Interesting Starwood and Marriott stacking opportunities

I was chatting yesterday with someone who has had a lot of success with Marriott recently, taking advantage of a number of opportunities that currently intersect due to the merger of the Marriott and Starwood hotel chains. While I don't generally think of Marriott Rewards as being a program that offers travel hackers much value, that may be less true today than it has been even in the recent past.

Here are a few ways you might be able to get above-average value from Marriott Rewards.

Transfer Starpoints to Marriott Rewards

While I mentioned this back in September in the context of Marriott Flight and Hotel packages, it's also true that you can simply transfer Starpoints to Marriott in order to book award stays.

Marriott award stays top out at 45,000 Marriott Rewards points (15,000 Starpoints) and Ritz-Carlton stays cost up to 70,000 Marriott Rewards points (23,333 Starpoints). The 5th award night is free for reservations with both Marriott Rewards and Ritz-Carlton.

That means the most expensive Ritz-Carlton property in the world requires just $23,333 in unbonused spend on the Starwood Preferred Guest American Express, or $18,667 in spend for stays of exactly 5 nights.

At the Tier 5 Ritz-Carlton, St. Thomas, you'd pay 280,000 Marriott Rewards points for a stay that would otherwise cost $2,729 in cash (dates June 30 to July 5, 2017). At roughly 1 cent per point, that would give you a roughly 3% return on your unbonused Starwood Preferred Guest American Express purchases.

Note that Marriott is terrible about making award rates available, so this isn't as low-hanging a fruit as you might otherwise hope.

Match Starwood Preferred Guest Gold to Marriott Rewards Gold

Since the merger you've been able to link your Starwood Preferred Guest and Marriott Rewards accounts and take advantage of your highest status in either program. You can find the details here, but the most important takeaway is that Starwood Preferred Guest Gold status matches to Marriott Rewards Gold status.

You can get Starwood Preferred Guest Gold status by spending $30,000 on a Starwood Preferred Guest American Express, or simply by holding an American Express Platinum or Platinum Business card, both of which offer complimentary Starwood Preferred Guest Gold status.

Marriott Rewards Gold status, on the other hand, is somewhat harder to earn and somewhat more valuable, coming as it does with free continental breakfast at Marriott properties.

Maximize the Chase Ritz-Carlton Visa

I don't carry the Chase Ritz-Carlton Visa since I don't pay $450 annual fees, but it has a number of features that may offer genuine value: a $100 hotel credit every time you book a paid Ritz-Carlton stay of 2 or more nights and three lounge upgrades on paid stays annually.

Those can be combined, and if you're aggressive about maximizing both benefits then three paid 2-night stays, each with a $100 hotel credit and lounge upgrade, during lower-cost or off-peak periods could handily offset a big part of that $450 annual fee, especially if you're traveling with a large family.


It really does seem like, for now, the merger of Marriott and Starwood has given those with Starwood Preferred Guest American Express cards access to similar values as they're used to at Starwood properties in Marriott's much larger portfolio of hotels.

Personally, my Hilton Honors Diamond status and cheap and plentiful access to Hilton Honors points, as well as Hyatt Gold Passport Diamond status and cheap and plentiful access to Hyatt points through Ultimate Rewards, together mean that I have no interest in spinning up another hotel loyalty relationship. But if you're still deciding on an approach to hotel stays, it seems you could do worse than looking into the Marriott/Starwood relationship.

How I think about the Hilton Honors reforms

People are talking about Hilton's recent announcement that they'll be eliminating the concept of hotel award categories and charging whatever they think is fair for a free night at their properties. They're also rebranding their loyalty program to "Hilton Honors," although I assume I'll keep spelling it "HHonors" for at least 8-12 months.

Hilton HHonors then

While some bloggers made a big deal about Hilton HHonors variable pricing, there was nothing mysterious about it. Every property had a fixed price for standard room awards, and that price varied by calendar month. You could find each property's standard room award rate, by month, by going to the Hilton HHonors Standard Room Rewards Pricing Points Search Tool.

That URL now redirects to the Hilton homepage.

Hilton Honors now

Now, properties will still have standard award rates, those award rates will vary by day, month, or season, and there will be no way of knowing how much a room costs until you check the award availability for the specific dates you're interested in.

That's bad if you are in the business of slowly saving up Hilton Honors points for specific stays at specific properties on specific dates, since by the time you save up enough points, the number required might slip away from you.

Obviously no travel hacker does anything like that.

What it means for a travel hacker

The starting point for a travel hacker looking at this situation is the Wandering Aramean Hotel Hustle "Visualize" page, where you learn that across thousands of Hotel Hustle searches, the average value of a Hilton Honors point is 0.450 cents and the median value is 0.425 cents.

Like Doctor of Credit, I'm under no illusion that this change is being implemented to help Hilton Honors members get more value from their points.

But there are three ways the changes to Hilton Honors could be implemented, all of which would be in the spirit of "saving Hilton money," but that would have very different implications for travel hackers.

