"True" credit card earning rates

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Nothing's ever simple in the world of loyalty programs, and that's doubly true f credit card rewards.  While most cards seem to offer a straightforward earning structure of 1 point per dollar, in fact that number can be somewhat higher because of bonuses that accrue either annually or at certain high levels of spending.  If you don't take those bonuses into account, you're not correctly evaluating the earning rate of your rewards credit cards.

Today we'll take a look at several popular rewards-earning credit cards nd compute the true earning rate on each.

Chase Sapphire Preferred

The Sapphire Preferred is a good example of a card with a "hidden" bonus.  Every calendar year (not cardmember year) in early January you're awarded a 7% bonus on all the Ultimate Rewards point you earned the previous calendar year.  This means that on unbonused spending, you earn a total of 1.07 Ultimate Rewards points per dollar, and on bonused spending (travel and restaurants) you earn a total of 2.14 points per dollar.

After the first year of card membership, the Sapphir Preferred has an annual fee of $95.  Valuing Ultimate Rewards points at 1 cent each (their cash redemption value; much higher value can be realized by redeeming them for travel or transferring them to airline, hotel, and rail partners), the first $9,500 you spend on the card each year only earns you enough points to pay your annual fee.  Taking into account the 7% annual bonus, however, you earn enough Ultimate Rewards points to pay the annual fee after only $8,879 in spending, a fairly low amount if you're manufacturing spend.

United MileagePlus Explorer

The MileagePlus Explorer card earns 1 mile per dollar on most spending.  However, if you spend $25,000 in any calendar year on the card, you earn an additional 10,000 bonus miles.  This makes the true earning rate on the card 1.4 miles per dollar, if you are able to spend exactly $25,000.  This card is essentially only worth spending any money on (after meeting the minimum spending required by the bonus you signed up for) if you intend to spend exactly $25,000, since the Sapphire Preferred has the same annual fee and allows transfers to United, while also allowing you to redeem your points for cash, travel, or transfers to other travel partners.

Platinum Delta American Express

Like the nited MileagePlus Explorer, the Platinum Delta card gives a bonus of 10,000 redeemable miles after spending $25,000 on the card in any calendar year.  However, along with the bonus redeemable miles, it also awards 10,000 valuable Medallion Qualification Miles (MQM), which can make a huge difference when qualifying for elite status.  Unlike the MileagePlus Explorer, the Platinum Delta card awards another 10,000 redeemable miles and 10,000 MQM at $50,000 in calendar year spending.

Most travel hackers who carry the Platinum Delta Amex therefore attempt to spend exactly $25,000 or $50,000 on the card each calendar year.  t those levels of spending, the card earns 1.4 miles per dollar, plus 10,000 or 20,000 valuable MQM.

Reserve Delta American Express

The Reserve card has a similar earning structure to the Platinum card, except instead of earning 10,000 mile bonuses at $25,000 and $50,000, the card earns 15,000 bonus miles and MQM after $30,000 and $60,000 in spending.

At those evels of spending, the Reserve card earns 1.5 miles per dollar, plus 15,000 or 30,000 MQM.

 

American Express Premier Rewards Gold

The Premier Rewards Gold card earns 1 flexible Membership Rewards point per dollar on ost spending.  At $30,000 in calendar year spending, the card earns an additional 15,000 Membership Rewards points.  If you are able to spend exactly $30,000 on the card, then you'll earn a total of 1.5 points per dollar.

Bank of America Virgin Atlantic Credit Card

The Virgin Atlantic card has a quite complicated earning structure.  On most purchases, the card earns 1.5 miles per dollar spent.  Then at $15,000 in purchases per cardmember year (not calendar year, like with the American Express cards), on the card anniversary, the card also awards 7,500 miles if you reached $15,000 in spend and another 7,500 if you reached $25,000 in spend.  However, you must renew the card for an additional year in order to receive the miles (unless you are able to cancel the card after the miles post and have the annual fee waived).  So the true earning rate of this card is 2 miles per dollar if you spend exactly $15,000 and 2.1 miles per dollar if you spend exactly $25,000 each year of card membership.  Since these miles transfer at a 1:2 ratio to Hilton HHonors points, this is like earning 4.2 HHonors points on all purchases, slightly better than the fee-free Hilton American Express card.  However, since the Virgin Atlantic card has a $90 annual fee, you would have to value the marginal 30,000 Hilton HHonors points at over .3 cents each in order to justify paying the annual fee each year and claiming the anniversary bonus.  

