Foreign airline co-branded credit cards issued by American banks, #3: SKYPASS by US Bank

Moving right along, today's foreign co-branded credit cards are the Korean Air SKYPASS credit cards issued by US Bank.

Korean Air SKYPASS by US Bank

US Bank issues 4 co-branded credit cards that earn Korean Air SKYPASS miles:

• the SKYPASS Visa Signature Card has an annual fee of $80 that isn't waived the first year, has a 15,000 SKYPASS-mile signup bonus after your first purchase and offers 2,000 annual anniversary bonus miles. It earns one SKYPASS mile per dollar spent on purchases.

• the SKYPASS Visa small business credit card has an annual fee of $75, not waived the first year, a 10,000 SKYPASS-mile signup bonus after your first purchase, and 2,000 annual anniversary bonus miles.

• the SKYPASS Visa Classic Card charges an annual fee of $50, not waived the first year, has a 5,000 SKYPASS-mile signup bonus after first purchase, and offers 1,000 annual anniversary bonus miles. It earns one SKYPASS mile per dollar spent on purchases.

• and the SkyBlue SKYPASS Visa Card has no annual fee, offers 5,000 SKYPASS miles after your first purchase, and earns one SKYPASS mile for each $2 spent on purchases.

Fortunately, Korean Air SKYPASS is also denominated in miles, so unlike the previous two entries in this series (AeroMexico and LANPASS) there's no need to convert between miles earned and kilometers redeemed for SKYPASS redemptions.

Morning Calm Club membership

In the description of the SKYPASS Visa Signature card, there's this potentially interesting bullet point: "SKYPASS Visa card purchases help you reach and maintain Morning Calm Club membership."

I had literally never heard of Morning Calm Club, so my digital ears perked up. Turns out it's Korean Air's pretty crummy elite status program. Like the Southwest Airlines Companion Pass, partner transactions count towards Morning Calm Club status, apparently including miles earned with the SKYPASS Visa cards.

Unfortunately, to earn Morning Calm Club status, you also need to earn 30,000 of the 50,000 miles required for qualification on Korean Air flights. Requalification requires 30,000 miles, 20,000 of which have to be earned on Korean Air flights.

Earning SKYPASS miles

Since the SKYPASS credit cards don't offer any bonus earning categories (except Korean Air flights), I don't see any point in putting any spend on any of these cards after triggering the signup bonus. That's because unbonused spend on a Chase Freedom Unlimited card earns 1.5 Ultimate Rewards points, which can be transferred on a 1000:1000 basis to SKYPASS from any flexible Ultimate Rewards account.

Redeeming SKYPASS miles

Korean Air is a SkyTeam member, and SKYPASS miles can be redeemed online for award flights on most SkyTeam member airlines (I wasn't able to pull up availability on AeroMexico, Alitalia, or Aerolineas Argentinas). As a reminder:

• SKYPASS charges fuel surcharges on award tickets;
• award tickets can only be booked for a very restrictive set of family members;
• but SKYPASS award zones are unusually generous.

The best opportunities to redeem SKYPASS miles are on routes with few or no fuel surcharges, like domestic US flights on Delta, especially to Hawaii, which is treated as a part of North America, flights on Delta to destinations like Japan and Peru, and flights on China Airlines to Taiwan. However, SKYPASS miles may still be worth redeeming on routes with higher fuel surcharges if cash rates are particularly expensive or if your alternative booking channels also pass along fuel surcharges.

You can read my more comprehensive rundown of SkyTeam fuel surcharges here.

Is it worth it?

This is where I'm supposed to tell you that this is a terrible credit card no one should sign up for. But I like to think every card is special and has its own role to play in our great human drama. Here are some fairly good reasons someone might sign up for a US Bank SKYPASS credit card:

• Increased signup bonuses. According to Frequent Miler's Best Signup Bonus page, until recently the SKYPASS Visa Signature card offered a $150 statement credit after spending $1,500 in addition to the 15,000 miles it currently offers after first purchase, and in 2016 the signup bonus was raised to 40,000 SKYPASS miles. If your primary means of earning SKYPASS miles is transfers from Ultimate Rewards, then every mile you earn with an increased signup bonus is one more Ultimate Rewards point you can transfer to a more lucrative program.
• Shut down by Chase and American Express. Flexible Chase Ultimate Rewards cards are easy ways to earn SKYPASS miles, but not everyone has or can get Chase credit cards. Likewise American Express issues Delta SkyMile-earning credit cards, but some people don't have or can't get American Express cards. In that way, the mere fact that SKYPASS credit cards are issued by US Bank is a mark in their favor. After all, if you want to book award travel on a SkyTeam carrier, you need some SkyTeam award miles!

Foreign airline co-branded credit cards issued by American banks, #2: LANPASS by US Bank

As we plow through the foreign airline co-branded credit cards issued by American banks, we continue with another card issued by US Bank.

LANPASS by US Bank

US Bank issues two LANPASS co-branded credit cards that earn LATAM Pass miles:

• The LANPASS Visa Signature Card has an annual fee of $75 after the first year, offers 4,000 annual bonus miles, and gives a 20% discount on LATAM purchases up to $1,000 once per year. The current signup bonus is 20,000 bonus miles after your first purchase. Cardholders also receive 25% bonus miles on certain paid flights, according to the following inscrutable language:

"LANPASS Visa Signature Cardmembers only will receive a flight mileage bonus of 25% in additional miles above the actual miles accrued on every LATAM Airlines or its Affiliate carriers’ flight. For example, if a cardmember accrues 6,000 miles, the cardmember will receive 1,500 extra miles. To renew this benefit, the cardmember must have net spending of at least $15,000 each calendar year."

