No, buying miles and points still (usually) doesn't make sense

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On Sunday I described a mistake I made when making an upcoming Marriott reservation: since Marriott allows you to purchase points for 1.25 cents each, if a Marriott redemption makes sense on the merits (I wanted to stay at the airport the night before my departure) then you should buy any points you need. Instead, I transferred super-valuable flexible Chase Ultimate Rewards points from my Sapphire Preferred account, even though those points are worth at least 1.25 cents each when used to purchase paid airline tickets through the Ultimate Rewards portal.

That reminded me of an e-mail I received recently from reader Kimberly in San Diego. She asked:

When I checked in for a united flight from San Diego to Chicago they asked if I want to get double miles (over 1700 extra) for around $60 I think. The ticket was $400. Should I do it?

This is the kind of split-second decision that frequent flyer programs love forcing their customers to make. After all, checking in at the airport you might not have any idea whether this is a once-in-a-lifetime opportunity to stock up on points, or even whether it's a better deal than buying points online at united.com. That's one reason why you should always have a general idea of what a mile or point is worth to you.

Now, some travel hackers take this to extremes and try to establish specific prices they're willing to buy points at and specific values they're willing to redeem points at. Those travel hackers also accumulate vast quantities of miles and points because they're always waiting for the perfect redemption. 

My approach is slightly different, and it works better for my lifestyle: I'm always eager to redeem my miles and points instead of spending cash, but I also only acquire them at the lowest cost possible: that's why I have a single-minded focus on my cost per point. For example, when the no-fee Hilton American Express card gave 6 Hilton HHonors points per dollar spent at drug stores, it was possible to earn HHonors points at a cost of 0.13 cents each. For me, that makes it academic whether I'm redeeming my HHonors points for 0.55 cents each or 0.8 cents each: either way I'm beating the house every time.

That brings me back to Kimberly's question: should she buy 1,700 United MileagePlus miles for $60 when she checks into her Chicago flight? For me there are three numbers that make this decision easy:

  • 25,000: the number of MileagePlus miles required for a domestic round-trip award ticket;
  • 60,000: the number required for an economy transatlantic award ticket;
  • 100,000: the number required for a business class transatlantic award ticket. 

Those are the three awards I redeem my MileagePlus miles for most frequently. And purchasing United miles for 3.5 cents each would value those tickets at $875, $2,100, and $3,500, respectively.  Since I know I would never spend that much money on one of these tickets, I know that I should pass on the offer to buy miles.

Delta award availability and @DeltaAssist

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There's no doubt about it: Delta has a terrible reputation for award availability.

SkyMiles are incredibly easy to accrue, since Gold and Platinum Medallion members earn 100% bonus miles on all paid tickets and Diamond Medallions earn 125% bonus SkyMiles. Meanwhile the American Express Delta Platinum card earns 1.4 SkyMiles per dollar at the $25,000 and $50,000 spend thresholds and the Delta Reserve card earns 1.5 SkyMiles per dollar at the $30,000 and $60,000 thresholds.

Meanwhile on the redemption side, Delta has 3 redemption levels (versus the 2 redemption levels offered by most of the other traditional airlines) and availability at the "low" level is notoriously hard to come by.

Personally, I think the two factors balance each other out fairly evenly: miles are about as much easier to earn as they are harder to redeem. On the other hand, there's no denying the amount of frustration caused by the cost of Delta award tickets. I come from a family of Delta flyers, and trust me, I hear a LOT of complaints about low-level award availability on Delta. My brother called me the other day and asked, "Why does an award trip to Indiana cost 32,500 miles?"

I asked him, "How much is a paid ticket?" It was over $600, which would give him a value of over 1.8 cents per SkyMile! That's not bad, especially since as a Gold Medallion he earns double miles on all his paid flights.

Still, I eventually end up with virtually all of my award tickets booked at the "low" level, and I want to give a quick rundown of the techniques I use to make sure I don't spend more SkyMiles than I have to.

Before you Start

Before you start looking for award tickets, there are two things you should do if at all possible: 

  1. Have elite status. Platinum and Diamond Medallions are allowed unlimited, free "Award Redeposit/Reissue" up to 72 hours before an award flight. Importantly, changes are still allowed after you've flown your outbound leg.
  2. Have a Delta American Express card. This will give you access to increased economy award availability on domestic routes. If you aggressively manufacture spend, the Platinum and Reserve cards also make it easier to reach a higher Medallion status. Now that the Gold card no longer comes with an annual $99 companion ticket, it's probably only worth signing up for with a monster bonus, like the 70,000 SkyMile offer about 6 months back.