he card is probably not worth getting just for the 20,000 miles signup bonus, since the annual fee is not waived the first year

Barclaycard Arrival World MasterCard

The Arrival World MasterCard earns 2 points per dollar spent on the card, and each point can be redeemed for 1 cent towards travel purchases ade with the card.  However, the card also gives a 10% rebate on all redemptions, meaning you earn approximately 2.22 cents for each dollar spent on the card.  I say "approximately," since when you redeem points received from the 10% point rebate, you'll receive another 10% rebate on those points, ad infinitum.  Thus if you redeem 100,000 points you'll receive a 10,000 point rebate, and when you redeem those points you'll receive another 1,000 point rebate, then a 10 point rebate, then a 1 point rebate.  Add it up and  $50,000 in spending earns 111,111 points ($1111.11 towards travel redemptions), a 2.22 point per dollar earning rate, which gives it a slight earning advantage over the 2% cash rebate Fidelity Investment Rewards cards.  However, the Arrival World MasterCard has a $89 annual fee after the first year of card membership.  To pay for that annual fee with the marginal earning advantage, you'd need to spend $40,050 on the MasterCard!  In other words, after the first year only spending above $40,000 is more lucrative than the Fidelity 2% cash back cards, which is probably unrealistic unless you have high business expenses you can charge to the card, or enough spare cash to consider aggressively making Kiva loans with the card.

 

However, the annual fee is waived the first year, so thanks to its competitive earning rate this is a good card to consider including in a credit card application cycle, as long as you're sure to cancel it before you pay the annual fee for the second year.

[Confirmed] Potentially huge change coming to Alaska Airlines Mileage Plan

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As discussed in Chapter 6 of the book, Alaska Airlines can be a valuable frequent flyer program for crediting miles flown on their non-alliance partners Delta and American Airlines, especially if you don't anticipate flying on either airline enough to earn elite status.

​Well, according to this thread, that value might be about to get a lot better.  So far this is just a rumor, but a number of people have apparently been told the same thing by Alaska phone agents: you will soon be able to redeem Mileage Plan miles for one-way partner awards on Delta and American.

​Why is this a game-changer?  First of all, Delta award availability is notoriously bad, and if you're booking award flights using Delta Skymiles (or, currently, with Alaska miles), you have to book your outbound and return legs at the same time, which means both legs must have award availability.  The consolation prize is that you can book a free one-way at the beginning or ending of your round-trip award.

If Alaska Mileage Plan miles can be used to book one-way awards on Delta, then you can book each leg as award space becomes available.  ​No more waiting for low-level availability on both legs to be available simultaneously.  This would make Alaska Mileage Plan miles much more valuable for Delta award flights than Delta's own program, assuming Delta continues to require round-trip bookings when you redeem Skymiles.

The second reason this is potentially a major game-changer is that by making Alaska miles so much more valuable, it also increases the value of Starwood Preferred Guest Starpoints.  Starwood points can be transferred to Mileage Plan miles at a 1:1 ratio with a 5,000 mile bonus at 20,000, 40,000, and 60,000 ​Starpoints (so 60,000 Starpoints become 75,000 Mileage Plan miles).  Keep in mind that these transfers are not instant, so you will need to plan ahead if going this route.

The rumored date for this change to go into effect is March 17, 2013.  ​If it ends up being true, I'll be recommending to all my friends and clients who are casual flyers to start crediting their Delta flights to Alaska.  Additionally, Starwood points, already one of the best hotel award currencies for low- and mid-tier properties, are about to get a lot more valuable!

Hotel loyalty program devaluation roundup

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Now that the last hotel programs have announced the changes to their loyalty programs for 2013, we can survey the landscape and see which programs lost value and which retained it (it would be too much to ask for a loyalty program to gain value).  

​As we'll see, the programs that changed the least were Starwood and Hyatt, which adjusted the award redemption categories of a number of their properties, but maintained the same basic earning and redemption structure (although Starwood Points and Cash redemptions got more expensive, as previously announced).

