Delta and American Express: break-even changes to break-even cards

If you have a Delta co-branded American Express card, then you might have gotten an e-mail or read elsewhere (Frequent Miler, Danny Deal Guru, Doctor of Credit) about increases to the annual fee and changes to some of the cards’ other benefits.

I’ve had the Platinum Business version for years now, and Delta is still my favorite domestic airline to fly, but I haven’t had any strong feelings about it since I drastically reduced my Delta flying and stopped pursuing their Medallion elite status. Since the card had a $250 annual fee, my only goal was to use the companion ticket for a flight that cost at least that much, so I wouldn’t just be throwing the money away.

Fortunately, Delta has nonstop flights from my preferred local airport to Madison, Wisconsin, and Lexington, KY, so I’m able to use the companion ticket almost every year to visit friends there.

The annual fee on the Platinum personal and business cards is going up to $350 per year, and the Reserve personal and business cards will cost $650, in both cases on your first cardmember anniversary after May 1, 2024 (the higher annual fees are already in effect for new applicants). Even taking the increased annual fee into account, the value proposition of the card after this month’s changes has actually moved slightly in my favor. Here are the major changes and my impressions of them.

Improved companion ticket

The most attention has rightly been paid to the improved companion ticket, which now can be used for flights from the continental United States to “Hawaii, Alaska, Mexico, the Caribbean, and Central America.” Platinum companion tickets can only be used for economy, while the Reserve tickets can be used to book first class (but not Delta One, the even fancier first class cabin).

As I mentioned, I’m not inclined to use a Delta companion ticket for domestic connections if a non-stop flight is available on another carrier. Since my preferred local airport doesn’t have international flights, when traveling abroad a connection or a worse airport is a given, so expanding the number of destinations makes me much more likely to successfully use the ticket each year.

Note that “success” in this case depends not just on your destination and the price of the ticket (at least $350 before taxes and fees), but on the eligible fare classes. While more destinations are eligible for the ticket, the same (L, U, T, X, and V) economy fare classes have to be available, which can deeply constrain your options, especially during more popular windows for air travel.

Rideshare credits

The updated Platinum and Reserve cards now have a $10 per calendar month rideshare credit. Ordinarily I’d consider this a distracting gimmick, but I happen to have a specific use for these credits: I have a $5 per month subscription to Lyft’s “community pass,” which gives me unlimited access to free 30-minute dockless scooter rides.

I switched my recurring payment over to my Delta Platinum card and can already confirm it triggers the rideshare credit. When I occasionally trigger small overage fees for rides over 30 minutes, the credits also pay for those, although that’s worth less than face value to me since I would be more vigilant about ending my rides on time if I didn’t have the credits to cover them.

Since this is a “real” expense I’m currently paying with cash, I consider this $60 per year to be worth a full $60 to me.

Who or what is an “eligible Resy purchase?”

Another statement credit added to the cards is a $10 (Platinum personal and business) or $20 (Reserve personal and business) monthly credit for “eligible Resy purchases.” Since I’d never heard of Resy, I hopped over to their website to see what they sold and whether I wanted any of it.

In case you’re as clueless as I was, it turns out to be a restaurant reservation management platform owned by American Express. Discovering this didn’t shed much light on the situation: I still needed to know what a “Resy purchase” was and what would make it “eligible.” Would I need to make a reservation? Is there such a thing as a prepaid restaurant reservation?

Fortunately, it turns out virtually every restaurant I could think of is on the Resy platform, so I headed to a cool café nearby to see what the deal was. They sell gift cards, so I bought $10 worth and waited. Two days later, I received an e-mail from American Express that I’d earned a Resy credit, and it has already posted to my account (the credit is backdated to the day of the purchase so I’m not sure when it actually appeared on my transaction record).

Given my experience, I believe the credit is applied by American Express based on their own record of participating Resy restaurants and not by the restaurant processing the transaction in a specifically “Resy way” (the payment terminal was “toast”-branded, a popular restaurant point-of-sale system in my city).

The gift card I bought is reloadable, so my current plan is simply to load another $10 to it on the first of each month. I don’t value the credit at a full $120 (since I have never and would never spend $10 a month at this café), but it’s certainly worth something.

Prepaid Delta Stays, large-transaction and high-spend bonuses

There are a few more odds and ends on the cards that you should be aware of but won’t be relevant to everyone.

All the Delta co-branded American Express cards cards have an annual Delta Stays credit of between $100 (Gold personal) and $250 (Reserve Business). Delta Stays is powered by Expedia and appears to have the same prices you’d find booking directly through Expedia or Hotels.com. I often use Hotels.com to book paid stays on non-chain properties, so I’m very likely to use my entire $200 credit each year.