• The LANPASS Visa Card has an annual fee of $45 after the first year and offers 2,000 annual bonus miles. The current signup bonus is 15,000 miles after your first purchase.

Just as in yesterday's edition of this series, the LANPASS credit cards earn miles, but the LANPASS award chart is in kilometers, so as LANPASS helpfully explains, the 20,000-mile signup bonus is worth 32,187 kilometers and the 4,000 annual bonus miles are worth 6,437 kilometers.

Earning LANPASS miles

Unfortunately, neither card offers any interesting category spending bonuses, so you're left earning 1 mile (roughly 1.61 kilometers) per dollar spent on either card everywhere.

Unfortunately necessary digression about Starpoint transfers

Starwood Preferred Guest transfers to LANPASS are into kilometers, not miles. So while 1 Starpoint transfers into 1.5 LANPASS kilometers, that's somewhat less than the 1.61 LANPASS kilometers you'd earn putting spend directly onto a LANPASS co-branded credit card.

Of course, 20,000-Starpoint transfers earn a 5,000-point (7,500 kilometer) transfer bonus, bringing the earning rate on $20,000 in Starwood Preferred Guest American Express spend slightly above the earning rate on a LANPASS credit card (37,500 kilometers versus 32,200 kilometers).

Redeeming LANPASS miles

LATAM is a member of the oneworld alliance, so its LANPASS kilometers should be redeemable on oneworld carriers, and indeed LANPASS has a distance-based award chart for flights on its oneworld partners.

But according to the LANPASS website:

"You can redeem your LATAM Pass KMS. for flights with American Airlines, Qantas and Iberia through our Contact Center or at one of our offices. For other oneworld and associated airlines, this service is not available."

I have no idea what this means. Can LANPASS kilometers be redeemed for flights on other oneworld carriers? Maybe, but not through the Contact Center or any of their offices?

Nonetheless, for American Airlines flights with low-level availability, LANPASS miles can be a strong choice. This FlyerTalk thread about LANPASS redemptions seems to cast them as less valuable than British Airways Avios redemptions, but that's only from the perspective of Starpoint transfers. If you're earning LANPASS kilometers directly at 1.61 kilometers per dollar spent, you're virtually certain to be better off compared to a 1:1 Chase Ultimate Rewards transfer to Avios.

In other words, your best redemption will depend on your best alternative.

Is it worth it?

Just as I concluded yesterday, the question of whether earning a more exotic loyalty currency is worthwhile will depend on whether you're able to leverage it for better value than you would the currencies in your wheelhouse. In 2014 Thought Leader from Behind Gary Leff reported that "you can redeem BA F without fuel surcharges using LAN kilometers."

If that's still possible, then LANPASS's distance-based award chart may still offer out-sized value, if you can redeem miles earned on unbonused spend for premium awards without paying extortionate fuel surcharges.

Foreign airline co-branded credit cards issued by American banks, #1: AeroMexico by US Bank

Most travel hackers take advantage of the loyalty programs of foreign airlines through flexible points currencies, like transfers of Chase Ultimate Rewards points to British Airways Executive Club Avios, American Express Membership Rewards points to Singapore KrisFlyer, or Citi ThankYou points to Air France KLM Flying Blue.

But US-based banks also enter into co-branded credit card relationships with the loyalty programs of foreign airlines. Some of those relationships are more familiar than others, so I thought it would be useful to put them all in one place.

So, without further ado, here is the first in a series on foreign loyalty programs with co-branded credit cards issued by US banks, with commentary and analysis as needed.

AeroMexico by US Bank

US Bank issues 2 co-branded credit cards that earn AeroMexico Club Premier miles:

• the AeroMexico Visa Signature Card has an $80 annual fee after the first year, 4,000 annual bonus miles and an annual $99 "Companion Certificate." The current signup bonus is 20,000 bonus miles after first use and a "Complimentary Companion Certificate."
• the AeroMexico Visa Card has a $45 annual fee after the first year, 2,000 annual bonus miles and an annual $99 Companion Certificate. The current signup bonus is 15,000 bonus miles and a Complimentary Companion Certificate.

This is going to sound insane, but bear with me: apparently, the AeroMexico Club Premier award chart is in "kilometers," while the AeroMexico Club Premier credit cards earn "miles." The conversion rate between the two is 1.6 AeroMexico Club Premier kilometers per AeroMexico Club Premier mile. That means you can either multiply the mileage earning by 1.6 or divide the award chart by 1.6 to normalize the ratio between your earning and redeeming rates.

If you're looking at AeroMexico's SkyTeam award chart, this explains why a domestic US ticket costs 40,000 "Premier Points:" once converted into miles it's a standard 25,000-mile roundtrip redemption.

Earning AeroMexico Premier Club Miles

Both US Bank AeroMexico credit cards earn 2 miles (3.2 kilometers) per dollar spent at gas stations and grocery stores. While gas station manufactured spend isn't as widely available as it used to be, grocery store manufactured spend is still available in many parts of the country, which creates an opportunity for these cards to outperform.

Of course, that depends entirely on the opportunities for...

Redeeming AeroMexico Premier Club Miles

Here I'm going to shamelessly lean on Travel Codex, who took a look at the AeroMexico award chart during an American Express transfer bonus back in 2015, while translating those results into bonused spend on the US Bank co-branded credit cards. The sweet spots Omar identified are:

• Roundtrip business class to Europe. 160,000 Premier Club kilometers (100,000 Premier Club miles) require $50,000 in bonused spend at gas stations or grocery stores.
• Roundtrip business class to North Asia. 180,000 Premier Club kilometers (112,500 Premier Club miles) require $56,250 in bonused spend.
• Roundtrip business class to Southeast Asia. 240,000 Premier Club kilometers (150,000 Premier Club miles) require $75,000 in bonused spend.
• Roundtrip business class to the Middle East. 224,000/248,000 Premier Club kilometers (144,000/155,000 Premier Club miles) require $72,000/$75,500 in bonused spend.

