Chase Sapphire Preferred is terrible, get Slate instead

I'm going to do my readers a favor and assume that by the time they've graduated to blogs like mine from the training-wheels affiliate bloggers, they're perfectly aware of my objections to the Chase Sapphire Preferred, so I won't relitigate that case today. Suffice it to say, the only person who should even entertain the notion of paying a $95 annual fee for the card is a business traveler who's reimbursed for their travel expenses and is allowed to pay for their own hotels and meals while on the road. Even then, I'd be skeptical.

But whenever I rail against the Sapphire Preferred, someone inevitably comes back with their supposed trump card: "Sure," they say, "you'd have to be crazy to keep the Sapphire Preferred, but a 40,000 Ultimate Rewards-point signup bonus makes it worth applying whenever you're eligible for a new bonus."

That's wrong too. Here's why.

Both Sapphire Preferred and Slate can be product-changed to Freedom

While Sapphire Preferred is an Ultimate Rewards-earning card and Slate isn't, both products are "own brand" Chase credit cards, and cardholders can call in to request a product change to the best no-annual-fee Ultimate Rewards-earning credit card: Chase Freedom.

That means the end game is the same with both cards: a product change to Freedom. The only comparison worth making is the advantages of signing up for each card in the first place. So which card offers bigger rewards for signing up?

What are 40,000 more Ultimate Rewards points worth to you?

A lot of bloggers will try to tell you what 40,000 Ultimate Rewards points are worth. A night at the Park Hyatt Vendôme costs 672 Euro, so 40,000 Ultimate Rewards points must be worth $810!

But I don't really care what 40,000 Ultimate Rewards points are worth in the abstract. I care what 40,000 more Ultimate Rewards points are worth.

And the answer is that if you're not going to redeem them, they're worth $400.

Now, maybe you are going to redeem them. Maybe you keep your Ultimate Rewards balance as low as possible by continually redeeming them for premium cabin international trips and luxury hotels. But even if so, don't value 40,000 more Ultimate Rewards points at the highest value you get from the program; value them at the average value you get across all your travel redemptions.

What is a $30,000 negative-interest-rate loan worth to you?

I wouldn't have thought it was possible, but last week I understated the value of the Chase Slate introductory balance transfer offer of no balance transfer fee for transfers within the first 60 days, and a 0% interest rate on balance transfer for 15 months.

I wrote, "for the first 60 days of a Slate account membership, you can transfer up to $15,000 in balances with no balance transfer fee."

But that's not exactly right. You can transfer up to $15,000 from non-Chase-issued credit cards in the process of opening a new account, but that actually has nothing to do with the $0 balance transfer fee and 0% balance transfer APR: it's a restriction Chase places on all balance transfers.

In fact, Chase's rule is that only $15,000 can be transferred in each rolling 30-day period. Since the $0 balance transfer fee lasts for the first 60 days of card membership, you're actually able to transfer up to $30,000 under the no-fee, 0% APR offer.

Of course, that would require having a sufficiently high credit limit, but Chase does allow you to transfer available credit from other credit cards, so you can always scrounge up as large a credit line as possible from your worthless Marriott, British Airways, Hyatt, and Southwest credit cards, for example.

Before I dig any deeper, let's be clear on the math here: your $30,000, 15-month loan has a negative interest rate because you've transferred the balance from other, rewards-earning credit cards. Using conservative assumptions of a 2% cash back credit card with 1% in purchase and liquidation fees, your $30,000 loan is worth a minimum of $300 — before you even get around to using the money!

So, how should you use the money?

Money is fun. Lots of money is even more fun

So now you've got $30,000 in cash lying around, and you only need to make minimum payments on your new Slate card for 15 months. What do you do with the cash?