The Platinum Business card is unique (Doctor of Credit incorrectly says that the Reserve Business has this feature as well) in offering 1.5 SkyMiles per dollar on otherwise-unbonused (i.e., excluding “transit,” “U.S. shipping,” “Delta flights,” and “hotels”) individual transactions over $5,000, on up to $100,000 in such purchases per year.

Finally, the Platinum and Reserve cards give you 2,500 Medallion Qualifying Dollars at the beginning of each year, and you can earn 1 Medallion Qualifying dollar for every $20 (Platinum) or $10 (Reserve) spent with the card.

The last two benefits create an interesting opportunity and tradeoff. The Platinum Business card alone allows you to spend $50,000 per year in transactions of $5,000 or more to earn 75,000 SkyMiles and Silver Medallion status, while the Reserve cards allow you to earn 25,000 Skymiles and Silver Medallion status with $25,000 in spend (in transactions of any size) or 75,000 SkyMiles and Gold Medallion status with $75,000 in spend.

I don’t think either of these are particularly good value propositions in a vacuum, since I don’t think either Medallion status or SkyMiles are very valuable anymore, but it’s worth mentioning if you need to top up your MQD’s to reach the next Medallion tier: doing so in $5,000 or larger transactions on the Platinum Business card improves the value by giving you 50% more redeemable SkyMiles.

Conclusion

You can see why I view these changes as modest improvements to a set of cards that were already pretty unremarkable. After deducting the $60 in cash-like rideshare credits, I’ll be paying $290 for:

  • a slightly-improved economy companion ticket;

  • $120 in café gift cards;

  • and $200 in prepaid hotel stays.

That’s not a card I’d move to the top of my applications pile on its own, but it’s a card I’m fine keeping for another year. There are currently signup bonuses of 100,000 SkyMiles for the Platinum Business and 110,000 SkyMiles for the Reserve Business, which might make one of those worth signing up for if you already have a valuable use for the miles in mind. Since the companion ticket is only awarded after the first anniversary, you do have to hold onto the card for at least a year to even begin to get value out of your annual fee, which is not waived for the first year on any of the cards.

Hilton gift cards trigger American Express Surpass statement credits

In October, 2023, American Expressed announced changes to the Hilton Aspire and Surpass co-branded credit cards. American Express has acquired a well-deserved reputation as a “coupon book,” and these changes were no exception. Alongside an increase in the annual fee from $95 to $150, American Express added “up to $50 in statement credits each quarter for purchases made directly with a property in the Hilton portfolio.” The only question was, how easy would it be to trigger those statement credits?

Hilton gift cards trigger Surpass statement credits

Back in December I tweeted that I’d received the $50 statement credit for the fourth quarter for purchasing a $50 Hilton gift card. Since the first quarter of 2024 was just around the corner, I decided to wait to write a blog post until I’d replicated that experience. This is that blog post.

Interestingly, the gift card purchase also triggered the Surpass’s 12 points per dollar spent on “eligible purchases made directly with hotels and resorts within the Hilton portfolio.”

Timing

I purchased my first $50 gift card on November 23, 2023, and my first statement credit posted on December 2, 9 days later. I purchased my second $50 gift card on January 1, 2024, and the second statement credit posted January 10, again 9 days later.

Having established that pattern, do not worry if your statement credit still has not posted 8 or fewer days after making your gift card purchase!

Why does it work?

All I can do here is speculate, but there are two obvious explanations.

First, it’s possible that when Hilton set up their gift card provider, they explicitly coded it as a Hilton property. If gift cards were coded as regular spend, earning just 3 Honors points per dollar, there would be a real tradeoff between putting your hotel spend directly on your card versus paying with a gift card. Coding gift cards as Hilton purchases eliminates that tradeoff.

The second possibility is that when American Express coded the $50 statement credit, they used a simple filter for the word “HILTON” in transaction descriptions. Since gift card purchases post as “HILTON GC [STRING OF NUMBERS]” they trigger the credit. This raises the interesting possibility that, for example, purchases made in Hilton Head Island, South Carolina, would trigger the credit if the merchant included the town name in their credit card description!

The cards themselves

Perhaps fittingly given the relationship between American Express and Hilton, the gift cards take the form of American Express cards, in the sense that they have 15-digit card numbers starting with 3, and can be used at any Hilton property that accepts American Express.

Whether the cards can be used at non-Hilton merchants that accept American Express is an exercise left to the reader.