Is it worth it?

Having a higher-than-average co-branded credit card earning rate for a SkyTeam carrier and lower-than-average redemptions rates for a SkyTeam carrier together seem like an obvious opportunity to seize for redemptions on SkyTeam partners. However, since AeroMexico Premier Club passes along fuel surcharges on award tickets, the value you'll ultimately get from the program depends on the airlines and routes you fly. AeroMexico does allow one-way redemptions, so it seems most obviously valuable for reservations on carriers with low fuel surcharges in one or both directions.

You can find some of my earlier research on SkyTeam fuel surcharges in my post on Korean Air SKYPASS.

Well look at Barclaycard adding a trip delay insurance benefit!

I've written before about taking advantage of the Chase Sapphire Preferred trip delay insurance benefit (the same benefit is shared by the Chase Sapphire and Sapphire Reserve cards). I don't think it's as good a benefit as your local affiliate blogger says it is, and like any insurance product they'll do their best to find reasons not to honor your claim, but the benefit is real and if they can't find any reasons not to, they really will honor it.

Good credit card trip delay insurance is good for a couple key reasons:

• it doesn't cost anything extra: you trigger it when you pay for your flights with the credit card;
• it's more generous than airline delay benefits: instead of having to eat at the airport Quizno's and make sure you spend less than $12, you can get a proper meal. Chase doesn't even ask for itemized meal receipts for charges under $50;
• you get to strategically stay wherever you want. I used my trip delay to get another Hyatt Gold Passport stay credit, which meant one less night I needed to mattress run in December.

I'm not trying to sell you anything, and credit card trip delay insurance has a profound shortcoming for a travel hacker: you have to purchase airfare, or at least pay the taxes and fees associated with an award ticket, with the credit card in question. That means:

• if you're booking flights with US Bank Flexperks Travel Rewards Flexpoints, you can't pay with another card to trigger trip delay insurance;
• if you're booking a Delta Platinum or Reserve American Express companion ticket, you have to pay for the ticket with an American Express card;
• if you're planning to redeem the Membership Rewards points connected to an American Express Business Platinum card against an airfare purchase at 2 cents per point, you can't also put the flight on a card with trip delay insurance.
• if, like me, you have a Chase Ink Plus but not a card in the Chase Sapphire family, the only way you can redeem Ultimate Rewards points at 1.25 cents each is out of your Chase Ink account, which means you can't also pay with a card that offers trip delay insurance.

I say all this as preface to a pleasant surprise I had this morning: the Barclaycard Arrival Plus World Elite MasterCard has added a trip delay insurance benefit!

Barclaycard Arrival Plus World Elite MasterCard adds trip delay insurance

When I logged into my Barclaycard account this morning, I was greeted by a popup saying I was in for some exciting changes:

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Needless to say, I found it profoundly unlikely that I would find the updates to my card benefits exciting, but as your dutiful servant I clicked through to find out. The link took me to the Services/Account Settings page (in case you want to navigate back there later), and down at the bottom there were two links: to the old Guide to Benefits (in effect since May 1, 2014) and to the new Guide to Benefits (effective April 1, 2017):

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The old Guide to Benefits included a baggage delay benefit, while the new Guide to Benefit also includes a trip delay insurance benefit. It's not quite as generous as the Chase Sapphire benefit, but it's not bad!

Details of the Barclaycard trip delay insurance benefit

The benefit is pretty simple:

• a trip must be delayed for 6 hours or more. There's no exception for overnight stays, so if a flight is delayed from 1 am to 6 am it won't be covered;
• the delay must be a result of inclement weather, equipment failure, or lost or stolen passport or travel documents;
• coverage is limited to $300 in benefits (compared to $500 with the Chase Sapphire cards);

To trigger the trip delay insurance benefit:

"You must purchase the trip entirely with Your covered card for You, or Your family member, and Your traveling companions. If redeemable certificates, vouchers, coupons, or discounts awarded from frequent flier programs are used to purchase the trip, any remaining charge for the trip must be purchased entirely with Your covered card."

I don't understand why credit card companies go to the trouble of writing their terms and conditions in legalese if the legalese is also going to be hopelessly confusing, but that's where we are. From what I can tell, the benefit covers tickets purchased by you for you and your traveling companions (whether or not they're related to you), and tickets purchased by you for family members, but not tickets purchased by you for the traveling companions of family members (if the family member's traveling companions are not related to you).

That's pretty stupid, but it's the best I can disentangle from this document. The benefit also seems to be limited to $300 per trip, while the Sapphire benefit is limited to $500 per ticket, so two people are eligible for $1,000 in reimbursement. That makes a big difference if you're traveling with a big family and need to book multiple hotel rooms. The flip side is that the Sapphire benefit only covers spouses, domestic partners, and dependent children, while the Barclaycard benefit seems to apply to anyone traveling with you, for example coworkers or older children.

Of course you can simply request a Sapphire authorized user card and extend the coverage protection to anyone you like.

