Quick hit: in defense of Blue for Business

Yesterday I dismissed the Blue for Business American Express credit card out of hand, writing that the "product earns 1 non-flexible Membership Rewards point everywhere, which isn't very interesting."

I was quickly corrected by reader Stvr, who commented, "Blue for Business is 1.3 MR per dollar."

What Stvr is referring to is the 30% bonus Membership Rewards points credited each year within 30 days of your account anniversary each year.

And Stvr is right! If you are willing to wait to receive 23% of your Membership Rewards points until the end of your cardmember year, you can think of the Blue for Business card as earning 1.3 points per dollar spent everywhere.

Does it matter?

The only situation in which I can imagine the Blue for Business card playing a useful role is if you also have a flexible Membership Rewards-earning credit card that isn't the EveryDay Preferred.

If you have a Business Platinum American Express, your Membership Rewards points are worth 1.43 cents each for paid airfare on a single airline you designate each year (the same airline you choose for your $200 statement credit). That makes your 1.3 Membership Rewards points per dollar spent on the Blue for Business worth 1.86 cents towards paid airfare. That's not great, but it's not terrible for a fee-free American Express card and it's 30% better than putting spend on the Business Platinum card itself, which earns just 1 Membership Rewards point per dollar spent everywhere.

Similarly, if you use a Premier Rewards Gold (2 points per dollar spent at supermarkets) or Business Gold Rewards (3 points per dollar spent at gas stations) card to manufacture spend in their respective bonus categories in order to transfer those points to their airline partners like Air Canada's Aeroplan, Delta SkyMiles, or Singapore KrisFlyer, you might get so much value out of your airline transfers that 1.3 Membership Rewards points per dollar gives you more value than putting the same spend on a 2% cash back card.

Of course, if you have an Amex EveryDay Preferred, then you can already earn 1.5 flexible Membership Rewards points per dollar spent everywhere with the card, as long as you make 30 or more purchases per statement cycle, which makes that card strictly superior to the Blue for Business.

Pointshound, Amtrak, Skiplagged, Updated signup bonuses

I'm heading to Chicago for a long weekend tomorrow, so updates might be spotty for the next few days. There's one newish technique I'll be checking out while I'm there, so watch for that update this weekend or early next week. In the meantime, here's a rundown of some quick hits which probably don't deserve their own blog posts, but which I wanted to bring to my readers' attention.

Pointshound Points Posting

I wrote a few posts back in July when Pointshound first launched their "double up" rates, which allows you to earn both bonus airline miles through Pointshound and elite qualifying nights and regular points with many of their hotel partners. These stays also qualify for hotel promotions

My feeling was that if you were planning to book through your hotel's website, and Pointshound offered the same nightly rate with the same cancellation policy, you may as well also earn a few hundred airline miles for your booking as well. I also was the first to reveal a simple technique for instant Pointshound Level 3 status, earning around twice as many miles per night on "double up" bookings, and somewhat more than that on standard (non-double up) bookings.

I haven't written about Pointshound recently because, frankly, my airline miles didn't post, and I wasn't interested in sending any more business to a sub-par operation. It was a good idea, but if they couldn't implement it correctly, I was fine waiting for someone who could (Rocketmiles is currently making a run at part of their market segment).

Imagine my surprise when I got a stream of e-mails on November 7 notifying me that my points had posted for 5 separate reservations. To be clear, these were "double up" reservations for August 30 - September 2, 2013. By my math, that means my points posted 9.5 weeks after checking out (in fairness, I did receive my "double up" hotel points and elite night credits for the stays immediately; just not my Pointshound airline miles).

So who knows, maybe Pointshound has managed to get their act together. File this under developing...

Amtrak Bonus Points with Google Wallet

I love Amtrak Guest Rewards points, which I value at between 3 and 6 cents each, depending on my planned redemptions (making them easily one of Chase's most valuable transfer partners). So I can't help but pass along this opportunity to earn 500 Amtrak Guest Rewards points for linking your AGR number to a mobile Google Wallet account.

Unfortunately, as far as I can tell you do need to own a smartphone, download the Google Wallet app, and add Amtrak Guest Rewards as a loyalty program to the app. All this takes a few minutes and is about as much fun as you would expect. You can unlink your AGR account once your points post, however, and they are worth between $15 and $30, depending on your redemption. To put it slightly differently, you would need to spend $250 on Amtrak or book 5 one-way tickets to earn the same number of AGR points.

Skiplagged for Hidden City Ticketing

There is a whole world of travel hacking that I simply don't have the time or patience to master. It involves things like fuel dumping and "hidden city" ticketing. The former technique is too complicated to explain here, but the latter is simple: sometimes it's cheaper to book tickets to places you have no intention of visiting, which happen to have stopovers in the city you actually intend to visit. As long as you don't check bags (which would be checked to your final destination) you can just leave the airport at your "intermediate" destination.

