Observations on the banks and their quirks

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Despite the fact that here in America we have a more or less centralized banking system, each bank still interfaces with that backbone (the Automated Clearing House, Visa and MasterCard payment networks, etc.) using its own proprietary software. That leads to the various banks processing identical transactions on different timetables. Nothing in this post is scripture, but I thought it might be interesting to share my observations on the quirks of each bank, as I've observed them, and invite readers to share their own experiences in the comments.

These observations are based on obsessively logging into all my bank accounts multiple times each day, both on PC and smartphone. If you don't obsessively watch your accounts, you probably won't notice any of these differences, since they don't have any impact on the important stuff like statement balances or due dates.

American Express

American Express clears transactions the fastest among any of the banks whose cards I carry: they'll typically post the second business day after a purchase.

When making a payment, my "available credit" will typically increase on the day the payment is scheduled to be received, while my "outstanding balance" will decrease only the following day.

Rewards typically post to third party accounts about a day after statement closing, while my Blue Cash seems to take up to 2 days (based on a very small number of statements to date).

Barclaycard

Barclaycard clears transactions typically within 3-4 business days, I haven't observed them to be particularly fast or slow.

Payments post in the opposite manner of American Express: my outstanding balance will go down in the evening of the day a payment is scheduled to post, but my available credit won't go up until the following business day.

One of the many reasons I love the Barclaycard Arrival (now Arrival+) is that rewards post mid-cycle. Interestingly, in my experience they tend to post the evening before a charge actually clears on my online account. This can lead to some confusion about whether miles are the results of a charge posting or RewardsBoost shopping portal miles posting, because the pending charge disappears completely overnight, before reappearing as cleared the following day.

US Bank

US Bank is the opposite of American Express: charges take the absolute longest to post of any of my credit cards, at least 4 business days and sometimes up to 5.

However, I've been able to use this to my advantage, because of the other quirk of US Bank compared to my other credit card issuers: US Bank reports my balances to credit bureaux on the last day of the month, not on statement closing, while rewards are naturally based on all the charges during my statement cycle. That means I can drive down my balances before the end of the month with charges that will post before my statement closing date. I'm unable to truly maximize this quirk because my statement closing date happens to fall at the beginning of the month. If you have a mid-month closing date, however, you could easily avoid having any of your spend ever show up on your credit reports.

All of my US Bank credit cards are without a preset spending limit, so I'm not sure when credit becomes available again after a payment. However, payments usually show up online the day after a payment is scheduled to arrive, with the correct posting date.

Chase

Chase is absolutely vanilla compared to these other card issuers. Charges clear within 3-4 days, and payments post on schedule (although they don't show up in online banking until the following day). Ultimate Rewards points post towards the evening of the day my statements become available, while third-party rewards (Avios) can take 2-3 days to post.

I also use my Chase cards least aggressively of all my rewards-earning credit cards, so my experience may simply be a consequence of basing my conclusions on fewer datapoints.

Conclusion

Do these quirks jibe with your own experiences?

Have you observed similar quirks with other card issuers, like Comenity, GE Capital, or FIA Card Services?

Frequent Miler's wrongheaded approach to redemption values

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Frequent Miler's a smart dude, whom I respect for his dedication to the craft. Sometimes, though, I have the sense that he gets a little up in his head. In today's edition of "Frequent Miler overthinking things:" redemption values.

Background

In three recent posts, Frequent Miler has sought to find a rubric for understanding the "reasonable redemption value" of various loyalty currencies:

The underlying principle behind the series is that the value you should feel comfortable redeeming your points at is based on the typical price of the product you're redeeming them for.

But that's not right, and here's why.

Forget 5%

If you have a 5% cash back-earning credit card, then presumably you already know you need to be putting as much spend on it as you're comfortable with. You're going to get more value from each dollar spent at 5% cash back than you will with virtually any other credit card (unless you're going for a heroic signup bonus or high-spend threshold on your alternate card).