  • The average value of a Hilton Honors point could go down. Since grocery store manufactured spend on an American Express Hilton HHonors Surpass requires that you get 0.35 cents per Honors point to break even compared to a 2.105% cash back card, reducing the average value of a Honors point below that level would reduce the value of manufacturing Hilton Honors points compared to cash back.
  • The standard deviation could go down. Currently, even with Hilton Honors points worth 0.45 cents on average, it's not difficult to find more valuable redemptions that get you up closer to the 1 cent-per-point range. A more aggressive pricing scheme might tighten the band around 0.45 cents so that it's still worthwhile to manufacture Hilton Honors points, but the potential upside of saving up Honors points is much lower than what a travel hacker might expect today.
  • The upside value might be capped. This is the real risk to travel hackers, and to the Hilton Honors program itself: if the program keeps low-value redemptions, and keeps the average redemption value at 0.45 cents per point, but at high-end properties, or during peak seasons, instead of simply charging more points switches to a revenue-based system anchored at 0.4 or 0.5 cents per point, then the "upside risk" of accumulating Hilton Honors points will be eliminated. Currently, you can accumulate Hilton Honors points with relatively little downside risk and the potential for significant upside if you stay at a particularly expensive property during particularly expensive dates. Putting a firm cap on that upside would mean there was little point in wasting credit card spend on any of their Citi or American Express co-branded credit cards.


I think it's an interesting question, although not one to spend too much time thinking about, whether Hilton HHonors points were worth too much in the past.

While it was and for now continues to be trivial to earn hundreds of thousands of points while redeeming them for outsized value at Hilton's prestige properties, that could only have ever represented a tiny percentage of overall Hilton redemptions, most of which were done safely in their comfort zone of 0.4 cents or below.

So, will Hilton reduce the average value of their points by causing mid-tier properties to cost slightly more points, or will they make top-tier properties cost vastly more points? We shall see.

Maybe just show up to a Global Entry interview without an appointment

I've never had a card that offered Global Entry or Precheck fee reimbursement because I don't pay $450 annual fees, but a generous reader with many, many more such credits than he could ever use insisted I use one to pay my Global Entry registration fee (thanks, SD!).

This being the federal government, all the Global Online Enrollment System, or GOES, requires is the credit card number and verification code of the credit card used to pay the enrollment fee; they don't verify the billing address or zip code of the credit card.

I have three regional Global Entry interview locations relatively close to me, but since I wasn't in any rush I didn't shop around and simply selected the first interview time available in downtown DC. It was months in the future, and I completely forgot about it.

After I rescheduled the appointment to yesterday, I diligently set up calendar reminders on my phone so I'd be sure to make it. I had a 2:45 pm appointment, and gave myself plenty of time to get there, arriving at 2:19 pm. By 2:39 pm, I had completed my interview and was walking out the door.

Maybe just show up?

As far as I can tell, the Global Entry interview appointment system allows one interview to be scheduled every 15 minutes at a given location. But at an actual Global Entry interview location, there are multiple agents working and interviews take much less than 15 minutes.

I don't know if there's an official protocol, and frankly I don't know if the agents know if there's an official protocol either: when I showed up at my interview location there was just a ratty paper book where you wrote down your name and the time you arrived. There's also a line for "notes," where people at my location wrote down their scheduled interview time or "walk-in," but that appeared to have been made up completely by the people being interviewed; there were no instructions to that effect.

This is an extremely common phenomenon, where the objects of bureaucratic indifference organize their experience so it makes more sense than it, objectively speaking, does.

Agents have access to an eclectic range of data

The first question my agent asked me was "what was the purpose of your trip to Turkey?" My totally truthful response was, "I was connecting on a flight to Budapest."

Then he asked me about my business, and I told him about this blog, so he asked me, "so is your travel for business?" My totally truthful response was, "I try to be scrupulously honest about only deducting legitimate business trips."

Only as I was walking home did I realize all he was asking me was, "business or pleasure?"

So don't overthink the agent's questions. Just say "business" or "pleasure."

The agent also asked me if I'd ever been arrested "regardless of the outcome of the case." I told him I had and he asked me if it was for a DUI (drunk driving). It wasn't (I don't drive drunk), and I told him so, and he told me that his system was showing him "some notes." It didn't keep me from being approved so I have no idea what his "notes" were showing him, but the point is, their system has more-or-less real-time access to criminal databases, so don't lie if you've ever been arrested for anything!

What are HawaiianMiles worth?

Hawaiian Airlines is a traditional US carrier that flies between the Hawaiian islands and between Hawaii and the Western United States as well as New York's JFK airport, and from Hawaii to Australia, New Zealand, American Samoa, Tahiti, Japan, Korea and China.

They have a co-branded credit card with an $89 annual fee and 35,000-mile signup bonus. The card doesn't have much value unless you fly a lot on Hawaiian metal, but if that's the case you get access to discounted flight awards and no blackout dates for award tickets. The card also gives 5,000 bonus miles each anniversary if you spend $10,000 on the card, but the card doesn't earn bonus points in any interesting categories of spend so that's unlikely to be the best place to direct your unbonused spend.

All of this raises the obvious question, "why are we talking about HawaiianMiles?" Good question! The reason we're talking about HawaiianMiles is, first, that they are historically very easy to earn. Long after, for example, was removed from airline and hotel shopping portals it remained on the HawaiianMiles marketplace, allowing you to earn HawaiianMiles for all your purchases. For heavy users of, that might mean tens of thousands of HawaiianMiles per year.

