Thoughts and feelings about BankAmericard Travel Rewards

The best deal in travel

In my opinion the best deal in travel hacking is likely the BankAmericard Travel Rewards credit card with Bank of America Preferred Rewards Platinum Honors. That combination turns every dollar in unbonused spend into 2.625 cents towards future travel redemptions.

That's not to say there isn't competition for best deal:

• A Chase Ink Plus and Sapphire Reserve combination allows you to earn 5 Ultimate Rewards points per dollar spent at office supply stores and redeem them for 1.5 cents each on paid travel.
• Likewise an Ink Plus combined with the Southwest Companion Pass allows you to redeem those 5 Ultimate Rewards points for (very roughly) 3.2 cents each on Wanna Get Away fares with Southwest when flying with your designated companion, the equivalent of earning 16% on your office supply store spend.
• An American Express Premier Rewards Gold card and Platinum Business card would let you earn 2 Membership Rewards points at supermarkets and redeem them for 2 cents each towards premium-cabin airfare, plus enjoy the flexibility of Membership Rewards points transfers.

That said, I don't personally have a Travel Rewards card, and suspect the vast majority of travel hackers either don't have or don't use one. Here's everything you need to know about the pros and cons of BankAmericard Travel Rewards and Preferred Rewards with Bank of America.

You need to have a lot of money (occasionally)

To qualify for Platinum Honors with Bank of America Preferred Rewards, you need to have $100,000 in combined balances with:

• Bank of America;
• Merrill Lynch, the bank's full-service brokerage business;
• and Merrill Edge, the bank's self-directed brokerage service.

Sound simple? Hang on tight.

To initially enroll in the program, you need to have an average daily balance over the preceding 3-month period of $20,000 or more (the minimum to qualify for the Gold tier in Preferred Rewards). Each month after that Bank of America checks to see if you're eligible for a higher tier: if you enroll with a 3-month daily average balance of $20,000, you'll be upgraded to the Platinum tier when your 3-month daily average balance reaches $50,000 and to the Platinum Honors tier when your 3-month daily average balance reaches $100,000. That "check" only happens once per month.

After you've reached a tier in Preferred Rewards you keep that status for 15 months. Technically you earn the status for 12 months and then have a 3-month grace period to requalify before being moved to a lower tier or removed from the program. [Edit 1/7/16: Please see Robert's comment for clarification on how the enrollment period and grace period work in practice.]

Three-month average daily balances are a funny thing. You could meet the $100,000 requirement over 3 months in any number of ways, including:

• Month 1: $100,000. Month 2: $100,000. Month 3: $100,000.
• Month 1: $0. Month 2: $150,000. Month 3: $150,000.
• Month 1: $0. Month 2: $0. Month 3: $300,000.

All three variants produce an average daily balance of $100,000 over a 3-month period, but you must have an account for 3 months to qualify. You can't just deposit $300,000 in a new account and enroll in the Platinum Honors tier the following month.

Most people don't have that kind of money in cash, but you might. If you just sold a house or inherited some money, for example, you might have $300,000, and if you aren't in a rush to spend it, parking it with Bank of America for a month would qualify you for the Platinum Honors tier for the next 15 months.

Investing with Merrill Edge

Obviously, most people don't meet the Platinum Honors tier requirements that way. Instead, they open up a Merrill Edge account and move $100,000 or more in cash or securities into their account, and leave them there.

Note: I'm a passive, indexed investor, so all of the following is going to be from the point of view of passive indexed investing.

In writing this post I scoured the ends of the internet to find as complete and accurate information as possible regarding how to transfer, buy and hold Vanguard mutual funds and ETFs with Merrill Edge. Here's what I found.

• Merrill Edge accountholders can buy shares of Vanguard ETF's and "Investor" shares of most if not all Vanguard mutual funds.
• As a Platinum Honors accountholder you receive 100 free stock and ETF trades per month, so there would be no cost to purchase Vanguard ETF's with cash. Purchasing new Investor shares of Vanguard mutual funds has a $19.95 fee.
• This creates an obvious chicken/egg problem: to get free ETF trades, you have to be Platinum Honors, but to be Platinum Honors, you have to have funds in your account.
• Unless you want to park $100,000 in cash in your account, the obvious solution is to transfer $100,000 (or more) in existing securities from their current custodian.
• Merrill Edge allows some, but not all, "Admiral" shares to be transferred in-kind from Vanguard. That means you are able to hold in a Merrill Edge account shares that cannot be purchased in a Merrill Edge account.
• Once you hold Admiral shares with Merrill Edge you can reinvest dividends and capital gains, but you still can't purchase new shares. Admiral shares have the advantage of being lower cost than Investor shares and, in some cases, ETF shares (VTIAX is cheaper than VXUS, for example). You can read way more about this issue here.
• If your Admiral shares can't be held by Merrill Edge, or if you intend to use Merrill Edge for ongoing contributions and don't want to hold two different share classes in your account, you can convert Admiral shares in all but four Vanguard mutual funds into ETF shares. You can also convert Admiral shares into Investor shares, but since Investor shares have higher fees than ETF's that's unlikely to be your lowest-cost move.
• ETF shares can be moved in-kind from Vanguard to Merrill Edge, although fractional shares will be sold, not transferred. This may produce a taxable capital gain if the transfer is between taxable accounts.
• [Edit 1/6/16: See reader EightBall's comment below for more on this issue, and this Boglehead forum post.]If you elect to reinvest dividends from an ETF, Merrill Edge will charge a 10% "fractional share liquidation fee" on any partial shares. In other words, they buy the whole number of shares your dividends can afford, then charge you 10% of the remainder as a convenience fee before depositing the rest in cash. To avoid that fee, you can elect to receive dividends in cash and manually purchase whole ETF shares, which sounds hellishly annoying. This is one reason I personally prefer Admiral shares to ETF's.

This may seem like a lot of trivia. But I'm laying it all out here for two reasons. First, it took me a couple hours of searching and reading to find the answers to all these questions, so hopefully putting it in one place saves somebody else the same trouble. Second, I truly believe the best way to build wealth is the long-term, automated, low-cost purchase of mutual funds tracking broad market indices.