Conclusion

Each $50 Hilton gift card has a $1.95 shipping and handling fee, so purchasing $200 in gift cards per year raises the total annual cost of the card (including the annual fee) to $157.80. In order to break even, you therefore need to value Hilton gift cards at about 79 cents on the dollar. Whether that’s a high value or a low value depends on how you plan on using the cards.

From my perspective, 79 cents is “a bit high” for spending the cards on food and drink at Hilton properties, since hotel prices are typically marked up by more than 25% off street prices, so I rarely spend money at hotel restaurants.

On the other hand, 79 cents is quite low if you plan on using the gift cards to “pay down” your hotel room charges, whether for your room rate on paid stays or, for example, for resort or other ancillary fees that you’d otherwise have to pay with cash. While resort fees should be waived on award stays, some resorts (like the Maldives resorts that have launched a thousand blog posts) charge hundreds of dollars in transfer fees that should be eligible for payment with Hilton gift cards. A 21% discount on those fees is likely better than anything your credit card offers, unless you’re spending towards a particularly lucrative signup bonus and have limited manufactured spend opportunities at home.

Comparing IHG's 4th-night-free with Marriott and Hilton's 5th-night-free

I was reading Danny the Deal Guru’s write-up of the latest Chase IHG Rewards signup offers and something jumped out at me: the 4th-night-free benefit offered to cardholders, including those who hold the no-annual-fee IHG Rewards Traveler card. To be clear, this isn’t a new benefit, it’s just one I haven’t had a chance to think about in depth.

Generally speaking, I don’t rate IHG or their rewards program very highly, because while they have an enormous global footprint, they’re rarely competitive compared with the main hotel programs I rely on, Hilton and Hyatt. For example, I regularly visit Portland, OR, which on a sample search turned up two downtown Hyatt properties priced at 12,000 World of Hyatt points, a Hilton priced at 37,000 Hilton Honors points, a Marriott priced at 30,000 Bonvoy points, and a Kimpton priced at 25,000 IHG Rewards Club points (plus a nightly “amenity fee”). For a one-night stay, it would be ridiculous to choose the IHG property unless you’d built up a large orphaned balance through various shenanigans.

Since my framework is manufactured spend, not signup bonuses, it’s easy to make a direct comparison between the options:

  • 12,000 World of Hyatt points transferred from Chase Ultimate Rewards is worth $120 in cash.

  • 37,000 Hilton Honors points earned at 6 points per dollar with the American Express Surpass co-branded card is between $123 (if the same $6,200 in spend had been put on a 2% cashback card) and $185 if the points were purchased for 0.5 cents each, an offer which is regularly available, including now through March 7, 2023.

  • 30,000 Marriott Bonvoy points are worth between $240 (if you bought the points during one of their periodic promotions) and $300 (if you transferred the points from Chase Ultimate Rewards.

  • 25,000 IHG Rewards points are worth between $150 and $175 if you buy them using the “points and cash” trick (purchasing points while making an award reservation, then cancelling the reservation and having the points refunded to your account).

This makes comparing the four sample reservation options, and indeed comparing all reservation options at the four chains, easy, if on average:

  • World of Hyatt points cost 1 cent each;

  • Hilton Honors points cost 0.42 cents each;

  • Marriott Bonvoy points cost 0.9 cents each;

  • and IHG Rewards points cost 0.65 cents each;

then on a one-night stay you can convert the points cost of any property into the cash cost of manufacturing, transferring, or purchasing the required points. In the concrete example above, we saw that Hyatt and Hilton were quite competitive, while Marriott and IHG Rewards were significantly more expensive options.

On four-night stays, the equation changes, but only for IHG Rewards points. On four-night stays at the other three chains, the cost per point remains the same, while the 4th-night-free benefit offered by the IHG Rewards credit cards increases their value by 33% or decreases their cost by 25% to 0.49 cents each — same difference. The four-night IHG Rewards stay now costs just $122 per night, putting it squarely in the middle of the “competitive” pack of Hyatt and Hilton, or even on the cheaper end (ignoring that pesky Kimpton amenity fee, which you obviously shouldn’t in practice).

Moving to a five-night stay, the equation shifts again, but this time against IHG Rewards, since Hilton and Marriott both offer the fifth night free on award stays. The cost per night on the sample five-night stays with Hilton is $123 per night, with Marriott is $216, and with IHG $130. Hyatt doesn’t offer free nights on longer stays so their cost per night remains flat at $120.

Reference Card

I wanted to use a specific example to explain why I personally don’t care for IHG Rewards, but in case you want to bookmark this post or paste the values into your notes app, here are the shortcuts when calculating the cost of stays of various lengths.