Almost all the other hotel loyalty programs underwent drastic devaluations.  We'll look at each program in turn.​  As each program's changes goes into effect, I'll update the point density analysis you can find on my page discussing Chapter 6 of the book in more detail.  All these loyalty programs allow award reservations for dates after the category changes at the old redemption level, as long as the reservations are made before the effective date. 

Hyatt Gold Passport

Effective date: February 7, 2013.​

Hyatt's loyalty program underwent almost no changes this year.  Only 17 hotels changed redemption category, and 10 of those ​moved to lower categories, costing fewer points.  You can find the list of all 17 properties on this Hyatt webpage.

Starwood Preferred Guest

Effective date: March 5, 2013.​

As of March 5, 2013, the new Cash & Points redemption rates will go into effect (read more about those new rates here).  Additionally, Starwood has announced a preliminary list of hotels that are changing categories, moving either up or down in the cost of both free nights and Cash & Points redemptions.  You can find that list in this pdf file.

Marriott Rewards

Effective date: May 16, 2013.​

Marriott is introducing a new hotel category, Category 9, which will cost 45,000 Marriott Rewards points and will initially have the following hotels:​

  • Boston Marriott Long Wharf
  • Le Merigot, A JW Marriott Beach Hotel & Spa, Santa Monica
  • London Marriott Hotel County Hall
  • London Marriott Hotel Grosvenor Square
  • Grosvenor House, A JW Marriott Hotel
  • London Marriott Hotel Park Lane
  • JW Marriott Essex House
  • New York Marriott Marquis
  • Paris Marriott Hotel Champs-Elysees
  • St. Pancras Renaissance London Hotel
  • Renaissance New York Hotel Times Square
  • Renaissance Paris Vendome Hotel
  • Renaissance Paris Arc de Triomphe Hotel

This pdf has a list of all the Marriott properties that are changing at least one category in 2013.​

Here's my updated analysis of the rebate value of Marriott stays for different combinations of elite status and cardholder status:

Hilton HHonors

Effective date: March 28, 2013.​

Hilton is radically changing their loyalty program by adding 3 new award redemption tiers, ​introducing seasonal pricing, and changing the current elite discounts on award stays of 4 or more nights into a more straightforward 5th night free on award reservations.  It's widely assumed that after March 28 they will also change the current discounts on stays of four nights for Hilton American Express cardholders, which I discussed in this post.

The new award chart will look like this:​

And here's the updated point density analysis:​

"Seasonal pricing" is Hilton's new way of charging a different number of points for hotels within the same category.  However, many have been quick to point out that at Hilton's aspirational properties, for example the Conrad Hong Kong, the supposedly "high season" pricing is in fact in effect year-round (80,000 points at the Conrad Hong Kong, for example).  That's a long season!

Finally, ​elites will no longer receive the variable discount they currently receive on longer award stays.  As I wrote earlier this week:

Elite members of the Hilton HHonors program receive a discount on stays of 4 or more nights at Category 3-7 hotels.  The discount is 15% of the points required for a 4-night stay, 20% of on a 5-night stay, and 25% of on a 6-or-more night stays.

After March 28, elites will instead receive every 5th night free on award reservations, up to 4 free nights on award reservations of 20 consecutive ​nights.

Avoiding foreign transaction fees

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Using rewards-earning credit cards for overseas purchases can incur foreign transaction fees which cost more than the value of any rewards you earn on your purchases.  To avoid these fees, it's best to use either cash, or a card that doesn't charge such foreign transaction fees.  Today we'll take a look at a few such cards.

American Express Bluebird

The Bluebird, which is technically a prepaid debit card, charges no foreign transaction fees on foreign purchases or foreign ATM transactions.  To earn rewards on your overseas purchases made with the Bluebird, you can load the card with Vanilla Reload cards purchased in the US, for example at drugs stores like CVS; you can load the card at Walmart using a rewards-earning debit card; or you can simply transfer in money from a linked US bank account.  However you choose to load the Bluebird, you won't pay foreign transactions fees when you use it overseas for purchases or ATM withdrawals.  You can also order a Bluebird card without any impact on your credit report, since it's a prepaid debit card, not a credit card.

