Category Archives: Credit Cards

Highest Ever 125k Point Hilton Surpass Offer

The Hilton Surpass card from American Express has a new sign-up offer that comes with a highest ever 125k Hilton point bonus.  This is already week-old news to some, but I figured I’d weigh in on it.



The Offer

  • 100,000 Hilton points after $3k spend in 3 months
  • Additional 25,000 Hilton points after additional $1k spend in 6 months
  • Hilton Gold status
  • Earns 12x points / dollar on Hilton purchases
  • Earns 6x points / dollar on gas, groceries, and dining
  • Earns 3x points / dollar on all other purchases
  • $75 annual fee, not waived the first year

Spending a combined $4k in 6 months is pretty doable and 125k is the highest bonus ever seen on this card, but keep in mind that not all hotel points are the same.  Hilton is near the bottom of the list, at around 0.33 cents per point.  Still, they are nice to have as Hilton properties are everywhere and in my experience they have the best overall service of the major conglomerates.  The high earn rate on continued spending sort of makes up for the crappy value of the points.  Hilton now lets you easily combine points with other people and they have a flexible cash + points option on award stays.  These two factors make orphan points almost nonexistent.

The Gold status shouldn’t be ignored either.  Hilton Gold status benefits vary by hotel brand and by individual property, but the least it will get you is free internet and a welcome snack and bottled water.  In many cases it will get you room upgrades and/or free breakfast.  During our stay at the Hilton Amsterdam in 2015 my Gold status got us free breakfast ($30 each) and access to the Executive Lounge, which could have easily served as our dinner.  Gold status at this one stay alone was worth more than the annual fee on the Surpass card!

Complimentary food at the Executive Lounge at the Hilton Amsterdam.

Complimentary food at the Executive Lounge at the Hilton Amsterdam.  Lounge access came with my Gold status.

The Catch

The Hilton Surpass is from American Express, which means it’s a once-in-a-lifetime bonus.  With that in mind, the strategy for when to get a given Amex card is simple: wait until it’s at its best known offer.

The problem is when a card is known to have a limited lifespan.  Such is the case with the Surpass. The offer above is only good through 01/17/2018.  At that time Surpass accounts will be converted to the new Hilton Honors American Express Ascend card.  (See Doctor of Credit’s outline of all Hilton AMEX card details and changes here)

That’s a shoe in, right?  If this is the last chance to get this specific AMEX product, we can safely apply for it with nothing to lose, and still get the bonus on the new Ascend, right?  That’s usually sound logic, but in this case most of the speculative thinking is that new Ascent applicants will be ineligible for any new bonus if they ever received a bonus on the Surpass.

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So in this case it’s a gamble whether to get the Surpass now or wait until it becomes the Ascend.  125K bonus points is nice but 2 free weekend nights would be much nicer.  That was the bonus on the now-retired Citi Hilton Reserve.  We don’t know what the sign-up bonus for new accounts will be on the Ascend, but we do know the benefits will be.  The one that caught my eye is this:

  • One free weekend night each year when you spend at least $15k on the card.

Previous Surpass offers have had this annual free night but without the spend requirement.  $15k a year is definitely doable, but at what opportunity cost?  That’s up to your spending habits and your valuation of Hilton points.

Why I value recurring free night benefits

Lately I’ve been infatuated with the idea of annual free nights as a credit card benefit.  This is how I booked one of our two $700+ nights at the Z Ocean Hotel this spring.  For a mere $49 annual fee, the Chase IHG card gets me a free night at any IHG property worldwide.  Our tropical weekend get-away to Costa Rica in February was also partially booked with free anniversary nights from our Chase Hyatt cards.  The Hyatt anniversary free nights are limited to category 1-4 properties and the annual fee is $75.

Free nights can be extremely valuable when redeemed at aspirational resorts or big city hotels during peak dates.  Hilton free nights often come with a “weekend only” restriction and some anniversary benefit free nights have a property category limitation.  Obviously the best potential for extreme redemption value is on the unrestricted type.

Nicoleen and I have redeemed a total of 11 free night certificates (8 from sign-up bonuses, 3 from anniversary benefits) for a total value of 5327.31! (Annual fees totaled $199 for the 3 anniversary nights)

Last fall we stayed 4 free nights at the Andaz Maui at Wailea. That was two Chase Hyatt cards' worth of bonuses at that time.

Last fall we stayed 4 free nights at the Andaz Maui at Wailea. That was two Chase Hyatt cards’ worth of bonuses at that time.