Stays of 1-3 nights:

  • World of Hyatt: 1 cent per point

  • Hilton Honors: 0.42 cents per point

  • Marriott Bonvoy: 0.9 cents per point

  • IHG Rewards: 0.65 cents per point

Stays of exactly 4 nights:

  • IHG Rewards: 0.49 cents per point

Stays of exactly 5 nights:

  • World of Haytt: 1 cent per point

  • IHG Rewards: 0.52 cents per point

  • Hilton Honors: 0.34 cents per point

  • Marriott Rewards: 0.72 cents per point

Now you can easily calculate the cost of reward stays of up to 5 nights in length in every city in the world — not just in Portland, Oregon!

Don't sleep on the American Express Hilton Surpass $5,000 threshold bonuses through June 30, 2021

For obvious reasons since early last year I’ve been focusing my manufactured spend on cards earning cash back or rewards easily converted to cash or paid travel, and slacking off on the few remaining co-branded credit cards I carry. That allowed it to completely slip my mind that the American Express Hilton Honors Surpass card has been running a fairly compelling deal, for 10,000 bonus Honors points each time you spend $5,000 on the card, up to 100,000 points when you spend $50,000. If all of your Surpass spend is in the card’s 6-points-per-dollar categories, that works out to 8 Honors points per dollar each time your cumulative spend reaches a $5,000 threshold.

The offer ends June 30, 2021, but it’s well worth checking how close you are to the next threshold and seeing if any additional local gas station or grocery store bonuses make it worth closing the gap. Speaking from personal experience, I received a “Thanks for using your Amex Offer” e-mail as soon as a purchase put me over the $5,000 threshold, so you shouldn’t need to wait or worry about whether your purchase has triggered the threshold bonus.

In my experience Hilton Honors points are consistently worth about half a cent each, which makes this a 4% rebate at gas stations and grocery stores, with the potential for outsized return at specific properties and when using the 5th-night-free benefit on award stays.

Finally, if you plan on meeting the $15,000 annual spend threshold to receive a free weekend night certificate (and if you aren’t planning on meeting the spend threshold you shouldn’t be carrying the card and paying its annual fee), then it’s obviously better to meet that spend threshold while the same spend also counts towards the extra bonus point threshold. Free night certificates and bonus points: two great tastes that taste great together.

Quick hit: easily adding all available Amex Offers (if you're an idiot, like me)

Yesterday I was excited to see Danny the Deal Guru’s post about a simple technique to quickly add all your available Amex Offers to your cards with a simple click. It worked for him and some other people who commented, but it didn’t work for me. Since I’m computer illiterate, I assumed it had something to do with my ad blocker or privacy settings, or the fact that I use Apple hardware, or any one of a hundred other things.

This morning I caught my second wind and decided to try again. Upon closer inspection of the error message, I saw a string that looked familiar: “U+201C.” That looks like a unicode character. Some light googling revealed that it was, indeed, a unicode character, specifically the “left double quotation mark” character, like the ones on the left side of those quotes.

Turns out, JavaScript doesn’t like left (or right) double quotation marks. JavaScript likes upright double quotation marks, and after replacing the former with the later, the code sailed through.

It turns out, in the original Reddit thread, user blamsonyo had used upright quotation marks, and if I had bothered to click through and copy the original code I wouldn’t have had a problem. Lesson reinforced: when possible, go to the original source! Save the games of telephone for summer camp.

My COVID-19 Delta companion ticket experiment (and one weird datapoint)

Most people aren’t in a position to plan travel these days, but like me, you might be in a position where you need to book travel. In my case, that meant making a companion ticket reservation using a card I plan to cancel.

News to me: Delta companion tickets are linked to your co-branded credit card, not your Skymiles account

I only have one Delta Platinum Business credit card, so I only get one companion ticket a year, which means it takes some time to collect datapoints (and they’re stale by the time the next one comes around). For that reason, I was not aware of a curious development: Delta companion tickets are now automatically charged to your co-branded Delta credit card.

This may not seem like a big deal at first glance, since if you have a Delta co-branded credit card in the first place you’re probably fine earning bonus Skymiles on your purchase, and you might even be working your way towards a $25,000 or $30,000 high spend threshold anyway. Otherwise, why have the card?

It is, however, a change: in the past, Delta companion tickets could be booked with any American Express card, even cards that weren’t issued by American Express, like the Fidelity 2% cash back card, which used the American Express payment network before eventually moving over to Visa.