Merrill Edge, like all brokerages, would like you to do as much short-term, manual, high-cost buying and selling of speculative securities as possible.

Merrill Edge new account bonuses

So you're a mid-career upper-middle-class professional, or early-career FIRE enthusiast, and you've got $100,000 sitting in your Vanguard account. You're intrigued by what your humble blogger earlier called "the best deal in travel hacking." The next step is to open a Merrill Edge account and transfer $100,000 in securities in-kind, right?

Not so fast.

Like many online brokerages, Merrill Edge offers signup bonuses for new customers who open accounts with qualifying balances. The standard Merrill Edge bonus is $100-$600 depending on the amount you deposit within 45 days of opening your account.

But that offer periodically goes as high as $1,000 for deposits of $200,000 or more. There's even a landing page for the higher offer, although it includes an expiration date of December 31, 2016.

If you're eager to get the process started of earning Preferred Rewards status and triggering the highest payout on the Travel Rewards credit card, then go ahead and get started. But if you're not in any hurry, then it may be worth waiting for that higher signup bonus to come around again. Even if you just deposit $100,000, the higher bonus pays out $250 more than the standard one, which it would certainly be nice to have in your retirement accounts happily compounding away.

Conclusion

I'm a long way from having $100,000 in my retirement account, so I won't personally be taking advantage of this deal any time particularly soon. But in this era of cheap and plentiful, but unbonused, manufactured spend I do believe earning 2.625% in travel rewards on all purchases is one of the best opportunities widely available — to those who can afford it.

Booking Southwest flights with Flexpoints and Ultimate Rewards

I previously wrote up my experience booking a Hyatt all-inclusive resort in Jamaica. That left the question of how to get there. While I'm not ready to be seduced by Southwest, I waited to pull the trigger a bit too long and the price difference between the nonstop Southwest flight and one-stop options on real airlines shrank enough to convince me to give them a shot, despite my reservations.

Chase Ultimate Rewards points and US Bank Flexpoints can be used to book Southwest flights

Southwest famously doesn't participate in the public Global Distribution System that real airlines use, which is why their fares don't show up on ITA Matrix, Google Flights, and online travel agencies (Google Flights will show you Southwest routes, but not fares).

But the Chase Ultimate Rewards travel center and US Bank Flexperks Travel Rewards travel contractor can book Southwest fares over the phone.

Redeeming Chase Ultimate Rewards points for travel on Southwest

To make an Ultimate Rewards redemption on Southwest call 866-951-6592.

Like all Ultimate Rewards travel redemptions, points are worth 1.25 cents each for travel on Southwest, and you can use any number of Ultimate Rewards points against the purchase price and pay the remainder in cash. After transferring points to Hyatt to pay for our stay in Jamaica, I didn't have quite enough Ultimate Rewards points left to pay for my partner's ticket, so I redeemed my entire Ultimate Rewards balance and paid the remaining amount with my Chase Ink Plus card, which should earn 2 Ultimate Rewards points per dollar if the purchase codes correctly as a Travel Center reservation.

Theoretically I could have redeemed my Ultimate Rewards balance for a cheaper Southwest fare, then cancelled that flight and used the value towards the ticket I really wanted while paying the difference with the card of my choice. Since this was my partner's ticket and as far as I know she doesn't even have a Rapid Rewards account, I decided to keep it simple and just book the tickets I really wanted.

After feeding the Ultimate Rewards agent the dates and flights I wanted, she came back with a price about $90 cheaper than the fare available online. I had heard of this happening before, so told her to go ahead and make the reservation. After giving her all of my partner's information and my credit card information, and waiting on hold for a while, she came back and told me that flight was not available.

After going back and forth a few times, it turned out what she really meant was that that fare wasn't available, which didn't surprise me, and she was ultimately able to book the fare I had found online.

The call took a total of 45 minutes.

Redeeming US Bank Flexpoints for travel on Southwest

To redeem Flexpoints for travel on Southwest call 888-229-8864. The "Rewards Center" US Bank uses is not open 24 hours a day, but has pretty reasonable hours, something like 7 am to 11 pm, Monday through Saturday (I didn't catch their Sunday hours, but they were closed at 10:50 pm Eastern on Sunday).

After taking down my trip details, the agent explained that in order to book international travel on Southwest he had to call them, get a fare quote, put the reservation on hold, and then return to confirm the fare and itinerary with me. He asked me if there was a particular fare I was expecting, which seemed like a common sense precaution to make sure we were looking at the same flights and dates. It was unclear to me whether the same procedure is required for domestic travel on Southwest.

While the Southwest Anytime fare I booked for my partner was still available for about $900, a Business Select fare was also available for $950. Since I was redeeming Flexpoints, I knew that either itinerary would cost 50,000 Flexpoints and I told the agent to look for the Business Select fare. He was happy to do so and, after putting me on hold for 25 minutes or so, returned with the same fare I had found online.

Since Southwest flights can't be booked online, he also waived the $25 phone booking fee.

The call took a total of 44 minutes. If it seems strange that the call took almost as long as my call with Chase did even though the agent was able to accurately find the correct fare on his first try, the reason is the two lengthy holds he placed me on while calling Southwest.

Adding your Rapid Rewards number

Neither agent asked for a Rapid Rewards number to add to the reservations, and I didn't ask since I was getting pretty bored of waiting on the phone. However, both agents provided the Southwest confirmation number, which made it easy to pull up the reservations on Southwest.com. The Flexperks Rewards Center also provided an "agency" confirmation number they use internally — be sure you get the Southwest confirmation number as well.

Strangely, I was unable to add my Rapid Rewards number to my reservation while logged into Southwest.com. After logging out, however, I was able to pull up my reservation and manually add my Rapid Rewards number, and the reservation immediately appeared in my account.

Fuel surcharges on Korean's SkyTeam partners

Last week I saw a flood of posts about Korean Air adding the ability to search and book SkyTeam partner awards online (for example). Since Korean Air SKYPASS is an Ultimate Rewards transfer partner, it's worth checking to see if there are any good values on their SkyTeam partners now that it can be done easily online.