While you're Searching

Since the Delta award calendar function doesn't work, to find low-level availability you'll probably need to search for each leg of your trip separately.

  1. Use ITA Matrix to find possible routes, then start plugging dates and legs into the Delta award search engine. I recommend using an "Incognito" or "Private Browsing" window to do this: once the booking engine stops returning any useful results, close the window, open a new one, and continue where you left off.
  2. Your total mile cost will be the average of your outbound and inbound legs.
  3. The cost of your outbound and inbound legs will be the cost of the most expensive cabin on each leg at the most expensive level on each leg. For example, if your outbound leg is JFK-SLC-LAX, and you have found low-level first class availability for the JFK-SLC flight, but only high-level economy for the SLC-LAX flight, then you'll be charged for first class (most expensive cabin) at the high level (most expensive level).
  4. If you're booking an international trip, start by looking for your international flights. Once you've found low-level availability for your international segments, you can start looking for availability for your domestic connections.
  5. Use the "Multi-city"  booking function to feed the flights you've found to Delta one-by-one. It helps to take screenshots as you go, or at least write down the exact flights you find.

After you've Booked

If you don't have Platinum or Diamond Medallion status, then congratulations, you're done! If you do have one of those, then you can start looking for better connections and lower-level flights. This is not particularly glamorous, but it's definitely worth it to get the most out of your miles.

Here's an example: for my current award trip, I had my return booked in BusinessElite non-stop from Prague to JFK, and then in economy from JFK to Boston Logan, since that's all I could find at the low level. But every morning as part of my ritual I would log into Delta and spend 35 seconds seeing if any first class availability had opened up at the "low" level. This morning I was pleased to see that it had. As a Platinum Medallion, I could switch from economy to first class on that flight for free (since I had already technically booked a first class ticket: that was the "highest cabin" I had booked on that leg).

If you have a "medium" or "high" level award booked, you can also call in and have the difference in miles refunded if "low" level availability appears.

Schedule Changes

A similar technique applies if you don't have Platinum or Diamond Medallion status: if a significant schedule change happens you can request that your ticket be refunded. However, you only have one chance to do this, so you should wait until low-level availability appears, then request the refund and rebook your low-level ticket.

@DeltaAssist

I've never had a problem simply calling into the Platinum Medallion service line and having my tickets reissued at the "low" level, or in first class – until today, when I was connected to an inexperienced agent who was unable to reissue just my JFK-BOS segment. Instead of following the rule of "hang up; call back," I decided to see if Delta's Twitter customer service team could make the change for me instead. I've used @DeltaAssist for everything from canceling an upgrade request to thanking a particularly helpful phone agent, but I'd never asked them to move me from economy to first class on an award ticket.

It turns out it worked perfectly: I tweeted them my confirmation number and the flight on which first class award availability had opened up, and they were able to reissue my ticket within about 5 minutes. Just another thing I'll be using the Twitter team for from now on! 

Comparing co-branded airline credit cards

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Hard at work on the second edition of The Free-quent Flyer's Manifesto and re-reading Chapter 4, it occurred to me that it might be useful to give a side-by-side breakdown of the similarities and differences between the co-branded credit cards of the principal US airlines.

In the second edition I'm adding Alaska Airlines to the list of traditional airlines given detailed treatment, along with Delta, US Airways, American Airlines, and United. Why? ​Alaska's route map makes them far from a regional carrier; their partnerships with American and Delta make their Mileage Plan program more flexible than miles with either AAdvantage or Skymiles alone; and their co-branded Bank of America credit card has a number of lucrative features.

What kinds of co-branded credit cards exist?

For all the traditional carriers except US Airways and Alaska Airlines, there are two kinds of co-branded credit cards: an "entry-level" card that offers some combination of a free checked bag, priority boarding, annual companion tickets, and sometimes a bonus for meeting a high annual spend target; and a "club-level" card that gives lounge access, plus some combination of the above. This basic picture is made a little more complicated by the fact that Delta also splits its "entry-level" cards into a Gold and Platinum American Express: the Gold has a lower annual fee, but substantially fewer benefits. Note: do not confuse the American Express Platinum cards with American Express Delta Platinum cards. The names are similar; the products are completely different.