Forget "unlimited"

I have a commenter here on the blog who regularly chastises me whenever I write about opportunity costs, because of the possibility of "unlimited MS at negative cost." But even if you did have access to unlimited manufactured spend, you'd still want to spend your time (which, last time I checked, is not unlimited) manufacturing that spend on the most lucrative cards possible.

What do you actually redeem your miles and points for?

Here's where Frequent Miler goes so far afield. He argues,

"I think it is important to supplement Fair Trading Values with estimates of the redemption values of points and miles.  Such numbers could be used to help decide whether buying points or miles is a good idea.  And, they can be used as a target when booking awards to ensure that you get good value from those awards."

But he doesn't explain why. And that's because no sane person starts with redemption values, then decides whether a redemption is worth making. Sane people start with a trip they want to take, and then figure out how to pay for it.

How about an example?

In the latest edition, Frequent Miler suggests that a reasonable redemption value for Delta Skymiles might be 1.02 cents for domestic economy redemptions, on the following grounds:

  • the average domestic flight costs $381;
  • it's typically possible to fly for somewhat (10%) less than average;
  • Delta charges up to $10 in fees on domestic award redemptions;
  • and you'll typically end up paying 32,500 for a domestic award redemption.

The problem

All of this begs the question: if you're getting just 1.02 cents per Skymile for your redemptions, why do you have any Skymiles at all?

I ask because every dollar you put on an American Express Delta Platinum (earning 1.4 Skymiles per dollar at $50,000) or Delta Reserve (1.5 Skymiles per dollar at $60,000) card could be put on a 2% or 2.22% cash back card. 

Furthermore, all your paid flights on Delta could be credited to Alaska Airlines' much more lucrative Mileage Plan.

The answer, of course, is that you have Skymiles because you get more than 1.59 cents (Platinum) or 1.48 cents (Reserve) per Skymile on your redemptions.

In other words, if you're getting just 1.02 cents per Skymile on your redemptions, you need to redeem all your Skymiles and stop earning more as soon as possible.

So what's my alternative?

The alternative approach, which I've advocated in my own posts (Club Carlson, Hilton) is to instead start with the cost of acquisition and ask a far simpler question: "how much do I need to value this redemption to justify putting the needed spend on a co-branded credit card instead of a 2% or 2.22% cash back credit card?"

The best part is that this exercise allows an instant validation of whether a trip should be paid for with cash or points, based on actually existing prices for the product you're interested in.

A real person starts by saying, "I'd like to fly roundtrip on Delta between Madison and a New York airport (but not Newark) for a weekend in June."

Then they pull up an ITA Matrix search and find the lowest fares available:

As you can see, our little weekend romp will cost between $460 and $541.

Then a real person hops on delta.com (or, more likely, alaskaair.com) and checks award availability, immediately seeing whether they are getting more or less value than their points' acquisition cost:

Using this technique (again, the thing that people actually do when evaluating redemptions), we can calculate our redemption value for each weekend:

  • June 5/6 — 8: $540/25,000 Skymiles. 2.16 cents per Skymile;
  • June 12/13 — 15: $460/25,000 Skymiles. 1.84 cents per Skymile;
  • June 19/20 — 22: $460-$520/32,500 Skymiles. 1.41-1.6 cents per Skymile;
  • June 26/27 — 29: $475-$540/32,500 Skymiles. 1.46-1.66 cents per Skymile.

Here's the thing: these are all great redemptions, not because of the high value you're getting for each Skymile but because you already have 25,000-32,500 Skymiles, and if you don't redeem them they're just going to keep collecting dust.

After redeeming, decide whether to keep earning

Once you have a load of Skymiles it's too late to start considering redemption values. The time to make that calculation is before you earn them.

If in your market, for your travel needs, you're redeeming your Skymiles for less than the implicit cost of acquisition (putting the spend on a 2% or 2.22% cash back card), you shouldn't be putting spend on that card to begin with (unless you're doing so for other reasons, like Medallion Qualifying Miles or the Medallion Qualifying Dollars waiver).