I wasn’t trying to be that clever, however. I simply wanted to pay with my American Express Hilton Honors Surpass card, since I plan to cancel my Delta card in the next few days. The payment was accepted, and my e-mailed receipt shows the last four digits of my Hilton card.

But the charge was put on my Delta card anyway, even though my Delta card isn’t even saved to my Delta wallet! I hope you’re as astonished as I am: not only did they charge a card I didn’t authorize them to charge, they charged a card that wasn’t saved to my account.

In my case this didn’t end up mattering, but do keep it in mind if you are planning to put a Delta companion ticket on a different American Express card, for example to meet a minimum spending requirement, high spend bonus, or to trigger an Amex Offer.

Book Delta speculatively by May 31 for travel before September 30

There are two slightly different rules on the Delta website that I’m hoping to take advantage of which led me to make this reservation the way I did:

  • “Tickets originally purchased between March 1 and May 31, 2020, can be changed without a change fee for up to a year from the date you purchased it.”

  • “for travel within the United States originally scheduled to depart March through September 30, 2020, all change fees are waived; You can rebook your trip to the same destination for travel departing before September 30, 2020, with no difference in fare applied."

Since, if epidemiologically possible, we’re hoping to take a trip to New Orleans in the fall, the way I read this is that I could book the cheapest possible flight to New Orleans departing anytime before September 30 and be able to change it to any date before September 30, at any price, while paying no change fees and no difference in fare.

By booking before May 31, I also have the backup option of using the price of the ticket towards any other Delta ticket up to a year after the date of purchase.

So, it is worth it?

In my case, I had the icing of being able to redeem a companion ticket that would otherwise be lost when I close my Delta card, but it’s worth considering who else might want to take advantage of this opportunity.

The clearest case is if you have a trip you know you need take on Delta before September 30, since according to my reading of these rules you can book the cheapest dates on the calendar, then simply change your flights to the correct dates without paying any fees or difference in fare. Delta appears to be saying all flights between two given airports, departing before September 30, are now priced at the lowest fare available anytime before September 30 between those same airports. Nice of them!

Another option is using the pre-May 31 change fee waiver as a kind of travel bank to liquidate fixed-value points on cards you plan to cancel, or to trigger airline fee credits. For example, the American Express Platinum cards offer a 35% rebate when you redeem Membership Rewards points for certain premium cabin tickets. Booking an expensive first class Delta flight, receiving the rebated points, and then using the value towards flights you actually plan to take might be one way to lock in that increased value.

I don’t carry any cards that offer annual airline fee credits so it’s not a sub-field I follow particularly closely, but if you can find some sub-$50 Delta fares, they might automatically trigger credits on cards like the American Express Platinum or Chase Sapphire Reserve.

Conclusion

Let me close with a word of (gentle) warning. The actual financial mechanism here is that you, the passenger, are making an unsecured loan to Delta, a troubled airline. That doesn’t mean you don’t have rights: you have a lot of rights! But if the pandemic lasts longer than expected, or Delta manages the aftermath worse than expected, then your rights are going to have to get in line along with everyone else’s rights: employees, bondholders, shareholders, airports, suppliers, etc.

I don’t mean to come across as pessimistic. I think Delta is an unusually well-managed airline! I just mean to say that, as in all these games we play, this is not a case of “pulling one over” on Delta, it’s a case of making a calculated bet, and your calculation may well end up being different than mine.

Two great, one good, and one marginal grocery store earning boost

By now you may have heard that starting May 1, 2020, Chase and American Express have enhanced the rate that several of their cards earn miles and points at grocery stores. I was notified by American Express by e-mail on May 1 (subject line “FQF, your Amex Card Member benefits just got better”), but I still haven’t actually received any official communication from Chase.

Here are the four most attractive offers I see, from the no-brainers to the tough call.

12 Hilton Honors points with Surpass and Aspire, plus a lifetime status angle

The American Express Surpass card usually earns 6 Hilton Honors points per dollar spent at grocery stores, and the Aspire card just an unbonused 3 points. Through July, both cards will earn 12 Honors points per dollar spent, with no maximum.

Hilton Honors points are worth about half a cent each, and normally cost about half a cent each when manufactured at grocery stores (since the same spend could be put on a card that earns 3% rewards). During this period, the card earns the equivalent of 6% cash back, which is essentially unheard of for an offer with no limit on the bonused amount.

Additionally, if your travel hacking strategy includes hitting the $15,000 spend threshold for a free weekend night with the Surpass card, or the $60,000 threshold for a second free weekend night with the Aspire, you obviously want to earn as many points as possible along the way, and the next 3 months are going to be a great opportunity to do so. American Express is also extending the expiration date of all certificates earned after May 1 and allowing them to be redeemed any night of the week.

