to check your credit report every few months to make sure everything is accurate and up to date. It would be terrible to discover a late payment on your record when you’ve never missed a payment before. You can access your credit report for free once a year through AnnualCreditReport.com. Parks also checks her credit score regularly with the help of her credit card apps.

Your credit score is a good indicator of the accuracy of your credit report, and a sudden drop in this three-digit number could indicate some fraudulent activity. Staying aware of your score, at least every few months, keeps you on top of any errors on your credit report and lets you know what to expect when applying for a new loan.