That doesn't mean you shouldn't plan ahead

Over at Milenomics they're doing the Lord's work advocating for a rational approach to earning and burning miles, and one of the centerpieces of that effort is so-called "demand schedules," explicit plans for upcoming trips and the miles, points, and cash currencies the traveler plans to redeem for them.

Demand schedules can't anticipate everything, however. If you have an upcoming trip to Milan planned with American AAdvantage miles and you suddenly discover a $200 one-way flight, you shouldn't blindly book the ticket with your AAdvantage miles anyway. You should, however, be ready to spend those miles as soon as possible, even on a less expensive trip you might have been planning to pay for with cash.

Because once you've passed up the opportunity to earn cash back, and instead earned miles or points, it's too late to start calculating [edit: ideal] redemption values.

Rant: if you care about the American devaluation, you're doing it wrong

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Fact: I currently have no more than 100,000 of any airline or hotel rewards currency.

Does that sound like a horrifically low number?

Good. That means I'm doing it right.

Your miles and points are not safe

In case you've forgotten your loyalty program terms and conditions, allow me to refresh your memory.

Delta Skymiles:

"Always remember, the rules below are subject to change at any time. Unless otherwise stated, the current rules in effect at the time of your travel, request for a benefit or other transaction will govern that transaction."

United MileagePlus:

"MileagePlus membership and benefits, including the Premier Program, are offered at the discretion of United Airlines and its affiliates, and United has the right to terminate the Program and/or the Premier Program or to change the Program Rules, regulations, benefits, conditions of participation or mileage levels, in whole or in part, at any time, with or without notice, even though changes may affect the value of the mileage or certificates already accumulated."

American AAdvantage:

"American Airlines may, in its discretion, change the AAdvantage program rules, regulations, travel awards and special offers at any time with or without notice. This means that the accumulation of mileage credit does not entitle members to any vested rights with respect to such mileage credits, awards or program benefits. In accumulating mileage or awards, members may not rely upon the continued availability of any award or award level, and members may not be able to obtain all offered awards for all destinations or on all flights."

What would it mean to "trust" a loyalty program?

There's an absurd conversation taking place between Gary at View from the Wing and Lucky at One Mile at a Time about whether American is a "trustworthy" loyalty program:

These are smart dudes, who have each forgotten more than I've ever known about earning and redeeming miles and points for free travel.

And yet here they are talking about "trusting" faceless, bankrupt multinational corporations.

Since those guys don't seem to get it, I thought I would share a few simple tips for never caring about an airline devaluation.

Tip #1: Earn points as cheaply as possible

The periodic US Airways "share miles" promotion allow you to buy US Airways miles for 1.14 cents each. Don't do it.

The only number that matters in this game is the spread between what you pay for your miles and points and what they're worth when you redeem them.

Unfortunately, you don't have any control over that second number.

Fortunately, you have complete control over the first number, and the lower that number is, the more pain you can absorb in the form of devaluations.

Tip #2: Redeem your damn miles!

There's only one mile that no loyalty program can devalue: the one you redeemed last year.

I only have 91,000 Alaska Airlines Mileage Plan miles. And look: I agree, that's a pretty low balance. Maybe you feel better having a cushion of 200,000 miles. Maybe you need 300,000 miles in your account to really feel comfortable.

But no matter how many miles you decide you need in your account for a rainy day, you need to be actively redeeming every single mile in excess of that number.

Why? Because the least value mile is the one you don't redeem. It's less valuable than a 1 cent per mile Pay With Miles redemption on Delta; it's less valuable than a 50,000 mile AAnytime award. It's less valuable than a $63 food processor.

It's worth nothing.

Tip #3: Earn cash back. Please.

There is one rewards currency that's totally out of the control of the airlines and hotels: the US dollar. You can redeem it for 100 cents per dollar online as well as at brick and mortar merchants. And it devalues at an extremely consistent and gradual rate of 1 – 2.5% per year.

Best of all, thanks to the techniques discussed here and elsewhere, you can purchase this rewards currency for a small fraction of its redemption value.