• Max out high-interest savings accounts. Maybe you're like me and you drip a steady amount into your high-interest savings accounts each month. That's no longer necessary: max them out and reap 5% or higher APY on your savings.
• Pay down your mortgage. While your home is hopefully financed at an extremely low interest rate, you may still be paying private mortgage insurance if you haven't yet built up enough equity. By bringing your equity up to 20% of your home's value, you may be able to save hundreds of dollars a month in mortgage insurance payments (I'm not your banker or insurance agent; check with them first).
• Pay down your student loans. I have a small Perkins student loan that's accruing interest at a rate of 5.6% APR. I'm going to pay it off, saving a few hundred dollars in interest payments over the life of the loan.
• Make retirement contributions. If you qualify for the retirement savings contribution credit, up to 50% of your contributions to qualifying retirement plans can be rebated when you file your taxes. I recently wrote a walkthrough of the retirement savings contribution credit over at the Saverocity Forum; there's a lot more information available there.
• Invest it. Of course traditional investment vehicles aren't paying much at the moment, but we're travel hackers: there are alternatives. You can fund Kiva loans with a 5%- or up-to-6%-earning credit card. If you belong to a bank or credit union that allows it, you can fund certificates of deposit with a rewards-earning credit card. A 6-month CD funded with a 2.22% cash back credit card suddenly adds 4.44% to your annualized return. 3-month CD's will double that again.
• Buy something. Of course this isn't strictly speaking a way of maximizing the yield on your loan, but if the alternative is to finance a car or appliance at a high interest rate, being able to make the purchase with cash may save you hundreds or thousands of dollars.

Conclusion

The options I listed above are just the first few that sprang to mind; you no doubt have your own ideas about what you'd do with a $30,000 negative-interest-rate loan. So do the math, and in almost all cases I suspect you'll find the loan is more valuable than the additional Ultimate Rewards points.

After all, Ultimate Rewards points are easy to earn — a lot easier than finding negative-interest-rate loans!

Personal finance digression: some high-interest savings accounts may not be long for this world

I've long been a shameless advocate of high-interest savings accounts. By replacing low-yield bonds at a one-to-one ratio in your portfolio with FDIC-insured savings accounts yielding 5%-6% APR, you can replicate or exceed the returns of those bonds in your portfolio while reducing your exposure to volatility in the bond market. That's just about as close to a free lunch as you can get in this world.

Mango appears to no longer be available to new customers

One of my favorite high-interest savings accounts is the one linked to Mango prepaid debit cards. Mango savings accounts pay 6% APY on up to $5,000 in deposits per savings account. After that, they pay a mere 0.10% APY, but customers can have up to 3 Mango savings accounts, with a distinct $5,000 limit on each.

To save my readers a headache, this works out to $24.84 in interest per month on a "maxed out" $5,000 savings account balance, less a $3 monthly fee, for a net APR of roughly 5.24%.

Via Saverocity Forum user and friend of the blog ed1chandler, I learned this morning that Mango has, at least for now, closed their site from registering new accounts. This change has not affected currently existing accounts, and indeed we can hope it's a temporary change, but in the meantime this cuts off one of the best high-interest savings account opportunities that has been widely available in the US.

Mango's parent company also administers the Union Plus prepaid card

Mango is the own-brand product of Rêv North America, which is supposedly a white-label prepaid card company. I say "supposedly" because I have no reason to believe the company actually exists. Look at their website and decide for yourself.

However, in addition to the Mango prepaid card and linked savings account, Rêv North America administers an almost identical product called the Union Plus prepaid card, which also has a linked high-interest savings account. The savings account pays just 5.1% APY on up to $5,000, but the prepaid card's $2 monthly fee is waived in months where you load over $500 to the card, making the two products much closer to a wash.

Most importantly, the Union Plus prepaid card appears to still be available for new applicants.

The Union Plus application is finicky

The first time I submitted a Union Plus prepaid application yesterday, the site returned an error. After refreshing the page, my application was submitted successfully and I was able to immediately access my new Union Plus prepaid account.

So if at first you don't succeed, I'd suggest clearing your browser cookies, using a different browser, and rinsing and repeating until your application is successfully submitted and you have access to your new account.