You can save real money doing this, but domestic airline tickets typically aren't expensive enough for me to spend time checking every possible permutation of hidden city ticketing.

Skiplagged is a new website that aims to take care of all that mindless searching for you, and it's going to become a regular stop for me, along with Kayak and ITA Matrix when I'm searching for paid flights. Their homepage has some examples of hidden city ticketing that you can book today, if you're so inclined, that offer (in some cases) substantial savings.

Updated Signup Bonuses

Here are a few updated signup bonuses you'll find on the site:

As my readers know, I don't receive any kind of bonus, referral credit, points, recognition or anything else of value if you sign up using these links, which are not connected to me in any way, shape or form. I provide them only as a service to my readers.

On the other hand, if you find the blog helpful, consider buying my ebook, The Free-quent Flyer's Manifesto, leaving a review on Amazon.com, and telling your friends and family about the site! It's the only advertising I have and it means the world to me.

The 5 best cards for manufactured spending at 7-11

[updated 7/25/13: see this post for the results of my experiment earning bonus points with American Express cards at 7-11. Long story short: it doesn't work, which takes options 3 and 4, below, off the table.]

As I reported yesterday, at least some 7-11 store locations that are coded by Visa as gas stations now allow Vanilla Reload Network reload cards and PayPal Cash cards to be purchased using credit cards. While the cost per dollar of manufactured spend is the same as reload card purchases made at CVS ($3.95 for up to $500), the ability to earn bonus points on Vanilla Reload and PayPal Cash purchases drives the cost per point earned down into even more lucrative territory.

Here are the cards that I believe offer the best return on manufactured spending at store locations coded as gas stations, in order of value to the average travel hacker: 

  1.  US Bank Flexperks Travel Rewards Visa Signature. As I explained in Chapter 2 of the Free-quent Flyer's Manifesto and in this blog post comparing fixed-value rewards points, the Flexpoints earned by this card are worth between 1.5 and 2 cents each when redeemed for paid airline tickets. The card has a somewhat confusing earning structure, whereby you'll earn 2 Flexpoints per dollar on purchases at whichever one of gas stations, grocery stores, or airline tickets you spend the most on each billing cycle. Using this card to purchase Vanilla Reload Network reload cards at a gas station, you can buy 3-4 cents in airfare for .79 cents, a 74-80% discount on mile-earning airline tickets. Once you account for the value of the frequent flyer miles you'll earn flying these tickets, this makes airline travel very close to free or even profitable if spent on 3-4 cent per mile mileage runs.
  2. Chase Ink line of small business credit cards.  These cards earn either fixed-value (Ink Cash) or flexible (Ink Bold and Ink Plus) Ultimate Rewards points. All three cards earn 2 points per dollar spent at gas stations on up to $25,000 (Ink Cash) or $50,000 (Ink Bold and Ink Plus) in purchases per year. If you have an account that earns flexible Ultimate Rewards points, you can then transfer the points to Chase's airline or hotel partners at a 1:1 ratio. If you have a Chase Sapphire Preferred card, you can also redeem these points at a value of 1.25 cents each for paid, mile-earning airline tickets, giving a total discount of 68% on paid airline travel.
  3. American Express Premier Rewards Gold/Business Gold Rewards.  Both of these cards earn 2 Membership Rewards points per dollar spent at gas stations. These points can be redeemed for paid airline tickets at 1 cent each, or transferred at various ratios to American Express's transfer partners.
  4. American Express Hilton HHonors Surpass. In the very early days of Vanilla Reload Network cards, many people (your humble blogger included) signed up for the no-fee American Express Hilton HHonors credit card, which at the time earned 6 HHonors points per dollar spent at drug stores. We earned hundreds of thousands of points buying reload cards at CVS until American Express eliminated drug stores as a bonus category with our May statement closing dates. However, gas stations are still a bonus category.  Using the standard "no-fee" HHonors card you'll only earn 5 points per dollar spent at gas stations, but the HHonors Surpass card still earns 6 points per dollar at gas stations, the same earning rate that attracted people to the Hilton cards in the first place. The Surpass card does have a $75 annual fee, so you'll need to make an individual decision on whether the additional HHonors point per dollar spent will be worth more than the cost of that annual fee.
  5. Bank of America Bankamericard Cash Rewards.  In terms of cash value, this card is second only to the US Bank Flexperks card, earning 3% cash back on gas station purchases. The reason I place it fifth on this list is that the 3% cash back is limited to $1,500 per calendar quarter. While $300 per year at a cost of $47.40 is a perfectly good deal, it's not possible to leverage it to the extent possible with the 4 options I've described above.

 

 

What's the best way to book a paid ticket?