US Airways and Alaska Airlines both have entry-level cards, but no club cards. Here's a side-by-side comparison of the entry-level cards available from each airline:

Take note of the following differences between these cards:

  • The annual fee on all these cards is waived the first year of card membership, except for the $150 annual fee for the American Express Delta Platinum card (although signup bonuses sometimes include statement credits of up to $100).
  • All the cards offer 1 mile per dollar spent on purchases, and 2 miles per dollar spent on purchases with the airline, except the Alaska Airlines Visa Signature, which offers 3 miles per dollar spent on Alaska.​
  • The US Airways ​and Alaska Airlines companion tickets are available during your first, fee-free year, and every subsequent year. The Delta Platinum companion ticket is only earned the second year of card membership, after paying the $150 annual fee a second time.
  • The MileagePlus Explorer card offers 10,000 redeemable United miles after spending ​$25,000 on the card; the Delta Platinum card awards both redeemable and Medallion Qualifying Miles for high spend on the card.

Here is a comparison of the Club-level cards from United, American Airlines, and Delta:​

Note that unlike the AAdvantage and United cards, the American Express Delta Reserve card does not technically give you a Sky Club membership; rather, it gives you Sky Club access, but only while you're flying on a Delta-issued or Delta-operated ticket.

Who should sign up for a co-branded credit card?

n my view, there are four reasons to sign up for a co-branded airline credit card, rather than a card that offers double or triple flexible points on airline purchases, like the Chase Sapphire Preferred or American Express Premier Rewards Gold cards:

    1. High signup bonuses. These cards periodically feature very high signup bonuses, high enough to justify applying for a card even if you have never set foot on the airline before. For example, the Citi AAdvantage ard offers up to 50,000 AAdvantage miles (my lifetime American Airlines miles flown are about 11,000), American Express Delta Gold occasionally offers 70,000 Skymiles, and I signed up for the United MileagePlus Explorer card when it was offering 65,000 miles. Since the annual fees on these cards are waived the first year, these are incredible offers of $1,000 or more in value for the cost of a hard inquiry on your credit report.
    2. You're a Delta frequent flyer. The American Express Delta Platinum and Reserve cards give you the opportunity to "mileage run from home" and earn 20,000 or 30,000 Medallion Qualification Miles per year through high spend bonuses. This is a no-brainer, especially if this is the difference between Silver Medallion and Gold Medallion status, since that's when the Medallion mileage bonus rises from 25% to 100%.
    3. You only fly occasionally, or fly a secondary airline, and check bags. If you have a preferred airline, where you receive free checked bags because of your elite status, but occasionally have to fly another airline because the fares are substantially cheaper, then you may save money on checked bag fees by carrying a Delta, United, or American co-branded credit card. Here in New England, I fly Delta whenever possible (because I receive unlimited complimentary Medallion upgrades to First Class, and I prefer Delta's in-flight product, even in Economy), but sometimes United flights are so much cheaper that I can't justify paying the premium to fly Delta. In these cases, it's helpful to carry the MileagePlus Explorer card in order to check bags for free.
    4. You pay for a lounge membership. In almost all cases, you're better off receiving your lounge access by paying the annual fee for a Club-level card, and also receiving the benefits of the co-branded card, like the United Club card's high earning rate and the elite-qualifying miles generated by high spend on the AAdvantage Executive and Delta Reserve cards.

    Fidelity Investment Rewards vs. Priceline Rewards

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    [Updated 5/25/13: I no longer know of a working landing page for the Priceline Rewards card that displays the 2% cash back offer. However, this FatWallet Forums thread has a link to this application, and if you click on the "Terms and Conditions" at the top of the page you'll see that they still show "2 points per $1 spent on all other transactions."]

    [Update 6/29/13: the link above is no longer working, which means the Priceline 2% cash back offer is now well and truly dead. If you know of a working application link, let me know!] 

    The two best all-purpose cash back credit cards available today are the Fidelity Investment Rewards American Express, which earns 2 points per dollar, worth 2% cash back when deposited to a Fidelity account, and the Priceline Rewards Visa, which earns 2 points per dollar spent on the card and allows you to redeem those points at 1 cent each for statement credits. Even better, neither card has an annual fee. Today, I'd like to clarify some of the important differences between the two cards.

