Four use cases for Hilton credit card spend

Lately I’ve been mulling a series of posts by Nick Reyes over at Frequent Miler about the relative value of earning Hilton Honors points directly through credit card spend, versus purchasing them for 0.5 cents each during Hilton’s periodic point sales. As someone who considers Hilton indispensable to my travel hacking practice, I took the opportunity to reflect on what I might be doing wrong (or right).

The Deal

As Reyes explains, the opportunity comes from the fact that while Hilton normally sells their points for 1 cent each, they very frequently offer sales where you can purchase up to 80,000 points per calendar year for $800, and receive 80,000 bonus points, bringing the cost per point down to 0.5 cents.

Moreover, you should be able to receive the same deal clicking through the TopCashBack portal and earning 2.5% cash back, or up to $20 on an $800 purchase. And of course the purchase itself will earn cash back, worth another $16 on a 2% cash back credit card. That means you can purchase up to 160,000 Hilton Honors points per year for $764, or 0.4775 cents each.

If that’s the cash cost of 160,000 Hilton Honors points, you should be at least reluctant, if not unwilling, to pay more than that in opportunity cost. For example, Hilton Honors credit cards earn 3 points per dollar on unbonused spend. If you can otherwise earn 2% cash back on unbonused spend, putting the same spend on a HIlton credit card would mean paying 0.67 cents per points — 40% more than they cost on the open market.

Even manufacturing spend in the Hilton Ascend bonus categories may mean overpaying: earning 6 Hilton Honors points per dollar spent at grocery stores means giving up 3 cents in travel on the US Bank Flexperks Travel Rewards card, while at gas stations it means giving up 2 Ultimate Rewards points per dollar on the Chase Ink Plus and Ink Cash.

All that is straightforward enough. What I wondered was, under what circumstances does it still make sense to put spend on a Hilton co-branded credit card?

Reimbursed business travel

It’s easy to forget today, but travel loyalty programs were not actually designed with cheapskates like me in mind. Instead, they were meant to encourage business travelers with control over their reservations to prefer one travel provider over another by offering to kick back a portion of the company’s travel budget to the traveler for later, personal use. And to an extent, that’s still what they do.

If you’re a reimbursed business traveler, it can make sense to charge your Hilton reservations to an Ascend or Aspire credit card. The former earns 12 points, and the latter 14 points, per dollar spent at Hilton properties, including taxes, resort fees, and room charges, the equivalent of 5.73% and 6.69% cash back, respectively (since 12 points can be bought for 5.73 cents during 100% bonus promotions on purchased points). That compares favorably to the 3 ThankYou points per dollar spent at hotels with the Citi ThankYou Prestige and 2 Ultimate Rewards points per dollar spent with the Chase Ink Plus.

Indeed, you would need to value the marginal ThankYou point at 1.91 or 2.23 cents each, and the marginal Ultimate Rewards point at 2.865 or 3.34 cents each to be willing to give up 12 or 14 Hilton Honors points per dollar spent. Those are not incredibly unrealistic values, but they’re well above the rate at which I would acquire those points speculatively.

And of course, American Express Offers linked to your Hilton credit cards may offer substantial additional savings, like the $70 off $350 offer I took advantage of in Hawaii last month.

Ascend free weekend night award spend threshold

If you don’t manufacture spend, and you don’t have reimbursed travel you can direct to Hilton, then you probably shouldn’t carry an Aspire card (with its $450 annual fee) and you absolutely should not carry an Ascend card unless you’re willing to meet the $15,000 cardmember year spend threshold to trigger a free weekend night award.

That free weekend night award has two costs: the card’s $95 annual fee, and the opportunity cost of putting $15,000 on the Ascend card instead of your next best alternative. Here I’ll assume that opportunity cost is 2% for unbonused spend, and 3% for bonused spend (gas stations and grocery stores). You should re-run these calculations if your opportunity cost differs, of course.

That brings the total cost of the free weekend night award to $395 or $545, from which we can back out the 45,000 points (worth $214.88) or 90,000 (worth $429.75) points earned on the spend, for a net cost of $180.12 or $115.25.

Using the same base cost of 0.4775 cents per Hilton point, we know $180.12 can buy you 37,721 points, and $115.25 can buy you 24,136 points. In other words, any Hilton free weekend night redemption above those values leaves you at least marginally better off than if you had put the $15,000 in spend on a 2% or 3% cash back card instead and simply purchased the corresponding number of points.

But ideally, you won’t be making breakeven redemptions. At a 95,000-point property, a free weekend night is worth $453.63 in purchased points, for a profit of $273.51 or $338.38. If the new Waldorf Astoria Maldives Ithaafushi really charges 120,000 points per night for a standard award — and those awards can be booked with free weekend night awards — then the potential profit is even larger.

