Mid-week roundup from around the web

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I periodically like to clear out my RSS reader and pass along the most interesting news that has recently crossed my desk:

  • Marriott's April 8, 2014 devaluation sucks, putting the Courtyard Portland City Center and Residence Inn Portland Downtown/RiverPlace in Category 6 and therefore out of reach for Megabonus and annual free night certificates;
  • Frequent Miler makes me laugh, since I can't bear to spend any money on Amazon unless I've redeemed Plink points for gift card credits;
  • Chasing the Points reminds us to not just manage hard credit pulls, but also utilization ratios;
  • Frugal Travel Guy wants you to sign up for a card that offers just 50,000 HHonors points and a $50 statement credit, and that you'll never use again (don't do it);
  • View from the Wing wants you to sign up for a card that offers 75,000 HHonors points and has a $75 annual fee. Instead, apply for the no-annual-fee version and then upgrade the card to Surpass and earn a total of 90,000 HHonors points for the same annual fee;
  • Frugal Travel Guy gets upset about your whining;
  • Milenomics does the shuffle;
  • PFDigest tells you to watch what you write in your PayPal message boxes (I usually go with "March rent").

Good work today, team.

This blog is not free

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I started blogging over a year ago because I was growing more and more serious about travel hacking and was disappointed with the quality of the blogs I was reading. After just a few months I had already noticed a lot of problems within the blogging community:

  • Blogs are repetitive. There are many more-or-less permanent features of rewards programs, and I was reading post after post repeating the same information. The Southwest Companion Pass is a great deal, but it's also a deal that hasn't changed in years: it doesn't require a new blog post, it requires a working search function;
  • Blogs are boring. I love reading about tips and tricks for booking award tickets, but I have an incredibly low threshold for staring at pictures of every meal a blogger ate in Milan;
  • Blogs are shills. In the United States of America in the 21st century, the finance industry is an all-consuming behemoth, swallowing everything it touches — and blogs are no exception. Credit card affiliate links are so lucrative it is simply impossible for a person of average quality to resist the kind of payday aggressive pitching of those links can provide.

That last point brings me to a post I read today on Matt's blog over at Saverocity. Matt asks the question:

"Can we create a new paradigm, where bloggers put the readers first, cut out the affiliate companies altogether, add value, and everybody wins?"

Why blog?

Obviously, there are a lot of people who think the travel hacking community would be better off without blogs and bloggers. While they undoubtedly have some legitimate concerns about blogs targeting people who don't have the financial responsibility to make it lucrative, those concerns are usually mixed with a self-interested belief that the fewer people who know about various techniques, the longer those techniques will remain viable for those in the know.

Personally, I blog because I want as many people as possible to have the same opportunities I do to travel the world for next to nothing, stay in 5-star hotels for the price of youth hostels, and make money taking advantage of credit card rewards programs. If 100 people find out about a technique thanks to my blog, then each month that technique continues to exist is worth 100 months of my taking advantage of it alone. My readers are my force multipliers.

This blog is not free

It's natural to think of everything available on the internet as "free," and that's certainly something I'm guilty of from time to time. But it's not true, and that's the fact underlying Matt's argument. If you want to read fresh, original content, someone has to be paying for it:

  • It might be Google or another display advertising network paying the blogger for your surfing and click data, as well as any personal information stored in your cookies;
  • It might be a credit card company hoping the blogger will provide less-than-objective analysis of a product if the payout is big enough;
  • Or it might be the blogger paying for it by donating their money to pay hosting costs and their time to produce the content you value.

In none of those cases is the content free, just because access to it is.

Pay for content worth reading

Over 500 readers visit this site each day, and hundreds more follow me on Twitter, through my RSS feed, or receive e-mail updates with new posts. That's how they find out about techniques I've covered in detail, like:

I don't currently have display advertising, and I don't have affiliate links, and I'd personally like to keep it that way. That's why rather than having Google pay for my content, or have the credit card companies pay for my content, I introduced the unprecedented opportunity for my readers to support the site directly by signing up for PayPal subscriptions.

A weekly or monthly contribution of $2, $5, or $10(!) goes directly to keeping this site proudly independent.