    Issuer

    • The Fidelity Investment Rewards card is issued by FIA Card Services, the credit card division of the Fidelity investment bank.
    • The Priceline Rewards Visa is issued by Barclaycard US. 

    Since the Fidelity card is not issued by American Express, you can apply for it at the same time as a credit or charge card issued by American Express, like the Premier Rewards Gold or Platinum Membership Rewards-earning cards, or a Starwood or Delta co-branded card, without an automatic rejection. 

    Barclaycard also issues the Arrival World MasterCard (which I just received in April) so you probably won't be able to receive both that card and the Priceline Rewards Visa in the same application cycle.

    Signup Bonus

    • The Fidelity Investment Rewards American Express does not have a signup bonus.
    • The Priceline Rewards Visa has a signup bonus of 5,000 bonus points after your first purchase, worth $50 in statement credits. 

    Acceptance

     

     

    Fewer merchants, especially small local merchants, accept American Express cards than Visa cards, although I find that besides at the smallest grocers and restaurants American Express cards are very widely accepted in the United States. 

    If you use the US Bank or Nationwide Visa Buxx cards to manufacture spending, those products only allow you to load using Visa and MasterCard.

    On the other hand, if you do much of your shopping at Costco you know that their stores accept only American Express cards.

    Minimum Redemption

    • The minimum redemption for the Fidelity Investment Rewards card is 5,000 points, worth $50 in cash deposited to a Fidelity account.
    • The Priceline Rewards card allows a minimum redemption of 2,500 points against a charge of at least $25. No partial redemptions are allowed, meaning you must have enough points to redeem for the entire amount of the charge to your account.

    Redemption Method

    • Fidelity allows you to set up automatic disbursements at the end of each month, or you can manually redeem your points for cash deposited to a Fidelity account.  In either case you must have at least 5,000 points, worth $50, in order to redeem them (however, there does not appear to be a maximum).
    • Priceline Rewards allows you to redeem your points for a statement credit against any charge made in the last 90 days.  Since you need to have enough points to cover the entire charge, the best method to make sure you don't have any points left over is to manufacture a transaction of exactly the right size. For example, if you send $1,000 per month using Amazon Payments, you can break that into one $950 transaction and one $50 transaction, which you can then redeem your Priceline Rewards points for.

    Conclusion

    The Fidelity Investment Rewards American Express and Priceline Rewards Visa are fairly evenly matched, being the only two no-fee cards I know of that offer 2% cash back on all purchases.

    The Priceline Rewards card has a lower minimum redemption, and more widespread acceptance as a Visa card, but a slightly more complicated redemption method, which doesn't allow you to redeem your points for cash directly.

     

    What's the best way to book a paid ticket?

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    Travelling on international premium cabin award tickets is one of the most lucrative uses you can make of your airline miles and flexible credit card points.  The example I usually give is a 100,000 United MileagePlus award to Europe in Business Class.  If you manufacture those points at .79 cents each, you'll pay $790, plus up to a few hundred dollars in taxes and fees.  The point is that you aren't saving much money over a paid economy ticket, but you get to enjoy the comfort of flying in a premium cabin instead.

    The downside is that you don't earn elite status-qualifying airline miles for the distance you travel on award tickets, which can be substantial on international flights.  If you value the benefits of elite status, then you'll need to make some paid domestic flights to reach the elite status threshold you're interested in.

    That's why today I'm going to cover the most lucrative methods for booking paid airline tickets.

    Booking Directly Through an Airline

    he most obvious reason to book through an airline's website directly is to use a credit or certificate issued by the airline.  Airlines typically hand out these certificates in exchange for voluntarily giving up your seat on an overbooked flight.  Likewise, if you cancel a non-refundable flight you may have a credit available to use for a later flight (after subtracting any cancellation fees).

    When you do so, it's best to use a credit card that gives bonus points on airline purchases.  For example, the Sapphire Preferred Visa and MasterCard issued by Chase give double flexible Ultimate Rewards points on all "travel" purchases.  The American Express Business Gold Rewards and Premier Rewards Gold cards likewise offer triple Membership Rewards points on purchases made directly through an airline.

    In terms of fixed-value and cash back cards, the US Bank Flexperks Travel Visa Signature card offers double points on airline purchases, if that is the bonus category you spent the most in during a given statement cycle.  These points are worth up to 2 cents each, meaning you can earn up to 4% back in value on travel redemptions.