Increased float

Even replacement-level affiliate bloggers have enough of a conscience to warn the folks they sell credit cards to that you should pay off your balance in full every month, since the high interest rates credit cards charge (sometimes after a low-interest or zero-interest introductory period) will almost immediately reclaim the value of any rewards you earn on spend.

A newbie taking this advice literally might use their manufactured spend to immediately pay off the card used to generate it. And indeed, during opportunities like the unlimited 5% cash back offered by Wells Fargo credit cards in the past, that’s sometimes the most lucrative strategy.

But more experienced folks understand that while credit card interest should be avoided, there are lots of advantages to holding onto cash, rather than plowing it back into the card used to generate it. A card with a 30-day billing cycle and 20-day grace period effectively offers a series of rolling 50-day interest-free loans. The more lucrative your short-term investment opportunities, the more willing you should be to maximize the value of those interest-free loans, a strategy discussed by Sam Simon and Robert Dwyer in the February 1, 2019, episode of their Milenomics Squared podcast.

That means if your credit limits are too low to meet your needs for cash to plow into your most profitable gigs, you may well find it worthwhile to put spend on a second-best or third-best card.

Ascend Hilton Honors Diamond spend threshold

In general, Hilton Honor Diamond status doesn’t afford very many concrete or guaranteed benefits. In fact, the only guaranteed benefit I’m aware of is that Gold members are only entitled to executive club access when they’re upgraded to a club floor, while Diamond members receive club access even when they are not upgraded. That’s not nothing, but it’s also not much.

Moreover, Hilton status seems to last more or less forever. So while Diamond status is a benefit of spending $40,000 per year on the Hilton Honors Ascend American Express card, you don’t have to spend $40,000 every year. If you spend that much even once, you’ll probably have Diamond status for at least 2-3 years, if not longer.

However, if you’re keeping the Ascend in order to hit the $15,000 spend threshold every cardmember year, you may find it worthwhile to also hit the $40,000 Diamond status spend threshold every few years, especially if you can do so in bonused spend categories.

Bonus use case: you just need more points

As Reyes pointed out in his post, while each individual Hilton account holder is limited to purchasing 80,000 (and receiving 160,000) points per year, Hilton has made it easy to transfer and pool points, so in principle you can simply enlist as many people as needed to buy points during each promotion and then combine them for your desired redemptions.

In reality, conscripting friends and family to help you spend thousands of dollars on virtual currency is as likely to generate dead-eyed stares as it is Hilton Honors points. Once you’ve picked the low-hanging fruit of yourself, your spouse, and your kids, you might simply not have any good options for additional points purchases. At that point, instead of wasting time trying to cajole your relatives into playing along, you might find that it’s worth slightly “over-paying” to avoid the fuss.

An annoying (but probably good) change to Visa gift cards from Staples.com

Like most (all?) travel hackers, I consider flexible Chase Ultimate Rewards points to be the most valuable currency for hotels (World of Hyatt) and award tickets (United Mileage Plus and Southwest Rapid Rewards), and even find myself redeeming them for paid airfare periodically at 1.25 cents each through my Chase Ink Plus card.

That means it’s a no-brainer for me to spend $50,000 per cardmember year at office supply stores, to earn 250,000 Ultimate Rewards points. That’s not the only way I earn Ultimate Rewards points (I also have two Chase Freedom cards and a Freedom Unlimited), but it’s a commonsense way to make sure I have a steady stream of points coming in each month.

Staples.com Visa gift cards can no longer be activated by Blackhawk phone reps

While I stock up on prepaid debit cards at Staples and Office Depot during promotions, my city unfortunately only has one of each, and they quickly sell out, so I top up my spend with monthly purchases of $300 Visa gift cards from Staples.com.

Those cards are mailed unactivated and unusable, and for each order, a separate letter is mailed with activation codes that can be entered online or over the phone.

In my experience, those activation codes typically arrive a day or two after the physical cards, and Blackhawk has long offered a workaround if the activation codes are delayed: after verifying your identity, their phone reps were able to submit manual activation requests without the activation codes.

Sometime between the beginning of October (my last order) and this week, that process stopped working. You can still activate gift cards using their phone system, but only using the automated phone tree; there’s no longer an option to speak to a phone rep to request manual activation of cards (or anything else).

This is annoying, since I typically order 18 cards per month, and waiting for the activation codes to arrive and then manually activating them is a pretty tedious chore, especially since the website makes you complete a “captcha” for every single card you activate. I’ve spent so much time looking for traffic lights and bicycles I can’t tell them apart anymore.