The second reason to look at HawaiianMiles is their travel partners. While you might not be interested in flying on Hawaiian metal between North America and Hawaii or the Pacific rim, you might be more interested in flying on their partner airlines. Since they have a fairly eclectic mix of revenue-based, distance-based, and zone-based travel partners, I had the idea of comparing HawaiianMiles redemptions on each partner with redemptions of that partner's own rewards currency.

Let's take a look!

All Nippon Airways

ANA is a transfer partner of American Express Membership Rewards, so their points are relatively easy to earn for folks with American Express cards that earn flexible Membership Rewards points.

Unfortunately, HawaiianMiles can't be redeemed for ANA flights between North America and Japan. Instead, there are two kinds of awards you can book: roundtrips between Hawaii and Haneda, in economy or business class; and roundtrips between Haneda and domestic Japanese destinations, in economy only.

There's no other way to say it: ANA's award chart for flights on their own metal is nuts. Here's Scott Mackenzie doing his best to explain it. However, we're just focused on the conversion rate between HawaiianMiles and ANA Mileage Club miles, which isn't too hard.

  • Roundtrip domestic ANA flights up to 600 miles cost between 10,000 and 15,000 ANA miles depending on season, and 18,000 HawaiianMiles year-round, for a conversion rate of between 1.2 and 1.8 HawaiianMiles per ANA Mileage Club mile;
  • Roundtrip domestic ANA flights over 600 miles cost between 12,000 and 23,000 ANA miles depending on distance and season. However, there are no eligible cities farther than 2,000 miles from Haneda airport so the equivalent ANA chart actually tops out at 21,000 ANA miles during high season. These flights cost 22,500 HawaiianMiles year-round, for a conversion rate of between 1.07 and 1.88 HawaiianMiles per ANA Mileage Club mile.
  • Roundtrip ANA flights between Haneda and Hawaii cost between 35,000 and 43,000 ANA miles in economy, depending on season, and 90,000 HawaiianMiles, for a conversion rate between 2.09 and 2.57 HawaiianMiles per ANA Mileage Club mile.
  • Roundtrip ANA flights between Haneda and Hawaii cost between 60,000 and 68,000 ANA miles in business, depending on season, and 155,000 HawaiianMiles, for a conversion rate between 2.28 and 2.58 HawaiianMiles per ANA Mileage Club mile.

HawaiianMiles are worth between 0.39 and 0.94 ANA miles.


JetBlue's TrueBlue loyalty program is revenue based, although the dollar value you get per TrueBlue point varies depending on, well, it varies. On a random search I found 6 different conversion rates, between 0.91 cents per TrueBlue point and 1.39 cents per TrueBlue point, with an average of 1.11 cents per TrueBlue point.

HawaiianMile redemptions on JetBlue are also revenue based, although the conversion rate comes with the stern warning: "Miles required for redemption will vary based on ticket value. Chart above shows ESTIMATED mileage redemption amounts."

Nonetheless, it's possible to calculate the minimum and maximum dollar value per HawaiianMile, and arrive at an average redemption value of 0.81 cents per HawaiianMile. Compared to the average of 1.11 cents per TrueBlue point, one HawaiianMiles is worth about 0.73 TrueBlue points

Korean Air

Korean Air SKYPASS miles are easy to earn through transfers from Chase Ultimate Rewards, but of course Ultimate Rewards points are valuable for all sorts of redemptions, so you might prefer to redeem a less flexible and less valuable rewards currency like HawaiianMiles instead.

There are three kinds of HawaiianMiles redemptions on Korean Air: roundtrips within South Korea, roundtrips within "Asia," and roundtrips between Korea and the United States. Flights can be booked in coach and business class. To the best of my knowledge Korean Air does not make partner awards available during their "peak" travel season, so HawaiianMiles can only be used for Korean Air redemptions during SKYPASS's "off" season (if you know otherwise let me know and I'll update this post).

  • Coach roundtrips within Korea cost 10,000 SKYPASS miles or 15,000 HawaiianMiles, for a conversion rate of 1.5 HawaiianMiles per SKYPASS mile;
  • Business roundtrips within Korea cost 12,000 SKYPASS miles or 30,000 HawaiianMiles, for a conversion rate of 2.5 HawaiianMiles per SKYPASS mile;
  • Korean Air has three different zones in Asia, while HawaiianMiles has only a single zone. SKYPASS charges between 30,000 and 50,000 miles for coach tickets depending on zone, while Hawaiian charges 30,000 HawaiianMiles, for a conversion rate of between 0.6 and 1 HawaiianMiles per SKYPASS mile. In other words, HawaiianMiles are 40% more valuable than SKYPASS miles when redeemed for Korean Air flights to Southwest Asia;
  • In business class between Korea and Asian destinations, SKYPASS charges between 45,000 and 90,000 miles while HawaiianMiles charges 60,000 miles, for a conversion rate between 0.67 and 1.33 HawaiianMiles per SKYPASS miles;
  • Finally, between Korea and the United States SKYPASS charges 70,000 miles in coach and 125,000 miles in business, while HawaiianMiles charges 100,000 miles in coach and 200,000 miles in business, for a conversion rate of 1.43 HawaiianMiles per SKYPASS mile in coach and 1.6 HawaiianMiles per SKYPASS mile in business.

In sum, one HawaiianMile is worth between 0.4 SKYPASS miles (on domestic business class flights) and 1.66 SKYPASS miles (on coach flights to Southwest Asia).