    Otherwise, your best bet is a 2% cash back card like the Fidelity Investment Rewards American Express or Visa card, or a card you're meeting a minimum spending requirement on.

    If you have elite status with Delta, you'll also earn 1 Starwood Preferred Guest Starpoint per dollar spent on airfare directly through the Delta website.  As you'll see below, that's not necessarily the most lucrative method of making paid Delta reservations.

    Clicking Through Ultimate Rewards to an Online Travel Agency

    If you have a Chase Ultimate Rewards-earning credit card, you have access to the Ultimate Rewards Mall, which allows you to earn bonus Ultimate Rewards points on purchases made through online travel agencies, or OTAs.  You can earn 1 bonus point per dollar spent at Expedia, Priceline, or Orbitz and 2 bonus points per dollar spent at Travelocity or Hotwire.  These OTAs can price out itineraries very differently, so it's always worth checking whether you can find a better price or more convenient itinerary on one OTA rather than another.

    The Chase Sapphire Preferred bonuses all travel spending, including OTA reservations, so that's a reliable way to earn a total of 3-4 Ultimate Rewards points per dollar spent on airline tickets (depending on which OTA you use).  In my experience, when booking only an airline ticket (and not a package which includes a hotel, rental car, or cruise) through Travelocity, there will be two credit card charges, one from the operating airline which covers airfare, taxes, and fees:

    ​With a second charge from Travelocity to cover their booking fee (up to $10.99):

    n these situations I believe the American Express Premier Rewards Gold and Business Gold Rewards cards will give triple points for the first, airline charge, for a total of 2 Ultimate Rewards points and 3 Membership Rewards points per dollar spent, a 5-10% rebate, depending on how you value those points.

    Cash Back Portals

    If you don't have access to he Ultimate Rewards mall, and you don't have a card that bonuses airline or travel purchases, and you don't have elite status on Delta (to earn 1 Starpoint per dollar), then you can still earn a small rebate on your flight purchases by clicking through a cash back portal.  All three of these cash back portals offer a fixed or variable amount of cash back when you click through to online travel agencies and make an airline reservation. 

    • TopCashBack (Expedia: $2.25, Travelocity: $3.00, CheapTickets: $5.50, Priceline: $5-$7)
    • BigCrumbs (Expedia: $1.75, Travelocity: $2.80, CheapTickets: $3.15, Priceline: $2.80)
    • Fat Wallet (Expedia: $1.25, Travelocity: $1.50, CheapTickets: $20(!), Priceline: 1%)

    Conclusion

    As this analysis makes clear, the best method of making paid airline reservations depends heavily on what tools you have at your disposal.  The single best combination is using the Premier Rewards Gold or Business Gold Rewards card from American Express at Travelocity or Hotwire, after clicking through to one of those travel agencies from the Chase Ultimate Rewards shopping portal.  To get access to that shopping portal, however, you'll need at the least least a no-annual-fee Chase Freedom card.  To turn those fixed-value Ultimate Rewards points into flexible Ultimate Rewards points, you'll need either a Sapphire Preferred, Ink Bold, or Ink Plus card.  However, even if you just redeem your Ultimate Rewards points for cash back through your Freedom card, you'll still be earning a generous 2% cash back on all your paid airline reservations, in addition to whatever awards you earn through the credit card you ultimately make your purchase with.

    Travel hacking: making money or saving money?

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    One question that travel hackers spend a lot of time thinking about is hether, at the end of the day, it's best to think of our hobby as making us money or instead as a way to save money.  The question I prefer to ask is, how much of the travel I now do for free would I pay money for if I weren't the Free-quent Flyer ("saving" money on travel I would do anyway) and how much additional travel do I do just because I know I can do it for free ("making" money in the form of more and better vacations)?

    If you go to see family in New York City for a week each year, you might expect to spend $400 on a plane ticket, plus $200 per night to stay at a 3-star hotel in Manhattan, for a total of $1,800.  If instead you applied for the BarclayCard Arrival World Mastercard or the US Bank Flexperks Travel Rewards Visa, after earning the signup bonus you'd be able to pay for your $400 airline ticket using those cards' fixed-value rewards currencies.  Instead of spending $1,400 for a hotel room, you could apply for the Club Carlson Premier Rewards Visa and after manufacturing $43,000 in spending (at a cost of $344, if you can manufacture spending at .78 cents per dollar), you'd have 300,000 Club Carlson points, enough for a 7-night stay at the Radisson Martinique on Broadway (since as a cardholder your last night is free).  Now you're paying just $344 for a trip you normally spend $1,800 on, saving $1,456.