The three most important things people know about Korean Air SKYPASS are:

1. You can only book awards for yourself and a very tightly defined group of family members;
2. SKYPASS awards pass along fuel surcharges;
3. Korean Air's award "zone" definitions are unusually generous, with Hawaii located in North America and South America being treated as a single zone.

Being a literal-minded sort of person, I decided to see how bad those fuel surcharges are on all of the SkyTeam carriers departing from the United States.

Here's what I found.

Not bookable online

While I was able to find award space on these SkyTeam airlines using Delta's search engine, I couldn't pull up the same flights using SKYPASS:

• Aeromexico to Latin America;
• Alitalia to Italy;
• Aerolineas Argentinas to Argentina.

The functionality may be added in the future, but for now I don't believe SkyTeam awards are bookable online using SKYPASS on those carriers.

Low fuel surcharges

Carriers that charge low fuel surcharges are the likeliest to be worth redeeming SKYPASS miles on, since you can take advantage of Korean's generous award chart without suffering the drawback of paying a high cash co-pay. On these low-fuel-surcharge routes you're likely to save money whether you choose to fly in economy, business, or first class.

For each airline I've given a sample route and the cost in SKYPASS miles for an economy ticket, and I've separated out the taxes and fees and the fuel surcharges. In all cases these prices are roundtrip, since Korean requires SkyTeam awards to be booked as roundtrips.

• Delta to Peru, ATL-LIM. 50,000 SKYPASS miles, $103.40 in taxes and fees, $0 in fuel surcharges.
• Delta to Japan, SEA-NRT. 80,000 SKYPASS miles, $80.04 in taxes and fees, $0 in fuel surcharges.
• Aeroflot to Russia, JFK-SVO. 50,000 SKYPASS miles, $252.12 in taxes and fees, $0 in fuel surcharges.
• China Eastern to China, LAX-PVG. 90,000 SKYPASS miles, $420.60 in taxes and fees, $8 in fuel surcharges.
• China Airlines to Taiwan, HNL-TPE. 90,000 SKYPASS miles, $73.15 in taxes and fees, $0 in fuel surcharges.

Medium fuel surcharges

These routes charge less than $500 in fuel surcharges, and might be worth considering in premium cabins or if you find award space on dates with particularly expensive cash fares.

• Delta to China, SEA-PEK. 90,000 SKYPASS miles, $70.60 in taxes and fees, $282 in fuel surcharges.
• Delta to South Africa, ATL-JNB. 80,000 SKYPASS miles, $99.95 in taxes and fees, $390 in fuel surcharges.
• China Southern to China, LAX-CAN. 90,000 SKYPASS miles, $70.60 in taxes and fees, $208 in fuel surcharges.

High fuel surcharges

These are the routes where high fuel surcharges mean economy award tickets are likely to cost the same or more than economy tickets, while premium cabin award tickets may cost the same as an economy ticket paid for with cash.

• Delta to Europe, JFK-BCN. 50,000 SKYPASS miles, $81.25 in taxes and fees, $556 in fuel surcharges.
• Air France to Europe, JFK-CDG. 50,000 SKYPASS miles, $113.16 in taxes and fees, $576 in fuel surcharges.
• KLM to Europe, JFK-AMS. 50,000 SKYPASS miles, $82.26 in taxes and fees, $576 in fuel surcharges.

Those flights would cost just 80,000 SKYPASS miles roundtrip in business class, for a total cost of $1437.25 - $1489.16 if you value transferred Ultimate Rewards points at their cash value of 1 cent each. Unfortunately business class space on SkyTeam across the Atlantic is very poor so you're unlikely to be able to take much advantage of these price points.

Routing rules

The basic routing rules for SkyTeam awards are pretty simple, although there are a host of exceptions: you can have three segments in each direction between your origin and destination, one stopover per itinerary, and one open jaw at your destination (which does not consume your stopover).

Drew at Travel is Free wrote a more detailed guide to Korean's routing rules, but I don't know if there's much point in trying to intellectualize their rules and restrictions. Basically, you can do a lot of things, within reason, and you can do some things beyond reason,  if you use Korean-operated flights. For example, a LAX-PVG-NRT-PVG-JFK itinerary will not price out entirely on China Eastern, but if you make it LAX-PVG-NRT/NRT-ICN-JFK with the return operated by Korean, it'll happily price out. This may also have to do with a Maximum Permitted Mileage restriction — the point is there's no substitute for getting in and playing around with the search engine to see if it'll accept your particular crazy idea.

For example, the engine happily priced out LAX-HNL(stopover)-NRT(destination)-HNL(transfer)-LAX for 80,000 SKYPASS miles and $87.84 total in taxes, fees, and surcharges. While a roundtrip to Hawaii for 25,000 miles is a good deal, a roundtrip to Japan with a stopover in Hawaii for 80,000 miles is a great deal.

Things I have learned about booking Hyatt all-inclusive resorts

In the past few weeks I've gone from vaguely speculating about booking a winter weekend at a tropical all-inclusive resort to starting to plan an actual trip. Since, for good or ill, I'll be a Hyatt Gold Passport Diamond/World of Hyatt Globalist next year, I've been looking at Hyatt's all-inclusive properties. Here are a few things I've learned so far.

Standard award availability is very tight

At the Hyatt Zilara Rose Hall I happened to reserve the last standard room available over Presidents' Day Weekend, which is quite a few months from now.

At the Hyatt Zilara Rose Hall, the only room types bookable at the 25,000-point level are the "Hyatt Zilara King" and "Hyatt Zilara Double" room types.

Suite award availability may be a bit better

While there are no more standard room awards over Presidents' Day Weekend at the Hyatt Zilara Rose Hall, there are still suite night awards available.

According to the phone representative I spoke with, at the 40,000-point level I could still book the "Junior Suite King" room type.

The point is that even if you don't have any reason to book a suite, if you're willing to spend the additional points you should ask anyway, since you may have access to additional award space you wouldn't have if you insisted on booking a "standard" room award.