Virgin America

Like JetBlue, Virgin America's Elevate program is revenue based. Unlike JetBlue, however, HawaiianMiles redemptions on Virgin America are distance-based, with three distance bands: under 750 miles, between 750 and 2,000 miles, and more than 2,000 miles. Virgin America Elevate doesn't black out award space to their own members (since the program is revenue based), but they do limit award availability made available to partners.

Until recently, there was no good way of checking Virgin America partner award availability, but since Alaska acquired Virgin America, it's now possible to search for partner award seats using the Alaska search engine. Look for dates where the lowest level award seats are available.

I can't think of any useful metric to convert a distance-based award chart into a revenue-based program. Elevate miles are worth "about" 2.2 cents each, so that's as good a benchmark as any when deciding whether to redeem HawaiianMiles on Virgin America flights.

Virgin Atlantic

Virgin Atlantic's Flying Club breaks out award prices for each of their destinations individually, while HawaiianMiles consolidates them into geographic areas. That means HawaiianMiles charges the same price for destinations that Virgin Atlantic charges different amounts for. Here's the HawaiianMile award chart for redemptions on Virgin Atlantic, helpfully annotated with the amount charged by Virgin Atlantic Flying Club:

The key takeaway is that while redemptions always require more HawaiianMiles than Flying Club miles, the difference narrows on Upper Class redemptions since HawaiianMiles awards don't accelerate in price the way Flying Club awards do. So while HawaiianMiles are worth between 0.25 and 0.42 Flying Club miles for economy redemptions, they're worth up to 0.92 Flying Club miles on Upper Class redemptions between, for example, the UK and Johannesburg.

Note that all redemptions on Virgin Atlantic will have carrier surcharges, which you can get a sense of on the Flying Club website.

Virgin Australia

Virgin Australia's Velocity program is only open to residents of Australia and a few other countries in the Pacific, so you're unlikely to ever actually redeem Velocity miles for a Virgin Australia flights.

HawaiianMiles and Virgin Australia Velocity both use distance-based award charts, although they use different distance bands (Velocity has more, smaller bands). Here's the HawaiianMiles award chart, with the corresponding cost in Virgin Australia Velocity miles:

Note that Australia is very far from the other continents so unless you're flying around the South Pacific all international redemptions will fall in the "Over 4,000 Miles" distance band, where HawaiianMiles are worth between 0.28 and 0.6 Velocity miles each in economy and between 0.3 and 0.64 Velocity miles in business.


Now that we've reached the end of the exercise, what kinds of conclusions can we draw? First, it's worth reiterating that HawaiianMiles are not very valuable, so you certainly shouldn't be going out of your way to earn them.

However, if you have access to cheap and plentiful HawaiianMiles, it's possible to redeem them for real value:

  • If you live in a city served by JetBlue, HawaiianMiles are worth an average of 0.81 cents towards those flights. It would take a lot of HawaiianMiles before you could redeem for a cross-country flight in their Mint business class product, but if that's the flight I wanted to take I'd much rather redeem HawaiianMiles than pay cash!
  • If you can find partner award space on Virgin America, short roundtrip flights cost as little as 20,000 in economy, and the longest flights in first class top out at just 90,000 HawaiianMiles roundtrip.
  • If you can find Korean Air partner award space, HawaiianMiles can be redeemed for first class travel between the United States and Korea, or within Asia, at relatively reasonable rates.

If you don't have the patience or inclination to book travel on Hawaiian's partner airlines, HawaiianMiles can be transferred to Hilton HHonors points at a rate of 1.5 HHonors points per HawaiianMile. HHonors points are also not very valuable, but they're much easier to redeem than HawaiianMiles.

Finally, HawaiianMiles can be redeemed for about half a cent each in rental car gift certificates, or even gift certificates to Foodland, a Hawaiian supermarket chain.

Sustainability: value, cost, and risk

When a good deal comes along, especially if it doesn't have a designated expiration date, folks often talk about whether the deal is "sustainable" or not. The general idea is that if a deal is "too good to last," then it won't.

Of course, there are lots of ways a deal can end. If it's ended retroactively, those who jumped on it quickly will find they've wasted their time, or worse. If it's ended going forward, the prospective benefits of a credit card application may be cut short, or someone can be left with a garage full of merchandise they have to return or resell at a loss.

I think there are three slightly different issues related to sustainability that guide how I think about how long a deal is likely to last: value, cost, and risk.

High-value deals aren't particularly vulnerable

For $75 per year, anyone can carry a Hilton HHonors Surpass American Express and earn 6 HHonors points per dollar spent at grocery stores. Applied to certain high-value redemptions, like a 5-night stay at a premier property like the Conrad Maldives Rangali Island, that might work out to a roughly 14% return on your grocery store spend (for a sample reservation from December 31, 2017, to January 5, 2018).

That's a great value. And since it costs American Express just a fraction of the value the cardholder receives, it's not particularly vulnerable. After all, American Express doesn't care where you redeem your Hilton points, they care what they pay for them, and they pay much less for 6 HHonors points than they earn on your grocery store swipe fees.

Likewise, the US Bank Flexperks Travel Rewards card offers "up to" 4 cents per dollar spent at grocery stores, but it's not like you get a check every month. Instead, you have to save up enough points to redeem for a flight you're planning to book. Then you have to hope the fare is close to the top of a redemption band. It could take the average customer years to save up enough points to redeem for a single flight, during which time they've paid multiple annual fees and they haven't cost US Bank a dime — in fact, they've been a profit center. That's a high-value deal to the travel hacker that has nonetheless proven extremely resilient over time.