    On the other hand, let's say you don't normally take a long annual vacation, but now that you've read my book and spent some time here on the website, you've decided you'd like to take a week-long vacation in New York.  Using the same techniques as above, you can buy an $1,800 vacation for $344.  In this case, you haven't saved any money; indeed you've spent $344 that you wouldn't have spent if you had you decided to stay at home that week instead!  On the other hand, at a cost of $344, you've bought a vacation worth $1,800.  In this case, it makes more sense to say that you've "made" $1,456 in value.

    Of course, those are two extreme examples, and most real-life situations fall somewhere in between.  For example, I take at least one trip to Prague in the Czech Republic each summer, and I can usually find a ticket in economy class on Delta for $1,200—$1,400.  An economy class award ticket costs 60,000 Delta Skymiles, which I can manufacture at a cost of $400 using the American Express Delta Platinum (you only need to manufacture $50,000 in spending since you'll receive 10,000 bonus miles at the $25,000 and $50,000 spend levels, for a total of 70,000 Skymiles after $50,000 in spending).  Now, that's obviously a great deal: a $1,200 plane ticket for $400, a savings of $800!  However, for 40,000 more Skymiles, you can fly to Prague in business class instead of economy.  You'll spend $240 more if you exclusively manufacture the spending at .78 cents per dollar, so you'll be saving less money versus a paid economy class ticket.  On the other hand, you're flying in business class instead of economy, meaning a more spacious, more comfortable seat; better food and service; complimentary alcoholic beverages; and so on.  This situation is more ambiguous than the two extreme examples above, and require a judgment call.  Since I value the benefits of business class at more than $240, it's worth it for me to pay the additional Skymiles, while it may not be worth it for you, if you prefer to instead spend that money on some delicious Czech beer once you arrive!

    "True" credit card earning rates

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    Nothing's ever simple in the world of loyalty programs, and that's doubly true f credit card rewards.  While most cards seem to offer a straightforward earning structure of 1 point per dollar, in fact that number can be somewhat higher because of bonuses that accrue either annually or at certain high levels of spending.  If you don't take those bonuses into account, you're not correctly evaluating the earning rate of your rewards credit cards.

    Today we'll take a look at several popular rewards-earning credit cards nd compute the true earning rate on each.

    Chase Sapphire Preferred

    The Sapphire Preferred is a good example of a card with a "hidden" bonus.  Every calendar year (not cardmember year) in early January you're awarded a 7% bonus on all the Ultimate Rewards point you earned the previous calendar year.  This means that on unbonused spending, you earn a total of 1.07 Ultimate Rewards points per dollar, and on bonused spending (travel and restaurants) you earn a total of 2.14 points per dollar.

    After the first year of card membership, the Sapphir Preferred has an annual fee of $95.  Valuing Ultimate Rewards points at 1 cent each (their cash redemption value; much higher value can be realized by redeeming them for travel or transferring them to airline, hotel, and rail partners), the first $9,500 you spend on the card each year only earns you enough points to pay your annual fee.  Taking into account the 7% annual bonus, however, you earn enough Ultimate Rewards points to pay the annual fee after only $8,879 in spending, a fairly low amount if you're manufacturing spend.

    United MileagePlus Explorer

    The MileagePlus Explorer card earns 1 mile per dollar on most spending.  However, if you spend $25,000 in any calendar year on the card, you earn an additional 10,000 bonus miles.  This makes the true earning rate on the card 1.4 miles per dollar, if you are able to spend exactly $25,000.  This card is essentially only worth spending any money on (after meeting the minimum spending required by the bonus you signed up for) if you intend to spend exactly $25,000, since the Sapphire Preferred has the same annual fee and allows transfers to United, while also allowing you to redeem your points for cash, travel, or transfers to other travel partners.

    Platinum Delta American Express

    Like the nited MileagePlus Explorer, the Platinum Delta card gives a bonus of 10,000 redeemable miles after spending $25,000 on the card in any calendar year.  However, along with the bonus redeemable miles, it also awards 10,000 valuable Medallion Qualification Miles (MQM), which can make a huge difference when qualifying for elite status.  Unlike the MileagePlus Explorer, the Platinum Delta card awards another 10,000 redeemable miles and 10,000 MQM at $50,000 in calendar year spending.