Grand Wailea - Hibiscus Pool

The extinct Citi Hilton Reserve yielded the sign up bonus we used for two nights at the Grand Wailea on Maui.

hyatt-hilton-smallBesides their obviously high value potential, another reason I’ve recently been fixating on free hotel nights is that they are becoming rarer.  This year Citi discontinued their Hilton Reserve card, which gave 2 free weekend nights as the sign-up bonus.  (Our two Reserve cards yielded us free stays at the Hilton Amsterdam, the Grand Wailea, and the Embassy Suites in St. Paul.)  Also this year, Chase replaced the 2 free night sign up bonus on the Hyatt card with a points bonus.

Will I apply for the Surpass?

I don’t know.  What I am really after is the anniversary free night.  So the gamble for me is basically whether I think the current 125k bonus will be better than the sign-up bonus on the new Ascend.  I would really kick myself if the bonus ends up bringing back the 2 free weekend nights we lost with the death of the Citi Hilton Reserve.  On the other hand, if the new Ascend card never gets above 100k and I didn’t try for the current Surpass offer, I’d also be disappointed.

Then I think about the $15k required annual spend just to get the free night and I question why I’m even spending so much thought on this card!  Oh well, I have until January 17th to decide. . .




For some other opinions on the Surpass/Ascend issue, check out the following:
FrequentMiler – Didn’t see this coming: New 125K Hilton offer
Doctor of Credit – American Express Hilton Surpass 125,000 Point Offer

And last but not least, here’s a link to the offer itself!

Tighter Rules for Credit Card Sign-Up Bonuses

I’ve been using the credit card tactic to earn points and miles for about 5 years now.  This tactic has earned me thousands of dollars in cash and tens of thousands of dollars worth of free travel.  I’ve had a good run!  The vast majority of the points and miles I have earned were not from regular spending, but from the credit card’s sign-up bonus.  But the rules for credit card sign-up bonuses are getting tighter all the time.

Each credit card has its own requirement in order to get the sign-up bonus.  The most common requirement is a certain amount of spending on the card in a given time period, typically the first 3 months of card membership.  The bonus on each card can change periodically and is advertised on whatever page you click through when you apply for the card.  However, just because you’re approved for the card and make the required spending doesn’t mean you’ll get the bonus!

Tighter rules on chase cards

An example of a card’s “splash page,” listing the bonus and other benefits of the card.  Chase’s rules only allow you to get the bonus on their Hyatt card every 24 months.  The 2 free night deal seen here has been replaced with a 40,000 point bonus, and the $50 statement credit comes and goes.

Most of the following rules only apply to someone who has already earned the bonus on a particular card once before.  Getting a repeat bonus on a particular card is called card churning.

Current rules for sign-up bonuses

Each issuing bank has their own set of rules for if and how often you can get a sign-up bonus.  These rules for credit card sign-up bonuses have changed a lot in the 5 years I have been in this game.  I can’t think of a single example of a rule loosening up!  Like most complex systems, things only tend to get more restricted and more narrowly defined.

Chase

Chase is a points and miles powerhouse, with co-branded cards with United Airlines, British Airways, Southwest, Hyatt, Marriott, and International Hotel Group.  Chase also has their own transfer points, Ultimate Rewards, which are highly valuable due to their transferability.  Even getting approved for a Chase card has its own extremely limiting rule called the 5/24 rule.  If you can get approved for a Chase card, here are the rules on getting the sign-up bonus:

  • You cannot get the bonus if you already have that card (i.e. you can’t have two copies of the same card).
  • You won’t get the bonus if you have earned a sign-up bonus on the same card in the past 24 months.  Keep in mind this 24 month timer starts when you received the bonus, not when your account was approved.
  • Only one Sapphire product at a time.  This is more of a card approval rule, but I’ll include it anyway since the Sapphire Preferred and the Sapphire Reserve are both popular cards for their 50k Ultimate Rewards sign-up bonuses.  If you apply for any Chase card with the word “Sapphire” in the card title and you already have any Sapphire card, your application will be denied.

Citi

Citi is another golden goose of sign-up bonuses.  As of this summer they no longer have Hilton co-branded cards but they still have American Airlines cards with 40-60k mile bonuses.  Citi also has their own transfer points called the Citi Thank-You points.  While Citi used to have very lax rules regarding sign-up bonus illegibility, they now have some of the most restrictive:

  • Like Chase, Citi has a 24 month timer between bonuses on the same card.
  • A few months ago Citi added some new fine print to their applications that pretty much makes the above-mentioned timer a moot point.  The 24 month timer is now shared among all cards within the same point species.  (For example:  if you earned a bonus on the Citi Thank You Premier, you are not eligible for the bonus on the Citi Thank You Prestige for 24 months since they both earn Thank-You points.)  The same goes for their American Airlines earning cards.

But wait, there’s more. . .  The new language also changed the triggers that activate the timer.  The timer is no longer started by earning a sign-up bonus.  Instead, the 24 months start when you open, close, or downgrade an account.  This is asinine because it offers extra motivation to close an account right after earning the sign-up bonus.  The one saving grace is that business cards are given their own separate timer.