High-cost deals are vulnerable in the medium-term

Compare that to the original "old" Blue Cash card from American Express, which offered 5% cash back at grocery stores and drug stores. Admittedly, cash back accrued with a 2-month lag time, but you could earn unlimited cash back far in excess of any swipe fees on a card, and with no annual fee. The "old" Blue Cash card was a loss center, and American Express noticed. They shut down some heavy hitters and transitioned the remaining cardholders to the product they continue to offer, which limits bonused earning to $50,000 of spend per calendar year.

Banks and other merchants have proven willing, but not particularly skillful, at shutting down opportunities like this. When you find an opportunity that moves cash directly to you from a bank or merchant, it's a good bet the opportunity will be closed within 6-18 months.

High-risk deals are extremely vulnerable

In my experience, banks don't seem to mind customers who grind away at them day in and day out. The reason isn't any secret: acquiring a single customer who runs up credit card balances they're unable to pay off covers the costs of many people happily earning 1-2% per month. A fisherman doesn't get at angry at all the fish he doesn't catch; he knows the more fish there are, the more likely he is to land a big one.

But unprofitable behavior is different from risky behavior. Spending a multiple of your credit limit each month isn't likely to get you shut down because it's unprofitable — lots of things we do are unprofitable in the short term. Spending multiple times your credit limit each month is likely to get you shut down because it's risky — if you look like you're struggling to juggle your credit limits across multiple cards, it creates the (not unreasonable!) fear that a particular bank might be the one left holding the bag.

That's not to say risky deals aren't worth pursuing. They're often very worth pursuing! But the riskier your behavior looks to the other participants in a deal, the more rapidly it's likely to be shut down — even if it's no more or less profitable than a high-value deal that's been available for years.

Unbonused spend outlook for 2017

Earlier this month I wrote about the BankAmericard Travel Rewards credit card and Bank of America Preferred Rewards Platinum Honors, and favorably compared that combination to some of the best deals in travel hacking:

  • A Chase Ink Plus and Sapphire Reserve, earning 7.5 cents per dollar towards paid travel on office supply store purchases;
  • an Ink Plus and Southwest Companion Pass, earning up to roughly 16 cents per dollar on your office supply store spend;
  • and an American Express Premier Rewards Gold card and Platinum Business card, earning 4 cents per dollar towards premium cabin airfare on supermarket purchases.

Those are great values. But if your appetite for manufactured spend is higher than your office supply store and supermarket purchase or liquidation bandwidth, you may be interested in manufacturing unbonused spend, as well.

With that in mind, here are some of the best current deals in unbonused manufactured spend.

Southwest Companion Pass

Earlier this month there was much hullabaloo about the impending loss of the ability to earn a Southwest Companion Pass through hotel transfers. But it's still possible to earn the Companion Pass through credit card spend (as well as signup bonuses).

The $99-annual-fee Southwest Rapid Rewards Premier card earns 6,000 Rapid Rewards points each account anniversary, while the $69-annual-fee Plus card earns 3,000 points. That works out to 1 cent per anniversary point, which is not a great value if you're already planning to manufacture large amounts of lower-cost spend on the card.

It's easy to overstate the case for earning the Companion Pass through unbonused spend, so let's be clear about the tradeoffs involved. For example, the Chase Freedom Unlimited earns 1.5 Ultimate Rewards points per dollar spent everywhere. On $104,000 in unbonused spend, which would earn 156,000 Ultimate Rewards points with a Chase Freedom Unlimited or (with the Companion Pass) the equivalent of 208,000 Rapid Rewards points redeemed for companion tickets, you're being paid $520 to "lock in" your preference for Southwest over Chase's other Ultimate Rewards transfer partners. That's the cash value of the 52,000 Ultimate Rewards points you don't have to earn to get the same value in Southwest flights.

The more highly you value the flexibility of Ultimate Rewards' transfer partners, the less willing you should be to lock in Southwest as your earning preference. In other words, paying twice as much for a Southwest ticket than you would if you'd earned a Companion Pass may still be worthwhile if you're getting three times more value from Hyatt or United transfers, which is not unreasonable at prestige properties or in premium cabins.

American Express Blue for Business

It's currently possible to sign up for a Blue for Business American Express card that earns 2.3 Membership Rewards points per dollar spent everywhere, on up to $50,000 in purchases during the first year of cardmembership. Mechanically speaking, you earn 1 bonus point per dollar spent, on up to $50,000 in spend, and then a 30% bonus on base (but not bonus) points earned at the end of the first year.

Since Membership Rewards points — even fixed-value, non-flexible Membership Rewards points like those earned by this card — are worth 1 cent each towards paid travel, if you book paid travel through the Membership Rewards portal you can treat this as a 2% cash back card that earns a bonus $150 in travel at the end of the first calendar year (if you reach the maximum of $50,000 in bonused spend).

Of course the real value of this card is unlocked when you combine it with a flexible Membership Rewards-earning card, allowing you to transfer your points to an American Express travel partner, or with a Platinum Business card, doubling the value of your Membership Rewards points when redeemed on one airline of your choice or when redeemed on any airline in a premium cabin.

