Arrival+ devaluation and imputed redemption values in a 2.11% world

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Last week a number of bloggers "confirmed" some forthcoming changes to the Barclaycard Arrival+ MasterCard. The trouble is, they confirmed different things!

  • Amol at Travel Codex wrote: "The first changes for new cardmembers should go into effect sometime in September, although it may vary for different people depending on when their cardmember year begins."
  • Matt Zuzolo at Bankrate wrote: "These changes will go into effect in November for cardholders who got the card before Sept. 30, 2014, and in August 2016 for cardholders who got the card on or after Oct. 1, 2014."
  • Summer Hull at Mommy Points wrote: "For those interested in applying for either version of the card, Barclaycard is targeted mid-July for a relaunch of the products for new customers.  At that time the 5% rebate on travel purchases will be in place, but it won’t expand to all categories until November (reportedly for tech related issues)."

I really like my Arrival+ card

As a reminder, I don't have any third-party credit card affiliate links anywhere on this site (although I do have a couple of personal referral links on my Support the Site! page).

So I don't have any incentive to write about cards I don't carry or cards I don't love. And I really like my Arrival+ card:

  • True Chip-and-PIN functionality makes it fantastic for buying train tickets when you've just arrived in Europe, without exchanging money at extortionate airport rates;
  • "Travel redemptions" are eminently gameable;
  • Barclaycard treats a wide range of online transactions as purchases, and MasterCards are much more widely accepted for such transactions than American Express cards;
  • I've had the annual fee waived on both of my account anniversaries to date.

Two changes to be aware of

While I'm not entirely convinced when the new changes will come into effect, all the reporting so far indicates that they will eventually be applied to existing cardholders. For me, there are two key changes to think about:

  • the Arrival+ mile rebate on travel redemptions will go down to 5% from 10%;
  • and travel redemptions will start at $100 (10,000 Arrival+ miles).

The first change means that the card is, at best, a 2.11% cash back card, while the second change means that the $89 annual fee will no longer be eligible for rebate. In other words, if you can't get Barclaycard to waive the annual fee, you'll actually have to pay it.

That raises the breakeven point of manufactured spend on the card from $40,050 to $80,909 — that's the point at which you're making any profit over a straight 2% cash back card, if and only if you actually pay the $89 annual fee (if you have the annual fee waived, then the card is still strictly superior to a 2% cash back card like the Fidelity Investment Rewards American Express or Citi Double Cash).

Imputed Redemption Values in a 2.11% world

I use the term "imputed redemption values" to designate the amount you have to save on hotel points redemptions in order to justify earning hotel points rather than cash back on your most-profitable cashback-earning credit card. So far, I've been using 2.22% cash back as my benchmark, and you can find those imputed redemption values here, which will remain valid for existing Arrival+ cardholders, for now.

But the upcoming devaluation of the Arrival+ MasterCard means those values will not be relevant to new cardholders, so I've recalculated my imputed redemption values for the hotel chains I follow using both the new 2.11% maximum earning of the Arrival+ MasterCard and a straightforward 2% cash back earning rate, like that of the two cards mentioned above. I've also included the 2.22% earning for the benefit of existing Arrival+ cardholders.

Club Carlson

This calculation has been additionally updated to reflect the end of the last-night-free benefit for co-branded US Bank cardholders.

Hilton HHonors

Starwood Preferred Guest

Marriott Rewards

Hyatt Gold Passport

IHG Rewards

Choice Privileges

This is the first time I've included Choice Privileges, the loyalty program of the Choice Hotels chain, in my hotel analyses. The administration of this program appears to me to be a complete disaster, but they have a remarkable number of hotels all over the world and what appear to me to be fairly generous imputed redemption values.

I'll have a more in-depth post coming on this program later this week, but for now, here's the imputed redemption value of manufacturing spend with the Barclaycard-issued Choice Privileges Visa Signature card, which earns 2 Choice Privileges points per dollar spent with the card:

Those are obviously very competitive imputed redemption values for top-tier properties. The only trouble is that it's wildly unclear to me whether Choice Hotels actually has any top-tier properties.

For example, the excellently-located Comfort Inn Central Park West costs just 25,000 Choice Privileges points. But a paid stay in July (Choice Hotels only allows award bookings within 30 days for non-elite members) costs just $209 — well below the $278 imputed redemption value for such a stay.