The previous system was extremely vulnerable

While phone reps previously “verified” your identity before submitting activation requests, the information needed to verify your identity was delivered along with the physical gift cards: your name, mailing address, order number, and the last four digits of the cards themselves (depending on the phone rep).

That meant anyone who knew what was in the envelope (anyone who knows what Blackhawk sells) could steal the cards and call in to have them activated using only the information in the gift card package itself.

It’s possible this threat was finally realized, or that enough such thefts actually occurred, and that led Blackhawk to make the change. It’s also possible, and perhaps more likely, that they decided to lay off some of their call center workers and needed to reduce the number and type of calls they handled.

Conclusion: probably for the best

If you manufacture a lot of spend, wasting a day or three waiting for activation codes to arrive can feel like an eternity, and I was definitely frustrated trying to find a way to talk to a phone rep until I realized the option had been completely removed.

But the frustration of not being able to immediately liquidate cards pales in comparison to the frustration of trying to get your money back if one or more orders of gift cards were stolen and liquidated.

Having gift cards and activation codes arrive on separate days is a fairly primitive form of one-factor identification (you have to be able to check the mail at the same address on two separate days), but since the previous system was zero-factor identification, on balance I think the inconvenience isn’t worth complaining about too much.

On the other hand, if your activation codes never arrive, then the inability to speak with a phone rep to resolve the issue is going to get very annoying, very quickly.

Two cautionary tales

I've been blessed multiple times to unknowingly move to communities that had favorable environments for manufactured spend. Now, that's not exactly a "coincidence," since many of the most hostile environments for manufactured spend are also the most expensive cities in the country (New York City, San Francisco), and my income doesn't support living there, so I've never lived there.

But I freely admit that it means this blog focuses more on successful manufactured spend techniques than unsuccessful manufactured spend techniques, since most of my techniques are successful!

MasterCard gift cards issued by U.S. Bank are a problem at Walmart

With that in mind, I took the recent occasion of fee-free MasterCard gift cards at Staples to deliberately revisit an old problem: can you use MasterCard gift cards at Walmart?

For several years after the Federal Reserve required prepaid debit cards to be PIN-enabled, MasterCard gift cards issued by U.S. Bank worked differently than Visa prepaid debit cards issued by Metabank at Walmart. Unless you knew about, and were able to convince your cashier to go along with, the "change payment" trick, MasterCards were unusable for money orders or bill payments.

This history means most people, under most circumstances, simply avoid MasterCard gift cards. After all, most merchants that sell MasterCards also sell Visas, and if a credit card or rewards program bonuses spend at a particular merchant, then your natural preference should be to buy the easy-to-liquidate Visa rather than the hard-to-liquidate MasterCard.

However, that natural preference hits a snag when a promotion comes along that targets MasterCard gift cards directly. For example, for folks who drive a lot, the cost of gas can make up a big part of their monthly budget, so when Stop&Shop offers bonus points on MasterCard gift card purchases, folks are understandably conflicted. How does the (relative) difficulty of liquidating MasterCards weigh against the accelerated earning when you pile gas rewards on top of the bonus credit card rewards you're already earning at grocery stores?

Plastiq isn't a good liquidation technique; Plastiq referrals are a good liquidation technique

This came up over the weekend when I asked a fellow travel hacker how he'd fared during the fee-free Staples MasterCard promotion mentioned above, since I'd only been able to grab 3 $200 cards (3,000 Ultimate Rewards points with my Ink Plus). He responded smartly, "what am I supposed to do with a bunch of MasterCard gift cards?"

I mentioned Plastiq, which allows you to you make payments to a variety of payees using prepaid debit cards, including bills that can amount to thousands of dollars per month: student loans, rent, mortgage, cable, and insurance payments, among others.

My friend again pointed out that under normal circumstances, Plastiq's 2.5% liquidation fee made the service scarcely worth using, let alone worth driving around town searching for gift cards.

The trick, of course, isn't that Plastiq is a good liquidation technique, the trick is that if you're good enough at promoting Plastiq as a liquidation technique, you get to liquidate an unlimited number of your own cards for free.

Affiliate bloggers rely on a constant stream of vulnerable newbies

The only income I get from this site comes from my loyal blog subscribers, Google Adsense, my Amazon Associates link, and the personal referral links I put on my Support the Site! page.

This gives me complete editorial freedom (manufactured spend is good, Membership Rewards points are bad, free night certificates are bad, companion tickets are bad), but it also means my income doesn't depend month-to-month on driving people to sign up for particular cards, chasing bounties or fretting when lucrative payouts go away.