Discover it Miles

The Discover it Miles offers 1.5 "miles" per dollar spent on all purchases, which can be redeemed against travel purchases made with the card or as an electronic deposit to your bank account. At the end of the first year of cardmembership, all the miles earned during that first year are doubled.

That means the Discover it Miles card earns 3% cash back on all purchases for the first year of cardmembership: 1.5% cash back on each statement, and another 1.5% cash back at the end of the year.

High Spend Bonuses

Finally, you may choose to manufacture unbonused spend on cards that don't offer a particularly high earning rate but give valuable benefits to cardholders who reach high spend thresholds:

  • Delta SkyMiles Platinum and Reserve personal and business American Express cards offer bonus redeemable and elite-qualifying miles upon reaching certain spend thresholds;
  • the Citi Hilton HHonors Reserve card offers an annual weekend night, redeemable at any Hilton property worldwide, to cardholders who spend $10,000 per year on the card;
  • Club Carlson Premier and Business credits cards offer an annual free night certificate, redeemable only in the United States, at the end of each cardmember year you spend $10,000;
  • The Chase Hyatt credit card, even after the transition to World of Hyatt on March 1, 2017, apparently will continue to offer up to 10 elite-qualifying night credits for $40,000 in spend per calendar year. Since that amount of spend will also earn 40,000 World of Hyatt points, you're sacrificing 20,000 World of Hyatt points compared to manufacturing the same spend with a Chase Freedom Unlimited card, or $20 in cash value per elite-qualifying night. If you expect you'll earn 45 elite-qualifying nights in 2017 through paid stays, those 10 bonus nights might be enough to earn you Globalist status through February, 2019.


Earning 2% cash back is a good baseline for unbonused spend, and one I use myself. Still, opportunities exist to get more value than that by taking advantage of card-specific bonuses. You can take advantage of the benefits most valuable to you, and then work your way down the ladder of value to that 2% baseline where you're confident you're not leaving any money on the table.

"Lombard Street" is a marvelous little book

This is a review of "Lombard Street: A Description of the Money Market" by Walter Bagehot. You can find all my previous book reviews here. If you're interested in buying a copy, I hope you'll consider using my Amazon Associates referral link.

19th century Britain, like all capitalist economies before and since, suffered periodic banking panics, during which the entire banking system froze and the economy was thrown into deep recession as the population waited to see when, and indeed whether, confidence in the system would be restored.

Walter Bagehot's "Lombard Street" is a careful description of the mechanics and aftermath of these panics, written by someone who experienced several of them firsthand. It has, I think, two great virtues that make it useful to the modern reader: he was writing about an economy which was operating on the gold standard by default, rather than by intention; and most, if not all, of today's market phenomena already existed at the time of his writing, but operated at a much slower pace.

Bagehot treats the gold standard as a feature of nature, not a regulatory decision

Today any introductory economics textbook will explain to you the importance of banks in the process of "money creation." Banks create money by loaning out a majority of their deposits. When those loans are deposited in a bank (either the same bank or any other), that bank then loans out a majority of those deposits. In this way money is "created" (in excess of deposits) and entered into circulation. A bank's regulator can slow or speed the process of money creation by increasing or decreasing the proportion of each bank's deposits it is required to keep on hand.

Bagehot would reject this idea outright. Banks cannot create money. They accept deposits, and then they can loan out some portion of those deposits and accept, in exchange, some security. The total amount of "money" within the banking system cannot be increased or decreased through this process, because the total amount of gold reserves kept by the banks in reserve is fixed.

To Bagehot, cash is gold and gold is cash. He literally uses the words interchangeably.

Bagehot's panics were gold panics

The source of Bagehot's panics is obvious: the banks of 19th century England were engaged in money creation just as our fractional reserve banks are today, but unlike ours, his banks refused to admit it! So the amount of deposits redeemable on demand for gold was, in fact, far higher than the amount of gold available for redemption. If enough people suddenly sensed that the amount of gold available was inadequate to cover their deposits, they would rush to the banks and attempt to withdraw gold before everyone else beat them to it.

This happened with some regularity.

Bagehot's solution is our solution

Today the Bank of England and the Federal Reserve solve the problem of banking panics through the "discount window," where they offer liquidity to any bank in need of it to meet customer demands for cash.

This is precisely the solution that Bagehot describes, except Bagehot's Bank of England had an important limitation our modern system does not: the quantity of gold bullion held in its vaults. Thus the central banking problem of Bagehot's time was maintaining a high enough bullion reserve to meet demand in time of crisis.

In those times of crisis, Bagehot says the Bank of England should lend freely to any and all banks, accepting any "security considered good in normal times." This is, almost exactly, the legal restriction the Federal Reserve in the United States operates under, being forbidden by law from making loans to "insolvent" banks.