Since during peak times those rooms can be phenomenally expensive, you may still save money even when "overpaying" for suite night awards.

Cancellation policies are brutal

My award reservation at the Hyatt Zilara Rose Hall has a 45 day cancellation policy. That means in the first couple days of January I've got to decide whether I'll really make it to Jamaica in late February.

Feel free to book these awards speculatively, but also keep track of their cancellation policies and don't get caught paying some preposterous cancellation penalty for missing it by a day.

Hyatt Gold Passport Diamond point loans still apply

On a final note, it is possible for Hyatt Gold Passport Diamonds to book award nights without sufficient points in their account. This is a pretty cool feature which can be used for domestic and international award stays, and can also be used for all-inclusive award stays.

Gut-checking the latest and greatest opportunities

Starting today, it should in principle be possible to sign up for the Popular Credit Service Avianca LifeMiles credit cards. Signup bonuses are constantly fluctuating up and down, but it's not every day that we get a brand new credit card to evaluate. With that in mind I thought I'd share my simple framework for looking at new offers like this when they come around.

What do I already know, and what do I need to know?

A quick glance at my airline alliances page shows that Avianca is a Star Alliance member. I already know that I hate flying United, so Avianca won't be useful for domestic itineraries, but it might be useful for international itineraries.

On Star Alliance partner airlines, there are no obvious sweet spots. Economy awards to Europe, for example on Lufthansa or Turkish Airways, cost 60,000 LifeMiles roundtrip, the same as United MileagePlus miles. In Business class on a Star Alliance partner you'll pay 126,000 LifeMiles roundtrip, somewhat better than the 140,000 MileagePlus miles United would charge.

To North Asia, LifeMiles will charge the same 70,000 miles roundtrip as United, but 10,000 miles fewer (150,000 LifeMiles versus 160,000 MileagePlus miles) for Business class. So in terms of redemption value, LifeMiles are certainly competitive with MileagePlus miles for travel on Star Alliance partners.

This is the sort of simple calculation you can glance at to anchor the valuation of a new currency compared to ones you're already familiar with. LifeMiles seem to be a pretty good Star Alliance rewards currency, at least competitive with MileagePlus miles.

Do I have a redemption plan?

Some readers seem to think that I'm some kind of maniac who insists there's no point in earning a mile you don't already have budgeted for a specific trip, on a specific flight, on a specific day, with a specific co-pilot leaving from a specific gate.

That's baloney! All I've ever said is that the least valuable point is the one you don't redeem, and that the point of travel hacking is to pay as little as possible for the trips you want to take.

If the trip you want to take is "Lufthansa First class to Europe," then having a slew of reasonably-priced Star Alliance miles lying around is a natural solution — a perfect solution! On the other hand, if the trip you want to take is "summer in Europe" then you may well have been better off waiting for a fare sale like the ones we saw last week where roundtrip economy fares were in the low 3-figures.

Knowing the kinds of trips you're likely to take, whether you're likely to pay for them with cash or with miles and points, and knowing which miles and points are well-suited for the job is a simple way of calibrating whether a brand new deal is spectacular or a dud.

Is it scalable?

There are two kinds of offers: one-of-a-kind opportunities like a 100,000-point signup bonus from a bank with good risk controls, and opportunities with potentially unlimited upside. Into the second category fall things like churnable credit cards, unappreciated reselling opportunities, or gift card liquidation mechanisms no one else has thought of.

A scalable opportunity is worth more than a one-off opportunity because once the background research has been done each iteration produces close to pure profit for as long as the deal lasts.

For example, while the US Bank Club Carlson credit cards offered the last night free on award stays, there was no limit to the number of 2-night stays you could book at half price. Along with a partner you could book any integer multiple of 2 nights at a top-tier 70,000-point property for 35,000 points per night, or $7,000 in otherwise-unbonused credit card spend per night.

In the case of the Avianca Vuela credit card, which is supposed to offer 2 LifeMiles per dollar spent at gas stations and grocery stores, the question is whether you'll be willing to earn 2 LifeMiles per dollar at the expense of other rewards currencies. There's no obvious answer to that question — it'll depend on your own circumstances. At grocery stores, 2 LifeMiles per dollar spent may be worth more than 6 HHonors points, or more than 2 Flexpoints, or more than 2 Membership Rewards points, or it may not.

In short: a lucrative bonus category can turn a so-so credit card, or a decent signup bonus, into a scalable opportunity — but whether it does or not will depend on your own circumstances.

What will I do with the remaining points?

After signing up for a Avianca Vuela card, and meeting the spending requirement, you'll be the proud owner of 60,000 LifeMiles. Say you jump on a 50,000-LifeMile First class award from North America to Hawaii. Now you're the proud owner of 10,000 LifeMiles.

You can either accept that you got a 50,000-mile signup bonus, instead of a 60,000-mile one, or you can start conniving and contriving to redeem your remaining 10,000 LifeMiles, or start doing your utmost to earn more until you get to another redemption threshold.

I don't give advice, and don't care which response you have.

But knowing which response you're likely to have before you get there is a key to long-term mental health and regret-minimization in this game.

Conclusion

Let me stress again that there's no reason that "maximizing" the cash value you get from each travel hacking technique should be the only goal of your practice. But it does provide a general framework that at least lets you calculate, within general parameters, what the tradeoff is between fixed-value and flexible rewards points, between hotel points and airline miles, and between manufactured spend and signup bonuses.

Shutdowns, devaluations, and resiliency

One travel hacking blogger who never disappoints is Vinh at Miles per Day (his Twitter account is a must-follow as well). Vinh attracts shutdowns like an office supply store promotion attracts Ink Plus cards. He's been shutdown by PayPal, eBay, Best Buy (huh?), Chase, and that's just in the last two months.

On the other hand, Vinh is incredibly resilient, judging by the fact that he seems to buy a new car every 6 months or so.

That got me thinking about different ways to approach shutdowns and devaluations. In other words, how to become as resilient as Vinh.