Conclusion

For the reasons I laid out in my introduction, I don't find trip delay insurance as valuable as some people claim to find it. But now that I have a card that offers trip delay insurance, there are some no-brainer situations where I'll be using my Arrival Plus card from now on:

• Award tickets. I usually use my Arrival Plus to cover the taxes and fees on award tickets anyway simply because it's my highest earning card for unbonused spend, but since I have a Delta Platinum Business American Express card, I have been paying the taxes and fees on Delta award tickets with that card. From now on I'll be paying all those piddling award taxes and fees with my Arrival Plus.
• Flying United. If I had to fly United for some reason, I'd be much more comfortable doing so if I paid with a card that offered trip delay insurance, given my awful track record with them (I was moving across the country on the day their Chicago air traffic control tower spontaneously combusted).
• Cheap tickets. For tickets in the sub-$300 range, for which I would typically redeem Ultimate Rewards points at 1.25 cents each, I'll strongly consider paying with my Arrival Plus and redeeming points against the charges, saving my Ultimate Rewards points for more lucrative opportunities.

It's harder to know what's public and what's private these days

Since I started blogging, I've tried to maintain a pretty consistent ethic here with respect to specific opportunities, whether on the manufactured spend and earning side of the loyalty equation or the redemption side. My basic views can be summarized as:

• widely available and publicly advertised opportunities can and should be shared widely, even if it causes them to be ended prematurely;
• obvious mistakes and coding errors that give outsized value should be shared narrowly since they're guaranteed to end as soon as they become public.

The logic behind the first point is that the more people who are able to take advantage of a deal, the more overall savings people achieve, even if the deal ends earlier than it otherwise would. This is why I refer to my readers as "force multipliers:" one thousand people taking advantage of a deal for one day get more value than one hundred people taking advantage of it for a week.

The logic behind the second point is that if an obvious mistake or coding error is made public then it will be fixed before anyone at all is able to take advantage of it, reducing the total savings people receive.

One of the strongest feelings of revulsion I've felt towards affiliate bloggers came out of the only Frequent Traveler University I attended, when one of the speakers answered, in response to a question about esoteric Lifemiles redemptions, that "Most of us are trying not to talk too openly about it." He said this to an audience of paying attendees! That moment really clarified for me how affiliate bloggers feel about their readers — even their readers willing to pay to spend a weekend in Seattle just to hear them speak.

It's harder to know what's public and what's private than it used to be

When this blog started one of the functions I think people valued was scrolling through tons of pages on FlyerTalk, spotting potential opportunities, and then checking out whether they actually worked or not. Today, I find FlyerTalk almost useless and spend more time networking with other travel hackers, on Twitter, and flipping through blog headlines to see if there are underreported opportunities. This hasn't changed my overall ethic (don't kill vulnerable deals, but share resilient deals widely), but has given me a slightly different perspective on some issues.

For example, I've been publicly linking to this grocery store opportunity almost since it came out, but have shared the results of my own experiments only through my subscribers-only newsletter. For me, that's a way of splitting the difference between sharing a lucrative, publicly available and publicly advertised deal, and potentially ending opportunities to scale it.

On the other hand, when people mention an opportunity on Twitter, it's difficult to know just how "public" that makes the deal. Is a deal public when it's widely known, or just when it has breached some unknown barrier between the secret and the non-secret?

Is this a golden age of manufactured spend, or the twilight years?

I've made no secret of my view that much of the changing attitude of veteran travel hackers towards the landscape today can be explained by what I call "lifecycle" effects. What was nearly effortless for a single person at age 30 becomes almost unbearably difficult for a married mother of two at age 50. That's not because travel hacking has gotten harder, but because your increased responsibilities have made everything harder!

Countless deals have died in just the 3 or 4 years since I started travel hacking intensively. If you treat the set of opportunities that existed when you first got involved as the "perfect storm" of opportunities, then you'll only notice the deals that die and not the new deals that have emerged since then. And, of course, over the course of those years you'll have gotten older, busier, and crankier. That's a recipe for believing the best days are behind us.

But I've said it before and I'm sure to say it again: all the travel hackers I know are manufacturing more spend and getting more value than they have at any time since I got started! Meanwhile the travel hackers who are complaining about the lack of opportunities are those who are either located in unfortunately restrictive geographic areas or who are simply unwilling to take advantage of the opportunities available today.

Those opportunities may or may not be more time and resource intensive than the opportunities that existed in the past. But at least we don't have to haul dollar coins around all day.

Do this now: register for 2017 second quarter bonus earning and World of Hyatt promotion

The second quarter of 2017 is right around the corner, and that means it's time for your friendly reminder to register for bonus earning on credit cards with quarterly rotating bonus categories, and some suggestions to maximize their value.

Chase Freedom

Next quarter each of your Chase Freedom cards earns 5 Ultimate Rewards points on the first $1,500 spent at grocery stores and drugstores. These categories are layups, with easy opportunities to manufacture spend in virtually every part of the country. If you were particularly inclined to be strategic you might wait to see if we get another grocery store promotion like the one that ended yesterday and try to stack the opportunities, but personally I'm not overthinking it. I have two Chase Freedoms and expect to have maxed out my bonus earnings by Sunday afternoon (CVS limits prepaid card purchases to $2,000 per rolling 24-hour period).

Activate bonus earning on each of your Chase Freedom cards separately here.

Discover it

The Discover it offers 5% cash back at home improvement stores and wholesale clubs next quarter. If you took advantage of one of the dozens of offers for cheap or discounted wholesale membership in the last year, then your best bet is to visit Sam's Club and see if you can find some PIN-enabled prepaid debit cards. I've never set foot in a Sam's Club, let alone manufactured spend at one, so I'm not sure what options they have available, but you may be able to find prepaid debit cards issued by Greendot Bank, US Bancorp, or Sunrise Bank.

Log into your Discover account to activate next quarter's bonus categories here.

