British Airways devaluation got you down? Book with Iberia instead!

The 4,500-Avios, short-haul British Airways Executive Club award has long been one of the most valuable things about the program for North Americans. On flights within the United States you pay neither fuel surcharges nor close-in booking fees, and your Avios are refundable up to 24 hours before departure (you forfeit only the taxes and fees).

Starting February 2, 2016, the same short-haul flights originating or ending in North America will cost 7,500 Avios per segment, although there's no indication the other two features will change.

The good news is that as far as I can tell Iberia hasn't announced any changes yet.

Iberia is still a weird program

The two key things to know about booking North America Iberia award flights are:

  • Awards have to be round trip. You can't even search for one-way availability; you have to use a dummy return date (or search for availability on American Airlines' or British Airways' website first);
  • Award prices are based on total trip length, adjusted by cabin.

What do I mean, "adjusted by cabin?" Hopefully the following example will illustrate the idea: a flight from Chicago (ORD) to Louisville (SDF), a 574-mile roundtrip, costs:

  • 11,000 Avios and $18.70 in Blue Class (economy);
  • 22,000 Avios and $18.70 in Blue Class one way and First on the return;
  • and 33,000 Avios and $18.70 in First in both directions.

The same itinerary connecting in Charlotte (CLT) in each direction (1,868 miles roundtrip), costs:

  • 17,000 Avios and $24.70 in Blue Class;
  • 23,109 Avios and $24.70 in First on one of the CLT-SDF legs (17.9% of the total distance) with the remainder in Blue Class;
  • 27,891 Avios and $24.70 in First on one the ORD-CLT legs (32.1% of the total distance) with the remainder in Blue Class;
  • 29,218 Avios and $24.70 in First on both of the CLT-SDF (35.9% of the total distance) legs with the remainder in Blue Class;
  • 38,782 Avios and $24.70 in First on both of the ORD-CLT (64.1% of the total distance) legs with the remainder in Blue Class;
  • 34,000 Avios and $24.70 in Blue Class one way and First on the return;
  • and 51,000 Avios and $24.70 in First in both directions.

The total number of Avios required very closely corresponds to the sum of the percentages of the total itinerary flown in each cabin multiplied by that cabin's roundtrip Avios award cost.

Observe two key things here:

  1. Under today's award chart, a roundtrip, nonstop flight between Chicago and Louisville in First is cheaper if booked with Iberia (33,000 Avios) than if booked with British Airways (36,000 Avios), and an itinerary connecting in Charlotte is also cheaper with Iberia (51,000 Avios) than with British Airways (72,000 Avios — no, I'm not kidding);
  2. After the February 2, 2016, British Airways devaluation, Blue Class nonstop flights booked with Iberia will be cheaper (11,000 Avios) than if booked with British Airways (15,000 Avios).


Here are a few things to take away from this post:

  • You can only use Iberia to book roundtrip partner itineraries;
  • Do not use Iberia to search for partner award availability;
  • Once you find North American award availability with American Airlines or British Airways, check their prices against Iberia's;
  • Iberia's online booking system is very frustrating but very flexible — it's easy to book short legs in Blue Class and longer legs in First for potentially big savings, because of the "cabin adjustment" mentioned above.


Using Iberia Avios instead of British Airways Avios for short-haul North American flights isn't a silver bullet to solve all of your award booking problems. But it is another tool you can use to let your miles take your further, faster.

Don't retire to hotels, live in them!

I've written a few speculative posts in the past based on the conceit that manufactured spend makes staying in hotels full time a cheap way to save on rent in retirement.

I recently joked on Twitter that it's cheaper to stay at the Hilton in San Francisco than it is to rent an apartment there, which got me to thinking: are there really places where the rent is so high that living in hotels could make practical sense?


To compare the cost of renting versus monthlong hotel stays, I used the figures in this recent CBS News article about median apartment prices in the 10 most expensive cities in the United States. These are median, not average, prices, so 50% of rental units are less expensive and 50% are more expensive.

I don't have any reason to trust these numbers, compiled by, but at least they give us some concrete figures to work with.

