An unusually auspicious week for an application cycle

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The travel blogosphere erupted this week with word of Chase's increased signup bonuses for their Ink line of small business charge and credit cards. While I'm extremely conservative in the pacing of my credit card applications, and it's been less than 90 days since my last application cycle, I have been eyeing the Ink Bold ever since I discovered Vanilla Reload Network reload cards could be purchased at my local 7-11 store locations, which are coded as "gas stations" by the Visa supplier network and therefore earn 2 Ultimate Rewards points per dollar when purchased with a Chase Ink card.

If you are due for an application cycle, this week became an even more lucrative  window of opportunity with the announcement of enhanced signup bonuses for the Delta Business Platinum American Express. As regular readers know, I signed up for this card back in April with a much lower signup bonus. I use this card to "mileage run from home," earning 20,000 valuable MQM per year and 1.4 SkyMiles per dollar when I spend exactly $50,000 per year on the card.

The new, higher signup bonus, which is supposedly good until July 7, 2013, is for 25,000 bonus SkyMiles and 5,000 MQM after your first purchase, and an additional 30,000 SkyMiles and 15,000 MQM after spending $5,000 on the card within 3 months of card membership.

In other words, this week is a remarkably auspicious time to apply for these two small business credit cards, if you have good credit and haven't applied for credit in the last 90 days: I think it's unlikely that two offers this good will come along again this year.

Bizarre changes to United elite qualification requirements

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It's hard for me to objectively evaluate the drastic changes to United elite qualification announced today:

Starting in January 2014, Premier qualification for members living in the United States will include a minimum annual spending level. We will track this new requirement with Premier qualifying dollars (PQD) – dollars spent on most United tickets, including partner flights, and Economy Plus purchases. The changes will not affect Premier qualifying miles (PQM) or Premier qualifying segments (PQS). The new criteria will look like this:
  • Premier Silver: [25,000 PQM or 30 PQS] and $2,500 PQD
  • Premier Gold: [50,000 PQM or 60 PQS] and $5,000 PQD
  • Premier Platinum: [75,000 PQM or 90 PQS] and $7,500 PQD
  • Premier 1K: [100,000 PQM or 120 PQS] and $10,000 PQD

On the one hand, these changes very closely parallel the recent changes to Medallion elite status qualification on Delta, my preferred airline. On the other hand, I don't mind meeting the Delta Medallion Qualification Dollar requirement by spending $25,000 on my American Express Delta Platinum Business card, since I also earn 10,000 Medallion Qualification Miles for reaching that threshold. That is to say, by reaching the $25,000 threshold I both earn higher Medallion status and am exempted from Medallion Qualification Dollar requirements.

It's true that the Chase United MileagePlus Explorer card gives 10,000 bonus miles after $25,000 in purchases per calendar year, but those miles don't count towards elite status.

The problem is that it's fantastically more lucrative to make United purchases with a flexible Ultimate Rewards point-earning Chase Sapphire Preferred card than with United's own co-branded credit cards. And that's ignoring the possibility of manufacturing Ultimate Rewards points at gas stations.

My sense is that this change will alienate United flyers in a much more profound way than Medallion Qualification Dollars alienated Delta flyers, in no small part because of United's disastrous customer service. Meanwhile, I'll continue earning Star Alliance Gold status by crediting United and US Airways flights to the Greek airline Aegean Air, giving me free checked bags and lounge access on domestic flights.

Who should use Travelocity's co-branded credit card?

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[edit 7:37 pm: searching around a bit more I found this offer for the $39 annual fee card for 10,000 points after first purchase and 10,000 points after $500 in spend within 3 months. I also edited the application links below.] 

[edit 6/18/13: see the comments for one data point applying through the 20,000 point link. I'm surprised that Barclaycard would deny an application just because an offer was expired, but that was reader Paul's experience (no credit pull, though).]

In the comments to a post last month, reader travel well asked whether I had any experience with the Travelocity Rewards co-branded American Express card. I hadn't heard of the card, but did some research, and want to share what I found with readers.

There are two versions of the Travelocity Rewards Amex: a $39 annual fee version and a no annual fee version.

Earning

  • The $39 annual fee version earns 5 points per dollar spent at Travelocity, 2 points per dollar spent at your choice of either gas stations, grocery stores, or restaurants, and 1 point per dollar spent everywhere else. The link I found offers 7,500 bonus points after your first purchase [edit: see above].
  • The no annual fee version earns 3 points per dollar spent at Travelocity and 1 point per dollar spent everywhere else. It offers 5,000 bonus points after first purchase.

Redemption

Like the US Bank Flexperks Travel Rewards Signature Visa, the Travelocity Rewards points earned by this card can be redeemed in fixed-value tiers. The value in turn depends on the redemption tier. From the Travelocity website:

As that list illustrates, points are worth 1 cent each until you reach the 20,000 point level, when the value jumps to 2 cents each. Then each subsequent point is worth an additional cent, until you reach the 40,000 point level, when the value jumps back up to 2 cents each. This means that the most lucrative redemptions are always in intervals of 20,000 points.