Shutdowns are another kind of devaluation

If, like me, you think the point of travel hacking is to pay as little as possible for the trips you want to take, then there's no conceptual difference between a shutdown and a devaluation.

When American Express Membership Rewards points changed their transfer ratio to British Airways Avios from 1000:1000 to 1000:800 in October, 2015, that was a 20% devaluation. If you have both a flexible Chase Ultimate Rewards account and a Membership Rewards account, losing the Ultimate Rewards account with its 1000:1000 transfer ratio is also a 20% devaluation, since you'll have to pay 25% more Membership Rewards points than you previously paid in Ultimate Rewards points.

You can adjust the numbers depending on how you value Ultimate Rewards points relative to Membership Rewards points, but the point is that an account closure makes trips more expensive, just like a change to an award chart or the elimination of a credit card bonus category does.

I don't think there's any one right answer to how to think about shutdowns and devaluations, but here are three different approaches, each of which suggests a different way to build a travel hacking practice.

Approach #1: Pretend you're safe

This is by far the most popular approach advocated on mainstream blogs and in fact practiced by many travel hackers. When someone tells you to buy American AAdvantage miles at their lowest price ever, they're not just telling you the price you can buy them at, they're also telling you to pretend they'll maintain their value until you redeem them, or at least to factor in only a small risk of a short-term devaluation.

Likewise when someone tells you to earn Ultimate Rewards points "because they're so valuable," they're also implicitly telling you "and ignore the risk of your Chase accounts being shutdown and you being forced to liquidate your points on 30 days' notice."

There's nothing inherently wrong with this approach, as long as you know that's what you're doing. Acting as if you're safe from devaluations and shutdowns would lend itself towards running up big balances in just a few programs where you get the most value. Someone pretending they're safe might use just two or three credit cards issued by a single bank.

A combination of a Chase Freedom Unlimited, Chase Ink Plus, and Chase Sapphire Reserve would give you easy access to bonused spend with the Ink Plus, unbonused spend with the Freedom Unlimited, and high-value redemptions with the Sapphire Reserve, all without setting foot outside of Chase's ecosystem.

After those cards are closed and your Ultimate Rewards points have been liquidated, you could switch to an American Express Business Platinum card combined with an Amex EveryDay Preferred and/or Preferred Rewards Gold card.

The point is that pretending you're safe creates a permission structure to focus as heavily as possible on the very most valuable rewards currencies. Ironically, this approach of ignoring the risks of shutdown and devaluations is best suited for someone who is convinced that travel hacking is dying as a hobby!

The reason is obvious: the more certain you are that travel hacking will no longer be possible in the near future, the less you have to lose by risking shutdown, and therefore the more value you can extract from the most valuable programs by ignoring the risk of shutdown and devaluation.

Approach #2: Equal-weight the value of your rewards

Another approach might be to admit that there is an unknown risk of shutdown and devaluation across all your rewards currencies. If the risk were known, you would be able to weight your earning rates by value and risk: if Delta SkyMiles were twice as valuable as United Mileage Plus miles today, but were certain to be worth half as much a year from today, you could earn and burn them in the precise ratio such that your remaining, post-devaluation balances have the same value in one year.

Since the risk of shutdown and devaluation is unknown, you can't make that precise calculation. Instead, you can assume that more valuable currencies are more likely to devalue than less valuable ones, and more lucrative credit cards are more likely to shutdown heavy hitters than less lucrative ones.

This approach lends itself to the counterintuitive practice of earning fewer of more valuable rewards and more of less valuable rewards. If one card earns 5% cash back and another earns 2% cash back, you could earn 2.5 times more rewards on the second, less-lucrative card. This would theoretically raise the risk of shutdown on the less-lucrative card (which would hurt less to lose) and lower the risk of shutdown on the more-lucrative card (which would hurt more to lose).

While it sounds slightly bizarre when I frame it this way, a version of this approach is actually practiced by those of my readers who leave comments on my posts about manufacturing spend with a Chase Ink Plus card. They'll frequently say, "I value my relationship with Chase too much to manufacture spend aggressively on my Ink cards." In other words, the more valuable they find a rewards program, the less risk of a shutdown they're willing to run.

Approach #3: Set earning and burning goals, and change course as necessary

If you asked a representative sample of travel hackers, I suspect a slight plurality would say this is their general approach to the game: combine a broad awareness of as many opportunities as possible with a realistic view of your own travel goals and time constraints, and do your best to earn and burn the "right" miles and points.

When framed this way, the approach has a lot to recommend it: by earning the miles and points you need for the trips you want to take, you can keep your balances low enough that you're unlikely to be devastated by a single shutdown or devaluation. There's no way to "protect" yourself from an overnight devaluation like the one inflicted on Emirates awards booked with Alaska Airlines Mileage Plan miles back in March, 2016, but under most circumstances if you restrict yourself to planning 6-12 months in advance, you're likely to be able to redeem your miles under roughly the same terms as you earned them.

While this is certainly the approach I take, it's also far more difficult to implement successfully than the previous two approaches. We call rewards currencies "loyalty programs" because they are designed to cloud precisely the judgment needed to make good decisions about them. While devaluations reduce the value of your rewards currencies for future redemptions, months or years in the future, they don't affect the value of rewards you've already redeemed — and you're more likely to judge a program based on your past success using it than prospectively based on its current and future earning and redemption structure.

The annual free night certificates offered by hotel credit cards are a great example of this. The Marriott Rewards Premier credit card currently has an 80,000-point signup bonus. Even in Marriott's miserly program, that's enough for 2 nights at a Category 8 property. After the first year, you receive a free night certificate good at a Category 1-5 property. During that second year you may find a Category 5 property that fits your needs, and still feel like you're getting a good value for your $85 annual fee. Now your third year rolls around and your annual fee is due: you're likely to look at your past success redeeming your free night certificate than look at your future plans when deciding whether to pay the annual fee or not. And as more and more properties migrate up and out of Category 5, you'll find it harder and harder to use that free night certificate each year.