I then looked at the imputed redemption value of a 30-day stay with four programs:

  • Hilton HHonors (manufactured with an American Express Surpass card at gas stations or grocery stores at an imputed redemption value of 0.35 cents each and redeemed in blocks of five nights, with the fifth night free);
  • IHG Rewards (purchased during a fake reservation at 0.7 cents each);
  • Hyatt Gold Passport (1 cent per point transferred from Chase Ultimate Rewards);
  • Choice Privileges (manufactured with the Chase Choice Privileges Visa at an imputed redemption value of 1.0525 cents each).

In the case of Hilton and Choice I compared their earning rate to the 2.105 cents per dollar earned everywhere on a Barclaycard Arrival+ MasterCard.

Wherever possible, I observed the following rules:

  1. I used the actual municipality given by CBS News/, so in the case of Oakland I excluded properties in San Francisco, and vice versa (the exceptions were Los Angeles, which doesn't have a Hyatt property downtown — I used the Andaz West Hollywood instead, and Miami, where I included Miami Beach properties);
  2. I used the cheapest property located within the central area of each city, with the exception of Washington DC, where I used the Holiday Inn Washington-Georgetown.
  3. Where seasonal adjustments were small, I used the smaller figure as long as it was realistic. In one case where the seasonal increase was over 100% (Bluegreen Vacations Solara Surfside, the Choice property I used in Miami) I gave both the high and low season figures;
  4. Large seasonal variations are the rule with Hilton HHonors, so in all cases I gave both the low and high season figures.

Finally there's an additional wrinkle worth noting: since hotels offer both award stays and paid stays for the same nights, you should be able to reduce your actual expenses below the imputed redemption values I give by paying cash for those nights where the cash rate is lower than the imputed redemption value of an award night.


Here are my results, in all their Excel spreadsheet glory:

For each city, I've highlighted the chain with the lowest and second-lowest imputed redemption values. That leads to a few observations:

  • In four of the ten cases, the Hilton properties have the lowest imputed redemption values whether or not the property is charging low-season or high-season prices;
  • In four of the remaining cases, the Hilton property is cheapest during low season and the Hyatt property is lowest during the Hilton property's high season. In these cases the logical thing to do would be to move from Hilton to Hyatt once high season pricing went into effect at Hilton;
  • The IHG Rewards Club property never has the lowest or second-lowest imputed redemption value.

These results so strongly confirm my biases towards Hilton and Hyatt that I had to double-check my math to make sure I hadn't tampered with the scales.

Hilton's dominance seems to be a mechanical product of two facts: earning 6 HHonors points per dollar with the Surpass card, and taking advantage of the fifth night free on award stays. While Hyatt typically charges fewer points for award reservations than Hilton, they have to charge 72% less to get an edge on Hilton. Since Hyatt doesn't charge more for rooms during high season as Hilton does, that's where their edge tends to emerge.


From one point of view, my original question was answered conclusively: in none of the top ten most expensive rental markets are monthslong award stays cheaper than renting the median apartment.

This conclusion should be taken with a healthy dose of salt, however:

  • as noted under Methodology above, you can save money over award stays by swapping in cheap paid nights over weekends and during low season. Doing so will also trigger points earning, which reduces the total amount of manufactured spend necessary each month;
  • as a top-level elite, your stay at many properties will include a continental or hot breakfast, and may include dinner as well, depending on the food spread available in the property's lounge;
  • this research compared the median rental property in a city to downtown chain hotel properties. Depending on the city, the median rental property may be in much worse condition, in a much worse neighborhood, much farther from downtown. In other words, if you're an upper middle class travel hacker working in San Jose, you're probably not living in the median rental property in the city, and you're probably paying much more in rent than the figures I cited.

Finally, while I intentionally framed it that way, living in hotels isn't an all-or-nothing proposition. For example, you may find that moving into a hotel for a month while you're between apartments, or in the process of moving to a new city, offers savings compared to other short-term housing options, or convenience compared to staying with friends or renting a room on AirBNB.

How much would you pay to be able to book any flight on any day?

Another day, another devaluation.