Fortunately, the Travelocity Rewards card does allow partial redemptions, and indeed as far as I can tell allows redemptions only in the tiers specified. Redemptions are made directly through the Travelocity website, for reservations made with Travelocity. After selecting your flights, hotels, or rental cars, select the Travelocity Rewards American Express as your method of payment, and you'll see the option to redeem points for part of your purchase. As the above analysis makes clear, whenever possible you should redeem them in blocks of 20,000 points. When you do so, you'll earn a full 10% rebate on all your purchases made at Travelocity with the $39 annual fee card and 6% rebate with the no annual fee card. After selecting your redemption amount, complete your purchase and you'll receive a statement credit for the amount of your redemption.

Who should use the Travelocity American Express card?

This card looks great on paper: a 10% rebate on Travelocity bookings, which can be paired with 2 Ultimate Rewards points per dollar when you click through to Travelocity through the Ultimate Rewards Mall. Still, there are two drawbacks that I think are serious enough to keep me from getting the card personally.

First, the more lucrative card has a $39 annual fee. Admittedly, that won't break the bank – if I were able to redeem my points regularly at the 20,000 point level, then the 5-6 cent edge this card has over a card like the Chase Sapphire Preferred (for double points on travel) would be justified. That's especially true if carrying this card allowed me to cancel my Sapphire Preferred, which carries a hefty $95 annual fee.

However, the second problem is that 20,000 point threshold. To earn those 20,000 points, I'd need to spend $4,000 on Travelocity, which isn't realistic for me personally: I purchase travel using my Barclaycard Arrival World MasterCard (for a 65% discount on paid travel after manufacturing spend), I redeem US Bank Flexpoints for paid travel (for a 74%-80% discount on paid travel), and of course I redeem airline miles for award travel. Even more importantly, sometimes Travelocity doesn't have the best price on airline tickets, or doesn't offer itineraries that are available elsewhere, in which case I use other online travel agencies instead or book directly through the airline. All that would add up to paying multiple $39 annual fees while I waited to hit the 20,000 point sweet spot.

All that said, if you already spend a lot of money on paid travel through Travelocity, enough to hit that 20,000 point threshold at least once a year, then this is a card with terrific earning potential. I would probably pair it with a Chase Ink card in order to continue to earn double Ultimate Rewards points through direct hotel bookings (and have access to the Ultimate Rewards Mall) while still earning hotel loyalty points and credit for nights and stays towards elite status.

 

 

AccountNow can supplement Bluebird and Gobank

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[edit 6/18/13: It looks like I have an affiliate link for the basic AccountNow card as well. If you are interested in using AccountNow, and want to support the site and the work I do here, feel free to use this link. See the comments below for some of the risks of the technique described here.]

Regular readers of this blog know that one of the simplest ways to manufacture spending on rewards-earning credit cards is by loading Vanilla Reload Network reload cards directly to a Bluebird account, which can then be used to pay bills, including credit cards. This has the advantage of being simple, predictable, and low cost - many rewards currencies are worth manufacturing at 0.78 cents each, and that's before taking bonuses into account. However, Bluebird loads are limited to $5,000 each month, which led travel hackers to seek out similar products.

A slightly more expensive technique that I discovered and reported out is loading a Gobank account with a reloadable debit card, like the MyVanilla Debit Card. This raises (but doesn't eliminate) the limit on the amount of manufactured spending you can do each month, but also raises the cost, since MVD cards charge $0.50 per swipe transaction. Still, at 0.84 cents (a $1,000 load, for simplicity's sake), this is still a great way to earn rewards.

A third, even more expensive version of the same technique uses AccountNow, a reloadable, prepaid debit product (not a checking account). Jason Steele over at The Points Guy reported on AccountNow in the context of Green Dot MoneyPaks – if you're able to buy those using a credit card, then AccountNow is only slightly more expensive than Bluebird (since MoneyPaks have a $4.95 load fee, rather than Vanilla's $3.95).

If you don't have access to MoneyPaks, you can still load your AccountNow account at Walmart using their Rapid Reload Network. However, there is a $3.74 load fee for swipe reloads of AccountNow. The maximum daily load is $1,500 and monthly maximum on total loads is $9,500.

Using my technique of loading MyVanilla Debit Cards with Vanilla Reload Network cards, then unloading them to AccountNow, your total out of pocket cost will be $16.09 ($11.85 in Vanilla Reload fees, $0.50 MyVanilla transaction fee, $3.74 in Rapid Reload Network load fees) for $1,511.85 in manufactured spending, or 1.06 cents per dollar.

On the one hand, that's much more expensive than other existing techniques to manufacture spending. Other than free techniques like Amazon Payments, my cheapest manufactured dollar is 0.185 cents (using the technique I pioneered here).  So the question isn't whether it's worth manufacturing every dollar at 1.06 cents each; the question is whether it's worth manufacturing your last dollar at 1.06 cents each.

That will depend on your specific situation, and especially on whether you have access to Vanilla Reload Network cards at merchants that are bonused categories for your rewards-earning credit cards. All that said, I think there are certainly situations that can make this technique worth using, and I wanted to make sure my readers were aware of it.