Finally, I want to mention — without putting too much emphasis on it — that there’s a lifetime status angle here as well: all points earned with the Surpass and Aspire cards through December 31, 2020, will be treated as “base points.” Base points are a legacy feature of the Hilton Honors program from when it was a hotel loyalty scheme instead of a credit card loyalty scheme, and are (normally) earned only on your room rate and room charges. If you receive Diamond status by holding the Aspire card or by spending $40,000 on the Surpass, then you have probably never had any reason to think about base points.

The reason you might care about base points now is that Hilton has a “lifetime” elite status program: if you earn 2,000,000 base points, and maintain Diamond status for a total of 10 years (they don’t have to be consecutive), you are awarded “lifetime” Diamond elite status. For those with access to especially plentiful and socially-distanced grocery store spend, this is an opportunity to earn a phenomenal number of base points towards that 2-million-point goal.

If, like me, you believe every deal dies eventually, then you can treat lifetime Diamond status as a kind of long-term insurance policy: American Express can fire you as a customer, grocery stores can refuse to serve you, but Hilton will be stuck honoring your status for years to come.

If you do decide to pursue this angle, contact Hilton and ask them what your current lifetime base point total is and the number of years of Diamond status they’ve credited you with. I don’t know of any way to look up this information online (leave a comment if you do!).

3 and 5 Ultimate Rewards points with Chase Sapphire Preferred and Reserve

Over time every travel hacker should be diligently accumulating as many Chase Freedom cards as possible, which in the second quarter of 2020 are already earning 5 Ultimate Rewards points per dollar spent at grocery stores, on up to $1,500 per card in spend. I personally only have 2, but I know others have many more.

In May and June, 2020, Chase has increased the earning rate on their premium Sapphire Preferred and Reserve cards to 3 and 5 Ultimate Rewards points, respectively, on up to $1,500 per month in grocery store spend. That means after you’ve exhausted your quarterly Freedom bonus categories, you have another $3,000 in bonused grocery store spend to go.

Points earned with the Sapphire Reserve are worth a minimum of 1.5 cents each (when redeemed for paid travel), which makes the spend a no-brainer, but even if you only have the Sapphire Preferred I think the flexibility of Ultimate Rewards points, compared to the relative restrictiveness of Hilton points, suggests you should knock out your capped spend on these cards before going all-in on the Surpass or Aspire cards.

3 World of Hyatt points with Chase Hyatt cards

The two offers above are great, in the sense that my recommendation is: if you have the cards, take advantage of them. The Chase World of Hyatt earning boost is attractive, but doesn’t quite fall into that category: in May and June, 2020, you’ll earn 3 World of Hyatt points per dollar spent at grocery stores, on up to $1,500 per month in grocery store spend.

My perspective here is that if you plan to transfer 9,000 Ultimate Rewards points to Hyatt any time in the near future, these 9,000 World of Hyatt points should be valued the same as Ultimate Rewards points: every point you earn in World of Hyatt is a point you don’t have to transfer from Ultimate Rewards.

But whatever your plans and your level of confidence in those plans, you should almost certainly value World of Hyatt points “somewhat” less than Ultimate Rewards points, which is to say, maximize your Ultimate Rewards earnings first before turning to World of Hyatt.

4 Delta SkyMiles with American Express consumer credit cards

I no longer have an American Express Delta co-branded consumer credit card, having swapped my personal Delta Platinum card out for the business version several years ago (a card I’m planning to cancel, if the increased $250 annual fee ever hits). That means I’m not personally affected by American Express raising the earning rate on consumer cards to 4 Delta SkyMiles per dollar spent at grocery stores through July, 2020.

Let me get the obvious out of the way first: if you value and chase elite status with Delta through the Medallion Qualification Dollar waiver (spending $25,000 per calendar year) and Status Boost (bonus Medallion Qualification Miles when spending $25,000 or $30,000 on the Platinum and Reserve cards, respectively), then you should certainly try to earn as many redeemable miles as possible while doing so! A high, uncapped earning rate at grocery stores makes the next few months a great opportunity to sprint towards those goals.

Likewise, if Delta American Express consumer cards are the only cards you have featuring enhanced earning at grocery stores, they’re the only ones you can use: play the hand you’ve dealt yourself.