So if you've learned any tips or tricks from this site that have increased your ability to earn money and generate value, please consider signing up for a subscription or making a contribution directly to freequentflyer@freequentflyerbook.com (also accepted: Amazon Payments contributions!).

If each of my readers made a contribution of just $2 each month, that would guarantee this site's sustainability and independence for years to come. That's my goal, and I hope you'll join me in getting there together.

To subscribe, just visit freequentflyerbook.com and look for the drop-down box that looks like this:

And thanks in advance.

Come hang out at the #milemadness DO!

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My favorite part of blogging is hearing from readers, whether they're passing along a tip, thanking me for some counter-intuitive analysis, or violently disagreeing with me.

The only thing better than reading your e-mails and comments is hanging out in person, which is why I'm so excited about the recently announced manufactured spending 'DO.'

Basically, a whole bunch of the players in this month's manufactured spending tournament, as well as Frequent Miler, the competition's judge, are going to get together to talk about the techniques and tools we use to travel the world for next to nothing.

There's going to be lunch, there are going to be speeches, cocktails, and of course a ton of networking opportunities, where you can learn from the best and share your own secrets (or not!).

The Details

  • When: Saturday May 10th, starting at 11 am;
  • Where: HYATT House Charlotte Center City, 435 East Trade Street, Charlotte, NC 28202;
  • Tickets: $65 until March 31, then $75;

We even have this easy widget you can use to buy your tickets!

Getting there

Charlotte's a US Airways hub, and I was able to find a pretty cheap non-stop flight down there, so I just clicked through the Ultimate Rewards mall to Travelocity and put the charge on my Barclaycard Arrival World MasterCard. I'll redeem 25,000 Arrival miles against the purchase sometime in the next 90 days and end up paying about $100 for the flight.

Alternatively, you could redeem either US Airways or American Airlines miles for an award flight on US Airways, although that ended up not being worth doing in my case.

Staying there

The scheduled events are taking place on Saturday, so you could theoretically fly in Saturday morning and leave late Saturday night. I knew I wanted to spend at least one night in Charlotte, so I talked to Matt at Saverocity who let me in on a little secret: any part of our event deposit we don't spend during our lunch and cocktails on Saturday is going towards Saturday night's festivities. So I decided to stay over Saturday night and leave mid-day Sunday.

We have an event rate at the HYATT House Charlotte Center City of $119 per night, plus taxes, which works out to $137.15. That's slightly higher than the AAA rate of $133.69 after taxes, if you're a AAA member. Both rates are cancelable until 4 pm the day of arrival.

If you want to use Hyatt Gold Passport points to reserve a room, it'll cost 12,000 points per night, giving you just 1.11 cents per point in value. That might be worth it if you already have a stockpile of Gold Passport points, but it certainly wouldn't be worth transferring points in from Ultimate Rewards.

If you're making a reservation through Hyatt.com, remember to click through a cash back portal and earn 3% (TopCashBack) or 4% (EBates) cash back on your room rate.

See you in Charlotte!

Chase Freedom bonus categories and the Sapphire Preferred

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I assume everyone who carries a Chase Freedom card has already received their quarterly text message telling them to register for next quarter's bonus categories of "restaurants and Lowe's home improvement stores."

So instead of reminding you to register for 5 Ultimate Rewards points per dollar spent on the Freedom in those categories next quarter, let me take the opportunity to continue my fruitless war against the Chase Sapphire Preferred.

The Sapphire Preferred, with its $95 annual fee, has 2 permanent bonus categories: restaurants and travel.

But neither category alone, nor both together, is worth a $95 annual fee. Here's why.

You should put non-bonused spend on a 2% cash back card

In non-bonused categories, a no-annual-fee 2% cash back card is clearly superior to a dollar spent on the Chase Sapphire Preferred. You would need to get over 2 cents per point in value from every Ultimate Rewards point earned in non-bonused categories in order to work your way up to a loss of only the $95 annual fee.

Just use the 2% cash back card instead.