Yesterday American Airlines announced the changes they'll be making to the AAdvantage program next year. You've likely already read all about them, but in summary, they are:

  • Revenue-based mileage earning (beginning in "the second half of 2016");
  • Award chart devaluation (effective March 22, 2016);
  • Elite status devaluation (effective for qualification after January 1, 2016).

Since I credit my paid American flights to Alaska, I don't care much about the first or third points. But the award chart devaluation is real and, for premium cabin redemptions, significant.

Premium cabin awards are not cheap or easy

With yesterday's announcement, American Airlines joined Delta and United in raising mileage prices for premium cabin awards, in some cases astronomically. For example, a first class award seat on a 3-cabin aircraft to Sydney from the continental United States will cost 110,000 AAdvantage miles starting March 22, 2016, up from the 72,500 miles it currently costs, a 52% increase.

Of course, that's purely academic. There are no first class award seats between the continental United States and Sydney.

Yes, if you're flexible, if you're searching far in advance, close-in, and on every single day in between, you might be able to find one or two seats during the Southern winter. But don't hold your breath.

Premium cabin seats are (not that) expensive

For a lot of people, "travel hacking" is synonymous with "loyalty program hacking." And indeed, historically the loyalty programs operated by hotels and airlines have been a great source of outsized value for people willing to dedicate the time and attention to maximizing the value of their miles and points.

But those airline award seats we hunt down so diligently are also available on the open market! Believe it or not, the airlines just sell them. Of course, in exchange for the flexibility buying revenue tickets grants, you're going to pay a little more.

Or a lot more. That 220,000-mile roundtrip first class award ticket American promised you might cost $10,000 or $15,000 if you choose the flexibility of a revenue ticket.

Well, it might cost someone $15,000. But it doesn't have to cost you $15,000, because you're a travel hacker.

The revenue premium may be smaller than you think

A $15,000 first class flight to Sydney will give about 6.8 cents per AAdvantage mile in value after the March 22 devaluation (if you could find first class award space).

Since the Citi Prestige card allows you to redeem ThankYou points for 1.6 cents each on American-marketed flights, you'd need about 938,000 ThankYou points to purchase your first class revenue ticket. That's a lot of points, but the ThankYou Premier card earns 3 ThankYou points per dollar spent at gas stations, so you'd only need to manufacture $312,666 in gas station spend to make your redemption. That's obviously not something you'll be able to do in a weekend, but it might be a reasonable goal if spread out over a year or two.

Since the Citi and Barclaycard AAdvantage co-branded credit cards earn just one mile per dollar spent everywhere, you'd need to manufacture $220,000 on those cards to make your first class award redemption. In other words, the revenue premium — the additional manufactured spend required to book any seat on any flight — in this case is about 42%.

The $15,000 flight has the additional advantage of earning an Executive Platinum 165,000 AAdvantage miles, enough for another roundtrip to Sydney (albeit in business class instead of first).


Most people aren't going to manufacture enough spend to pay what American is asking for a first class ticket to Australia. Those who do probably don't value a first class ticket to Australia at $15,000, and would rather redeem their fixed-value points for the domestic economy flights they'd book anyway. That's a perfectly reasonable point of view.

The point I want to make is that while I sometimes say that cash is a superior earning choice for manufactured spend unless you have a particular, high-value redemption in mind, it may be a superior earning choice even if you do have a particular, high-value redemption in mind!

In other words, it's not enough to say that an award redemption will get you more value per dollar in manufactured spend than earning a currency like Ultimate Rewards (1.25 cents per point), Flexpoints (up to 2 cents per point, redeemed in tiers), Membership Rewards (1.43 cents per point with the American Express Business Platinum), or ThankYou points. You also have to be willing to redeem your loyalty currencies exclusively on the dates, flights, and times that the airlines choose to make award seats available, and put the time into learning the intricacies of each alliance and each airline.

If you don't find that fun or interesting, you may well be better off saving your time and paying the revenue premium instead.

Uber is no longer selling gift credit (for now)

A few people have reached out to me on Twitter to tell me that Uber is no longer selling gift cards. Sure enough, my account (in which I had asked them to re-enable the "Gifts" option after it mysteriously disappeared) no longer showed the option of buying gifts, and this cached version of an Uber help page reads: "Please note that we are no longer offering gift cards for purchase on the Uber system."