Citi Title

American Express

Amex has a horribly harsh, yet refreshingly simple rule for bonus eligibility:

  • One sign-up bonus per card, per person, per lifetime.

If you have ever earned the sign-up bonus on a particular card, you are permanently ineligible to receive a bonus on that card again.  For example, if you had the Amex Delta Gold card 8 years ago and cancelled it 7 years ago, you might be approved again for the card today, but you would not get the sign-up bonus.

If the sign-up bonus changes (like when the Amex Delta Gold goes up to 50k, as it does periodically) it is still the same card so you will still be ineligible.  It’s different if they release a different version of a card with a different name.  For example, if they stopped making the Delta Gold and instead created a new card called the “Delta 24 Carat Gold Card” then you could earn that card’s bonus even if you earned one for the old version.

Most points and miles earning cards periodically come with elevated bonuses. Since Amex sign-up bonuses are once-in-a-lifetime, wait for the best known offer on a given card before applying for it.

Most points and miles earning cards periodically come with elevated bonuses. Since Amex sign-up bonuses are once-in-a-lifetime, wait for the best known offer on a given card before applying for it.

Bank of America

BoA is famous for it’s Alaska Airlines card, which has been the go-to card for compulsive churners for years.  There are reports of people getting a new card every 2 months and earning the sign-up bonus each time.  Bank of America just released it’s new Premium Rewards card, which indicates they may be making a foray into the more competitive group of banks issuing premium travel cards.

  • Some Bank of America cards have no specific fine print related to repeat bonus earning.
  • The brand new BoA Premium Rewards card fine print says you can’t earn the sign-up bonus if you have earned it within the past 24 months.

There is evidence that BoA is starting to get wise about abusive card churning, and several recent reports indicate a general clamping down, like the 24 month timer on the new Premium Rewards card.  It’s still fair to say that Bank of America cards are more churnable than not, but let common sense be your guide on when to try for a repeat bonus on cards without specific language.

Barclay

Barclay has several good points and miles cards including the Arrival Plus and the American Airlines Aviator series.  Barclay has no publicly defined policy on bonus eligibility for many of their cards  However, Barclay seems to have more of a human touch when it comes to approving new accounts.  Unless you leave some evidence of regular and legitimate card use, it may be difficult to get approved for a new card, especially if you appear to be doing it just for the sign-up bonus.



Is the situation getting worse?

Yes.  It’s not the Wild West anymore.  Many value tacticians who have been around longer than I have remember the days when you could get 4 different versions of an American Airlines card from Citi every 6 months, racking up 300-400k miles a year just from bonuses!  And of course there are the ancient heroes like Pudding Guy, who found a pretty big loophole that earned him over 1.25 million miles by buying and donating $3k worth of pudding!

In my 5 years in this game I have seen a lot of new restrictions come into play.  The most drastic of which have been from Chase and Citi.  This makes sense since these banks have some of the most lucrative bonuses out there.  They need some way of limiting people like us who pay attention to the details and want to maximize these offers.  Limiting bonus earning is a key way they can do that.  The other method banks use to limit churning is with rules on card approvals.  I’ll address this closely-related issue in another post.

How you can still beat the game

Credit card bonuses are an incredibly valuable resource.  But like all resources, they become harder and harder to extract as time goes by.

Signal Hill CA active oil field 2011

Signal Hill CA active oil field 2011. CC Image courtesy of haymarketrebel on Flickr.

Tighter rules on getting sign-up bonuses are just one factor.  Getting approved for some cards is becoming more difficult all the time as well.  Points and miles, like currency, are in a constant state of inflation.  Mileage devaluations and new award charts decrease the value of the points you’ve already earned.  Loopholes are closing across the board at a pretty steady rate.

The solution to all this is to adapt and update your strategy.  Speaking for myself, every card application for me or my wife is very carefully considered.  I have a long term schedule of cards we would like to get, but it’s also flexible.  Elevated bonuses come and go, rules change, and the value of particular points and miles change.

  • If you’re already playing the credit card game, pay attention.  If you got away with willy-nilly card applications in the past, you can’t anymore.
  • If you’re still sitting on the sidelines, get in the game.  I sound like a broken record but I can’t stress this enough.  The crazy world of credit cards, points, and miles is getting more complicated all the time.  But the opportunity is still there and still awesome!  Get in while the gettin’ is good!

🙂  For those of you still on the fence about the credit card game, here’s some general motivation to get your blood pumping: 🙂

Here are some other resources with similar information (minus the awesome motivational video):





Some images in this post made available through a Creative Commons license. Click here for info.

The Best Credit Card (Right Now)

A family member recently asked for my recommendation for a good points-earning credit card she could use for her business expenses.  She spends around $1000 a month on product for her small business.  Right now she’s using a non-points-earning bank card.