Sure, it takes a whole hell of a lot of US dollars to pay for a business class or first class international redemption. But that's what your huge stockpiles of (rapidly depreciating) airline miles are for...right?

Reminder: Using Alaska miles for Delta BusinessElite

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I love my complimentary Medallion upgrades as much as the next Delta flyer, but back in August of last year I threw together a quick explanation for why you and everyone you know should be crediting your paid Delta flights to Alaska's Mileage Plan, rather than to Delta Skymiles. Namely, the same Delta flights, on the same Delta aircraft, on the same Delta days, in many cases cost fewer Mileage Plan miles than Skymiles.

Of course, the changes to Skymiles earning rates coming in 2015 make the point even more convincingly than I ever could.

Still, I want to point out one additional wrinkle that I came across the other day: Alaska doesn't know or care that BusinessElite exists.

In case you, like Alaska, have never heard of BusinessElite, it's Delta's long-haul preimum international and transcontinental product. It features a curated wine list, lie-flat seats, and some other features you're more than capable of reading about on Delta's website.

Most importantly, redeeming Skymiles for BusinessElite seats on transcontinental routes costs more than redeeming them for domestic First Class.

A non-stop round-trip itinerary from New York's JFK airport to Los Angeles in BusinessElite costs 65,000 Skymiles:

The same trip in domestic First (without the fancy wine or lay-flat seats) with a layover in Detroit or Salt Lake City costs just 50,000 Skymiles. But both trips cost 50,000 Alaska Mileage Plan miles:

Conclusion

I don't consider redeeming miles for domestic first class a great deal under most circumstances.

But if it's ever a great deal, it's a great deal for premium transcontinental service.

More thoughts on buying Marriott elite status

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Way back in July of last year I wrote a kind of silly thought experiment about buying United Premier Silver status by status matching to Marriott Platinum elite status and then taking advantage of the RewardsPlus partnership between the two programs. That post has no comments so I have no idea whether anyone liked the idea or not, but I do remember reading some reports of success with the technique on Flyertalk.

This year I've had cause to start thinking about a slightly different thought experiment. I carry a Chase Marriott Rewards Premier card, which comes with 15 "bonus nights," which count towards elite status each year. Additionally, the card awards 1 "bonus night" for every $3,000 spend on the card. That means that in order to achieve mid-tier Gold status you would need to spend $105,000 on the Premier card, and to achieve top-tier Platinum status (and United Premier Silver) you would need to spend $180,000 on the card.

That's patently insane.

On the other hand, if you had already earned 49 elite-qualifying nights, you would have to almost-equally crazy to not spend $12 (for example) to put an additional $3,000 in spend on the card and earn Gold elite status through the end of the next program year.

Which got me to thinking: wouldn't it be nice to know the break-even point, where the amount you would need to spend on the Premier card in order to achieve the next level of elite status is justified by the additional benefits of that status?

The Model

For the sake of modeling, I'm forced to make a few assumptions, the most important of which is that the number of paid nights you stay this year is a good predictor of the number of paid nights you'll stay next year. After all, if you won't make any paid stays next year, then it wouldn't matter if elite status were free; it still wouldn't be worth anything.

Next, remember that on paid Marriott stays, you'll earn 10 Marriott Rewards points per dollar, plus 20% bonus points as a Silver elite, 25% bonus points as a Gold elite, and 50% bonus points as a Platinum elite. Since the Premier card comes with Silver elite status, spending up to Gold earns a bonus of 4.17% over Silver, and spending up to Platinum earns a bonus of 20% over Gold status.

Here are the two most extreme examples of buying up to Gold status:

  • 15 "bonus nights," 0 paid nights: $105,000, no bonus points;
  • 15 "bonus nights," 34 paid nights: $3,000, 4.17% bonus on 34 paid nights.

And here are two extreme examples of buying up to Platinum status:

  • 15 "bonus nights," 35 paid nights: $75,000, 20% bonus on 35 paid nights;
  • 15 "bonus nights," 59 paid nights, $3,000, 20% bonus on 59 paid nights.