The point here is simple: it's not enough to draw up a strategy to earn and burn the points you need for the trips you want to take. To use this approach successfully you also have to periodically revisit your plans and programs to decide whether the techniques you're using still offer the straightest path towards your goals, or whether it's time to add a new program, cut out an old program, or change your strategy entirely.

Conclusion

Every travel hacking practice is ultimately a hybrid of calculation, opportunism, and habit. My own relentless focus is on those currencies I'm most likely to redeem as soon as possible. I start with cash back, then build on that with fixed value currencies like US Bank Flexpoints and Ultimate Rewards points, then add Delta and Hilton points thanks to their combination of accelerated earning and ease of redemptions — Delta SkyMiles and Hilton HHonors points are both relatively easy to redeem as long as you are willing to redeem them at "break even" rates instead of swinging for the fences with each redemption.

For example, an upcoming Hilton redemption over the holidays yielded 0.5 cents per point — nothing out of this world, but the equivalent of 3% cash back on my grocery store manufactured spend, and 57% off retail, after accounting for fees.

But my strategy only works for me because I'm willing to keep my rewards balances as low as possible. If you're the kind of person who likes seeing 7 or 8 digits in their loyalty accounts, you may want to consider figuring out whether you actually have a travel hacking strategy at all.

Why I'm gunning for Globalist

After I wrote last month that Hyatt's new loyalty program "made the decision easy" to requalify as a Hyatt Gold Passport Diamond in 2016, Joe Cheung at As the Joe Flies suggested it might be useful to explain my thinking in more detail.

The fact is, I take a pretty brute force approach to travel hacking, so the calculus for me is equally straightforward: I calculate my projected benefits, subtract my projected costs, and figure out whether I'll come out ahead or not. I'm happy to spell that calculus out in more detail.

The cash value of 2017 Diamond status

There are exactly three benefits of the World of Hyatt program which have any concrete value to me:

• A free night at any Category 1-7 property worldwide. This is worth up to $300, the cash value of 30,000 Ultimate Rewards points transferred to Hyatt Gold Passport or World of Hyatt.
• Breakfast and club access. This is worth perhaps $20-30 per night stayed at Hyatt properties between March 1, 2017, and February 28, 2018.
• 4 confirmed suite upgrades, subject to availability. This is worth perhaps $100 total — suites are nice, while being subject to availability sucks.

In other words, given a minimum of 4 Hyatt stays in the 2017 membership year, Hyatt Gold Passport Diamond status requalification can be assigned a starting value of $480: $300 in transferred Ultimate Rewards points, $80 in breakfast, and another $100 in suite upgrades.

The cash cost of 2017 Diamond status

After meeting the $40,000 spend threshold on my Chase Hyatt credit card, and earning a total of 5 elite-qualifying stay credits, I'll be 5 stays away from requalifying for Diamond status in 2016. Earning those 5 elite-qualifying stay credits only needs to cost me $96 per stay to "break even" with my projected value of Globalist elite status

I'm always anxious to remind people that "breaking even" isn't the point of travel hacking: we're supposed to come out so far ahead that all the crazy antics we commit ourselves to end up paying for themselves! If spending $480 in cash only got me $480 in value, there'd be no point in using Hyatt Gold Passport as an intermediary — I'd just pay $480 for things I valued at $480.

I can, in fact, achieve my remaining 5 elite-qualifying stays for a total price of $455. Putting those charges, at Hyatt Regency properties, on my Chase Hyatt credit card will reduce the price by another $50. One of these "mattress runs" will trigger another 10,000 Hyatt Gold Passport-point payout from the current "More Points. More Play." promotion, and all 5 will trigger 500-point payouts from the current mobile-booking promotion. Earning 6.5 points per dollar adds up to another 2,600 points on the room charges, plus up to 5,000 more points if I choose the points amenity on all 5 stays.

Valuing those earned points at their cash opportunity cost to me — one cent each — means I can pay $204 for $480 in value. That puts me squarely in the range of savings that travel hackers should take seriously.

This calculation requires no fantasies

If you're paying attention, the value I place on Hyatt Gold Passport Diamond status and World of Hyatt Globalist status requires just four stays of one night each in the 2017 membership year.

If I stay four separate nights, and apply four suite upgrade awards, and a single one of my nights is at a Category 7 property, I'm certain to get $480 in value.

I plan to get much, much more value from Globalist status in 2017. The key point is that the more realistic your assessment of the value of elite status, the easier it is to calculate the return on your travel hacking investment.

My Borgata Black Label trade up experience

For quite a while now My Borgata Rewards has been running a status match program called "Trade up to Black Label." New My Borgata Rewards members who show elite status with "Caesars Entertainment, MGM, Tropicana Atlantic City, or Trump Casinos" will instantly receive My Borgata Rewards Black Label status and:

• "$100 BONUS SLOT DOLLARS or Match Play
• "Complimentary Stay in a Classic Room
• "Access to VIP Lounge"

During a weekend trip to Philadelphia I popped over to Atlantic City to see how the status match works in practice. Here's my report.

Getting the status match

When I arrived at the Borgata, which is not on the Boardwalk but rather stuffed into a little corner of Atlantic City along with the Golden Nugget and Harrah's, I went straight to the My Borgata center and got in line for a new account. I mentioned the promotion (it's prominently advertised on-site as well) and showed a screenshot on my phone of my M life Platinum status (showing 0 tier credits, points, etc.). In other words, I didn't need a physical M life Platinum card in order to take advantage of the status match.

The My Borgata agent was happy to get me set up with a new Red Label account and immediately upgrade me to Black Label.

Although she kept apologizing for her "system being down," it seemed to me to work perfectly so I'm not sure what she was talking about.

Using $100 Bonus Slot Dollars

I chose the $100 Bonus Slot Dollars option, which can be redeemed for credit on any of the casino's slot machines. The $100 in match play option can be used on table games, but requires a real dollar to be matched to each bonus dollar.

The only two things you need to know about Bonus Slot Dollars are that once added to a machine, they can't be withdrawn and added back to your account, and that only your winnings can be cashed out, not the Bonus Slot Dollars you add to a machine. To simplify things, I just added $10 at a time to the machines I played, then after betting $10 withdrew however much I had won.