This family member is in a pretty common position.  She doesn’t want to dive headfirst into the points and miles game, but she understands there’s value to be gained when making those purchases.  She doesn’t want to juggle multiple cards or frequently open new accounts.  In a case like this the decision of which card to get is actually simple.  All you have to do is find the single best card out there.

The best credit card, period.

The Chase Ink Preferred - The Best Credit Card out there!

When I started thinking about which business card to recommend, my first reaction was the Ink Business Preferred from Chase.  For various reasons (which I explain below) I thought this would be the best option for someone who only wants to get one card.

The more I thought about it, I realized the Ink Preferred is probably the best business card out there regardless of how many cards you want to juggle.  Old, weathered, card-churning veterans should want this card just as much as a newbie who wants to keep it simple.

Ink Preferred and stacks of cards

Whether you want one card or many, the Ink Preferred is the best!

After even more thought and some discussion with a couple of my card buddies, it hit me: The Chase Ink Preferred is the best card out there, period.  It not only beats all other business credit cards, but all personal ones too. It’s the best whether you’re just dabbling in the credit card game or if you’re a Value Tactics fanatic.

Let’s look at the reasons why the Chase Ink Preferred is the hottest card out there right now.

80,000 Ultimate Reward point bonus

Unless this is your first visit to ValueTactics.com, you know that the majority of a credit card’s value is in the sign-up bonus.  The Chase Ink Preferred is no exception.  After spending $5,000 in your first three months with this card, you’ll earn 80,000 bonus points.

Any card with an 80k bonus would be worth looking into, but these are Chase Ultimate Rewards we’re talking about!  To give you an idea of how much this bonus is worth, here are my last 3 Ultimate Rewards redemptions and their values:

  • For our weekend get-away to Costa Rica in February, I transferred 5,000 UR points to my Hyatt account so I had enough a third night at the Andaz Papagayo Peninsula.  The room value was $546.92/night, so those Ultimate Rewards were worth 3.65 cents each.
  • mini-polarisFor my upcoming trip to Europe, I booked a Polaris Class United flight with miles transferred from Ultimate Rewards.  The value of this redemption works out to 5.82 cents per point.
  • mini-planningI am almost ready to book flights for our fall vacation.  I will either be transferring Ultimate Rewards to Southwest for a value of about 1.7 cents per point, or using points at the Ultimate Rewards travel portal to buy airfare at a rate of 1.5 cents per point.  Let’s split the difference and say 1.6 cents per point will be the value for this Ultimate Rewards redemption.

The worst possible way to redeem Ultimate Rewards is for cash, where you’ll get 1 cent per point.  As you can clearly see, Ultimate Rewards are worth well over 2 cents per point when used wisely . . . and that’s being conservative.  My personal lifetime average for Ultimate Rewards is 2.86 cents per point.

After the $5,000 required spend to get the bonus, you’ll have a minimum of 85,000 points. At my lifetime average redemption rate of 2.86, 85k points is worth a whopping $2,341!  Even at the crappy cash-out rate, 85k points is still worth $850.  And all this for paying the initial $95 annual fee and making the minimum spend. Not bad at all!

If you’re going to apply for the Ink Preferred, I would appreciate it if you click through this link. You get the same 80k offer and I also get some bonus points for sending you there. Thanks!

Other benefits of the Chase Ink Preferred

Besides the amazing sign-up bonus, the Ink Preferred is a strong contender based on its other perks.  These perks include bonus categories for regular point earning, a bonus when redeeming points for travel, and various protections on purchases.  This card also has no foreign transaction fees, which comes in handy when traveling abroad and can save you some money when ordering from foreign websites.

Bonus Categories

The regular earning rate on the Ink Preferred is 1 point per dollar spent. From the above analysis you can see that this is probably worth more than even a 2% cash back card because the value of Ultimate Rewards is easily more than 2 cents per point. But the Ink Preferred really shines when it comes to bonus categories.  You earn 3 points per dollar spent on:

  • Travel (fairly broadly defined)
  • Shipping purchases
  • Internet, cable, and phone services
  • Internet based advertising charges

Using a valuation of 3 cents per point for Ultimate Rewards, you could look at it as an automatic 9% discount in all of these spending categories.

The Ink Preferred is the latest version of Chase's "Ink" business card line. I currently have the Ink Plus (pictured). The Preferred has the best bonus I've ever seen on an Ink card, 80,000 Ultimate Rewards points.

The Ink Preferred is the latest version of Chase’s “Ink” business card line. I currently have the Ink Plus (pictured). The Preferred has the best bonus I’ve ever seen on an Ink card, 80,000 Ultimate Rewards points.