An Example

This year based on my current reservations I'll have 24 elite qualifying nights, meaning I'd have to spend $78,000 to earn Gold elite status, and $153,000 to earn Platinum elite status.

Based on the 7 paid nights I've already earning this year, at an average of $76.04 per night:

  • Gold status would earn an additional 342 Marriott Rewards points, a rounding error;
  • Platinum status would earn an additional 1711 Marriott Rewards points, or roughly 1.01 Marriott Rewards points per dollar spend on the Premier card.

The Data

I hate to admit it, but I can't give you the "break-even" point I promised above. Your break-even point will depend entirely on the value you put on Marriott Rewards points (and the other benefits of elite status).

What I can do is give you a simple tool that allows you to determine your own break-even point. You can use the following chart, and your own valuation of Marriott Rewards points, elite benefits like free continental breakfast, upgrades, access to club lounges, and United Premier Silver status to decide whether buying up is right for you:

marriott rewards buy up.png

This chart translates the bonus points you earn from your newly acquired elite status into "points per dollar" earned with your Marriott Rewards Premier credit card. The intuition is that while you're only technically earning 1 Marriott Rewards point per dollar spent on the card, the elite bonus points you earn as a Gold or Platinum elite are also in some sense "earned" by your credit card spend.

Club Carlson: Best. Devaluation. Ever.

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By now you've probably heard about Club Carlson's March 15, 2014, devaluation. The short version:

  • Introduction of a 7th category, which will cost 70,000 Gold Points per award night;
  • Changes to the Silver and Gold elite earning bonuses;
  • Premium room award nights (suites and such, I gather);
  • Elimination of the online-booking bonus, except on a promotional basis;
  • and finally, award nights will count towards elite status.

In the travel hacking community we're accustomed to thinking about loyalty programs as a chess match between hotels, who try to squeeze us as much as possible while not scaring off the business travelers who make up the bulk of their revenue, and those of us who seek to stay as many nights as possible while paying as little as possible.

And indeed, that's the approach most bloggers have taken to this devaluation:

  • View From the Wing says "On net these changes are not good. You’ll earn fewer points, and it will take more points to redeem for many hotels.. especially their most expensive properties."
  • The Points Guy says "All in all, though these changes are mostly disappointing, but not entirely surprising."
  • One Mile at a Time says "These changes are no doubt negative on the whole."

I disagree completely. Of course I'm not thrilled that Club Carlson has changed elite earning and made me rework my beloved point density charts.

But allowing award nights to count towards elite status is the single most consumer-friendly thing any chain can do.

And it's good business.

Award stays are so lucrative at Club Carlson that, while everyone with one of their co-branded credit cards has Gold elite status, it has been unthinkable to achieve Concierge status since that has — to date — required 75 paid nights or 30 paid stays.

Now that award nights and stays count towards elite status, it changes the calculus for where to direct paid stays, as well. If you're a business traveler and travel hacker, before this change you might have redeemed Gold Points you earn with a Club Carlson credit card for award stays, but directed your paid stays towards Hyatt or Starwood in order to secure elite status with one of those chains. Now, one or two award stays per month gets you almost all the way to Concierge status, where you earn 75% more Gold Points on your paid stays and free breakfast on all stays. That might convince you to direct additional, paid, stays to Club Carlson properties as well.

That's why I'm inclined to not think of these changes as a devaluation, but as part of a realignment. Club Carlson is eagerly trying to position itself as an appealing brand for business travelers, especially in Europe where their properties are frequently in great downtown locations. Allowing award nights and stays to count towards elite status is going to drive a lot more business towards those properties since it puts Concierge status within reach for more casual travelers. And it's a brilliant move by Club Carlson.

Is it time to reconsider Hilton HHonors?

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[update 2/18/14: I updated the charts below to show the effect of the depreciating 5th night free for stays of 6 – 10 nights in length.]

I applied for the no-annual-fee American Express Hilton HHonors card in January of last year, in order to take advantage of its then-lucrative 6 HHonors points per dollar spent at drug stores. Of course that was rapidly followed by both the 2013 Hilton devaluation and an end to bonus points at drug stores in May, 2013.