 

Gobank calls again

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Yesterday I received a voicemail from a "Christie Smith" in Gobank's fraud department,  who left her direct phone number and asked me to call to talk about the activity on my Gobank account.

When I was finally able to reach her today, she explained that:

  1. My level of account activity was "very unusual;"
  2. She was not allowed to tell me the level of deposit and bill pay activity that was allowed, but;
  3. I was exceeding it.

To her credit, she sounded apologetic about the absurdity of the situation. Still, she told me that unless I drastically reduced the amount of deposits I was making, my account would be closed (although she couldn't tell me what a "safe" level of activity would be).

The obvious explanation for this is that Green Dot, the prepaid card company which also operates Gobank, pays Walmart for each cash register load there. For most of their prepaid card products, Green Dot then charges the customer some amount (typically $3.74) that covers the fee they pay Walmart plus whatever their margin is.

In order to compete with American Express's groundbreaking Bluebird checking account alternative, which allows free cash register loads at Walmart, Green Dot decided not to charge Gobank customers for cash loads at Walmart. I suspect, however, that Green Dot still has to pay Walmart for those transactions, which means heavy users of that feature like myself are costing Gobank some serious money.

For now I don't think I'll change my usage pattern very much. Gobank is a remarkably valuable tool, but it's only valuable if you use it. I'll cut down my loads to less than $2,500 per week and less than $10,000 per month (I loaded considerably more than that last month).

And as always, I'll continue to report on every ongoing development with my Gobank account here on the blog.

 

Do this now: Priority Club summer promotion

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It's hard to stay up-to-date on all the promotions run by Priority Club (the massive loyalty program behind omnipresent chains like Holiday Inn). The single best way is to follow Priority Club Insider, who does the Lord's work maintaining the ever-changing list of Priority Club promotions. Before you stay at any Priority Club property, you owe it to yourself to check out Priority Club Insider and make sure you're registered for all the relevant promotions.

That's where I learned about Priority Club's summer promotion, which allows you to earn double points or double miles starting with your second stay between June 1 and July 31, 2013 (starting with your first stay at Candlewood Suites and Staybridge Suites properties). 

Register for the promotion now, before you forget. 

Delta's latest devaluation, and why I'm relieved

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If you feel like spending 15 minutes you'll never get back, read these four posts about the changes to Delta's partner earning rates, effective for flights flown on or after September 1, 2013.

Frankly, my reaction was one of relief. Why? Because I have a 20,000 MQM-earning first class trip, from New England to Hawaii, booked for Christmas and MQM earning on Alaska Airlines is not affected by the current devaluation.

No one (except Rene at Delta Points) would be crazy enough to defend this devaluation. But whether you're personally affected by it will depend on your specific travel plans. As always, check the partner earning rates of your preferred airlines before crediting miles to any program.

Does anyone that knows anything..still fly Delta? Yes.

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In the middle of my 18-hour Delta mileage run, in a case of particularly egregious linkbait Gary at View from the Wing asked today:

Does anyone that knows anything about travel, miles, and elite status — that doesn’t live in Atlanta or the Upper Midwest — still fly Delta?

Well, I live in New England, and whether I know anything about travel, miles, and elite status is an exercise I'll leave to the reader .

And I fly Delta almost exclusively.

As I confessed earlier this week, in the 20 years I've been flying more or less constantly, I've only spent about 11,000 miles on airlines operated by oneworld alliance carriers (and my recollection is that the majority of those were earned on a single cheap Aer Lingus flight to Dublin in the early 2000's. So I'm prepared to believe that American Airlines is a world class airline, with comfortable seats, good loyalty recognition, on-time departures and arrivals, and courteous flight staff.

On the other hand, due to a serious of unfortunate career decisions, I was forced to fly a hundred thousand miles or so on United Airlines over the course of a few years, both domestically and internationally. 

And that's why I fly Delta almost exclusively. 

A lot of digital ink has been spilt over the consequences of the merger between United and Continental. The loyal flyers of each airline were shocked - shocked! - by the terrible flight experience they found on flights operated by their new crews.

Since I was never a loyal flyer of either airline, I can say with complete equanimity that every flight I've flown on pre-merger Continental and pre- and post-merger United have been absolutely abysmal. The cabins are dim and unpleasant, the flight attendants are apologetic at best and rude at worst. I'm graciously leaving unmentioned the libertarian capitalist fantasies expressed by United CEO Jeff Smisek in almost every issue of their inflight magazine.

 United MileagePlus miles are still the most valuable traditional airline miles (with Alaska's Mileage Plan a close second).

As much as I value the inflight experience offered by Delta, the fact is that United offers more award seats, with more partners, to more destinations I need to fly than any other carrier. And that's why I use United miles regularly for award seats, for example on my spring break trip to Prague earlier this year.

But I earn those United miles through manufactured spending on my Chase Freedom and Sapphire Preferred cards, not by flying on paid United and US Airways flights. 

So tell me, does anyone that knows anything about travel, miles, and elite status — that doesn’t live in a United hub — still fly United?

The 5 best cards for manufactured spending at 7-11

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

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

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

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