Travel redemption bonus

If you’re satisfied with a 1.25 cent per point redemption rate, you can use your points at the Chase travel portal.  Cardholders get a 25% bonus on these redemptions, so 8,000 points is worth not $80 but $100 in travel expenses (when booked through the service.)

Purchase protections

When making purchases with the card, you will be covered with the following: trip cancellation/trip interruption insurance, roadside dispatch, auto rental collision damage waiver, cell phone protection, purchase protection, extended warranty protection, and price protection.

I have to admit, I need to look more into these kinds of benefits on all of my cards that come with them.  The restrictions, limitations, exclusions, and other terms involve quite a load of fine print on all of these.  However, I know people who have used them and saved hundreds of dollars.  You can read the fine print yourself to see if these coverages make a big difference in your overall picture of this card.  Personally, I look at these coverages as a nice little bonus but I’m not going to let them affect my decision on whether or not to get a particular card.




Should you get the Chase Ink Preferred?

Yes!!  What kind of question is that?  I just explained how it’s the best single card out there!  Ok, ok. . . let’s nuance my answer a bit.

Do you have to be a business owner?

Yes but you might be surprised to find out what qualifies you as a business owner.  Obviously Brenda from “Brenda’s Hazmat Services” is a business owner.  If you are John from “John’s Christmas Tree Farm and Flu Vaccine Emporium” you are also obviously a business owner.

But here are some examples that would qualify you as well:

  • Do you earn bicycle racing prize money and have expenses to support your racing?
  • Do you run a website that generates ad revenue?
  • Are you in a construction trade and make income with side work?
  • Do you sell giant soccer balls on amazon and ebay and have related expenses?
  • Do you spend weekends buying and selling antiques at flea markets?

These are only a few examples.  One beautiful thing about the United States is that there’s no clear line that says when you are in business or not.  Use that to your advantage when applying for business credit cards.  My usual advice is to use your full name and personal SSN if you’re not incorporated, and use your honest income figures or estimates of your income from whatever endeavor you are calling your business.

When to get the card

It’s a pretty easy decision in my opinion.  If you don’t currently have it and you are eligible to get it, get it now.  (Of course this assumes you have a plan to meet the $5k minimum spend requirement in the next 3 months).  Since it’s the best credit card available at the moment there are few, if any, reasons to prioritize any other cards above it.  By not prioritizing the Ink Preferred, you also run the risk that the 80k bonus will downgrade to 60k, which is the historically typical bonus on Chase Ink cards.

The Chase 5/24 rule applies to this card.  If you have had 5 or more new cards opened (even as an authorized user on someone else’s account) at any bank within the past 24 months, your application will be denied.

If you’re going to apply for the Ink Preferred, I would appreciate it if you click through this link. You get the same 80k offer and I also get some bonus points for sending you there. Thanks!

Conclusion

The Chase Ink Preferred is currently the best credit card out there.  The fringe benefits and category spending bonuses are valuable, but the major value is in the 80k sign-up bonus.  Ultimate rewards are so versatile that they fit into any points and miles strategy.

Since the 80k sign-up bonus is probably temporary, I would recommend almost anyone to apply for this card.  As I explained above, most people probably qualify for a business card one way or another, so that shouldn’t deter you.  (If you really can’t make any case that you need a business credit card, check out the similar personal card, the Sapphire Preferred.)




Semi-Monthly Update (June 16, 2017)

In this update:  A plethora of increased sign-up bonuses, another exciting excuse from yours truly, a travel update, and a recap of recent ValueTactics blog posts.




Credit Card News

The summer weather is heating up and so are the credit card sign-up bonuses!  Across the board, banks are rolling out some of their cards’ typical increased sign-up bonuses.  Whatever your overall card strategy is, the elevated sign-up bonuses can either simplify or complicate your decision matrix.  Either way, it’s nice to see these bonuses return; it indicates that card issuers are still hungry for your business!

  • Citi AAdvantage Platinum MastercardCiti’s AAdvantage Platinum Select MasterCard currently has an increased sign-up bonus of 60,000 American Airlines miles.  The usual bonus is 40,000.  To get the bonus miles, you must spend $3,000 in the first three months.  The $95 annual fee is waived the first year.
  • Citi’s business version of the American Airlines card listed in the previous bullet point is also at 60,000 miles for a limited time.
  • The AAdvantage Aviator Red from Barclaycard doesn’t exactly have an increased sign up bonus, but it is available with a nice 50,000 mile bonus.  This card was previously not available for new account holders; it was only available in a converted form from an old U.S. Airways card.  The $95 annual fee is not waived the first year, but the bonus is earned after your first purchase!
  • Barclaycard’s Arrival+ currently has an elevated bonus of 50,000 points after spending $3000 in the first 90 days.  The usual bonus is 40,000.  These points are redeemed for reimbursements of travel purchases made on the card.  You get 5% of redeemed points back in your account, so the current bonus on this card is worth $588.  The $89 annual fee is waived the first year.