Discover Cards

Since 2008, when Discover acquired the Diners Club overseas credit card network, Discover cards have had increasingly wide acceptance internationally, and all Discover cards have no foreign transaction fees.  I recommend the Discover it card (formerly known as Discover More) since it has no annual fee and potentially lucrative rotating 5% cash back categories.  For example, in the last quarter of 2012, Discover gave 5% cash back on all "online purchases," a very broad category!

Capital One

Like Discover, all Capital One cards have no foreign transaction fees.  These cards include the Capital One Venture Rewards card, which allows you to redeem your points for travel expenses.

Chase Sapphire Preferred and Chase Ink Bold/Plus

These premium credit cards, which earn flexible Ultimate Rewards points, incur no foreign transactions fees on purchases made outside the United States.  The Sapphire Preferred has a $95 annual fee after the first year, as do the Ink Bold and Ink Plus cards.

American Express Platinum

While this card with its $450 annual fee certainly isn't worth getting just to avoid foreign transaction fees, if you already have a Platinum card you can use it overseas and earn Membership Rewards points without incurring any additional fees.

Co-branded Credit Cards

If you're interested in earning points with a specific rewards program, the following cards also have no foreign transaction fees:

Chase

Citi

PIN-based Visa Prepaid Debit Cards

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There are a number of products which can help when meeting high minimum spending requirements or generating spend on cards that earn valuable points.  Today I want to discuss three of them.  These cards have a number of benefits: they can be loaded either directly or indirectly using points-earning credit cards, and they can be unloaded at ATMs, by buying money orders, or used to fund the American Express Bluebird card at any Walmart and used to pay bills, including credit cards.

For the first two options, the Nationwide Visa Buxx and Wells Fargo Prepaid cards, the transaction can be classified differently by different card issuers.  For example, Citibank classifies all such transactions as cash advances, which incur high fees and interest charges, and there are some reports that Bank of America classifies the transactions as purchases, but doesn't award points.  The best bet is to first do a trial load with any card you're considering using, wait for your statement to close, and see if points are rewarded.

Nationwide Visa Buxx

The Nationwide Visa Buxx is an excellent starter card for anyone considering entering the miles and points game.  

  • It can be loaded using any Visa or Mastercard.
  • You can load up to $500 at a time, up to twice per month, at a cost of $2 per load.
  • There's no monthly fee.

If you max out this card, you can manufacture $1000 in spending at a cost of $4 per month, which is worth doing for almost any points currency.

There are two things to be aware of when using this card.  First, ATM withdrawals (limited to $200 per week) at MoneyPass ATMs are not free, they cost $1.  No one has any explanation for this, since they are advertised as free.  There have been reports of success having the charge reversed by calling into Customer Service, although this is a long, annoying process.

Second, there is a daily purchase limit of $800.  This means you can either load $800 onto a Bluebird card, or purchase a money order at Walmart for $799.30.

My approach is to withdraw $200 from a Moneypass ATM and purchase a money order for $798.30 (since my balance is only $799 after paying $1 for the ATM withdrawal).

Wells Fargo Prepaid Visa

This card is good for a more experienced hacker who wants to make some bigger moves.

  • Load using any Visa or Mastercard
  • $4500 rolling monthly load limit.
  • Load up to $2500 per day.
  • $5 fee per load.
  • $3 monthly fee.
  • $600 transaction limit.

Because of the $600 transaction limit it can take a while to unload this card.  Purchasing 8 $599.30 money orders at 70 cents each brings the total cost for $4500 in spending to $18.60, or .4 cents per dollar.

MyVanilla Debit

The MyVanilla Debit card is a more marginal play, but can be useful for meeting minimum spending requirements or reaching bonused spending thresholds.

  • Load using Vanilla Reload Network Prepaid Reload cards.
  • Load up to $2,500 per day.
  • No monthly fee.

You have to buy a MyVanilla Debit card in a store, like CVS, that sells temporary cards.  After buying a temporary card, you can register it online and you'll receive a permanent card in the mail within a few weeks.  You can register up to 3 cards per social security number. Once you have the permanent card, you can then load it by buying Vanilla Reload Network Prepaid Reload cards, which you can load with up to $500 in value for a fee of $3.95.