I ultimately won about $280 on my $100 in free Bonus Slot Dollars. If you go to Atlantic City, you should definitely try to do that.

Hitting the Amphora Lounge

After "gambling" up an appetite, my partner and I decided to head to the Amphora Lounge for dinner. Both the Amphora Lounge and the buffet cost $10 for Black Label members (and $10 for up to one guest), and the My Borgata staff member had added $20 in comp dollars to my account when I signed up. My impression is that the Amphora Lounge has a more limited food selection than the buffet, but drinks are included (and as Matt suggested on Twitter, they are happy to make drinks to carry out).

(Not) redeeming my complimentary stay in a Classic Room

Once back in Philadelphia, I activated my online My Borgata Rewards account and logged in to see how the free night benefit works. The stay has to be booked within one month for a stay no later than 3 months in the future.

Long story short, there are no complimentary rooms available in the next 3 months, or at least none available online. I assume this varies with demand and with the season, so maybe if you status match at some other time of year there would be more complimentary rooms available. But there aren't any right now, so don't count on this benefit when deciding whether to make the trip.

Is it worth it?

On the one hand, I came out pretty far ahead on my day trip to Atlantic City: after backing out the $46 in train tickets, plus cabs and tips, I made about $200 and got material for this blog post.

On the other hand, if you go to Atlantic City and status match to My Borgata Rewards Black Label, you might not win $280 on the slot machines. After paying for gas and parking, or train tickets and cab fare, plus the obligatory salt water taffy, the trip might turn out to be a pretty expensive "free" dinner with cocktails in the Amphora Lounge.

Quick hit: what we think we know about World of Hyatt status transition

In this Monday's post, I explained why I thought a plain reading of the World of Hyatt terms and conditions made it possible, but far from certain, that Hyatt would grant World of Hyatt Globalist status through February, 2019, to Hyatt Gold Passport members who qualified for Diamond status between January 1 and February 28, 2017.

Then I launched into a pretty extensive rant on Twitter about the habit of loyalty programs to leak "confirmed" details, without attribution, to their pet affiliate bloggers.

What can I say? I get worked up about unethical bloggers occupying a privileged position in the loyalty firmament.

An actual Hyatt Gold Passport executive appeared to have answered the question in public

Under increasing pressure from hardworking independent bloggers (joking!), an account claiming to be that of Hyatt Gold Passport Senior Vice President Jeff Zidell tweeted that "25 Stays or 50 nights in Jan/Feb, would earn Diamond through Feb 2019, which would then transition to Globalist on March 1."

Pretty convincing, right? The simplest reading of the tweet is that anyone who qualifies as a Diamond through February, 2019, would be transitioned into Globalist status for the same period.

Who is @jeffzidell and who is @BinghamtonDaily?

I don't know Jeff Zidell. I don't get invited to the Freddies, and I don't have one-on-one chats with loyalty program executives. But it's clear that the @jeffzidell Twitter account is not the Twitter account of someone deeply invested in the nitty-gritty of loyalty program logistics. He mostly retweets other people's posts about Hyatt's loyalty program, marathoning, and being a vulnerable leader.

Meanwhile, his supposedly definitive tweet about Diamond requalification in 2017 was directed at @BinghamtonDaily, which is a Trump-supporting sockpuppet account. Recent representative tweet: "NY 22 Three candidate field of non-compelling candidates. Write In Eric Trump."

@BinghamtonDaily deleted whatever tweet @jeffzidell appeared to be responding to, so we have no public record of the entire exchange.

I personally believe Hyatt will transition 2018 Gold Passport Diamond status to 2018 World of Hyatt Globalist status

But this is not about my personal beliefs. If a loyalty program wants to earn loyalty it has an obligation to make the terms of the program as clear as possible, and where ambiguity exists, to resolve it publicly on equal terms.

So don't attack me for calling into question what will happen to Hyatt Gold Passport Diamonds after March 1, 2017. Join me in asking Hyatt to make clear, in public, with attribution, whether they intend to transition 2018 Hyatt Gold Passport Diamond status to World of Hyatt Globalist status through February 28, 2019. It's a simple yes-or-no question, and Hyatt's refusal to answer it on the record is a problem.

World of Hyatt: more on the Chase credit card and chasing status

Now that some official information information has been released about the World of Hyatt program, I have a few additional thoughts to add to Friday's post.

Chase Hyatt Gold Passport bonus spend thresholds

The Chase Hyatt Gold Passport credit card currently awards 2 elite-qualifying stays and 5 elite-qualifying nights after spending $20,000 and 3 additional elite-qualifying stays and 5 additional elite-qualifying nights after $40,000 in calendar year spend.

Since the Hyatt Gold Passport terms and conditions remain in effect until March 1, 2017, I believe those elite-qualifying stays and nights will be awarded if you're able to meet the spending threshold by February 28, 2017. My statement closing date happens to fall on the 27th — if yours is earlier in the month and you are interested in pursuing this option, I recommend moving your statement closing date as soon as possible, since February spend after your statement closes may not trigger the bonus nights.

The World of Hyatt FAQ's seem to make clear that "a member’s Tier-Qualifying Nights and Base Points earned during January and February 2017 will count toward earning tier status in the new World of Hyatt program." That matters because Tier-Qualifying Nights earned through spend on the Chase Hyatt credit card are not, under the terms of the World of Hyatt program, "Tier-Qualifying Nights." Under World of Hyatt, "Tier-Qualifying Nights" are only:

"the number of nights the Member (i) stays at a Hyatt hotel or resort or an M life Resort; (ii) pays an Eligible Rate; and (iii) associates his or her valid Program membership number with the reservation (either at the time of reservation or check-in or by requesting retroactive credit for the night in accordance with Hyatt’s procedures) during the applicable measuring period."

The World of Hyatt terms do not include any allowance for Tier-Qualifying Nights earned through credit card spend.