YouTube Channel Update

todolistAnother update, another excuse!  🙂  I have acquired a key piece of equipment I need to produce high quality videos.  However I haven’t managed to acquire the time needed to put it to use.  I promise you, as soon as I’m able I will start releasing useful and entertaining videos for you to watch and share!

Recent ValueTactics Blog Posts

Barclaycard Aviator RedKeep or Cancel: Some Examples is a great post for helping you decide whether to keep a credit card when its annual fee is due.  It’s impossible to cover every variable for every situation, but this post shows some examples of how I work through the decision.

Travel News

Over the past week I’ve been struggling to book airfare for our fall trip.  It’s not that there aren’t any good options; there are plenty that would work.  It’s that I’m coordinating with a friend and we both want to get the best deal possible.  It should be pretty easy once we can both get a free hour or two together to work through it.

One thing is for sure. . . our planning is going to result in quite the spreadsheet!  Once I have it, I’ll be sure to share it on the ValueTactics Facebook page.

Now you’re updated.  Go employ some Value Tactics!

Keep or Cancel: Some Examples

Keep or cancel?  It’s the perennial question that comes up every time your credit card’s annual fee is due.  Should I pay the fee and keep the card?  Should I cancel it?  Or should I fish for a retention offer and base my decision on that offer?  All these questions can really be boiled down to one:  Will keeping this card another year be more valuable than the annual fee?




The answer to that question can be determined with some simple math, although assigning a dollar value to some card benefits gets a little subjective.  For example, the impact of cancelling a card on your credit score is hard to quantify.  Likewise, banks have different rules on how often you can get a sign-up bonus.  Keeping a card too long could hinder your future points-earning potential.  You need to consider these and many other factors when you calculate the value in each scenario.

Discussing all the different ways a card can provide value is beyond the scope of this post.  Instead, I will use a few recent examples of keep/cancel decisions that Nicoleen and I made to highlight some of the thought processes involved.

Credit cards on the chopping block.

All credit cards eventually end up on the chopping block.

Citi AAdvantage Platinum MasterCard

Recent action: CANCEL

The annual fee for Nicoleen’s Citi AAdvantage Platinum was charged on the May statement.  She’s had this card for 3 years and has never paid the annual fee.  The previous two times the fee was due she called and fished for a retention offer.  Both times she was successful in getting the fee waived or reimbursed.  We even got a few bonus miles out of the deal.

chaos pool

Citi phone reps are pretty easy to deal with, in general.  But I would still recommend finding a quiet place to make these phone calls!  This was not ideal, but it all worked out in the end.

This time she wasn’t fishing for a retention offer.  She just needed to cancel.  One main factor dominated this decision.  Before I explain that factor, here are the basics of the Citi AAdvantage Platinum MasterCard:

  • This card earns American Airline miles; 1 point per dollar on regular purchases and 2 points per dollar on American Airlines purchases.
  • The standard sign-up bonus is 30k miles with a $3k spend in the first 3 months.  The fairly frequent increased sign-up bonus is 50k miles (and rarely 60k).
  • Annual fee is $95 but is waived the first year.  Historically it’s been a very easy card to get the annual fee waived just by calling.
  • The most noteworthy fringe benefit is free checked baggage on American Airlines flights.

Citi AAdvantage Platinum Mastercard

Long before my time, this card was one of the most churnable miles cards out there.  There were several card versions and each had their own sign-up bonus.  Some people would open multiple cards in a year and have several accounts of the same card at once.  Citi was very lax with the rules on opening accounts and getting sign-up bonuses.  It was the Wild West!

By the time I got in the game, a more typical strategy for these cards was thus:  String along annual fee waivers in order to keep the account open for free.  Doing so helps your credit score by adding to both your average account length and your credit-to-debt ratio.  Some time after 24 months (Citi’s old minimum time limit between sign-up bonuses for a given card), close the account and open a new one for another 50k American Airlines miles.

But recent changes have made that strategy invalid. . .

The main factor

Late last year Citi dropped a bomb on credit card churners.  It wasn’t quite the MOAB that Chase dropped with their 5/24 rule, but it was disruptive enough to change my strategy on Citi cards.

The minimum time between sign-up bonuses is still 24 months, but it no longer applies to each specific card.  The 24 month timer is now shared among all cards of a given point type.  For example getting any Hilton sign-up bonus with Citi precludes you from getting the bonus on any other Citi Hilton card.

What’s worse is that the 24 month timer isn’t only reset by earning a sign-up bonus as it previously was.  It now also resets any time a card is cancelled or downgraded.  This is nonsensical to me because it incentivizes people to cancel their cards right after getting the sign-up bonus instead of continuing to use it for the following year(s).