To unload the MyVanilla Debit, you can purchase money orders, load a Bluebird card, or ask for a cash advance from a bank teller.  All three options currently cost 50 cents, plus any other fees charged by merchants.  

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Finding value in longer hotel stays

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Different hotel rewards programs have different ways of incentivizing longer stays.  If you're the kind of person who like to stay in one place for two or more nights, it pays to know how to make the most of your points.  In this post I'll give a brief summary of each chain's approach towards longer stays.

Club Carlson: Second Night Free

As anyone following this blog knows, US Bank's co-branded Club Carlson credit card has one of the most lucrative incentives for award stays of 2 or more nights: the last night is free.  This benefit is more lucrative the shorter your stay: for a 2-night stay, it's a 50% discount on the points required, and the discount decreases the longer your stay lasts.  In cities with more than one Club Carlson property, you can make 2-night award reservations at each property in order to take full advantage of this discount.

Starwood and Marriott: Fifth Night Free

When you make a Starwood Preferred Guest or Marriott Rewards redemption of 5 nights, the fifth night is free, a 20% discount on stays of exactly 5 nights.

Starwood Nights and Flights: 5 nights plus miles

Starwood's Nights and Flights redemptions are another way of getting value out of 5 night stays at Category 3 and Category 4 properties.  You can redeem 60,000 Starpoints at Category 3 or 70,000 Starpoints at Category 4 properties, and receive 50,000 miles in the program of one of their transfer partners.  Since you can redeem 40,000 points for 50,000 miles at any time (because of the 25% transfer bonus on transfers of 20,000 points), this is like paying 20,000 Starpoints for 5 nights at a Category 3 property (about a 29% discount) or 30,000 Starpoints for 5 nights at a Category 4 property (a 25% discount)

Marriott Hotel + Air Packages: 7 nights plus miles

For even longer stays of 7 nights, Marriott offers Hotel + Air packages, which allow you to redeem additional Marriott Rewards points for miles in their airline partners at extremely lucrative rates.  For example, instead of spending 150,000 Marriott Rewards points on 7 nights at a Category 5 property, a Hotel + Air package allows you to redeem an additional 120,000 Marriott Rewards points for 120,000 miles in one of their airline transfer partners.  This radically increases the rebate value of paid stays at Marriott properties!

Hilton American Express and Elite Redemptions: stays of 4 or more nights

Elite members of the Hilton HHonors program receive a discount on stays of 4 or more nights at Category 3-7 hotels.  The discount is 15% of the points required for a 4-night stay, 20% of on a 5-night stay, and 25% of on a 6-or-more night stay.

Hilton American Express cardholders also have access to an unrelated set of discounts for stays of exactly 4 nights.  For 4-night stays in Category 6 hotels Hilton American Express cardholders pay only 125,000 points, instead of 160,000 points.  At Category 7 hotels Hilton American Express cardholders pay 145,000 instead of 200,000 points.

Hyatt and Priority Club

Hyatt and Priority Club have no discounts for longer award stays at their properties.

Hotel credit card point density

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The best way to earn free travel is by having someone else pay for it, usually an employer.  "Road warriors" can earn elite status and hundreds of thousands of points and miles by taking flights and staying in hotels for which their employer pays or reimburses them.  The rest of us earn points either traveling on tickets we pay for ourselves, or the old-fashioned way: with co-branded credit cards.  Today we'll be examining the question, how lucrative are purchases made with different co-branded hotel credit cards.  Specifically, we'll want to know how much we need to spend on different credit cards in order to earn a free hotel night.

This is important information, because if it's possible to manufacture spending at an average cost of .8 cents per dollar in manufactured spending, we need to know which credit cards make it worth doing so.  Which card earns the most value per dollar spent?

To make this determination, we'll perform a similar calculation as we do here, but without taking elite status into consideration.  Looking only at the credit card earning rate, how much do we need to spend in order to earn a free night at a bottom-tier, mid-tier, and top-tier hotel?