You should put eligible travel purchases on the Barclaycard Arrival

As I reported back in December, the Arrival's definition of "travel" purchases doesn't align exactly with the Sapphire Preferred's. Namely, while Chase bonuses taxi fares, Barclaycard does not allow Arrival mile redemptions against them. That's a real difference, but of course its significance depends on how frequently you take taxis.

2 flexible Ultimate Rewards points are strictly more valuable than 2 Arrival miles, being worth a minimum of 2.5 cents towards paid travel through the Ultimate Rewards portal, compared to the 2 Arrival miles' value of 2.22 cents.

So why don't they justify putting your travel purchases on the Sapphire Preferred? Because of the annual fee.

Consider how much you'll have to spend in order to recoup the Sapphire Preferred's $95 annual fee:

  • At 2.5 cents back per dollar, you'll need to spend $3,800 in travel categories in order to earn back the value of the annual fee.
  • But it'll take another $3,040 to recover the $76 in value you would have earned from putting the initial $3,800 in travel spend on a no-annual-fee 2% cash back card!
  • With the conservative valuation of 2.5 cents back per dollar spent in bonused travel categories, you'll need to spend $6,840 before you start showing a profit.

What makes the Barclaycard Arrival World MasterCard different? Redeeming Barclaycard Arrival miles against the same $6,840 in travel purchases will yield at least $752 in excess value over the 2% cash back card, with an annual fee of just $89:

  • Redeeming 684,000 Arrival miles against a single transaction will yield a 10%, 68,400 mile, dividend, worth $684 towards a future redemption;
  • That future redemption will yield a dividend of 6,840, redeemable for up to $68 towards a third purchase.

To rephrase this point slightly differently:

  • The Barclaycard Arrival isn't superior in earnings to the Sapphire Preferred for travel purchases;
  • It's superior to the Sapphire Preferred for travel purchases because that's how you can leverage its dominant 2.22% cash back earning rate on all non-bonused (manufactured) spend.

Lots of cards bonus restaurant spending

Earning 2 Ultimate Rewards points earned per dollar spent at restaurants with the Sapphire Preferred is a nice touch, but it's hardly revolutionary. Check out Frequent Miler's list of cards giving bonuses in various common categories to see why.

The no-annual-fee Chase Freedom offers 5 Ultimate Rewards points per dollar spent at restaurants this quarter.

So for 25% of this year you would be downright insane to put restaurant charges on your Sapphire Preferred card. And for the rest of the year, you can simply select restaurants as one of your US Bank Cash+ bonus categories to secure 5% cash back year-round on up to $2,000 per quarter spent at restaurants.

Conclusion

Leave the Sapphire Preferred at home.

Reflections on week 2 of #milemadness

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This post is coming a little late, since week 2 of #milemadness ended last Friday, but I wanted to share my thoughts before the week 3 results are tabulated and released.

My War on CPD

Since I started travel hacking, and in particular manufacturing spend, I've had my eye trained on a single metric: cost per dollar of manufactured spend, or CPD. It's important to note that this is a minority view — the traditional metric thrown around is CPM, or cents per mile. It's basically the difference between judging the tool of manufactured spend versus judging the outcome of free travel.

A simple example will illustrate this difference. The new TD Go Visa Buxx card allows you to pay $1 to load up to $1,000 from any Visa or MasterCard credit or debit card, which can then be unloaded using PIN-based debit. This tool gives you a fixed CPD of $1 per $1,001 in manufactured spend, or $0.001. The CPM, on the other hand, depends entirely on which card you use to load the TD Go:

  • the Bank of America Alaska Airlines debit card earns 1 Alaska mile per $2 spent on the card, leading to a "traditional" CPM of 0.2;
  • the Chase British Airways Visa Signature earns 1.25 Avios per dollar spent, generating a CPM of 0.098.

My point is, it doesn't make any sense to judge the TD Go based on what cards you happen to carry or how you happen to value their respective rewards currencies. That's going to depend on your travel goals, your credit limits, your bank relationships, and spiritual factors known only to you.