It also means that I don't need to recruit any new travel hackers. My basic view is that most people who are mentally configured to be travel hackers are pretty easy to identify. You can give the absolute simplest task to someone: "buy a Visa gift card," and if they come back with a Home Depot gift card, you know they don't have the attention or precision to be a travel hacker.

That's not to say I "hoard" information; I love sharing information! I just don't have a rooting interest in recruiting additional travel hackers just because they happen to be eligible for new referral bonuses.

But if, on the contrary, your income depends on getting people to sign up for the first time for something, whether it's a Chase Sapphire Preferred card or a Plastiq account, then newbies are the world's most precious resource, and there is nothing more inevitable than a blogger trying to extend their appeal deeper and deeper into less and less appropriate target audiences.

That is to say, a blogger who successfully refers 100 people to Plastiq is correct when they say Plastiq is a good way to liquidate MasterCard gift cards fee-free, because they have $10,000 in fee-free dollars, but incorrect when they tell newbies, about whom they know nothing, to go out and buy a bunch of MasterCard gift cards and to liquidate them through Plastiq.

If you don't understand this reasoning, then a lot of blogger behavior looks absurd. Even setting aside the blogs that are actually owned and operated by credit card affiliate companies, why would Rich Weirdo Ben Schlappig participate in this humiliating spectacle for Rolling Stone? But if you understand that he needs to fish where the fish are, then it makes perfect sense that the more outlandish the venue, the more likely he is to find vulnerable newbies! After all, if your livelihood depended on it, you too would prefer to attract 10 signups from Brides.com than 1 signup from Flyertalk.

Conclusion

Unfortunately, even with a patient cashier and plenty of tries, I wasn't able to make the "change payment" trick work at my local Walmart. Thank God for grocery stores (and Plastiq)!

If you're already buying Hilton points for 0.5 cents each, why not buy in bulk?

I've never successfully bought one of the US Travel Association's "Daily Getaways," but when they're released I always poke my head over to see if anything jumps out at me as a fantastic deal. As usual, there's nothing too special, but the April 16 offer did catch my attention: buying up to 250,000 Hilton Honors points for 0.5 cents each.

Now, like all Daily Getaways, this is not, on its face, a very good deal, since 0.5 cents each is roughly what Hilton Honors points are worth (unless you have a particularly high-value redemption planned, and are certain to be able to find award availability).

However, I'm already buying Hilton Honors points for 0.5 cents each when I use my Ascend American Express card at grocery stores instead of my US Bank Flexperks Travel Rewards card. The latter earns 2 Flexpoints per dollar spent, worth 3% cash back towards travel redemptions, while the former earns 6 Hilton Honors points per dollar: 0.5 cents per Hilton Honors point.

why not buy in bulk?

The reason I won't be going all-in on this offer is that one of the benefits of earning points through manufactured spend over time is that you can calibrate your earning to your actual travel needs. While I "spend" $1,250 in foregone Flexpoint value whenever I earn 250,000 Hilton Honors points, I don't do so all at once, and if I suddenly find myself in more need of airfare than hotel nights, or vice versa, I can swing the dial in the needed direction.

Not a terrible way to meet minimum spend requirements

The best argument for buying Hilton Honors points in bulk at 0.5 cents each is simply as a form of manufactured spend. If you believe, as I think it's not unreasonable to believe, that Hilton Honors points are actually worth 0.5 cents each when redeemed for hotel stays, then buying them up front is simply a way of shifting forward in time your future hotel spend.

That's precisely what we do when we manufacture spend: we incur known, fixed costs in the present with sufficient confidence that the rewards we earn will be redeemed for enough value to justify the upfront payment. Normally you'd want to do that with a margin of safety: we don't normally pay 1 cent in advance for 1 cent in travel, since if all you're getting is 1 cent in travel, you may as well pay later and hang onto your money for now.

But if you have a minimum spending requirement to meet, and especially if you have a minimum spending requirement on an American Express card, where the most common manufactured spend techniques have attracted scrutiny and can cause signup bonuses to be denied, then an opportunity to incur $1,250 in expenses for $1,250 in Hilton Honors points may be worthwhile even if you don't have plans to redeem the points for outsized value, due the potential value of the signup or high spend bonus the purchase may trigger.

Don't sleep on the next couple weeks of manufactured spend

There are a couple current and upcoming manufactured spend opportunities I want to make sure readers are aware of.

Office Depot/OfficeMax Visa gift card promotion through March 17

This promotion comes around every few months and is always a good opportunity to load up on Ultimate Rewards points for folks who have a Chase Ink Plus, Ink Bold, or Ink Cash small business card. The current iteration of the promotion is $10 off $300 or more in Visa gift cards.