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As you can see, the main takeaway here is that manufacturing spending on a co-branded hotel credit card is rarely worth doing unless you have a specific redemption in mind.  The best value here is Club Carlson, which has a good earning rate on non-bonused spending.  If you frequently travel to cities with relatively expensive Club Carlson properties, it may be worth manufacturing spending on your Club Carlson card in order to quickly redeem for free nights, especially since Club Carlson credit cardholders receive their last night free with every award redemption of 2 or more nights.

Starwood Preferred Guest offers an interesting case, since their points can also be transferred to their airline partners and redeemed for flights.  This creates a situation whereby you can spend $35,000 on the Starwood American Express and redeem those points for a single night at a top-tier hotel, or you can spend $5000 more and transfer 40,000 points to one of their airline partners and then redeem the points for two free domestic round-trip flights.  On the other hand, Starwood's low- and mid-tier properties are relatively reasonable point redemptions, costing $24-$80, if you're able to manufacture spending at .8 cents per dollar, versus $280 for a top-tier property.

A Beginner's Churn

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"Churning" is the term used in the travel hacking community for applying for several credit cards on the same day, in order to maximize one's chance of being approved for each card.  The reasoning behind this strategy is that since recent applications for credit  temporarily reduce your credit score, you can prevent each credit card company from seeing applications made to other issuers if they're made more or less simultaneously (or at least on the same day).  

In other words, if you apply for two credit cards on the same day, one issued by Citibank and one by Bank of America, when each bank looks at your credit history, neither one will know about your application to the other, increasing your chances of being approved for both cards.

So let's take a look at a sample churn for someone who's just beginning to get involved in the travel hacking game.  We'll start with three credit cards, which will allow us to diversify our miles and points, without committing to too large of a minimum spending requirement.  To set up our churn, we'll want to pick a total of three out of these 7 offers, with one from each bank.

US Bank

US Bank issues two of the most lucrative credit cards available, and you'll want to apply for one of the two on your first churn, since US Bank is notorious for being relatively strict with their credit approvals.  

  • US Bank Cash+ card can only available for in-branch, so you can only apply if you live in or are visiting a region served by US Bank.  As a reminder, this card offers 5% cash back on two categories of your choice, on up to $2000 in spending each quarter.  This card has three advantages over other 5% cash back cards: you get to choose your 5% cash back categories; you receive 5% cash back on up to $2000 in spending, instead of $1500; and you also receive unlimited 2% cash back on drug stores, grocery stores, or gas stations.
  • If you can't apply for the Cash+ in-branch, US Bank also issues the co-branded Club Carlson credit cards, which have incredible sign-up bonuses and on-going benefits right now.  If you're eligible for a small business credit card, apply for the Club Carlson Business Rewards Visa with an 85,000 point signup bonus after $2500 spending within 90 days, 40,000 point annual renewal bonus, and $60 annual fee.  If you don't have a small business, apply for the Club Carlson Premier Rewards Visa Signature card with the same signup bonus and renewal bonus, but with a $75 annual fee.

The Cash+ card doesn't have a minimum spending requirement, while the Club Carlson cards require $2500 in spending within 90 days to receive the full bonus.

Chase

Chase has some of the best credit cards for novice and veteran churners alike.

  • The Chase Freedom card has a 10,000 point signup bonus after $500 in spending in 3 months.  You'll definitely want this card eventually, so if you're just getting your toes wet in the world of travel hacking, this is as good a time as any! The Freedom has no annual fee, and while the Ultimate Rewards points it earns aren't "flexible" Ultimate Rewards points, if you later open a Sapphire Preferred or Ink Bold/Plus card, you can transfer your Freedom Ultimate Rewards points into those "flexible" accounts instantly.
  • If you have recent activity in your United MileagePlus account, you might be eligible for an excellent offer of 55,000 MileagePlus miles after $1000 in spending within 3 months and after adding an authorized user, plus a $50 statement credit.
  • Finally, if you're ready to get serious about travel hacking, the Sapphire Preferred is an excellent workhouse card, allowing you to redeem your flexible Ultimate Rewards points for 1.25 cents towards travel through the Ultimate Rewards portal, or transfer them at a 1:1 rate to Chase's transfer partners.  The current offer is the standard 40,000 points after $3000 in spending within 3 months.