As a reminder, Uber gift credit was useful because an individual Uber ride is often cheaper than the $25 minimum redemption of the Barclaycard Arrival+ MasterCard. Buying Uber credit in bulk got around that restriction, and I probably would have continued to buy it $100 at a time even after today's Arrival+ devaluation.

Why the change?

It's always fun to speculate on why companies make sudden, unannounced changes like this. I have two pet theories to explain why Uber stopped selling gift credit.

The first theory is based on the possibility that whichever Uber city you originally sign up in is persistently linked to your account, even if you move. That being the case, it's possible that Uber gift credits were being improperly assigned as revenue to your home city, rather than the city you actually take your rides in, which may have been messing up some internal profit metric Uber uses.

The second theory is that since Uber is currently running an American Express Offer for $10 off $20 in rides, the last thing they want is for customers to buy thousands of dollars in Uber credit for 50% off! If this theory is true, gift credit may return after the American Express Offer expires on December 31, 2015.

Alternate Uber payment schemes

If you have an American Express card enrolled in Membership Rewards, you can use your Membership Rewards points for 1 cent each against Uber rides, or earn 2 Membership Rewards points per dollar. Since Membership Rewards points are relatively easy to earn and difficult to monetize, this is a straightforward way to redeem them for 1 cent per point.

You should be able to redeem Bank of America Travel Rewards points or Capital One Venture miles against Uber rides starting at $25, although I don't have either card so I don't know for sure.

While not exactly a payment scheme, also remember to link your Starwood Preferred Guest and Uber accounts, so you can earn 1 Starpoint per dollar spent on Uber rides (up to $10,000 per year, and only after your first qualifying Starwood Preferred Guest stay each calendar year).

Avios and cash followup: booking that Air Berlin flight

Last month I wrote about an Air Berlin flight from Berlin to New York City, for which I was planning to redeem British Airways Avios. I had 24,000 Avios in my account, but since British Airways allows cash to be substituted for Avios at relatively favorable rates, I had to decide how many Avios to redeem (including transfers in from Chase Ultimate Rewards) and how much cash to pay for the two tickets I wanted to buy.

Here were my Avios and cash options for purchasing the tickets:


As I wrote then,

"ultimately, I fall on the side of redeeming my Ultimate Rewards points for 1.5 cents each. That's because I'm points-rich and cash-poor: if I "saved" my points by redeeming 20,000 or 14,000 of them against the Air Berlin itinerary, instead of transferring in 16,000 Ultimate Rewards points, I would then redeem the corresponding Ultimate Rewards points for cash at just one cent each."

Not so fast!

My decision was based on the best alternate redemption of the Ultimate Rewards points I already had, which was just 1 cent each for cash redemptions. However, I still wasn't sure how I was going to fly outbound from the United States to Budapest.

So before transferring 16,000 Ultimate Rewards points to British Airways, I first checked for award space between Chicago and Budapest, and sure enough the calendar was wide open for economy award travel on Turkish Airlines, United's Star Alliance partner. Suddenly, my alternate Ultimate Rewards redemption wasn't 1 cent each for a cash redemption, but a little over 3 cents each when transferred to United for a transatlantic flight redemption.

British Airways charges variable amounts of cash per substituted Avios

A close look at the Avios and cash chart above reveals something odd: the intervals between the Avios redemption levels are irregular. Here's the same chart, rearranged to illustrate the point:

Now, if I already had enough Avios in my account, I would certainly have redeemed the maximum 40,000 Avios and paid just $178.18 in cash.

But I didn't have enough Avios, which is why I had to ask the question of how many Ultimate Rewards points I was willing to transfer in.

  • Since I had 24,000 Avios in my account, the first 2,000 were a no brainer: I would get the full $60 in cash savings value but pay just $20 in Ultimate Rewards points.
  • The next 6,000 would give me just 1.17 cents per Ultimate Rewards point, less than the points' value when redeemed for paid travel and barely more than their cash value.
  • Finally, an additional 8,000 transferred points would yield 1.38 cents per point, which would be worth considering, except that in my case it would first require the above 6,000-point transfer, averaging out to just 1.29 cents per Ultimate Rewards point.