If you buy two $200 Visa gift cards with $6.95 activation fees, you'll end up paying $3.90 in activation fees after the $10 discount is applied, or 0.2 cents per Ultimate Rewards point if you pay with a card earning 5 Ultimate Rewards points per dollar spent at office supply stores.

This is worth doing basically regardless of your liquidation method. Even paying Plastiq (you can find my personal referral link on the Support the Site! page) $4.88 per card in liquidation fees brings your cost per Ultimate Rewards point up to just 0.68 cents each — a good deal!

Grocery store gas points on Visa gift card purchases between March 16 and March 22

Slightly overlapping with the Office Depot promotion, via Miles to Memories I saw that Giant, Stop & Shop, and Martin's stores will offer 2 gas points per dollar spent on Visa gift cards between March 16 and March 22.

These stores usually don't offer any gas points on prepaid debit card purchases, so it's potentially lucrative to time your grocery store manufactured spend to periods when these promotions are in effect, if you drive and especially if you have a way of storing extra discounted fuel.

I don't drive but have mused in the past about options for distributing fuel points to folks who do (there are some more great suggestions in the comments to that post).

Ongoing Simon Mall discount and newish Walmart money order protocol

Just a couple quick notes today as we head into the holidays.

Two more days of discounted Simon Malls Visa gift cards

Through December 24, 2017, (some?) Simon Malls are selling their PIN-enabled Visa gift cards with a $2.95 activation fee instead of the usual $3.95. On an order of 19 cards, that's a savings of $19, which may or may not make them worth stocking up on, depending on your own liquidation bandwidth and tolerance for holding onto a lot of undrained cards. I had planned to get in one more order this week but ended up getting caught up in other projects so I was only able to take advantage of the promotion once.

New Walmart money order protocol

Two of my local Walmart stores have slowly and haltingly introduced a new protocol for selling money orders. It appears that Walmart customer service and money center terminals have two options for ringing up money orders.

What I'll call the "old" system involves ringing up the money orders individually, paying for them, then printing them one by one and inputting the last four digits of the money order's serial number as it comes out of the printer.

The "new" system involves ringing up the money orders through a different section of the point of sale terminal. After paying for them, the money orders print out together and the serial numbers don't need to be inputted. One additional receipt prints out with the money orders' serial numbers, along with a slip for the customer's signature. Money orders printed with the new system have "gift certificate" printed on their face, but are identical in every other respect.

I don't know why they've introduced the new system, but it doesn't appear to be anything to worry about for now.

Travel hacking with less manufactured spend

It seems that the travel hacking community has been thrown into one of its periodic panics, first over the loss of a popular gift card reselling opportunity and then an online bill payment option. I don't participate in such panics myself, but it's an opportunity to ask the question: what would travel hacking look like not in a world without manufactured spend, but in a world with less manufactured spend?

It's a good question because in a world with plentiful manufactured spend, lots of things are worth doing that might not be in a more constrained world. For example, today I happily earn 1.5 Ultimate Rewards points per dollar spent with a Chase Freedom Unlimited card, essentially speculating that I'll get more than 1.3 cents per point when I ultimately redeem them (since I could use a 2% cash back card instead). That wouldn't make any sense (for me) in a world where every dollar manufactured on one card reduces the amount I can manufacture on the others.

So, here's what I would do in a world of severely constrained — but not eliminated — manufactured spend.

Chase Ink Plus or Ink Cash for office supply stores

I consider buying $200 or $300 Visa prepaid debit cards from office supply stores with a Chase Ink Plus or, if you're signing up today, Ink Cash, to be the best current opportunity, even though liquidating smaller-denomination gift cards can be time-consuming if you have to do it in-person. Paying $8.95 in activation fees and $0.35 for money orders lets you buy 1,545 Ultimate Rewards for $9.35. That's slightly more expensive than paying $4.30 for 756 Ultimate Rewards points by using a Freedom Unlimited at an unbonused merchant, but it's over twice as efficient, in that a single money order transaction made with four $300 debit cards earns 6,180 Ultimate Rewards points (at 0.6 cents each), while one transaction with four $500 debit cards earns just 3,024 points (at 0.57 cents each). In a world of limited manufactured spend, maximizing the total haul from each transaction would inevitably become a much higher priority.

Since flexible Ultimate Rewards points can be redeemed for 1.25 cents each for paid travel, doing this alone would let you earn $3,125 in paid travel each year for about $1,504.

Annual spend: $25,000 (Ink Cash) or $50,000 (Ink Bold or Ink Plus).