Citi Dividend

Citi Dividend cards throttle bonus spending slightly differently from the other quarterly bonus credit cards: your total cash back is limited to $300 per calendar year, but you can earn the $300 through any combination of bonused and unbonused spend throughout the year. That means it's best to hold back on putting any spend on a Citi Dividend card until they have a particularly lucrative bonus category.

This year, that category falls in the second quarter, when you'll earn 5% cash back on purchases at drugstores and fitness clubs. After taking care of my Chase Freedom cards at CVS this weekend, I'll be maxing out my Citi Dividend card by spending $6,000 there over the next three days, thereby earning the maximum $300 annual cash back.

Activate your bonus earning here.

US Bank Cash+

Unlike the other cards here, US Bank allows you to pick 2 categories in which to earn 5% cash back on up to $2,000 in total spend. In the second quarter of 2017, your options are:

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Slim pickings! If you commute by train then ground transportation might be worth picking, especially if you can add a large amount of value to a commuter pass and don't have another card that bonuses travel purposes generally (many people would consider the 3 Ultimate Rewards points earned by a Chase Sapphire Reserve more valuable than 5% cash back). Other than that, I don't see many opportunities to manufacture spend. Furniture, electronics, and cell phones are all expensive, however, so you might decide to just save some money on a purchase you were already planning to make.

Select your bonus categories here.

World of Hyatt Double Points for Being You promotion

Also next quarter, World of Hyatt is running a promotion. Between April 1 and June 30, 2017, earn double base points on eligible stays starting with your second eligible stay. Register for the promotion here.

While you're at it, check out all the current hotel promotions I'm aware of on my Hotel Promotions page.

Washtubs, not teaspoons

A few years back, reclusive travel hacking personality Mr. Pickles started tweeting pictures of a gas pump dispensing hundreds of gallons of gas for free and asking "what am I filling up?" Twitter's an elusive medium and I can't dredge up the actual thread (send me a link and I'll update this post!), but as I recall it ended up being a large wheeled diesel generator of some kind. There's nothing special about a travel hacker being able to buy gas for next to nothing, if they have access to the right stores during the right promotions, but Mr. Pickles didn't just have free gas: he had a plan.

In Warren Buffett's latest shareholder letter he wrote:

"Every decade or so, dark clouds will fill the economic skies, and they will briefly rain gold. When downpours of that sort occur, it’s imperative that we rush outdoors carrying washtubs, not teaspoons. And that we will do."

Many people in the country today are in the midst of such a downpour, which has got me thinking about the ways a travel hacker can equip herself with washtubs, not teaspoons.

Maintain a diverse collection of credit cards

I've been taking advantage of the current promotion with my Hilton Surpass American Express and US Bank Flexperks Travel Rewards cards, which I consider worth manufacturing spend on even in the absence of a promotion. But reasonable people disagree, and might instead manufacture spend primarily at unbonused merchants using cards like the Starwood Preferred Guest American Express or Chase Freedom Unlimited. Most of the time, that's a perfectly defensible decision. But when an opportunity like the current one comes along, it leaves those people at a disadvantage compared to people who keep one or more credit cards bonusing grocery store spend.

Manage credit lines

Like most travel hackers I have a general awareness of my reported credit card utilization rate, but unlike many travel hackers I don't really care about that rate, since my practice focuses mainly on manufacturing spend, not accumulating signup bonuses. However, being sure that you have the credit lines available to maximize an opportunity while it exists is a totally separate question. It's absolutely worth thinking in advance about how you'll open up credit limits suddenly when a unique opportunity emerges. How fast can you liquidate your spend in order to create additional headroom? Even if you manufacture relatively little spend, you might consider having a plan in place when a particularly lucrative opportunity comes along.

Come up with a plan

The benefits of the current promotion expire on April 6, which means there are two different timelines: the deadline to earn additional benefits and the deadline to redeem them. There's no point earning benefits that won't be used, or using benefits for things you don't want. That means I've been spending a lot of time looking around my apartment thinking, "what can I buy today that I'm certain to use eventually?" If you're hitting this opportunity hard, you may need to think further outside the box than usual. A few suggestions:

• Paper goods: Paper towels, toilet paper, facial tissue, coffee filters.
• Occasionally used products: batteries, lightbulbs.
• Toiletries: toothbrushes, toothpaste, soap, feminine hygiene products, razors, deodorant, shampoo.
• Canned goods.

Of course, the best time to come up with a plan is in advance, which is what Mr. Pickles did. I'm not saying you should buy a diesel generator just in case an unlimited free gas opportunity arises. But I am saying Mr. Pickles did and was able to hit that opportunity as hard as humanly possible.

Give stuff away

Once you've stocked up on everything you can possibly imagine needing, it's as good a time as any to think about folks who have unmet needs. I don't particularly care if you think of this as "charity" or as "paying it forward" or as "sticking it to the man," but if you have the ability to make somebody's day by giving them free gas, free groceries, or whatever else your travel hacking practice gives you free or cheap access to, then I think it's worth considering.

Conclusion

I happen to be in a position to take advantage of the current promotion fairly aggressively, but it should be obvious that I'm trying to frame this discussion in more general terms. If you don't have a plan in place in advance of a promotion, you're more likely to waste valuable time coming up with one while the promotion is ongoing.

Rewards programs, ranked by reliability

One fun thing about writing a blog is that reader feedback gives you a chance to see how different ideas interact and collide. Last Friday when I wrote "While I'm willing to take unlimited risk in my investment portfolio, I'm willing to take virtually no risk in my travel hacking portfolio," reader Danny commented:

"This seems like an interesting sentiment. I'd be far more concerned with keeping my investments sound than my points balance."