But as much as I enjoy the experience of flying on Delta, there’s no escaping the fact that SkyMiles are simply hard to use for high-value redemptions, and I hesitate to value them at more than 1 cent each (their value when used on “Pay with Miles” redemptions). The risk of unredeemed balances, or low-value redemptions, is much higher even than with a program like Hilton, where even break-even redemptions come with a 5th night free, for instance.

That’s what makes this earning boost a “marginal” play: a 4% earning rate in normal circumstances would be great, especially with the potential of accelerated elite status with a good airline. But given the other possibilities available, I would turn to Delta only after meeting Chase’s earning caps and satisfying my need for Hilton points.

Bonus tip: free manufactured spend at Safeway & Co.

I’d been noodling this post for a day or two when I saw Doctor of Credit share a new Safeway deal for $10 off $100 in MasterCard gift cards. The discount reduces the cost of each card below face value, making it a great opportunity to score some early wins this month.

The offer runs through May 16, 2020, but in my experience these offers must be added to your Safeway accounts during the week they launch (after which they remain linked until expiry).

So, get cracking!

Barclaycard gutting Arrival+ travel benefits November 1

I’m not sure how old this news is since I rarely log into my credit card accounts on my desktop, but when I logged into my Barclaycard account the other day I was greeted by a foreboding message:

Never a message you want to see from your primary credit card, and sure enough, a quick comparison of the old (current) and new Cardholder Guide to Benefits reveals the damage is near-total. Here’s are some of the most important changes.

Trip Delay

Most travel hackers prefer the more generous trip delay insurance provided by the Chase Sapphire family of cards, but since I don’t have one of those (I use a legacy Ink Plus to make my Ultimate Rewards points transferrable), I put most of my travel charges on my Arrival+ card, which currently offers a benefit of up to $300 for delays of 6 hours or more.

I can’t say that I “rely” on Barclay’s trip delay coverage since I’ve never actually used it (my only experience was using the Sapphire Preferred trip delay coverage), but the ability to earn some points, and possibly trigger a hotel promotion, on someone else’s dime at least partly makes up for the inconvenience of a long flight delay.

On November 1, the benefit disappears (it’s possible trips purchased before November 1 will still be covered, but I wouldn’t rely on that possibility).

Purchase Protection Benefits

I don’t know what else to call the suite of current benefits, which include “Extended Warranty,” “Price Protection,” “Purchase Assurance” (goods stolen or damaged within 90 days of purchase), and “Satisfaction Guarantee” (the ability to return items that the retailer refuses to refund).

These benefits all disappear November 1, and are replaced with “Cellular Telephone Protection.” Besides the obvious requirement you charge your monthly bill to the credit card in order to qualify, there are a number of additional requirements that I think would make my phone ineligible, particularly the exclusion of “Eligible Cellular Wireless Telephone(s) purchased from anyone other than a cellular service provider’s retail or internet store that has the ability to initiate activation with the cellular service provider.”

Since I bought my iPhone directly from Apple, which is not a cellular service provider, the question of whether my phone would be covered depends on precisely what work the word “or” is doing. In other words, is a phone eligible if it is purchased from a cellular service provider’s retail store or a cellular service provider’s internet store (the obvious grammatical reading), or is it eligible as long as it is purchased from a cellular service provider’s retail store, or from any internet store that has the ability to initiate activation with the cellular service provider?

Phones purchased directly from Apple would be excluded under the first reading but covered under the second.

The maximum benefit is $800 per claim and $1,000 per 12-month period, after a $50 deductible per claim, and you can make a maximum of 2 claims per 12-month period.

Unchanged Benefits

The card will continue to offer “Baggage Delay,” “Trip Cancellation and Interruption,” and “Travel Accident Insurance” (this is not medical insurance — it’s basically an accidental death and dismemberment policy that only applies during your trip), although there may be some changes to the coverage terms and amounts. The rental car collision damage waiver benefit also remains, and is still secondary to your primary auto insurance policy.

Conclusion

Obviously the loss of the trip delay benefit is the worst of these changes, and if you’re the kind of person who relies on trip delay reimbursement, you’re going to need to find another card. Besides the Sapphire family of cards, there are several more cards from Chase (United Explorer and Club, Marriott Bonvoy Bold and Boundless), US Bank (Altitude Reserve), that offer a trip delay benefit and that you might already carry for one reason or another. Additionally, American Express is reported to be adding a trip delay benefit to certain cards beginning January 1, 2020.

I don’t think it is reasonable for most people to pay an annual fee on a credit card they wouldn’t otherwise carry exclusively for the trip delay benefit, but if you’re already paying for it, you had better be using it!