"Old" Blue Cash for grocery stores

For reasons that are beyond my petty comprehension, American Express still issues the "old" Blue Cash card that earns 5% cash back on up to $43,500 in purchases at supermarkets, gas stations and "select" drugstores in the United States. That's a devaluation from the previous, unlimited bonus earning, but it's still a lot of money.

Since grocery store spend is somewhat cheaper than office supply store spend, whether you prefer to prioritize Ink Plus or Ink Cash spend or "old" Blue Cash spend properly depends on the value you expect to get from Ultimate Rewards points redemptions.

Annual spend: $50,000.

Amex EveryDay Preferred for grocery stores

I almost hesitate to include this one since the cap on earning is so low, but if you can knock out $6,000 in grocery store purchases, then make enough additional purchases to get to 30 transactions in the same statement cycle, you can earn 27,000 flexible Membership Rewards points per year (and pay an annual fee of $95).

That's not very many Membership Rewards points, so in a world of unlimited manufactured spend you'd want to supplement them with, for example, a Premier Rewards Gold card. But in a world of less manufactured spend, it would roughly add up to a business class international award ticket every 3-5 years. That's not great compared to the status quo, but it's not terrible either.

Annual spend: $6,000

A good cashback card for unbonused spend

So far so good, right? The problem is that all these cards are terrible for anything except manufactured spend. The Ink Cash and EveryDay Preferred have foreign transaction fees (the "old" Blue Cash card does not for some reason), and the Ink Bold and Ink Plus only earn 1 Ultimate Rewards point per dollar on unbonused spend.

Obviously if you have a lot of money the answer is the BankAmericard Travel Rewards with Platinum Honors Preferred Rewards, which earns 2.625% on all spend, has no foreign transaction fee, and is PIN-enabled for use internationally.

If you don't have a lot of money, you can use the PenFed Credit Union Power Cash Rewards card, which earns 1.5% cash back, or 2% if you have a PenFed Access America Checking Account. It's PIN-enabled and has no foreign transaction or annual fees, although the checking account requires a $500 average daily balance or monthly direct deposit to avoid a $10 monthly fee.

For domestic transactions you might consider using a Chase Freedom Unlimited to top up your Ultimate Rewards balance, but that card also has a foreign transaction fee so shouldn't be used internationally.

Conclusion

I think this is roughly the strategy I would pursue if my access to manufactured spend were suddenly constrained. It's pretty cheap (two $95 annual fees), pretty lucrative, and isn't very time-consuming, requiring only an average of about 6 total trips per month.

It would yield 125,000 or 250,000 Ultimate Rewards points, $2,240 in cash, and 27,000 Membership Rewards points. Whether or not that's sufficient to cover all your travel expenses depends on how many travel expenses you have, but it would certainly make a dent in mine.

Sapphire Preferred, Sapphire Reserve, or Ink Preferred for Ultimate Rewards transferability?

I am on the record believing that much of the caterwauling about the end of travel hacking is essentially an artifact of individual travel hackers aging and having more responsibilities in other parts of their lives and less time to dedicate to the game. A person starting today wouldn't miss Vanilla Reload cards, just like when I got started I didn't miss buying dollar coins from the Mint. You can't miss what you never knew.

On the other hand, it's absolutely true that things are constantly changing, and keeping up-to-date on changes taking place is essential if you don't plan on retiring when your favorite credit card, award sweet spot, fuel dump, or manufactured spend technique is killed.

One such important change came about when Chase stopped issuing new Ink Plus small business credit cards.

The Ink Plus is the best Ultimate Rewards-earning credit card

People who currently hold Chase Ink Plus (and an even earlier card, the Ink Bold) earn 5 Ultimate Rewards points per dollar spent at office supply stores. While those cards can come with expensive activation fees, it's possible to turn a profit buying them virtually regardless of the liquidation technique you use, including even the most expensive options like making ordinary bill payments through Plastiq.

The Ink Plus also makes the Ultimate Rewards points you earn with other cards, like the Chase Freedom and Freedom Unlimited cards, transferrable to Chase's travel partners, meaning you don't need to hold a Sapphire Preferred or Sapphire Reserve card in order to maximize the value of your Ultimate Rewards points.

I say all this by way of background, and in case you already have an Ink Plus account: don't close it!

Brief aside: the Chase Ink Cash is still available for new signups

I try not to give recommendations around here. Your situation is different from my situation, your needs are different from my needs, etc.

But the no-annual-fee Ink Cash card is still available for new applications, and it still earns 5 Ultimate Rewards points per dollar spent at office supply stores (although only up to $25,000 per cardmember year, unlike the Ink Bold and Ink Plus maximum of $50,000 per cardmember year).