    Most travel hackers who carry the Platinum Delta Amex therefore attempt to spend exactly $25,000 or $50,000 on the card each calendar year.  t those levels of spending, the card earns 1.4 miles per dollar, plus 10,000 or 20,000 valuable MQM.

    Reserve Delta American Express

    The Reserve card has a similar earning structure to the Platinum card, except instead of earning 10,000 mile bonuses at $25,000 and $50,000, the card earns 15,000 bonus miles and MQM after $30,000 and $60,000 in spending.

    At those evels of spending, the Reserve card earns 1.5 miles per dollar, plus 15,000 or 30,000 MQM.

     

    American Express Premier Rewards Gold

    The Premier Rewards Gold card earns 1 flexible Membership Rewards point per dollar on ost spending.  At $30,000 in calendar year spending, the card earns an additional 15,000 Membership Rewards points.  If you are able to spend exactly $30,000 on the card, then you'll earn a total of 1.5 points per dollar.

    Bank of America Virgin Atlantic Credit Card

    The Virgin Atlantic card has a quite complicated earning structure.  On most purchases, the card earns 1.5 miles per dollar spent.  Then at $15,000 in purchases per cardmember year (not calendar year, like with the American Express cards), on the card anniversary, the card also awards 7,500 miles if you reached $15,000 in spend and another 7,500 if you reached $25,000 in spend.  However, you must renew the card for an additional year in order to receive the miles (unless you are able to cancel the card after the miles post and have the annual fee waived).  So the true earning rate of this card is 2 miles per dollar if you spend exactly $15,000 and 2.1 miles per dollar if you spend exactly $25,000 each year of card membership.  Since these miles transfer at a 1:2 ratio to Hilton HHonors points, this is like earning 4.2 HHonors points on all purchases, slightly better than the fee-free Hilton American Express card.  However, since the Virgin Atlantic card has a $90 annual fee, you would have to value the marginal 30,000 Hilton HHonors points at over .3 cents each in order to justify paying the annual fee each year and claiming the anniversary bonus.  

    he card is probably not worth getting just for the 20,000 miles signup bonus, since the annual fee is not waived the first year

    Barclaycard Arrival World MasterCard

    The Arrival World MasterCard earns 2 points per dollar spent on the card, and each point can be redeemed for 1 cent towards travel purchases ade with the card.  However, the card also gives a 10% rebate on all redemptions, meaning you earn approximately 2.22 cents for each dollar spent on the card.  I say "approximately," since when you redeem points received from the 10% point rebate, you'll receive another 10% rebate on those points, ad infinitum.  Thus if you redeem 100,000 points you'll receive a 10,000 point rebate, and when you redeem those points you'll receive another 1,000 point rebate, then a 10 point rebate, then a 1 point rebate.  Add it up and  $50,000 in spending earns 111,111 points ($1111.11 towards travel redemptions), a 2.22 point per dollar earning rate, which gives it a slight earning advantage over the 2% cash rebate Fidelity Investment Rewards cards.  However, the Arrival World MasterCard has a $89 annual fee after the first year of card membership.  To pay for that annual fee with the marginal earning advantage, you'd need to spend $40,050 on the MasterCard!  In other words, after the first year only spending above $40,000 is more lucrative than the Fidelity 2% cash back cards, which is probably unrealistic unless you have high business expenses you can charge to the card, or enough spare cash to consider aggressively making Kiva loans with the card.

     

    However, the annual fee is waived the first year, so thanks to its competitive earning rate this is a good card to consider including in a credit card application cycle, as long as you're sure to cancel it before you pay the annual fee for the second year.

    A Beginner's Churn

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    "Churning" is the term used in the travel hacking community for applying for several credit cards on the same day, in order to maximize one's chance of being approved for each card.  The reasoning behind this strategy is that since recent applications for credit  temporarily reduce your credit score, you can prevent each credit card company from seeing applications made to other issuers if they're made more or less simultaneously (or at least on the same day).  

    In other words, if you apply for two credit cards on the same day, one issued by Citibank and one by Bank of America, when each bank looks at your credit history, neither one will know about your application to the other, increasing your chances of being approved for both cards.