Since I already have a planned redemption that offers more than twice as much value per Ultimate Rewards point — my Turkish Airlines flight to Budapest — I ended up transferring just 2,000 Ultimate Rewards points and saving the remaining 14,000 points for my transfer to United Mileage Plus.


The lesson here is that the value of points and miles varies, not just between people but for the same person over time, depending on their points balances and plans for redemptions.

In my earlier post, I was fully ready to redeem 16,000 Ultimate Rewards in order to save $240 (1.5 cents each). When my plans developed further and I settled on a 3-cent-per-mile Turkish Airlines award, my calculus likewise changed and I became unwilling to transfer more than a nominal number of Ultimate Rewards points.

I was right both times, but the more information I had about my future plans, the better my decision became.

Portland is a city where young people go to retire

I go to Portland, Oregon, three or four times a year. I think it's a little slice of paradise, so I thought I'd share some of the things that make it so special for me.

How to get there

  • Amtrak. Take the Empire Builder west from Chicago or the Coast Starlight north from Los Angeles. The first costs 40,000 Amtrak Guest Rewards points in a bedroom (or family bedroom), and the second costs 25,000 points in a bedroom until January 24, 2016. A single redemption includes tickets for up to the maximum occupancy of the room, e.g. 2 adults and 2 children in a family bedroom.
  • Portland International Airport. PDX has flights operated by the big 3 US carriers and Alaska Airlines, as well as Southwest. From PDX the MAX light rail will take you downtown in about 40 minutes for just $2.50 ($5 for a day pass).

Where to stay

  • Downtown. I usually stay at the Hilton Portland & Executive Tower (30,000 HHonors points November-March, 40,000 HHonors points April-October), although they sometimes play games with award availability. If you're a Gold or Diamond HHonors member, you can use your continental breakfast voucher for about $12 off anything on the breakfast menu, which I recommend since the continental breakfast is terrible. If you have Starwood Preferred Guest points, The Nines is a very fine hotel, and Urban Farmer is one of the best restaurants in Portland, located on the 8th floor of The Nines. Other than that, Marriott dominates the downtown hotel scene, and their properties are overpriced, unless you're able to get an especially good deal using Priceline.
  • AirBNB. AirBNB offers two advantages over staying at hotels: you'll often pay much less than you would staying at a downtown hotel, and you can stay in the neighborhoods, which are one of the things that make Portland so great. Three fantastic neighborhoods to check out are Northeast Alberta, between perhaps 9th and 33rd Streets; Southeast Hawthorne almost anywhere East of Grand St; and North of Burnside in the Pearl District or what's charmingly called "Nob Hill."

What to do

  • The 4T Trail. Do a loop around Portland taking the MAX light rail train, the trails between the Portland Zoo and the Oregon Health & Science University, the aerial tram down to the river and the Portland Streetcar Trolley back downtown. You can do the loop in either direction, but the aerial tram is only free going downhill. Warning: bring a printout of the trail segment, or you might get very, very lost (not that I'm speaking from experience or anything).
  • ZooLights. Speaking of the Portland Zoo, every winter the Zoo is open late and lit up with holiday lights. Fun for all ages.
  • Ground Kontrol Classic Arcade. Classic arcade games from your youth and your parents' youth, plus new additions like Killer Queen, the world's first 10-player arcade game. There's a huge selection of classic and new pinball games, as well.
  • Dante's Sinferno Caberet. Sundays at 11 pm until the wee hours of the morning, a mixture of nudity, profanity, and feats of strength. The pizza joint in the corner is now operated by Lonesome's Pizza, which is excellent.
  • Clinton Street Theater's Rocky Horror Picture Show. One of the longest-running screenings in the country, doors open at 11:30 pm on Saturday nights.
  • Laurelhurst Theater and Pub. $3-4 second run movies and classics, cheap beer and great pizza. Each seat has bar space to place your pitchers, pizzas, and salads, so you don't have to juggle your dishes.
  • Look for inspiration. Part of what makes Portland so magical is that you don't need a plan to have a good time. You can walk around, make friends, check out the local alternative weekly, and wait for inspiration to strike.