Then on Monday I wrote with respect to my findings on Hilton all-inclusive award pricing that:

"If points costs will fall to match low revenue rates, it is easier to justify earning large quantities of Hilton points knowing that you'll almost always get close to, or above, their imputed redemption value."

I've been thinking about these two ideas, risk and reliability, and how they interact in my travel hacking practice.

Devaluations are the big, unknown risk

For several years, the US Bank Club Carlson credit card offered the last night free on all award stays. Now, this benefit was never quite as good as it was cracked up to be since Club Carlson properties, even or perhaps especially high-end Club Carlson properties, are dumps (true story: months after the Radisson Blu Warwick Hotel Philadelphia finished their renovations to not be a dump any longer they left the program).

Many people, expecting that benefit to continue indefinitely, earned hundreds of thousands, or millions, of Club Carlson Gold Points (trust me — many of them are readers of this blog).

Then the last-night-free benefit ended, and those points could only be redeemed at still-crappy Club Carlson properties. The same spend that earned those millions of points could have been used to earn 2% cash back, unbonused Ultimate Rewards or Membership Rewards points, or another rewards currency.

That's the kind of risk that I do my best to avoid in my travel hacking practice, by earning the rewards I redeem and redeeming the rewards I earn.

Reliability is the certainty of being able to redeem rewards for the trips you want to take

Reliability is something slightly different than risk. A reliable program offers consistent redemption values, whether or not that value is high or low, attractive or repulsive.

For example, according to Hotel Hustle, the IHG Rewards Club offers quite remarkable consistency, with a median value of 0.58 cents per point, with 75% of award searches above 0.44 cents per point and 75% of awards below 0.68 cents per point. That doesn't make it attractive to manufacture IHG Rewards points, but it gives you a clear view of the value of any points you might earn in one of their periodic sweepstakes or promotions.

My top ten loyalty programs, by reliability

Whether a particular rewards currency is "worth earning" depends on both your cost of acquisition and your particular travel plans, so this is not a list of the top ten most valuable loyalty programs. It's only a list of the top ten rewards programs sorted by my view of their reliability.

1. Cash. Cash has the great benefit of maintaining its dollar redemption value no matter what happens. It is, in that way, the most reliable rewards currency. Into this category also falls the fixed-value redemption of currencies like Ultimate Rewards, Membership Rewards, BankAmericard Travel Rewards, and other rewards programs with fixed values, like Delta SkyMiles Pay with Points redemptions. Their reliability is unimpeachable.
2. IHG Rewards anniversary free night certificates. In the several years I've been travel hacking, I've never seen an IHG property that I would be willing to transfer points, buy points, or manufacture points in order to book. But they really do have a Chase IHG Rewards credit card that gives you an annual award night at any IHG Rewards property in the world! I've never seen a report of the certificate not being honored for any reason, except the chain's preposterously loose rules on award availability. As far as I can tell the thing is completely reliable. Compare that to Marriott's anniversary night certificates, which have become almost unredeemable as properties continually migrate up out of Category 4.
3. Flexible Ultimate Rewards. Chase Ultimate Rewards points held in a Sapphire Preferred, Sapphire Reserve, Ink Bold, or Ink Plus account are more valuable than cash but slightly less reliable, since their value depends in part on the value of transferred points. One component of the value of a flexible Ultimate Rewards point is the value of one United Mileage Plus mile, but the value of a United Mileage Plus mile is highly volatile, so that portion of the value of an Ultimate Rewards point is also volatile. Nonetheless, Chase strongly supports the 1:1 transfer ratio of Ultimate Rewards points to their partners, so the reliability of the program overall is raised by the relative constancy of programs like World of Hyatt and Southwest Rapid Rewards.
4. US Bank Flexpoints. Long-time readers know I love the US Bank Flexperks Travel Rewards Visa because of its generous bonused earning categories, but the process of redeeming Flexpoints introduces some unreliability into the system. Flights will sometimes be shown with odd fare differences which push them into a higher redemption band, for example. Nonetheless, the ability to redeem Flexpoints for between 1.33 and 2 cents per Flexpoint makes them one of the most reliable currencies around.
5. Flexible Membership Rewards. Here the problem of transfer partner volatility is magnified by the eclectic range of partners Membership Rewards has. For example, in 2015 the transfer ratio to British Airways Avios dropped 20%, from 1000:1000 to 1000:800. Then in 2016 British Airways created a special exception to their distance-based award chart in order to charge between 33% (off-peak) and 60% (peak) more for business class flights between Boston and Dublin on Aer Lingus. Today, you may need to transfer 75,000 Membership Rewards points to Avios to pay for a flight that would have cost 37,500 Membership Rewards points before the two devaluations. This doesn't mean that Membership Rewards points themselves have radically decreased in value (how often do you fly between Boston and Dublin?), but the example illustrates the way in which their reliance on transfer partners for value introduces a lot of volatility into the value of their rewards currency, since they don't control their partners' award redemption rates.
6. Southwest Rapid Rewards. Unlike a true fixed-value currency, Southwest Rapid Rewards points have fixed values only within each fare bucket: Wanna Get Away (between 1.4 and 1.6 cents), Anytime (about 1.1 cents), and Business Select (about 0.9 cents). That means that while you know you'll get one of those three values, which one you get depends on availability, reducing in my view the overall reliability of the program. Southwest enthusiasts avoid this problem by carefully watching the schedule and snapping up Wanna Get Away fares as soon as they become available, increasing the overall reliability of the program for them, at least for flights booked far enough in advance.
7. World of Hyatt. According to the Hotel Hustle database of search results, the lowest value redemption at Hyatt properties is 0.91 cents per point (the median is 1.78 cents). If my Chase accounts were abruptly closed and I had to speculative transfer my entire Ultimate Rewards balance, I would choose World of Hyatt in a heartbeat. Hyatt doesn't have properties everywhere in the world, which makes it hard to rely on as a first-string hotel rewards program, but if there's a Hyatt in your destination you're exceedingly likely to get a good redemption value.
8. Starwood Preferred Guest. Starwood has three different sources of value: their points can be redeemed for hotel stays at Starwood and Marriott, they can be transferred to airlines partners (either directly or through a Marriott Hotel + Air package), or they can be redeemed for revenue flights. That makes it almost impossible to get a bad value for your Starpoints, although it also causes the much more serious and common problem of hoarding Starpoints and being unwilling to redeem them for anything but the perfect redemption!
9. Hilton Honors. As I've been discussing lately, the biggest effect of the recent changes to Hilton Honors is that they've apparently deliberately increased the reliability of the program. While there will always be sub-par redemptions in any non-fixed-value loyalty program, Hilton appears to have increased the number of properties where points redemptions make sense compared to paying cash rates.
10. Legacy airline programs. I got into travel hacking at the very tail end of the period when, with flexibility and planning, it was still possible to fairly reliably book low-level domestic award tickets. Those days are over. Virtually all of my domestic travel today, in both economy and first class, are revenue tickets, not because revenue tickets have become cheaper but because award tickets have become completely unreliable as a means of booking domestic travel. International travel, especially on partners, hasn't seen quite as bad a gutting, and flexibility and planning still go a long way to booking flights overseas. Having access to legacy airline currencies through Ultimate Rewards, Membership Rewards, and Starpoints is still a reasonable tactic in case you happen to find award availability, but I don't think it can be the cornerstone of a strategy any longer.

