What's next: product changes

Since my April round of applications, I haven't applied for any new credit cards (although I have done a few product changes, which – usually – don't involve a "hard pull" of your credit report). That's been for a few reasons. I've already got the two most lucrative credit cards for hassle-free manufactured spend: the Citi ThankYou Preferred card with 5 ThankYou points per dollar spent at drug stores (no longer available online, and in-branch applications have reported a high failure rate), and the Barclaycard Arrival World MasterCard, which earns 2.22 cents in value per dollar spent. Using just those two cards, I'm able to pay off student loans at pennies on the dollar (made even better using my favorite hack, now featuring Plink), and pay for hotels and airline tickets at about a 65% discount (while earning points for those paid flights and stays). Add in my Delta Business Platinum American Express card, which earns 1.4 Skymiles per dollar at the $25,000 and $50,000 spend levels, and that accounts for just about all of my manufactured spend budget (although I can't resist maintaining a 50,000 Club Carlson point balance, good for two free nights at any Club Carlson property in the world).

While it's still true that you'll never earn more points per dollar than you do meeting a minimum spending requirement, I have no interest in scoring every single signup bonus before I'm 30. That's why I focus on putting spending on the wildly lucrative cards I already have, instead of applying for 3-4 new cards every 91 days.

However, my year of manning the mint with Citi ends with my January statement, and my first Barclaycard annual fee is due in April, so naturally I've turned my mind towards the future. In this occasional series I'll share my thoughts on my next moves. Today's edition: product changes!

American Express Hilton HHonors Surpass

This is a card I've been eyeing since I finally found PIN-enabled Visa gift cards at a local supermarket. Earning 6 HHonors points per dollar spent at grocery stores, and 50,000 HHonors points for upgrading my current, no-annual-fee version of the card, seems like a great value proposition, even at $75 for the first year.

To illustrate this, take a property I love in a city I love, the Hilton Prague Old Town (the Hilton Prague hotel is even more spectacular, but slightly less convenient), which in June (high season) goes for 50,000 points per night. Obviously I'll earn one free night just for upgrading, which makes that night cost about $75, or a little less (depending on whether you decide to prorate the $75 annual fee over all the additional points you earn, or just over the upgrade bonus – the latter is slightly more accurate but much more complicated). The advance purchase rate in June is around $250 after taxes, so you're paying about 30 cents on the dollar.

If I were able to aggressively manufacture spend on the Surpass card at grocery stores, I could earn additional nights after every $8,333 in spend. If that takes the form of Visa gift cards at a cost of $5.95 per $500 card, I'd be paying around $101.15 per night, or $80.92 if I redeem my points in batches of 5 nights, with the 5th night free, a 60-68% discount. In other words, it's a good workhorse of a card (for the first year), but not one that offers incredibly outsized value.

Unfortunately, recently my local supermarket...stopped allowing gift card sales to credit cards. Until I find a more reliable source, I'm shelving the upgrade.

Citi Dividend Platinum Select

While this card does typically offer a small signup bonus of $100 in Dividend Dollars for new applicants (although it has also reached as high as $300), I'm more interested in the rotating 5% cash back categories. Unlike the Chase Freedom and Discover More/it, the Dividend Platinum Select's cap on bonused earnings is annual, instead of quarterly, meaning that a single lucrative quarter (2013 offered drug stores in Quarter 1) allows you to max out $300 in Dividend Dollars. Since I won't be using my ThankYou Preferred card after mid-January, it's an obvious candidate for a product change.

Barclaycard Arrival World MasterCard - No Annual Fee

I currently have the $89 annual fee version of this card, which I've explained before is only worth carrying for the first, fee-free year. Barclaycard does have a reputation for offering annual fee waivers (or statement credits for their cards' annual fees) to good customers, so my intention is to call in April to ask if they'll offer me an $89 statement credit. After all, I am a VERY good customer. If not, then I'll call back and ask for a product change to the no-annual-fee version of the card, keeping my credit history with Barclaycard and any points I've stockpiled. Since the redemption structure is actually identical for the $89 and fee-free cards, I won't lose any of my points' value when I make the product change.

In future installments in this series I'll be discussing the cards I'll be canceling outright and the new cards I'll be applying for in the new year.