If you don't have one or more Ink Plus or Ink Bold accounts (and possibly even if you do!), moving an Ink Cash card up your list of applications in order to get another $25,000 in annual bonused office supply store spend seems like very low-hanging fruit to me at this point.

You can't sign up for new Ink Plus accounts

Chase hasn't given any indication they plan to force current Ink Plus or Ink Bold cardholders to change to the recently-introduced Ink Preferred, but they have stopped opening new accounts with those products.

That means if you have a portfolio of Chase Freedom, Freedom Unlimited, and Ink Cash cards that are earning fixed-value Ultimate Rewards points, you have to decide which Chase card to use to turn them into flexible Ultimate Rewards points.

So, which flexible Ultimate Rewards-earning credit card is best for someone without access to an Ink Plus? Like I say, I don't give recommendations, but here are four factors you can use to help you decide.

1) Product changes

Chase's proprietary credit cards can be more or less freely changed within the personal and business credit card "silos." That means the Sapphire Preferred and Reserve cards can be changed to Freedom and Freedom Unlimited cards, while an Ink Preferred can be easily changed to an Ink Cash card.

On the personal side, a Freedom Unlimited card is quite valuable for earning 1.5 Ultimate Rewards points at otherwise-unbonused merchants, but you only need one since you enjoy that earning rate on an unlimited amount of annual spend. Freedom (not Unlimited) cards meanwhile earn 5 Ultimate Rewards points per dollar spent in specified bonus categories, which have typically included widely-available manufactured spend opportunities like grocery stores and drug stores, but that bonused earning is capped at $1,500 per quarter, per card. That means you're typically best off accumulating as many individual Chase Freedom accounts as possible.

On the business side, as mentioned the Ink Cash is the last remaining Ultimate Rewards-earning credit card available to new customers that earns 5 Ultimate Rewards points per dollar spent at office supply stores.

The decisive question then is whether you prefer to earn bonus points on a finite amount of spend or fewer points on an unlimited amount of spend. If the former, an Ink Cash card lets you earn up to 125,000 Ultimate Rewards points on $25,000 in cardmember-year office supply store spend, while a Freedom card lets you earn a maximum of 30,000 points on $6,000 in calendar-year bonus spend. If the latter, the Freedom Unlimited card lets you earn 1.5 points per dollar spent on cheaper, unbonused manufactured spend or, for example, on unbonused reselling opportunities.

I'm not differentiating between the two premium personal cards here, since both can be product changed to either of the Freedom or Freedom Unlimited cards.

2) Signup bonuses

The Ink Preferred currently has a signup bonus of 80,000 Ultimate Rewards points after spending $5,000 within 3 months, while the Sapphire Preferred and Sapphire Reserve cards offer 50,000 points after spending $4,000.

That should give the Ink Preferred a strong advantage if you plan to transfer the points to Chase's travel partners. If you plan to redeem them for paid airfare, the difference shrink somewhat since the Ink Preferred signup bonus is worth $1,000 in paid airfare while the Sapphire Reserve's bonus is worth $750 due to its higher fixed redemption rate of 1.5 cents per point.

Note that unlike with some fixed-value rewards currencies you can combine points and cash on Ultimate Rewards booking portal reservations.

3) Bonus categories

If you plan to hold a flexible Ultimate Rewards credit card, it would be nice if you could earn some bonus Ultimate Rewards points with it:

  • Both the Sapphire Reserve and Ink Preferred cards earn 3 Ultimate Rewards points per dollar spent on travel;
  • The Sapphire Reserve earns 3 points per dollar spent at restaurants while the Sapphire Preferred earns just 2 points (the Ink Preferred doesn't bonus restaurant spend);
  • The Ink Preferred earns 3 points per dollar spent on internet, cable, and phone services.

If you're a reimbursed business traveler, especially one in charge of wining and dining clients, the Sapphire Reserve or Preferred has the advantage, while if you can convince your employer to let you put $150,000 in telecommunications charges to your Ink Preferred card that would be a no-brainer.

4) Trip delay insurance

Depending on your own travel habits, this may be a decisive factor or more of a tie-breaker. The Sapphire cards have excellent trip delay insurance (Reserve for delays of 6 hours or an overnight stay, Preferred for delays of 12 hours or an overnight stay), and it applies to reservations paid for with the card, booked through the Ultimate Rewards portal, and award tickets so long as you charge the related taxes and fees to your card.

I've used Sapphire Preferred trip delay insurance in the past and it was both fairly painless and fairly lucrative.