Economic crises used to be banking crises

One of the best chapters in "Lombard Street" is when Bagehot explains what happens when the price of a commodity increases:

"When the agriculture of the world is ill off, food is dear. And as the amount of absolute necessaries which a people consumes cannot be much diminished, the additional amount which has to be spent on them is so much subtracted from what used to be spent on other things. All the industries...are somewhat affected by an augmentation in the price of corn, and the most affected are the large ones, which produce the objects in ordinary times most consumed by the working classes. The clothing trades feel the difference at once, and in this country the liquor trade (a great source of English revenue) feels it almost equally soon. Especially when for two or three years harvests have been bad, and corn has long been dear, every industry is impoverished, and almost every one, by becoming poorer, makes every other poorer too. All tracks are slack from diminished custom, and the consequence is a vast stagnant capital, much idle labour, and a greatly retarded production." (p. 56)

This is what we would call today a "supply shock," with a sudden decrease in supply in one sector causing higher prices and a decrease in production economy-wide. But the important thing to remember here is that Bagehot is only able to describe an increase in the price of corn denominated in gold, or as he would call it, "money." Every change in supply and demand for a particular commodity is also moderated through the supply and demand for gold bullion.

That means a sudden shortage of corn, and resulting economic contraction, also results in a banking crisis as people realize their deposits were lent out to businesses who are suddenly unlikely to be able to repay them. Panic quickly sets in and each depositor is anxious to withdraw their cash before the bullion reserve is exhausted.

The only solution is a rapid increase in the interest rate to attract deposits of gold bullion from overseas, in order to meet the sudden demands on the Bank of England.

A fiat currency works on the everything standard

Developed economies today issue fiat currencies, which people sometimes claim means they are backed by "nothing." But of course dollars, pounds, and euros are backed by gold — they're backed by the amount of gold you can buy with them. They're also backed by the amount of land you can buy with them, the amount of beer you can buy with them, and the amount of refrigerator you can buy with them.

It's true that dollars and pounds used to backed by fixed amounts of gold, instead of market rate amounts of gold, but that just meant that everything else — all the stuff you actually wanted to buy — was mediated through the supply and demand for gold.

Now not just the exchange rate between euros, pounds, and dollars float based on market forces, but the exchange rate between gold, land, beer and refrigerators floats as well.

And best of all, there is not, and can never be, a shortage of the convenient, wallet-sized, digitally-accounted-for, currency units of value.


Bagehot's description of the money market is of a system that is based on the psychology, and whims, of a diverse group of market participants. It takes only the slightest rumor to send the bill brokers and private bankers dashing through the streets trying to shore up their balance sheets before complete panic sets in and the nation is ruined.

Basically, if you were alive in 2008, it will all be familiar to you. Bagehot's advantage over the chroniclers of the Great Recession is his fine prose and step-by-step analysis of the psychology and business practices of bankers of every sort, from the country banker to the Governor of the Bank of the England.

On Chase Hyatt stay credits

Last year I did a fair amount of waffling back and forth on whether to requalify as a Hyatt Diamond for 2017. After the new World of Hyatt program was announced, I ultimately decided to requalify for two main reasons:

  • As a Hyatt Gold Passport Diamond transitioning to World of Hyatt Globalist status, I'd receive a free night certificate at any Category 1-7 Hyatt property in the world;
  • After March 1 confirmed suite upgrades will be useable on free night awards, which means I'll actually use all 4 confirmed suite upgrade awards (I still have two left from 2016, and many people have all four).

Since I was within a few stays of requalifying, I decided that those two benefits would be worth the roughly $200 I spent on mattress runs in December.

My plan relied on earning 20 elite-qualifying stay credits, mainly by booking at least one night as a Points + Cash award whenever I stayed at a Hyatt, and sometimes by bouncing around between Hyatt properties when it wasn't too inconvenient (i.e. when I was traveling alone). Those 20 stay credits would be enough to requalify as Diamond once I spent $40,000 with my Chase Hyatt credit card, which I finished off before my December, 2016, statement closed.

Then I waited.

Chase Hyatt stay credits post automatically, sometimes

My 2 stay credits and 5 night credits posted in August, 2016, without any intervention on my part, so I practiced watchful waiting for the first few weeks after my December statement closed. As days became weeks, I called Hyatt and was told that it can take up to 10 business days for Chase to communicate with them. I waited some more, called back again, and the agent (helpfully?) suggested I call Chase instead.

If your stay credits don't post, go straight to Chase

This was an excellent suggestion. I had obviously called Chase before my statement closed to confirm that I had reached the $40,000 spend threshold, but when I called back in early January the agent insisted on going through each statement and adding up my net purchases to make sure I qualified. Then she asked if she could put me on hold to call Hyatt.

When she came back on the line, she had connected in someone from Hyatt's corporate office who said she understood the problem and promised to get it sorted out within a couple days.

Then keep watching

As I diligently continued to log into the Hyatt app each day, I noticed immediately when my stay and night credits posted about 4 business days later. The problem was that they posted in 2017, not 2016! In other words, I had 3 stay credits and 5 nights credits towards 2018 status, not 2017 status.

This time when I called Hyatt the frontline agent immediately saw that my account had been flagged in some way and connected me to "someone in corporate," who was handling my case. I explained the situation again, and she immediately understood what had happened and told me she'd take care of it.

And watching

A few days later I received an e-mail from Hyatt, which read in its entirety: "Current tier status is reflecting Diamond.  Spend bonus update from Chase posted Jan 14, 2017.  Please review your account and let us know if you are in need of further assistance."

Obviously I was in need of further assistance, so I replied to the e-mail explaining the situation again. The next morning I saw in my inbox another e-mail, subject line: "You've Achieved Diamond Status Again."

And sure enough, my account now reflects my Diamond elite status will be good through February 28, 2018.