American Express retreats from Priority Pass restaurants and resort credits

In the last few weeks a couple pieces of news have come out from American Express:

While the former change in principle affects more cardholders, I think the latter change gives a better clue to what’s going on here.

Very few American Express cards offer Priority Pass membership

To the best of my knowledge (leave a comment if I missed any) the only American Express cards currently available which offer Priority Pass Select memberships are:

  • Platinum business and personal charge cards (unlimited visits)

  • Centurion charge cards (unlimited visits)

  • Marriott Bonvoy Brilliant credit cards (unlimited visits)

  • Hilton Honors Aspire credit cards (unlimited visits)

  • Hilton Honors Ascend credit cards (10 free visits per calendar year)

  • Hilton Honors Business credit cards (10 free visits per calendar year)

The first 4 cards have annual fees of $450-$595; by comparison the Hilton Honors Ascend and Business cards are a steal at $95 per year.

Priority Pass restaurant credits should be a win-win situation

There are a few moving pieces it’s important to understand about the economics of a Priority Pass restaurant relationship:

  • breakage: restaurants get a flat fee for a maximum value. In May, 2018, for example, Priority Pass reimbursed Timberline Steaks & Grill at Denver International Airport $23 per check-in. Of course, customers with unlimited Priority Pass memberships and unlimited guests may not use their entire $28 per person credit if they’re just popping by for a drink or an appetizer.

  • overage: on the other hand, a cardholder and guests who order more than $28 each, after tax, doesn’t receive a discount on the overage. So while an 18% discount ($5 off $28) may sound like a lot if you order exactly $25.85 before tax, you get a 0% discount on every dollar you spend over that amount.

The labor squeeze

If you have ever looked at the description of a Priority Pass restaurant, you’ll have noticed that they emphatically, entirely, and comprehensively do not include gratuities in the value you’re able to redeem during a restaurant visit. In jurisdictions with a “tipped minimum wage,” i.e. places where employers are not required to pay their employees the minimum wage, the restaurant gets to keep the entire value of the Priority Pass redemption while the tipped staff’s income is reduced by the amount Priority Pass customers tip less than paying customers.

On the margin, this should modestly increase the value of Priority Pass redemptions to restaurants since the increased value of the sales accrue to the restaurant’s management while the increased intensity of the work is paid for through customers’ tips.

Priority Pass restaurants (and lounges) can and do throttle access

The flip side of that is during periods of high demand, when lounges and restaurants in the Priority Pass network simply refuse to accommodate Priority Pass customers, collecting the full value of their sales without passing along a discount. This issue first came to my attention through the Alaska Boardroom lounges, where Priority Pass customers were routinely turned away during peak periods, but it has since spread and lots of people are familiar with the ubiquitous signs telling Priority Pass cardholders to get lost.

Most people don’t visit Hilton resorts most years — and American Express wants to keep it that way

Once you start to think in terms of breakage and overage, the restriction on prepaid advance purchase rates for Aspire resort credits makes perfect sense: some share of Aspire cardholders books stays at eligible Hilton resort properties each cardmember year. Perhaps it’s as high as 70%, leaving a hypothetical 30% breakage rate on the $250 resort credit. But if 90% of Aspire cardholders stay at an eligible Hilton property every 2 years, then the calculation potentially changes: those cardmembers will be able to redeem their resort credit every year: once when they make an advanced purchase rate reservation before their cardmember anniversary, and once when they arrive for their stay after their cardmember anniversary.

That reduced breakage rate has the potential to radically increase the product’s cost to American Express, just as the miscalibration between Hilton annual fees and Priority Pass reimbursements caused their current panic. But at the end of the day, it’s also not sustainable to offer high-cost, low-value credit cards in a competitive market.

My guess: Priority Pass restaurants will be back in the next year or two

It’s hard to make predictions — especially about the future. But given the short notice American Express gave for cutting off Priority Pass’s expanding network of restaurant locations, it seems like an obvious timing problem: Priority Pass has already entered into contracts with its participating locations, so it couldn’t afford to give American Express a discount. American Express takes years to adjust its annual membership fees. That meant the only place American Express had the option of stopping the bleeding was to cut off restaurants completely.

But there’s no reason to believe that’s true in the long term: airport restaurants will always have high fixed costs and low marginal costs. American Express will have to keep competing against premium products offered by Chase and Citi. Priority Pass’s network of relationships with airport restaurants is a valuable and unique asset (those handheld devices aren’t cheap).

All of which is to say, the American Express Priority Pass relationship may not, and probably won’t, take its current form, but I’d bet American Express premium cardholders will have access to Priority Pass restaurants in one form or another by the end of 2020.