Where to eat

  • Pine State Biscuits. Three locations, always lines at all 3, but always worth the wait. Go at weird times for shorter waits, go during brunch for hour-plus waits.
  • Pacific Pie Co. Two locations. Great meat and vegetarian savory pies, sweet pies, and craft beer. Save money by going during happy hour, Monday-Friday 3-6 pm.
  • Bunk Sandwiches. Five locations. The Marinated Garbonzo Beans sandwich at Bunk Downtown is way, way spicier than it has any right to be.
  • Food carts. Portland food carts are clustered into groups called "pods." Make a food cart pod the beginning or end of a walk around town and you're guaranteed to find something delicious.
  • Anywhere. Portland bars are generally required to serve hot food, and it tends to be fantastic, or at least greasy, which can be almost the same thing.

Where to drink

  • Distillery Row. Portland's craft distilleries are clustered in Southeast Portland. Visit any one to try a flight of craft liquors, or buy a Passport and drink many flights of craft liquors.
  • Swift Lounge. Craft cocktails served in large or very-large mason jars. Great food.
  • Binks. Great cocktails made with house-infused spirits.
  • Ash Street Saloon. You will never find a more wretched hive of scum and villainy.
  • Craft breweries and brewpubs. There are a lot of them, including nationally known breweries and brewpubs like Widmer Brothers, Hopworks Urban Brewery, Full Sail, and Deschutes.


Remember, the dream of the 90's is alive in Portland.

Towards a theory of hotel points and cash redemptions


Regular readers know that I use the concept of "imputed redemption values" to calculate the relative value of manufactured spend on co-branded hotel credit cards. I've also written about the difficulty of thinking about "points and cash" redemptions conceptually.

Today I want to make a preliminary attempt at reconciling the concept of imputed redemption values and points and cash redemptions, something I've never seen attempted before in a comprehensive way.

I looked at five hotel loyalty programs that offer points and cash redemptions:

  • Marriott Rewards
  • Hyatt Gold Passport
  • Starwood Preferred Guest
  • Wyndham Rewards
  • Hilton HHonors

For each program, I used the following assumptions:

  • For Ultimate Rewards transfer partners (Marriott and Hyatt), I used a value of one cent per point (the value of the corresponding Ultimate Rewards points when redeemed for cash);
  • For the other programs, I compared each card's earning rate on spend to a 2% cash back card. The Starwood Preferred Guest American Express earns one Starpoint per dollar spent everywhere (2 cents per point), the $69-annual-fee Barclaycard Wyndham Rewards Visa earns 2 Wyndham Rewards points per dollar spent everywhere (1 cent per point), and the Hilton HHonors Surpass American Express earns 6 HHonors points per dollar spent at gas stations and grocery stores (0.33 cents per point).

I used these assumptions to investigate two questions:

  1. When do points and cash redemptions make sense compared to award nights?
  2. When do points and cash redemptions make sense compared to cash nights?

Marriott Rewards

Starting in "early 2016," Marriott Rewards will allow cash and points redemptions based on the following chart:

I used those values to calculate under what circumstances it would be worth making a cash and points redemptions, instead of a points redemption or paid stay:

This chart illustrates two points:

  • if your primary source of Marriott Rewards points is Ultimate Rewards transfers, cash and points stays are cheaper for all Category 3-8 properties, when compared to a points-only award stay;
  • but cash and points stays, just like points-only award stays, are extremely expensive, so unless your Category 8 stay costs more than $390, you're still better off paying with cash than transferring Ultimate Rewards points to Marriott Rewards.

Hyatt Gold Passport

Here's Hyatt's points-only and Points + Cash award chart:

And here's the same information, interpreted through a lens of Ultimate Rewards point transfers to Hyatt Gold Passport:

As this chart shows, there are no circumstances under which Cash + Points redemptions are cheaper, on a cash basis, than point-only redemptions (although you may still want to pay with cash in order to save your Ultimate Rewards points for other, higher-value redemptions).