American Express

  • American Express doesn't have any amazing signup bonuses at the moment, but many travel hackers love the Starwood Preferred Gold card by American Express, with a 25,000 point signup bonus after $5,000 in spending within 6 months.  These points can be redeemed directly for hotel stays with Starwood, or transferred to Starwood's airline partners.

Citibank

  • The American AAdvantage card issued by Citibank currently has an excellent signup bonus of 50,000 AAdvantage miles after spending $3000 within 4 months, a $150 statement credit after your first purchase on American, and two lounge passes.

Decision Time!

As you can see, you need to make a couple decisions right away:

  • Are you more interested in hotel stays or flights?  For hotel stays, the Club Carlson, Starwood, and Sapphire Preferred are all good offers, depending on where you're planning to travel.  If you're more interested in free flights, you'll want to look closely at the 50,000 American AAdvantage mile and 55,000 United MileagePlus offers, as well as the Sapphire Preferred offer, since those points can be transferred to a number of airlines as well.
  • How much of a minimum spending requirement are you willing to commit to?  No rewards credit card is worth signing up for if you're unable to meet the spending requirement.  On the low side, you could apply for the Freedom, Cash+, and American AAdvantage cards and need to spend only $3500 within 4 months.  If you're feeling more ambitious, you could apply for the Sapphire Preferred, Club Carlson, and either American AAdvantage or Starwood Preferred Guest cards and need to spend $8,500-$10,500 within 4 months.  That's definitely a lot of money, so you'll need a plan in advance for meeting that minimum spend requirement, using the tips and tricks in the book and here on the website!

Free one-ways on Delta award reservations

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One of the least appreciated aspects of award reservations is something discussed in chapter 4 of the book: free one-way flights at the beginning or end of award reservations, which are possible because of the flexibility of some airlines' routing rules. Today I'll take a closer look at just how to take advantage of free one-way flights on international Delta award reservations.

First, we'll put together a basic award reservation: Detroit to Amsterdam in Economy class.  We'll follow the steps I describe in chapter 4, which you can read more about here.

Step 1: Find outbound availability.  Here's a non-stop flight in Economy at the "low" 60,000 mile level from Detroit to Amsterdam:

Step 2: Find return availability.  Here's a flight back from Amsterdam to Detroit a few days later:

Since both these legs are at the "low" level, we know we can book this itinerary for 60,000 Skymiles plus taxes and fees.  Even if it can't be booked online, you can call into the reservation center and they'll be able to find each leg, although they may charge you a telephone reservation fee unless you're a Platinum Medallion or higher.  In this case it turns out we can book the reservation online:

Now let's see about our free one-way flight.  So far we've put together a great low-level award reservation in April.  Now suppose you have some family in Portland and every August you get together there to watch Star Trek in the Park.  Understandably, you'd like to get there as cheaply as possible.  What about a free one-way flight?

Step 3: Find a low-level flight to your next destination.  Here's a low-level flight to Portland in August:

Step 4: Use the Multi-City search to put your final reservation together:

Step 5: Select your flights, and make sure the reservation prices out correctly.  In this case, there was no problem at all.  Note that the entire reservation, with the one-way flight to Portland, costs the same number of Skymiles as the original round-trip from Detroit to Amsterdam.  You'll just pay an extra $5 in boarding fees:

And that's the simplest version of a free one-way flight on a Delta award reservation!  There are just a few more things to keep in mind:

  • The free one-way can be at the beginning OR end of the award reservation.  In the above example we put our trip to Portland at the end of our trip.  Alternatively, we could get a free one-way FROM Portland to Detroit at the beginning of the award reservation.  In either case our trip has to pass THROUGH Detroit: it would be an invalid routing to book a flight from Detroit to Portland and THEN from Detroit to Amsterdam on the same reservation.
  • Use of this trick is somewhat limited by what's known as the "Maximum Permitted Mileage" between two cities.  In this case, our trip from Detroit to Portland fit under the Maximum Permitted Mileage for an itinerary from Detroit to Amsterdam, but a flight to Hawaii might not have.  You can read more about Maximum Permitted Mileage and other restrictions on free one-ways over at the Points Guy's blog or in this post at MileValue, who discusses free one-ways on purely domestic reservations.