The fact that it will be at least 2 years before Nicoleen can get any American Airlines co-branded card from Citi dominates all the other factors.  Any value she would get from keeping the card, even if Citi waived the annual fee, would pale in comparison to getting that timer going ASAP.  With Citi’s new bonus policy, cancelling this card was an easy decision.

NOTE: One silver lining of cancelling the Citi AAdvantage Platinum was that Nicoleen was able to transfer the credit to one of her no-fee Citi cards.  Therefore there will be no impact on her credit to debt ratio, which helps maintain a good credit score.





Barclaycard American Airlines Aviator Red

Recent action: CANCEL

Another American Airlines card and another history of having annual fees waived.  Like Nicoleen’s Citi card, I have successfully had the annual fee waived twice on my Barclaycard Aviator Red.  Usually my retention offers also came with some nice bonus miles for easy spending requirements.  Last year they waived my fee, gave me 5k miles, and bonus miles on my upcoming spending.

Barclay’s generosity with this card seems to be coming to an end, however.  According to reports on Flyertalk, retention offers are gradually drying up.  Nicoleen found this out first hand when she was offered nothing late last year.

A little about the Barclaycard Aviator Red:

  • The Aviator was originally the result of the American Airlines / U.S. Airways merger.  Barclay had a U.S. Airways card which was converted to the Aviator after the merger.
  • Until recently, the only Aviator Reds that existed were grandfathered U.S. Airways cards.  Now Barclay is taking new applications for the Aviator line of American Airlines cards.
  • Current offer is for 50k miles with no minimum spend, but the $95 annual fee is not waived the first year.
  • Notable fringe benefits are free checked bags on American, and 10% of redeemed miles refunded back every year.

Barclaycard Aviator Red

Other than the usual benefits of keeping a card open (credit score maintenance) the most compelling reason I had to keep this card was the frequent and generous bonus mile offers that came around.  –Read about some of these in this post.–  But without the annual fee waiver, the possibility of bonus offers definitely wouldn’t be enough incentive to keep this account open.

As expected, when I called I got no retention offers and decided to cancel.  I moved my credit to my Arrival card to minimize the impact on my credit score.  Now that the Aviator Red is available for new accounts, I may end up getting the card again sometime soon.  After all, I technically never got the bonus on this card, since my bonus was on the U.S. Airways card before the conversion.




More examples

Stay tuned for Keep or Cancel: Part II where I’ll show examples of cards we recently decided to keep.  I will explain what went into the decision and I’ll show just how much value we reaped from these cards to make them worth the annual fee.

My Easiest (and Quickest) Credit Card Cancellation

I recently did my monthly update to my big credit card spreadsheet and discovered I had two cards with annual fees about to hit.  After a brief analysis I decided that at least one of them, my Capital One Spark Business, had to go.  I had never cancelled a Capital One card before so I had no idea what I was in for.

The Card

The Spark Business from Capital One was my first card from that heavily advertised bank.  “What’s in your wallet?”  Not many Capital One cards.  For reasons I won’t get into right now, they have historically been relatively unpopular with those of us playing the credit card game.

spark

In a nutshell, the Spark Business earns 2% cash back on all purchases.  The sign-up bonus after spending $4.5k in 3 months was $500 cash!  That’s a pretty sweet deal, and the 2% cash back isn’t bad either.  But in my case, I wasn’t putting much regular spending on the card so the $59 annual fee wasn’t worth it for me.  The fee was waived the first year, but my first year was almost past.  It was time to cancel.

Easy (and fast!) Cancellation

I always dread cancelling cards.  This is an irrational dread since most of the time it’s pretty painless.  But once in a while you’ll get a customer service rep who wants to convince you to keep a card.  If you don’t make your intentions clear right off the bat, you’ll have to endure their run-through of the card’s benefits, or their pitch to downgrade the card or convert it to another type altogether.

In some cases, you’re fishing for a retention offer, so the personal customer service is what you want.  But other times you know you want to cancel and you just want to get it checked off your list.  In those cases, the human interaction could bog things down.

A few months ago I wrote a blog post about how easy it is to cancel Citi cards online.  At the time this was my only experience cancelling a card impersonally.  (After all, who really wants to talk to a human when you could hide behind digital anonymity!)  When I called Capital One to cancel the Spark Business I stumbled upon an even easier way to cancel cards!

I prompted the automated phone system by saying the reason for my call was: “close account.”  After I verbally affirmed a few things, the system read me a description of what closing the card would mean.  It even proactively notified me that any annual fees posted to the account in the past 30 days would be automatically refunded.  (A nice reassurance even though my fee had not yet posted.  Overall the call took less than three minutes!

Credit card cancellation in record time

As far as I know, only Capital One allows card holders to perform a credit card cancellation over the automated phone system.  I’m sure it was faster than cancelling my Citi card online and it was even more impersonal . . . if you’re into that sort of thing.