Since my experiment buying PayPal My Cash cards for bonus points at 7-11 ended in failure, I shelved my HHonors card except for periodically taking advantage of promotions like Small Business Saturday and Amex Sync offers.

Now that I have another local gas station willing to play nice, I need to decide whether it's worth getting the card back out and potentially even upgrading to a Surpass card that would earn 6, instead of 5, HHonors points per dollar there.

Back in December I tried out a new approach to valuing manufactured spend, by calculating the value you would need to get from a night's stay to make it worth manufacturing spend on a chain's co-branded credit card, rather than a 2.22% cash back Barclaycard Arrival. The advantage of this approach is that it gives you a straightforward calculus (do I value this hotel night at more or less than the break-even point?), without needing to take into account the actual cost of an identical, paid hotel stay.

Here's that same analysis applied to the American Express Hilton HHonors Surpass card, assuming that your spend is manufactured exclusively at merchants that give 6 HHonors points per dollar.

Note two things about these charts: first, I've assumed that you'll be redeeming your HHonors points during the "high" period at Category 4 – 10 properties. If you redeem at the lower end of the award bands, the points required and consequent required value per night will be lower. Second, I haven't taken into account the additional HHonors points you would earn on paid stays. That's a real shortcoming, but I can't think of an elegant way to capture it. You should feel free to adjust these rates based on your HHonors earning rate on paid stays.

Finally, remember that you receive HHonors Diamond elite status in any calendar year you spend $40,000 or more on the Surpass card, and you keep that status through the following membership year (i.e. in March 2 years in the future).

Here's are the points and bonused spend required for 1 and 5 night stays at each category of Hilton property:

And here's the value you'd need to get per night in order to justify manufacturing spend on the American Express Hilton HHonors Surpass card:

So is it worth manufacturing spend on the Surpass card? The sweet spot here appears to be category 5-6 properties, where you can get a night for less than $200, including tax, and possibly category 7 properties on stays which are multiples of exactly 5 nights.

Of course if you're intent on visiting a resort property like the Conrad Maldives Rangali Island, where your only options are to pay a cash rate or redeem points, you'll save easily $1,000 per night on a 5 night stay by redeeming manufactured HHonors points instead.

How much would it cost to live in a hotel?

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[Editor's note: as a reminder, I'll be blogging and tweeting all day today since I'm taking a 5 hour train to Philadelphia, then another train back tonight. Thank God for whiskey.]

I read a lot of "aspirational" travel blogs, but I personally take only a few aspirational trips per year. Last year over the summer I flew to Prague on Delta's new lie-flat BusinessElite product for 100,000 Skymiles (now 125,000 Skymiles), and of course over Christmas I flew on a paid Alaska Airlines first class ticket in order to secure one last year of Platinum Medallion status before I status match to Alaska's Mileage Plan.

For me, travel hacking is about saving money on flights I would take anyway, and making money by taking trips I wouldn't be able to otherwise afford.

That's why I've been following with interest Lucky's musings on hotel living. Lucky's an aspirational kind of guy, so he's talking about bouncing around the world's most beautiful locals being waited on hand and foot.

But he got me thinking: how much would it cost to live in a hotel year-round?

Club Carlson to the Rescue

Fortunately, this is wildly easy to calculate thanks to my lovingly-crafted point density charts. The obvious candidate for a hotel chain is Club Carlson, where Category 1 hotels cost just 9,000 Gold Points per night. Using a Club Carlson Premier Rewards Visa or Club Carlson Business Rewards Visa, you'll need to spend $1,800 to earn enough points for a night at a Category 1 property.

Of course, as a cardholder, you receive the last night free on all award stays of 2 or more nights, good for up to 100 free nights annually. That means you'll need to spend $1,800 on the card for every 2 nights you plan to stay — assuming you're able to book stays of exactly 2 nights.