Conclusion

How to weigh these different factors in your own travel hacking practice is up to you, depending on your particular earning and redemption needs. Since I already have a couple of Freedoms, a Freedom Unlimited, and an Ink Plus, my advice wouldn't be worth anything to someone new to the game.

That being said, two obvious approaches suggest themselves. You could use a personal card (which one you choose depends on your own situation, including the factors above) as your permanent flexible Ultimate Rewards card, and then periodically apply for Ink Preferred cards before downgrading them to Ink Cash cards.

A second approach would be to alternate applying for personal and small business credit cards every 24 months (in order to be eligible for new account signup bonuses on the personal cards). This way you could product change Sapphire Preferred or Reserve cards to Freedom or Freedom Unlimited cards, and Ink Preferred cards to Ink Cash cards, gradually accumulating a stable of cards that are each subject to separate bonus earning limits. In this strategy, you would always have a flexible Ultimate Rewards card, but it would alternate between a personal and small business card, as long as you could continue to be approved. Of course, this approach may be somewhat riskier since it would always be subject to Chase approving your product change requests and new card applications — no sure thing!

Walmart Money Center debit limit problem solving; gone vacationing

I have never felt the impulse to constantly repeat, here on the blog, every manufactured spend technique that still works. People periodically send me e-mails or leave comments on ancient posts asking, "does this still work?" and my response is usually, "why wouldn't it?" After all, almost everything I know and do is contained here on the blog, and virtually everything else I know is included in my subscribers-only newsletters.

Still, even I occasionally wonder whether a given rule still applies or a given restriction has been loosened or tightened, and I had an experience the other day that provided a funny example.

The Walmart Money Center 4-debit limit

If you're a working travel hacker, grinding out your manufactured spend with money orders and bill payments, you know that Walmart point-of-sale systems will only accept four separate debit payments on a single transaction.

But do you really know that? I mean, if you are going to a Walmart with competent cashiers, making purchases with exactly 4 debit payments on each transaction, how would you know if a the point of sale system were updated to suddenly allow 8, 12, or 20 debit payments per transaction? They wouldn't tell the cashiers, since the cashiers have no reason to know. You'd have to find out for yourself.

Which, the other day, I did!

Walmart Money Center problem solving

In a typical Walmart money order purchase, you might ask for two $1,000 money orders, intending to pay $500 at a time on four PIN-enabled Visa or MasterCard debit cards. Since the amount debited from each card is manually entered by the cashier, that creates the possibility of the cashier manually entering the wrong amount.

In my case the other day, my cashier debited $50, rather than $500, from my first card. That left me with a $450 hole to fill. She offered to let me pay with the remaining balance of my debit card, but she didn't have any say in the matter: the point of sale system spit out a little slip refusing a fifth debit, after I'd paid the remaining $1,500 with my three remaining cards.

At this point, you have a few options. None of them is better or worse than the other, but you need to be ready, because if this happens to you your cashier is going to be very flummoxed and you need to know your options, depending on what they're they're prepared to do:

  • Remove a money order from the transaction to square it up. This is technically the best option if the mistake is made on the first or second debit charge of your transaction. For example, if you have a $2,000 total money order purchase, and the first debit is accidentally made for $50, you can ask the cashier to remove the second $1,000 money order, make a $450 supplemental payment with your first (incorrectly debited) card, and then another $500 payment with a second card. You'll have completely paid for one money order. No harm, no foul.
  • Remove a money order from the transaction to generate a refund. This is actually a variation of the situation most experienced travel hackers have run into, where the money order printer crashes and the store has to give you a refund in cash since they can't refund debit card transactions. If the erroneous debit takes place on the third or fourth debit, this may be your only option. You can either take a cash refund or, if your cashier is game, use it against the cost of the second money order (since most Walmart cashiers don't have that much cash in their drawers anyway).
  • Finally, and this is only for folks who are sure about the competence of their cashiers, you can ask them to add a money order to the purchase in the amount of the mistake, before removing one of the original money orders. For example, if you intended to buy two $1,000 money orders with four $500 debits, but one of the debits was incorrectly entered at $50, you can ask the cashier to add a $550 money order, then remove one of the $1,000 money orders. That would bring your order to $1,550 — the amount you were ultimately able to pay with four debits.

I'm going to Europe!

This afternoon I'm flying to Munich to spend 10 days in France, Switzerland, and Germany. Don't burn the place down while I'm gone!

I guess this is a vacation so I don't expect to post more than once or twice next week, but I do plan to have sporadic internet access so follow me on Twitter for updates, pictures, and rants about how they do things over there, putting mayonnaise on their fries or whatever.