Travelling on international premium cabin award tickets is one of the most lucrative uses you can make of your airline miles and flexible credit card points.  The example I usually give is a 100,000 United MileagePlus award to Europe in Business Class.  If you manufacture those points at .79 cents each, you'll pay $790, plus up to a few hundred dollars in taxes and fees.  The point is that you aren't saving much money over a paid economy ticket, but you get to enjoy the comfort of flying in a premium cabin instead.

The downside is that you don't earn elite status-qualifying airline miles for the distance you travel on award tickets, which can be substantial on international flights.  If you value the benefits of elite status, then you'll need to make some paid domestic flights to reach the elite status threshold you're interested in.

That's why today I'm going to cover the most lucrative methods for booking paid airline tickets.

Booking Directly Through an Airline

he most obvious reason to book through an airline's website directly is to use a credit or certificate issued by the airline.  Airlines typically hand out these certificates in exchange for voluntarily giving up your seat on an overbooked flight.  Likewise, if you cancel a non-refundable flight you may have a credit available to use for a later flight (after subtracting any cancellation fees).

When you do so, it's best to use a credit card that gives bonus points on airline purchases.  For example, the Sapphire Preferred Visa and MasterCard issued by Chase give double flexible Ultimate Rewards points on all "travel" purchases.  The American Express Business Gold Rewards and Premier Rewards Gold cards likewise offer triple Membership Rewards points on purchases made directly through an airline.

In terms of fixed-value and cash back cards, the US Bank Flexperks Travel Visa Signature card offers double points on airline purchases, if that is the bonus category you spent the most in during a given statement cycle.  These points are worth up to 2 cents each, meaning you can earn up to 4% back in value on travel redemptions.

Otherwise, your best bet is a 2% cash back card like the Fidelity Investment Rewards American Express or Visa card, or a card you're meeting a minimum spending requirement on.

If you have elite status with Delta, you'll also earn 1 Starwood Preferred Guest Starpoint per dollar spent on airfare directly through the Delta website.  As you'll see below, that's not necessarily the most lucrative method of making paid Delta reservations.

Clicking Through Ultimate Rewards to an Online Travel Agency

If you have a Chase Ultimate Rewards-earning credit card, you have access to the Ultimate Rewards Mall, which allows you to earn bonus Ultimate Rewards points on purchases made through online travel agencies, or OTAs.  You can earn 1 bonus point per dollar spent at Expedia, Priceline, or Orbitz and 2 bonus points per dollar spent at Travelocity or Hotwire.  These OTAs can price out itineraries very differently, so it's always worth checking whether you can find a better price or more convenient itinerary on one OTA rather than another.

The Chase Sapphire Preferred bonuses all travel spending, including OTA reservations, so that's a reliable way to earn a total of 3-4 Ultimate Rewards points per dollar spent on airline tickets (depending on which OTA you use).  In my experience, when booking only an airline ticket (and not a package which includes a hotel, rental car, or cruise) through Travelocity, there will be two credit card charges, one from the operating airline which covers airfare, taxes, and fees:

With a second charge from Travelocity to cover their booking fee (up to $10.99):

n these situations I believe the American Express Premier Rewards Gold and Business Gold Rewards cards will give triple points for the first, airline charge, for a total of 2 Ultimate Rewards points and 3 Membership Rewards points per dollar spent, a 5-10% rebate, depending on how you value those points.

Cash Back Portals

If you don't have access to he Ultimate Rewards mall, and you don't have a card that bonuses airline or travel purchases, and you don't have elite status on Delta (to earn 1 Starpoint per dollar), then you can still earn a small rebate on your flight purchases by clicking through a cash back portal.  All three of these cash back portals offer a fixed or variable amount of cash back when you click through to online travel agencies and make an airline reservation. 

  • TopCashBack (Expedia: $2.25, Travelocity: $3.00, CheapTickets: $5.50, Priceline: $5-$7)
  • BigCrumbs (Expedia: $1.75, Travelocity: $2.80, CheapTickets: $3.15, Priceline: $2.80)
  • Fat Wallet (Expedia: $1.25, Travelocity: $1.50, CheapTickets: $20(!), Priceline: 1%)

Conclusion

As this analysis makes clear, the best method of making paid airline reservations depends heavily on what tools you have at your disposal.  The single best combination is using the Premier Rewards Gold or Business Gold Rewards card from American Express at Travelocity or Hotwire, after clicking through to one of those travel agencies from the Chase Ultimate Rewards shopping portal.  To get access to that shopping portal, however, you'll need at the least least a no-annual-fee Chase Freedom card.  To turn those fixed-value Ultimate Rewards points into flexible Ultimate Rewards points, you'll need either a Sapphire Preferred, Ink Bold, or Ink Plus card.  However, even if you just redeem your Ultimate Rewards points for cash back through your Freedom card, you'll still be earning a generous 2% cash back on all your paid airline reservations, in addition to whatever awards you earn through the credit card you ultimately make your purchase with.