In order to do so, you'll need a partner who also carries a Club Carlson Premier or Business Rewards Visa. You'll book alternating blocks of 2 nights each, paying a total of 135,000 Gold Points per 30 days.

That means between you and your partner you'll need to manufacture $27,000 in spend on the Club Carlson credit card each month. [Yes, there's an annual renewal bonus of 40,000 Gold Points, which takes care of 8 nights for each person, or about half a month between the two.]

Getting to $27,000

This is an almost laughably easy amount of spend to manufacture between 2 people. Here's how I'd do it, in ascending order of cost and using strictly "within the lines" techniques:

  • Amazon Payments, $1,000: one partner to the second partner; free.
  • TD Go, $6,000: $3,000 per person; load cost $6; liquidation cost $4.20; total cost $10.20.
  • Nationwide Visa Buxx, $2,000: $1,000 per person; load cost $8; liquidation cost $1.40; total cost $9.40.
  • US Bank Visa Buxx, $2,000: one partner as parent, one as teen; load cost $10; liquidation cost $1.40; total cost $11.40.
  • Bluebird, $10,000: 2 Bluebirds; load cost $79; free liquidation; total cost $79.
  • PayPal, $6,000: 2 personal accounts with linked PayPal Personal Debit Cards; load cost $47.40; liquidation cost $4.20; total cost $51.60.
  • Club Carlson Premier Rewards annual fees: $150 ($12.50 per month).

30 days in a Category 1 Club Carlson property, with accomplice: $174.10.

But Which Hotel?

Interesting exercise? Sure. But we still have to figure out which Category 1 Club Carlson property to move into!

Fortunately Club Carlson makes it easy to find properties by Category. Here's the list of all the Category 1 properties in the world we have to consider.

Home or Abroad?

The first question you should ask is whether you want to manufacture this spend on an ongoing basis, or stockpile 1.62 million Gold Points before you move in. On the one hand, the former gives you more flexibility if Club Carlson undergoes the long-awaited devaluation of their award chart. On the other hand, it requires you to pick a property that's convenient to your manufactured spend techniques, which rules out any overseas properties.

Since Gold Points reservations are easily cancelable, you don't actually have to decide this in advance, since you can move out after literally any 2-night reservation. A lot cheaper than breaking a lease, in my experience!

Stateside Options

I looked into all 10 US Category 1 properties [editor's note: it's a long train ride], and here's what I found:

  • Country Inn & Suites By Carlson, Saraland, AL: CVS, Walmart
  • Park Inn Fresno, Fresno, CA: CVS, Walmart
  • Country Inn & Suites By Carlson, Jacksonville, FL: CVS, Walmart
  • Country Inn & Suites By Carlson, LaGrange, GA: CVS, Walmart
  • Country Inn & Suites By Carlson, Norcross, GA: CVS, Walmart
  • Country Inn & Suites Greenfield, Greenfield, IN: CVS, Walmart
  • Radisson Hotel Indianapolis Airport, Indianapolis, IN: CVS, Walmart
  • Country Inn & Suites By Carlson Tulsa Central, Tulsa, OK: CVS, Walmart
  • Country Inn & Suites By Carlson, Cookeville, TN: CVS, Walmart
  • Park Inn By Radisson Dallas Love Field, Dallas, TX: CVS, Walmart

So based on my research, I'd say these are all outstanding options, if you want a taste of Southern living (or airport-adjacent living).

Options Abroad

As they say, read the whole thing, but a few properties jumped out at me from the list of Category 1 properties.

5 Eastern European capitals:

  • Park Inn Sofia (Bulgaria)
  • Park Inn Central Tallinn (Estonia)
  • Park Inn Budapest (Hungary)
  • Radisson Blu Beke Hotel, Budapest (Hungary)
  • Park Inn by Radisson Vilnius North (Lithuania)
  • Park Inn Danube, Bratislava (Slovakia)

One beachfront-ish property:

  • Radisson Hotel Hacienda (Cancun, Mexico)

And one place in Costa Rica. Island living!