I confess I'm a bit confused by this whole situation: there must be thousands of people who meet the $40,000 spend threshold in December each year. Does each one of them have to go through this rigmarole? If not, why me?

But the conclusion is unmistakeable: the Hyatt elite-qualifying stays and nights are a benefit offered by Chase, not Hyatt, and Chase phone agents are much better equipped to handle these problems than Hyatt front-line phone agents. So if you're still waiting on your 2016 elite-qualifying stays, or planning to storm 25 elite-qualifying stays before the February 28, 2017, changeover to World of Hyatt, Chase should be your first point of contact for these issues.

Quick hit: how American Express cards treat refunds towards annual spend thresholds

Late last year I tried to take advantage of an increased portal payout at an online merchant by buying a few thousand dollars of electronics which, if the portal had tracked and paid out properly, I planned to then resell.

The portal ultimately didn't track or pay out properly, so I returned the merchandise this month and found an interesting nuance to how American Express treats returns when calculating annual spend thresholds.

Returns count against your annual spend in the calendar year of the return, not the purchase

In many ways this should be obvious: your annual spend is calculated based on "net purchases," or purchases minus returns and credits (including OPEN small business savings and Amex Offers for You) during each calendar year. So, in my case, my roughly $8,000 in January, 2017, purchases were reduced by my roughly $2,000 in returns when American Express calculated my 2017 year-to-date net purchases.

On the other hand, this is noteworthy because this is not how spend towards signup bonuses is treated: if you make $3,000 in purchases in the first 90 days of card membership, then return $3,000 in merchandise on the 91st day, you may find that your signup bonus is "clawed back" by the credit card issuer, as this FlyerTalker found in May of last year.

This is lightly gameable

Under most circumstances this won't matter, since if you meet a high annual spend threshold each calendar year, any returned amount will simply have to be spent in the year of the return. For example, my $2,000 in returned purchases means I need to spend $52,000, not $50,000, in 2017 in order to earn my 20,000 Medallion Qualifying Miles with my Platinum Delta SkyMiles Business card.

On the other hand, if you are no longer getting enough value from an American Express card to justify paying the annual fee year after year, but want to maximize the card's value while you still have it, you could storm the spend threshold by the end of a calendar year, triggering any relevant bonus (waived Medallion Qualifying Dollar requirements and Hilton HHonors Diamond elite status, for instance), then return the merchandise the next calendar year before cancelling the credit card.

On booking channels

If you've been travel hacking for any length of time you likely have access to a range of points currencies and credit cards, each with its own strengths. Rewards programs typically are combined with a specific booking channel: you can only redeem Alaska Mileage Plan miles through the Mileage Plan website, and you can only redeem Chase Sapphire Reserve Ultimate Rewards points for 1.5 cents each through the Ultimate Rewards website.

Under many circumstances, however, it's possible to combine the benefits of multiple programs in order to get the best of multiple worlds.

Award tickets

The simplest example comes when booking an airline award ticket. In addition to the mile component of an award ticket, you'll typically pay a cash component ranging from $5.60 for the simplest domestic one-way flights to hundreds of dollars in fuel surcharges on many international flights.

That cash component gives you the opportunity to choose the right credit card for the job. On the simple end you might use a co-branded credit card in order to earn bonus points. If you have a Barclaycard Arrival+, Bank of America Travel Rewards, or other credit card that lets you redeem credit card rewards towards travel purchases, then such fees are an opportunity to extract value from those points.

Finally, if you have a credit card in the Chase Sapphire family, paying award ticket taxes and fees with a Sapphire, Sapphire Preferred, or Sapphire Reserve triggers their fairly generous trip delay insurance benefits. The Citi Prestige's similar trip delay insurance apparently does not cover award tickets, although it does cover tickets booked using Citi ThankYou points.

Revenue tickets

It's also possible, albeit trickier, to trigger credit card protections on revenue tickets.

When booking two or more tickets through the US Bank Flexperks Travel Rewards booking channel, you have to redeem Flexpoints towards at least one ticket in each order, while additional tickets on the same order can be paid for with a credit card. Booking a single ticket with Flexpoints and paying for your additional tickets with a Chase Sapphire card would extend insurance coverage to the entire reservation while only paying out of pocket for one ticket.

Flexible and refundable tickets offer another opportunity. Airlines like Southwest and Alaska allow the value of cancelled tickets to be returned to your account and used towards future flights. You could then "top up" the cost of your flights with a Chase Sapphire card and trigger trip delay protections.

This should work with any airline that sells refundable tickets, although you may have trouble finding refundable tickets that are cheaper than the flight you actually plan on reserving, which is necessary in order to have space "left over" to pay for with your Chase Sapphire, or any other, credit card.

Car rentals

One trip insurance benefit people seem to value especially highly is primary rental car collision insurance. Of course, this benefit is only valuable if you get in an accident. If you don't get in an accident, you might prefer to pay with another card, for example in order to redeem fixed-value points against the charge.

This classic post by The Mr. Pickles explains how you can do precisely that: reserve and collect your rental car with whichever card offers the best insurance protection, then upon returning the car change your payment method to whichever card has the highest earning rate or where you have fixed-value points stored up to cover the charge.


Knowing the particularities and peculiarities of each program you participate in, and the requirements for triggering statement credits, insurance coverage, and other credit card benefits, gives you added flexibility in deciding how to get the most value, at the lowest price, from each of your booking decisions.