If you’ve had similarly convenient or quick experiences cancelling credit cards, please let me know by commenting on this post or on the ValueTactics Facebook page.

Thanks for reading!

Online Shopping: How to Avoid My Biggest Mistake this Holiday Season

burning-money
I leave a lot of points and miles sitting on the table.  It can happen at any time but it’s more noticeable this time of year with Christmas shopping.  I’m not talking tens of thousands of points, like you would be wasting if you screwed up a credit card bonus offer.  It’s not that huge of a mistake.  I call it my “biggest mistake” because it’s easy to avoid, yet I still manage to screw it up regularly.  I’m talking about online shopping portals.

Virtually Free Points and Miles with Online Shopping Portals

With online shopping portals you can earn potentially thousands of bonus points for about 20 seconds of work and a few keystrokes.  Many credit card points and frequent flier miles programs offer these online shopping portals, where you can earn bonus points for clicking through their link before shopping online.  You make the purchase on the retailer’s website just like normal, but you get bonus points for whichever program you used to click through to the retailer’s site.  Here’s an example:

You are about to make an electronics purchase at my favorite online computer store, newegg.com.  You remember you can earn bonus Ultimate Rewards if you shop through the portal at Chase’s website.  You log on to your Ultimate Rewards account and click “Shop through Chase:”
Online Shopping Portal

Search for newegg.com in the “earn more” area:
portals2

You’re in luck!  Newegg.com is one of the retailers in the Chase Ultimate Rewards shopping portal program.  In this case, you earn 2 additional points for every dollar you spend on newegg.com

Click through the link to newegg.com and shop like usual.  (If I go afk and I get signed out of either the shopping portal or the retailer’s site, I usually start over again.  This probably doesn’t matter but I wouldn’t want to lose out on points because something weird happened.)  I normally get my purchase researched and ready to buy, close the browser tab, and then start over with the shopping portal to actually make the purchase.

With Chase Ultimate Rewards portal (and I believe all other programs’ shopping portals) you can use whatever payment method you want.  In other words, you don’t have to use the card tied to that points program to make the purchase from the online retailer.  This comes in handy when you want spending on a particular card but would like bonus points for another program.

Do as I say, not as I do

The key to getting these bonus points is simply remembering to get them!  As this article title suggests, I am horrible at this.  Many times I don’t realize I lost out on points until weeks or months later.  It’s one of those things where you just have to get into the routine and it will become second nature.

Don’t throw away free points and miles!  Check if your credit card or frequent flyer miles program has an online shopping portal BEFORE you make those last minute Christmas shopping purchases.

Small Business Saturday 2016 . . . Another Year, Another Disappointment

This year American Express has expanded Small Business Saturday to the entire holiday shopping season.  But, for the second year in a row, they are not offering any statement credits for AMEX purchases at small businesses.  In previous years, American Express enticed shoppers to patronize small businesses by offering $10-30 in statement credits after paying with your AMEX card.  Last year was the first since 2012 that no statement credit was offered.

Scraps from the table

In an effort to salvage what was undoubtedly a less successful effort last year, American Express is offering a consolation prize.  A few days ago I received an e-mail offer for double points when using an AMEX card at small businesses through December 31st, 2016:

Small Business Saturday 2016

My Hilton HHonors card from American Express

My Hilton HHonors card from American Express

Most American Express cards are included in this offer, but you have to register each card to activate the deal.  Cards that already earn more than 1 pt per dollar on regular purchases will also double their points.  For example, my AMEX Hilton Reserve normally earns 3 points per dollar.  During the promotion it would earn 6 points per dollar at small busineses.  However, the same is not true with category bonuses (such as dining or travel) that some cards earn.  Check out the full official FAQ here.

Not a remarkable deal

For some people this promotion will be worth something.  If you already frequent retailers on the small business list, it might be worth it for you to get the double points with your AMEX card.  On the other hand, you may still get better value using another card at the same store.  This is especially true at the many restaurants that are part of the promotion, since some credit cards already earn extra points for dining establishments.  This is not even to mention other bonus offers that might be running on one of your cards, like the frequent promotions the Barclay Aviator runs.

Do the math before automatically assuming your AMEX card is the best one to use at one of these small businesses during the promotion.

The moral of the story

As I wrote about in my post about last year’s American Express Small Business Saturday, there is a lesson here.  And it’s an important one at that.  For several years people came to expect the statement credit.  Now it appears to be permanently gone.  If you count on deals, offers, bonuses, etc. to be there for you in the future, you’re misplacing your confidence!  All value tactics change and some disappear.

I liked what I wrote last year so here it is again: The key to capturing and creating value is to recognize and take advantage of good deals when they exist, and to move on and adapt when the current opportunities change or disappear.