  • Country Inn & Suites By Carlson, San Jose (Ciudad Cariari, Costa Rica)

Now you know everything I know. See you in Cancun?

American and US Airways award discounts

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As I've mentioned, in January I was approved for both the Citi Platinum Select / AAdvantage World MasterCard and Barclaycard US Airways MasterCard. Having met the minimum spending requirements for both cards, I paid them off and stuck them in a drawer.

Of course, now I've got all those miles on my hands! Since I have an expensive domestic roundtrip coming up in March, I thought I'd check out what kind of award availability the airlines had on the dates I needed (hint: not much!).

That got me to wondering about the award discounts offered by the two airlines to their co-branded credit card holders. I found it intensely confusing, so I thought I'd throw up a quick summary in case any of my readers recently signed up for the same cards.

American Airlines: 10% mileage rebate & reduced mileage awards

There are two kinds of discounts you get as a Citi / AAdvantage cardholder. First, there's a 10% mileage rebate on all the miles you redeem out of your account each calendar month, up to 10,000 total miles (on 100,000 in mileage redemptions). Second, there are "reduced mileage awards" which are offered to a changing list of (domestic) destinations throughout the year. That program is clearly decided to be as difficult to take advantage of as possible: you need to look up the eligible cities for each month, copy down the code, and input it when making your award reservation.

Oddly, the terms and conditions of the 10% rebate program don't even require these redemptions to be for flights, so if you find a good redemption for hotels or car rentals, or if you redeem your miles for an Admiral Club membership, you should receive the rebate on those redemptions as well (I don't know how this works in practice).

Finally, for bookings made through February 27 for flights through April 4, there's another active promotion whereby non-stop MileSAAver economy award flights between Los Angeles and cities in the continental United States, and all MileSAAver economy award trips between Las Vegas and cities in the continental United States cost 10,000 AAdvantage miles each way, instead of 12,500. The 10% mileage rebate should apply to the final (post-discount) cost of each flight.

US Airways: 5,000 mile award discount

When you're a Barclaycard US Airways cardholder in good standing, you are designated "Dividend Miles Select." As far as I can tell the only benefit of that "status" is that you receive a flat, 5,000 Dividend Mile discount on all US Airways-operated flights.

I'm not going to lie, I've been messing around on US Airways' website for the last hour and I cannot for the life of me get the 5,000 mile discount to apply to any award tickets. Presumably if I actually wanted to book an award I could call in and have a phone agent apply the discount.

Analysis

The added wrinkle in all this is that starting a few weeks ago, you've been able to use American miles to make award reservations on US Airways, and vice versa. That means that it's possible to receive a 10% discount on US Airways award reservations by making the reservation through your American AAdvantage account. So when deciding which account to make a reservation through, you need to ask yourself the following questions:

  • Have I already received 10,000 miles through the AAdvantage rebate program this calendar year? If so, you won't receive any additional discount this calendar year.
  • Is this award ticket operated entirely on US Airways aircraft? If not, it's not eligible for the 5,000 mile discount.
  • If it is operated entirely by US Airways, is it more or fewer than 50,000 Dividend Miles? If it's more, you'll be better off using AAdvantage miles. If it's fewer, use your 5,000 Dividend Mile discount and save your rebate headroom for a more expensive redemption.

Finally, consider checked bag fees. The US Airways MasterCard famously does not include free checked bags, while the AAdvantage card does. American's website currently has the following helpful information:

"Q: Do the First Bag Checked Free Waiver and Group 1 Boarding (or Priority Boarding) benefits on select Citi®/AAdvantage® cards apply to US Airways flights?

"A: Not at this time. These benefits will not be available for travel on any US Airways flights, including any codeshare flights."

That means that if you're deciding specifically between American-operated and US-operated flights, booking the American flight with a 10% discount may be more economical than booking the US Airways flight with a 5,000 mile discount; it depends on whether the difference in miles is worth more or less than the $50 you'll pay roundtrip per first checked bag and $70 per second checked bag on US Airways.

Confused yet? Me too. Let me know in the comments if I'm missing anything obvious.