Conclusion

There you have it, my completely subjective top ten ranking of rewards programs by reliability. This is certainly not the only ranking possible: those whose travel regularly brings them to expensive cities with Starwood properties will find they're able to get consistent value from Starwood Preferred Guest, and those who live in cities with many international partner airlines will likely get more consistent value from legacy airline programs than I do. But today, a combination of cash back, Ultimate Rewards or Membership Rewards, and one or two strong hotel programs seems most likely to help you pay as little as possible for the trips you want to take.

Quick hit: new Hilton all-inclusive award pricing is great

I earn a lot of Hilton HHonors points, and I'm going to be earning even more than usual this week, so I decided to take a look at some of Hilton's all-inclusive resorts to see if I could lock in some award space for next Presidents Day, since I had such a good time in Jamaica this year, and I remembered having a terrible time finding award space at Hilton's Rose Hall all-inclusive resort. While checking out the current award space availability, I discovered some pretty odd pricing anomalies — or features, if you prefer.

Searching for flexible dates doesn't work great (and never has)

When you search for flexible dates on the Hilton website, you'll be given something that looks vaguely like a flexible date search. For example, here's a search for flexible dates in July of this year:

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This looks like you've got some expensive premium availability at the beginning of the search period, some not-unreasonable premium availability for a few days, some less-expensive award space for a couple days, one date of low-level availability, 3 sold-out dates, and then some more premium availability. That's not what's happening.

Here are the actual lowest-priced rooms I could find on the dates during this search period:

• June 24: 70,000
• June 25: 70,000
• June 26: 65,000
• June 27: 65,000
• June 28: 65,000
• June 29: 65,000
• June 30: 70,000
• July 1: No availability
• July 2: No availability
• July 3: No availability
• July 4: 115,000
• July 5: 65,000
• July 6: 65,000
• July 7: 70,000
• July 8: 70,000

The award space on June 30 seems to flicker in and out of existence depending on whether I'm logged in, whether I'm doing a flexible search or a date specific search, etc. The search results shown on the website seem to be very path-dependent.

If this continues, it's a huge improvement over the old Hilton HHonors

Once I noticed these pricing anomalies, I decided to see whether I could find any more extreme prices. Here are a few weird prices I found checking the next few months

• April 9: 70,000 (0.76 cents/point)
• May 31: 45,000 (0.58 cents/point)
• June 1: 50,000 (0.58 cents/point)
• July 23: 41,000 (0.49 cents/point)

My original plan was to check each of the next 12 months and find the cheapest date with points. That ended up not being feasible because the Hilton website is terrible. It errors out after every 2-4 searches, periodically signs you out, and inflicts all sorts of other madness on you.

The key takeaway here isn't that there are atmospheric points redemptions (although they're squarely above Hilton imputed redemption values): the value you get from points depends on both the number of points charged and the comparable revenue rate, and the lowest points costs are on nights when revenue rates are in $200-400 range. Really brag-worthy redemptions are on nights when revenue rates are in the thousands or tens of thousands of dollars, and you're able to redeem a "mere" 95,000 points.

The real takeaway here is that by being willing to reduce point costs so dramatically on nights with low revenue rates, Hilton has increased the reliability of their points' value. Prior to the revaluation, the Hilton Rose Hall was 95,000 points per night regardless of the revenue rates available. In fact Hilton had a wide range of nice properties where on cheap nights it was difficult to justify redeeming points. If points costs will fall to match low revenue rates, it is easier to justify earning large quantities of Hilton points knowing that you'll almost always get close to, or above, their imputed redemption value.

The app works great

Last night after I scheduled this post I suddenly wanted to check over a few more things and opened up the Hilton app on my phone. After a few moments, I realized, "this isn't generating any of the errors the website was giving me."