Starwood Preferred Guest

Starwood produces the opposite situation. If you're earning 1 Starpoint per dollar spent on a Starwood Preferred Guest credit card, you will under virtually all circumstances save money using cash and points compared to a points-only redemption:

Wyndham Rewards

Wyndham Rewards is unique for having just one price point for points-only ("Go Free") stays: 15,000 Wyndham Rewards points per night.

For points and cash ("Go Faster") stays, all hotels in the chain cost 3,000 Wyndham Rewards points, plus a variable amount of cash.

Wyndham Rewards doesn't publish, as far as I can tell, a list of the variable cash amounts required by the hotels in their program, so this chart is based on my very extensive searching, but I can't promise it's totally comprehensive:

As you can see, at all but the most expensive properties (like the Wyndham Garden Long Island City Manhattan View), you'll pay less with a "Go Fast" cash and points stay, when available, compared to a "Go Free" points-only stay.

Hilton HHonors

Hilton HHonors, like Wyndham Rewards, doesn't publish a list of their points and cash award levels, so the following chart is based on my own extensive research, and its accuracy is not guaranteed:

This chart makes clear that if you're manufacturing spend on a Hilton HHonors Surpass American Express instead of a 2% cash back card, you'll come out ahead saving your HHonors points with cash and points redemptions at hotels priced in the 30,000-to-70,000-point range.

A note on the final column

The neatly highlighted calculations above are helpful, but I want to draw particular attention to the far right columns, showing the imputed redemption value of cash and points stays at each chain.

This column is relevant because in contrast to points-only award stays, which hotels are often required to offer as long as they have standard rooms available, cash and points stays are offered at the discretion of the property, and are generally made available only when rates are already unusually low.

The "Cash + Points" imputed redemption values I included for each chain is the price point above which cash and points redemptions become cheaper than cash-only stays, given the assumptions I outlined in the introduction. If you can find cash-only rooms at that price point or below, you're generally better off booking the cash rate rather than any cash and points or points-only rates available, unless you're particularly points rich and cash poor or have other extenuating circumstances.

Quick hit: in defense of Blue for Business

Yesterday I dismissed the Blue for Business American Express credit card out of hand, writing that the "product earns 1 non-flexible Membership Rewards point everywhere, which isn't very interesting."

I was quickly corrected by reader Stvr, who commented, "Blue for Business is 1.3 MR per dollar."

What Stvr is referring to is the 30% bonus Membership Rewards points credited each year within 30 days of your account anniversary each year.

And Stvr is right! If you are willing to wait to receive 23% of your Membership Rewards points until the end of your cardmember year, you can think of the Blue for Business card as earning 1.3 points per dollar spent everywhere.

Does it matter?

The only situation in which I can imagine the Blue for Business card playing a useful role is if you also have a flexible Membership Rewards-earning credit card that isn't the EveryDay Preferred.

If you have a Business Platinum American Express, your Membership Rewards points are worth 1.43 cents each for paid airfare on a single airline you designate each year (the same airline you choose for your $200 statement credit). That makes your 1.3 Membership Rewards points per dollar spent on the Blue for Business worth 1.86 cents towards paid airfare. That's not great, but it's not terrible for a fee-free American Express card and it's 30% better than putting spend on the Business Platinum card itself, which earns just 1 Membership Rewards point per dollar spent everywhere.

Similarly, if you use a Premier Rewards Gold (2 points per dollar spent at supermarkets) or Business Gold Rewards (3 points per dollar spent at gas stations) card to manufacture spend in their respective bonus categories in order to transfer those points to their airline partners like Air Canada's Aeroplan, Delta SkyMiles, or Singapore KrisFlyer, you might get so much value out of your airline transfers that 1.3 Membership Rewards points per dollar gives you more value than putting the same spend on a 2% cash back card.

Of course, if you have an Amex EveryDay Preferred, then you can already earn 1.5 flexible Membership Rewards points per dollar spent everywhere with the card, as long as you make 30 or more purchases per statement cycle, which makes that card strictly superior to the Blue for Business.