Playing Against Myself

At this point I'm hopelessly behind the front-runners, who have been leveraging 5% cash back credit cards to run up huge scores buying PIN-enabled gift cards at drugstores and office supply stores. Meanwhile, I've stayed laser-focused on driving down my CPD, and am very pleased with the results. Here's my CPD calculations from the first two weeks of the competition:

  • Week 1: $19,861 in spend, $170 in fees, 0.86 cents per dollar of spend;
  • Week 2: $10,357 in spend, $91 in fees, 0.88 cents per dollar;
  • Running total: $30,218 in spend, $261 in fees, 0.86 cents per dollar;
  • Week 3 estimate: $9,060 in spend, $63 in fees, 0.7 cents per dollar.

I'm truly satisfied that I've been able to scale my manufactured spending activities as much as I have without giving very much up on the CPD front. I'm remaining well below what I consider my unofficial "ceiling" of 1 cent per dollar — the maximum I'd be willing to pay for a dollar of manufactured spend.

My Extracurricular Activities

One funny side effect of the way the manufactured spending tournament is being scored is that it almost completely discounts my favorite way of earning miles: using my Bank of America Alaska Airlines debit card. The reason is somewhat technical, but basically goes like this:

  • Each day, we're only allowed to count towards the competition the spend that we do within our remaining "bankroll;"
  • Therefore, in order to count my Alaska Airlines debit card spending, I would have to have that amount remaining in my bankroll at the end of the day;
  • However, if I had money remaining in my bankroll at the end of the day, I'd be better off using it on credit card spending (earning 1 or more mile per dollar, or 2% cash back) rather than debit card spending (earning just 0.5 miles per dollar).

So even though I've already earned 7,000 Alaska miles this month, just a tiny fraction of them count towards my official score!

Reminder: Using Alaska miles for Delta BusinessElite

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

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

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

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

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

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

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

Conclusion

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

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

That was fast: Hawaiian changes Hilton transfer rate

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At the end of January I responded to the surge of posts about changes to the ratio at which Virgin Atlantic Flying Club miles could be transferred to Hilton HHonors points by pointing out that the Hawaiian Airlines transfer ratio hadn't changed.

Unfortunately, Hawaiian quickly followed suit and devalued their transfer ratio, so that Hawaiian Airlines mile can now be transferred to Hilton HHonors only at a ratio of 1 HawaiianMile for 1.5 HHonors points, in increments of 10,000 HawaiianMiles (for 15,000 HHonors points).

I don't like to play armchair industry analyst, but it was obviously problematic for Hilton's co-branded credit card issuers, American Express and Citi, that the Barclaycard-issued Hawaiian Airlines co-branded credit card was giving a higher signup bonus — in terms of HHonors points — than HHonors' own co-branded credit cards.

That problem has now been finessed, by reducing the appeal of the Hawaiian Airlines card for those interested only in transferring their miles to Hilton HHonors points, without devaluing Hawaiian's own award chart.

Update: JH Preferred spending limits

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Background: Alert: JH Preferred limitations and shutdown reports
Background: JH Preferred cash advances: your miles may vary
Background: Update: JH Preferred

As you can see from the above background reports, the JH Preferred card is one that I've looked into in some depth. It's also a card about which there isn't a lot of information publicly available online.

Over the course of this month I've been using my own JH Preferred card fairly aggressively in order to manufacture as much spend as possible for the #milemadness manufactured spending competition. And that's caused me to run into one additional limitation of the card, in addition to those mentioned in the posts above.

Limitations on PIN-based debit card transactions

Between March 1 and March 13, 2014, I loaded $10,000 in Vanilla Reload Network reload cards to my JH Preferred account, unloading the same amount using PIN-based debit transactions at Walmart.

Today, I loaded an additional $1,000 without any problem, but was unable to make any PIN-based purchases at Walmart. Immediately fearing the worst, I made a signature-based "credit" transaction that was approved.

I ended up successfully unloading the remainder of my balance using a (credit) Amazon Payments transaction.

I dug up my cardholder agreement and found neatly filed with it an "Important Notice Regarding Changes to your JH Preferred Prepaid Visa Card:"

"The maximum amount that can be spent on your Card per month is $10,000.00."