Chase World of Hyatt $50,000 bonus spend threshold

According to the World of Hyatt Frequently Asked Questions (look under "Discoverist" — thanks to Twitter user @VM4827 for finding it there), the Chase Hyatt credit card will replace its automatic Platinum status benefits with an automatic Discoverist status.

Moreover, according to the FAQ, "starting January 1, 2017, Hyatt Credit Cardmembers who spend $50,000 USD on their Hyatt Credit Card in each calendar year will receive Explorist status through the following calendar year."

That means it should be possible, since the Hyatt Gold Passport program is in effect through February 28, 2017, but credit card spend starts counting towards Explorist status on January 1, 2017, for the same spend to count towards both Diamond status qualification for 2017 and Explorist status qualification for 2018 (if you don't end up meeting the Diamond qualification requirements, or if Diamond qualification ultimately does not granting Globalist status in 2018 — see below).

A Category 1-4 free night certificate is not a benefit of Explorist status

This has been missed in much of the discussion I've seen so far of the new World of Hyatt program, but it's spelled out clearly in the World of Hyatt terms and conditions:

"This award is available only to Members who complete the qualifying number of Tier-Qualifying Nights or earn the qualifying number of Base Points starting from the Effective Date of these Terms. While this award requires the same Tier-Qualifying Night and Base Point accrual requirements as are required to achieve Explorist status, the Category 1-4 Free Night Award is not provided as a benefit of Explorist status and a Category 1-4 Free Night Award will not be provided to Members who receive Explorist status through any means other than satisfaction of the Tier-Qualifying Night or Base Point accrual requirements (e.g., Members who receive Explorist status as part of the migration from the Hyatt Gold Passport program to the Program)."

That means that while spending $50,000 on the card may grant you Explorist status, and thereby earn 4 Explorist Club Upgrade Awards ("Upon receiving or re-qualifying for Explorist status, Explorists will receive four (4) complimentary Room Upgrade Awards for accommodations with Club lounge access"), you will definitely not earn a Category 1-4 free night certificate for spending $50,000 on the card.

Should you put $50,000 in unbonused spend on the Chase Hyatt credit card in order to earn Explorist status? The same spend on a Chase Freedom Unlimited card would earn 75,000 Ultimate Rewards points, which could be transferred to World of Hyatt with the help of a Chase Ink Plus or Bold, or Sapphire Preferred or Reserve. By foregoing those 25,000 Ultimate Rewards points (worth $250 in cash), you receive:

• 4 Club Upgrade Awards;
• 1 bottle of water per day;
• 2:00 pm late checkout "subject to availability at some locations;"
• and waived resort fees on free night awards.

That's not worth $250 to me, but if you book up to 4 stays of up to 7 nights with multiple family members, or frequently stay at properties with resort fees, you could conceivably get $250 in value from those benefits.

2018 Diamond qualification does not guarantee 2018 Globalist status

I have scoured the World of Hyatt website and the terms and conditions, and have come to the definite conclusion that requalifying as a Hyatt Gold Passport Diamond member in January and February of 2017 does not guarantee that you will be awarded World of Hyatt Globalist status for 2018.

Here's what the FAQ says:

"If my new World of Hyatt status doesn’t take effect until March 1, 2017, what happens January 1 through February 28, 2017?

Hyatt Gold Passport will continue to operate exactly the same until the March 1, 2017, launch of World of Hyatt. In January and February 2017, members will continue to earn Platinum or Diamond tier status based on nights or stays. If a member achieves Platinum or Diamond tier status in January or February 2017, the member will be upgraded to that tier status and then transitioned into a new World of Hyatt tier status on the March 1, 2017, launch of World of Hyatt. At the same time, a member’s Tier-Qualifying Nights and Base Points earned during January and February 2017 will count toward earning tier status in the new World of Hyatt program."

Here's what the terms and conditions say:

"Members who, in the course of one (1) Calendar Year, record a minimum of sixty (60) Tier-Qualifying Nights or earn one hundred thousand (100,000) Base Points will receive Globalist status after meeting the minimum requirement through February of the second Calendar Year following qualification."

In other words, according to the letter of the rules, if you qualify for Diamond status in the first two months of 2017, you'll transition into Globalist status for 2017, and your elite-qualifying nights will roll over to the World of Hyatt program and be used to calculate your 2018 status.

What will Hyatt do with 2018 Diamonds?

While Hyatt may not be obliged by the terms of its program to award 2018 Globalist status to 2018 Diamonds, it does seem like they are trying to please as many stakeholders as possible in this transition, for example by awarding Category 1-7 Free Night Award to Diamonds who are transitioned to Globalist status on March 1, 2017.

That means it's at least possible, at least on a case-by-case basis, that people who qualify as Hyatt Gold Passport Diamonds in the first 2 months of 2017 will be awarded Globalist status through March 2019, although Hyatt would be perfectly within its rights to only award Globalist status through March 2018. Hyatt's Twitter team, naturally, was unable to give a definite answer to this question.

Final note: pay attention to the terms and conditions for upgrade awards

While Suite Upgrade Awards and Club Upgrade Awards will be redeemable on award stays booked with points starting March 1, 2017, note that they are not eligible for use on free night awards booked using any other instrument. According to the terms and conditions, Suite Upgrade Awards are:

"Not valid in connection with any Free Night Award other than those identified above, including, without limitation, Hyatt Credit Card premium and anniversary Free Night Awards, 5-brand Free Night Awards, Category 1-7 Free Night Awards (defined below), or any other promotional Free Night Award."

Likewise with Explorist Club Upgrade Awards:

"Not valid in connection with any Free Night Award other than those identified above, including, without limitation, Hyatt Credit Card premium and anniversary Free Night Awards, 5-brand Free Night Awards, Category 1-4 Free Night Awards (defined below) or any other promotional Free Night Award."

Conclusion: details matter

There's a lot of sloppy writing and sloppy thinking out there about the new World of Hyatt program, which is a good reminder that letting other people read and think for you is unlikely to work out well for you in the long run. If something is unclear, go to the original source. If the original source is unclear, ask the people in charge. And if the people in charge are unclear, keep a close eye on your wallet!