If you think about there being a fixed "real world" of Hilton award space out there in the universe, it appears to me that the app is designed to tap into that world directly, while the website presents only a distorted image of it and requires you to rotate and adjust the lens in order to see different bits and pieces of the real world of award space.

Unfortunately the app doesn't have a flexible date search function, but since the one on the website is so terrible I hesitate to even say this is a disadvantage of the app over the website. In any event, if you know the dates you're interested in I highly recommend going straight to the app and skipping the website completely.

The advantages of prepaying for travel at a discount

I have never belonged to the "travel is free" school of travel hackers, not because I don't think there are free or negative-cost methods of manufacturing spend (there are) or because I think my time has intrinsic value (it doesn't), but for the much simpler reason that most techniques that can be used to generate travel rewards can also be used to generate cash back. No matter how cheap or profitable your travel hacking is, the same techniques can often be used to generate some amount of cash back; that cash is the price of your "free" trips.

Now, there are a few exceptions. The IHG Priceless Surprises promotion didn't have a "cash back" option (although I did make some money when I sold the Bose speaker system I won). Likewise if you had 24 paid stays or 49 paid nights at Hyatt in 2016, you could pay for one additional stay and get a free night at any Hyatt in the world when Hyatt Gold Passport switched over to World of Hyatt. That's good old-fashioned travel hacking, with no obvious cash back equivalent.

But if you earn most of your loyalty rewards from manufactured spend, fulfillment by Amazon, or reselling private label products, you can almost always choose to earn cash instead of travel rewards. That's the simple reason I think travel is almost never free.

Instead, I prefer to think of my travel hacking practice as prepaying for travel at a — sometimes very steep — discount.

Prepaying for travel can save you money

This is obviously the most attractive reason you might choose to earn rewards currencies instead of cash back. If you need to choose between earning 1.5 Ultimate Rewards points with a Chase Freedom Unlimited card or 2.625% cash back on a BankAmericard Travel Rewards card, the obvious reason to do so is if you expect to get more than 1.75 cents per Ultimate Rewards point, for example on a premium cabin United redemption, expensive Hyatt stay, or Wanna Get Away fare on Southwest.

While I mentioned manufacturing cash versus rewards currencies, there are other ways to prepay for travel at a discount: Hyatt gift cards, for instance, are often on sale for 10% or more off face value, allowing you to "lock in" savings by purchasing gift cards on sale and redeeming them over time as needed.

It's more convenient to spread travel spending throughout the year

The other day I was chatting with a travel hacker who consults with businesses to use rewards to lower their travel costs and started thinking about the way a firm could use rewards earned throughout the year on business expenses to avoid month-to-month fluctuations in travel costs. After all, if you absolutely have to go to Louisville for business in May during the Kentucky Derby, you don't have the choice of paying the October cash rate — but you do have the option of paying the year-round points rate if, of course, you can find a standard room available.

This is more or less how I think about my Delta SkyMiles. I earn a block of SkyMiles each year with my Platinum Delta SkyMiles American Express card at a fixed cost, and then redeem them for my Delta flights whenever appropriate. Sometimes (hopefully more often than not) I save money compared to a cash back or fixed-value points card and sometimes I don't, but I don't have sudden Delta flight expenses as long as I have enough points to cover my flights.

This is partly what Frequent Miler calls "the joy of free:"

"When you book travel using miles & points, it may feel like your trip is free (or nearly free), regardless of how many miles and points you spend. If so, the pleasure you get from spending points and miles may greatly outweigh the pleasure you’d get from paying for the same trip with cash. In this case, miles & points are arguably (and ironically) worth more to you because you do not value them like cash."

But there's a more serious side to it as well. Travel expenses that can't be covered by existing points balances and have to be charged to a credit card require you to have cash available to pay off those new charges, lest you be stuck paying interest charges that quickly devour any profit or savings from your travel hacking practice. If you aggressively invest as much of your monthly cash flow as possible (have I mentioned my new blog, Independently Financed?), then having additional cash on hand to cover credit card payments necessarily disrupts the pace of your investments.

In other words, there are potential advantages to steadily building up and redeeming an inventory of travel rewards currencies even if you save relatively little in out-of-pocket expenses.

Some people need a permission structure to travel as much or as well as they'd like

Reader ed commented the other day:

"once a certain cache of points is retained, a freedom opens up to divert efforts toward cash back while still retaining flexibility for award-based travel. It would seem perfectly OK to me to pay for that increased flexibility even if I didn't use it. Therefore, I'm not sure that points that go unredeemed are without value. The value may simply be to clarify what my priorities are in the present moment, while retaining the means to travel on very short notice."

I think this is an interesting point that I don't always fully take into account. It's not just that traveling for "free" is more joyful, as I quoted Frequent Miler writing above, but that some people need the permission that paying little or nothing out of pocket provides in order to travel at all. A person who's both frugal and wants to see the world may need the impetus of high or even excessive points balances, hopefully cheaply acquired, in order to give herself permission to take the trips she's always dreamed of.

In this spirit, the constant drumbeat of devaluations may actually be a positive for the reluctant traveler! A trip that's affordable today might not be tomorrow, which may be enough to get someone out the door.

Conclusion

I love earning cash back, and try to earn as much of it as possible each month. But I admit that each of these different motivations drives me in part to earn rewards currencies in lieu of cash back: there are rewards currencies that I know will invariably save me money compared to cash back, there are rewards currencies like Hilton HHonors points that are so easy to earn and redeem that I'm able to spread my hotel spending evenly throughout the year, and there are currencies I accumulate just to give myself permission to book trips I might otherwise consider too expensive.

While the three rationales may differ in the degree of their economic "rationality," hopefully there's more to life than maximizing a utility function.