    So let's take a look at a sample churn for someone who's just beginning to get involved in the travel hacking game.  We'll start with three credit cards, which will allow us to diversify our miles and points, without committing to too large of a minimum spending requirement.  To set up our churn, we'll want to pick a total of three out of these 7 offers, with one from each bank.

    US Bank

    US Bank issues two of the most lucrative credit cards available, and you'll want to apply for one of the two on your first churn, since US Bank is notorious for being relatively strict with their credit approvals.  

    • US Bank Cash+ card can only available for in-branch, so you can only apply if you live in or are visiting a region served by US Bank.  As a reminder, this card offers 5% cash back on two categories of your choice, on up to $2000 in spending each quarter.  This card has three advantages over other 5% cash back cards: you get to choose your 5% cash back categories; you receive 5% cash back on up to $2000 in spending, instead of $1500; and you also receive unlimited 2% cash back on drug stores, grocery stores, or gas stations.
    • If you can't apply for the Cash+ in-branch, US Bank also issues the co-branded Club Carlson credit cards, which have incredible sign-up bonuses and on-going benefits right now.  If you're eligible for a small business credit card, apply for the Club Carlson Business Rewards Visa with an 85,000 point signup bonus after $2500 spending within 90 days, 40,000 point annual renewal bonus, and $60 annual fee.  If you don't have a small business, apply for the Club Carlson Premier Rewards Visa Signature card with the same signup bonus and renewal bonus, but with a $75 annual fee.

    The Cash+ card doesn't have a minimum spending requirement, while the Club Carlson cards require $2500 in spending within 90 days to receive the full bonus.

    Chase

    Chase has some of the best credit cards for novice and veteran churners alike.

    • The Chase Freedom card has a 10,000 point signup bonus after $500 in spending in 3 months.  You'll definitely want this card eventually, so if you're just getting your toes wet in the world of travel hacking, this is as good a time as any! The Freedom has no annual fee, and while the Ultimate Rewards points it earns aren't "flexible" Ultimate Rewards points, if you later open a Sapphire Preferred or Ink Bold/Plus card, you can transfer your Freedom Ultimate Rewards points into those "flexible" accounts instantly.
    • If you have recent activity in your United MileagePlus account, you might be eligible for an excellent offer of 55,000 MileagePlus miles after $1000 in spending within 3 months and after adding an authorized user, plus a $50 statement credit.
    • Finally, if you're ready to get serious about travel hacking, the Sapphire Preferred is an excellent workhouse card, allowing you to redeem your flexible Ultimate Rewards points for 1.25 cents towards travel through the Ultimate Rewards portal, or transfer them at a 1:1 rate to Chase's transfer partners.  The current offer is the standard 40,000 points after $3000 in spending within 3 months.

    American Express

    • American Express doesn't have any amazing signup bonuses at the moment, but many travel hackers love the Starwood Preferred Gold card by American Express, with a 25,000 point signup bonus after $5,000 in spending within 6 months.  These points can be redeemed directly for hotel stays with Starwood, or transferred to Starwood's airline partners.

    Citibank

    • The American AAdvantage card issued by Citibank currently has an excellent signup bonus of 50,000 AAdvantage miles after spending $3000 within 4 months, a $150 statement credit after your first purchase on American, and two lounge passes.

    Decision Time!

    As you can see, you need to make a couple decisions right away:

    • Are you more interested in hotel stays or flights?  For hotel stays, the Club Carlson, Starwood, and Sapphire Preferred are all good offers, depending on where you're planning to travel.  If you're more interested in free flights, you'll want to look closely at the 50,000 American AAdvantage mile and 55,000 United MileagePlus offers, as well as the Sapphire Preferred offer, since those points can be transferred to a number of airlines as well.
    • How much of a minimum spending requirement are you willing to commit to?  No rewards credit card is worth signing up for if you're unable to meet the spending requirement.  On the low side, you could apply for the Freedom, Cash+, and American AAdvantage cards and need to spend only $3500 within 4 months.  If you're feeling more ambitious, you could apply for the Sapphire Preferred, Club Carlson, and either American AAdvantage or Starwood Preferred Guest cards and need to spend $8,500-$10,500 within 4 months.  That's definitely a lot of money, so you'll need a plan in advance for meeting that minimum spend requirement, using the tips and tricks in the book and here on the website!