From my experience, it appears that limit is enforced on PIN-based debit transactions, but not on signature or online credit transactions.

Conclusion

While I consider the above information valuable in its own right, for those seeking to take maximum advantage of the JH Preferred card, I also want to suggest that when your JH Preferred card is declined for the first time, don't panic. You may not have been shut down; you may simply have run up against the $10,000 monthly PIN-based debit transaction limit.

The next question I intend to investigate and report back on: is the $10,000 purchase limit based on the calendar month or a rolling 28-, 30-, or 31- day period?

My next application cycle

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Background: What's in my wallet?

Compared to many travel bloggers, I rely on signup bonuses for a relatively small part of my travel needs. For example, my Barclaycard Arrival World MasterCard came with a 40,000 "mile" signup bonus, worth $444 in statement credits against travel purchases.

However, since it earns 2 miles per dollar, worth 2.22% cash back against travel purchases, it's also my go-to card for non-bonused manufactured spend, and I've earned and redeemed many tens of thousands of miles with the card. The 40,000 mile signup bonus is a great incentive to include it in any application cycle, but it's not the only reason to get the card, and in a lower-signup-bonus environment the card might still be worth applying for — at least for the first, fee-free, year.

All this leads me to say that since I rely on manufactured spend more than signup bonuses, it's more important for me to find the right combination of cards on the earning side than merely waiting for the highest signup bonuses. For example, I applied for the American Express Blue Cash back in January because of its earning potential, not its signup bonus — then I included a few cards with valuable signup bonuses to round out my application cycle.

The cards I'm waiting for

There are a few cards I don't yet have, which are going to complement my current holdings nicely. I plan to apply for these cards during my next application cycle:

  • Bank of America Alaska Airlines Signature Visa. The signup bonus for this card went as high as 50,000 miles back in December, during what I called a perfect storm of signup bonuses. It's currently stuck at 40,000 miles after spending $10,000 within 6 months, which is a great offer. But I'm hoping it pops back up to 50,000 sometime soon, so I can keep earning Alaska miles after May 31, when the Bank of America Alaska Airlines debit card finally disappears;
  • American Express Starwood Preferred Guest Personal or Business. This card has a 25,000 Starpoint signup bonus, and the ability to earn Starpoints, which are incredibly valuable for hotel stays, but also transferable to partner airlines and redeemable for paid airline tickets. In other words, if approved I'll be putting this card in heavy rotation, despite its earning rate of just 1 Starpoint per dollar;
  • Chase Ink Bold or Plus. I write about the earning potential of these cards fairly regularly, mainly when I'm envying people who already have them. I've grown increasingly disgusted with my Chase Sapphire Preferred card, since I put my travel purchases on my Arrival card and just don't eat out all that often (no reimbursed business expenses here!). I'm looking forward to changing my Sapphire Preferred to a Chase Freedom card (doubling my quarterly bonus earnings) and adding an Ink Bold or Plus to retain the flexibility of my Ultimate Rewards points.

What's missing

After picking up those three cards I'll have access to virtually all the most valuable points currencies. But there are a few cards I'm still considering for their other benefits:

  • Chase Hyatt Visa. I've written about this card before when contemplating whether it's worth renewing for its annual free night certificate (short answer: yes, if you'll use it). It simply isn't the case that staying at a Hyatt property is the best option for me very often, which makes it a tough decision to spend a hard credit pull on the card without specific upcoming plans;
  • Membership Rewards. American Express has a number of cards with lucrative Membership Rewards earning structures, but until I can find a few reliable venders where I can maximize those bonus categories, I'm not willing to commit to a $95 or $175 annual fee, given the signup bonuses currently available;
  • Club Carlson Premier Rewards Visa Signature. I already have the business version of this card, and I love it. The personal version has a slightly higher annual fee ($75 vs $60), and gives an additional 40,000 Gold Points on each account anniversary. That's a great value, but I'm not convinced it's worth another $75, given that I can manufacture 40,000 Gold Points whenever I want, without paying $75 or waiting for my account anniversary!

Those are the cards that are currently on my mind. What do you think: what cards do I need to include in my next application cycle?