American Express cards I'm thinking about


When I say that I don't chase signup bonuses, it sometimes gives readers the impression that I don't apply for new cards or that I don't think signup bonuses are a good deal. Nothing could be further from the truth!

If I need a new card, I'll apply for it, I'll call reconsideration lines, and I'll move credit around like anyone else hungry for approval. Likewise, if I'm planning to sign up for a card, I'll do my due diligence and hunt down the highest signup bonus available.

The difference, as I see it, come down to what cards I think I need. Since I earn the miles I redeem and redeem the miles I earn, I won't sign up for a new card just because it has a high signup bonus; I need to have a sense of where and when I'd redeem those miles. Otherwise, I might never redeem them and be left with a worthless novelty balance.

That being said, here are a few cards I'm currently thinking about adding to my collection.

Starwood Preferred Guest Business

I recently met the $50,000 spend threshold on my Platinum Delta SkyMiles Business American Express card, which makes the card all but useless for the rest of the calendar year. Last week I called American Express to ask which cards I was eligible to product change my card to, and was given two options: the Starwood Preferred Guest Business card, or the Blue for Business.

The latter product earns 1 non-flexible Membership Rewards point everywhere, which isn't very interesting, while the Starwood Preferred Guest card earns points that can be transferred to Delta, Alaska, or American (among others), in addition to booking Starwood hotel stays.

The main reason I'm interested in the Starwood card is for hotel stays. While Hilton is my primary hotel program because of their enormous footprint and the high bonused earning rate on the Hilton Surpass American Express, there are times when Hilton rooms aren't available or their properties are inconveniently located. At times like those, it's helpful to have points like Ultimate Rewards (for transfers to Hyatt) or Starpoints for booking alternatives.

On the one hand, requesting a product change to the Starwood Preferred Guest card would save me a hard credit pull and the risk of having my application denied. On the other hand, it would permanently cost me the 25,000 Starpoints I would earn if I applied for the card from scratch.

Ultimately, given the choice between canceling my Delta card, keeping it, or product changing to Starwood Preferred Guest, I'm leaning towards the product change, even if that means leaving 25,000 Starpoints on the table.

New "Old" Blue Cash

While my pre-devaluation "Old" Blue Cash card was closed by American Express in December, the "Old" Blue Cash card is still available, albeit in stunted form, and still earns up to $2,240 in annual cash back on purchases at supermarkets, gas stations, and drug stores. It's not as outrageously good a deal as it was before bonused earning was capped at $50,000 in yearly spend, but it's still low-hanging fruit, and I'm considering applying for another.

Amex EveryDay Preferred

While I'm not thrilled about the $95 annual fee, the EveryDay Preferred earns 4.5 Membership Rewards points per dollar spent at grocery stores (on up to $6,000 in spend) and 3 Membership Rewards points per dollar spent at gas stations (uncapped) when you make 30 purchases during your statement cycle.

I don't find Membership Rewards points to be particularly valuable, but this card would be a highly efficient method of earning Delta SkyMiles compared to my Delta Platinum Business American Express, and with a much lower annual fee. Delta is my primary airline program for domestic travel, so being able to earn those miles faster means paying less for the redemptions I already know I'm going to make.

The tradeoff, assuming I product change my Delta card to a Starwood card, would be giving up the opportunity to earn 20,000 Medallion Qualifying Miles per year through credit card spend.

However, I've already secured Silver Medallion status for 2016, and I don't trust Delta enough to pay a $195 annual fee purely in the hope that the SkyMiles program will retain value in 2017 and beyond.


When thinking about my credit card applications, as you can see above, signup bonuses play virtually no role in deciding whether to apply. If the Amex EveryDay Preferred is worth getting, it's worth getting in order to manufacture spend on the card year-round, not because its signup bonus was temporarily raised to 30,000 Membership Rewards points.

Likewise, for the convenience of a product change (keeping the same account number, avoiding a credit pull, etc.) I'll go so far as to permanently give up the chance to earn a 25,000 Starpoint signup bonus, because I believe the card is worth spending money on year-round, not just in order to trigger a one-time payday.