Consumers Credit Union offers yet another option

Based in Illinois, Consumers Credit Union offers up to 5.09% APY on up to $20,000 in balances in their rewards checking account, although it's necessary to meet a variety of hurdles each month. Still, for those of us with the resources to meet those hurdles, it offers an extremely competitive interest rate on a much higher maximum balance than either Mango or Union Plus.

Conclusion

High-interest savings accounts offer the best of all worlds: easy access to your money through ACH pulls and interest rates that exceed those of "safe" assets like US Treasury bonds. I consider them an indispensable part of a well-balanced portfolio, and hope they'll be here to stay.

But this week's developments are not an especially promising sign.

Amtrak thruway bus cabotage

I just got back from a long weekend in Galveston, Texas, which had a surprising effect on me. I don't enjoy reading, let alone writing, trip reports, but I had enough interesting impressions while there that I plan to write up a few key lessons I learned during the trip. So look forward to more Galveston-related content soon; in the meantime, here's a quick tip on Amtrak thruway bus cabotage.

Amtrak is prohibited from providing intercity bus transportation

Cabotage, strictly speaking, is the act of carrying goods or passengers by a carrier registered in one country between two points in another country, and is prohibited except at the discretion of the second country.

But a similar principle is at work in the delivery of passenger bus and rail transportation in the United States. In my primitive understanding, Amtrak, the American passenger rail service, is allowed to provide bus transportation from cities that are not served by passenger rail to its passenger rail stations, but only on the condition that passengers have an onward passenger rail connection.

This is basically a shameless sop to passenger bus companies, who don't want to compete against a loss-making quasi-governmental train company. Interestingly, most of these so-called "thruway" bus routes are in fact operated by private passenger bus companies, from whom Amtrak contracts to provide transportation to their passenger rail stations. 

Amtrak tickets are quite cheap (and they have a rewards program)

While considering our various options to travel back from Galveston to Houston (I'll cover travel to Galveston in a future post), I stumbled across the interesting fact that the only passenger bus service from Galveston to Houston is operated by Lone Star Coaches, as a thruway bus service connecting to Amtrak's Sunset Limited service between Louisiana and California.

Of course, Amtrak is prohibited from selling thruway bus tickets between Galveston and Houston.

But they aren't prohibited from selling tickets from Galveston to San Antonio (one stop West of Houston). And those tickets are not very expensive.

Here's a ticket from Galveston to San Antonio (available Monday, Wednesday, and Saturday):

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That's the second-cheapest price I could find for transportation from Galveston to Houston (spoiler alert: the cheapest is Galveston Express, but they seem to operate only when the cruise ships are in port).

Conclusion

I began looking into this option as a way to save money on our return from Galveston, but the same principle operates in markets all across the country: even if you can't find passenger bus service between two points, Amtrak may run a thruway bus between them, which only requires a train ticket to the next station down the line.

A personal finance application cycle

Last night I applied for two new credit cards which have nothing to do with miles and points. It was a strictly personal finance application cycle.

Citi Double Cash

When the Citi Double Cash was first launched, I explained why I wanted to sign up for the card: with its 2% cash back earning rate and 15-month introductory 0% APR on purchases, Citi is extending a fairly long-term negative-interest-rate loan. In life, when people offer you negative-interest-rate loans, you take them (present European finance ministries notwithstanding).

Before applying, I took the advice of my Twitter followers and lowered the only substantial credit line I had with Citi, a $13,700 credit limit on my Dividend Platinum Select card, to $3,000.

My online application for the Double Cash was immediately approved with a $5,200 credit limit.

Chase Slate

The Chase Slate and Citi Double Cash cards are two great tastes that taste great together: for the first 60 days of a Slate account membership, you can transfer up to $15,000 in balances with no balance transfer fee. Those balances are then interest-free for 15 months.

What this means is that I should be able to turn my $5,200 Citi Double Cash credit limit into a $20,200, 15-month negative-interest-rate loan by repeatedly manufacturing $5,200 in spend and then requesting balance transfers (in the first 60 days) from my Citi Double Cash to my Chase Slate.

Since I have over $25,000 in combined Chase credit lines, I didn't bother adjusting them before applying, knowing that if necessary I could reallocate my credit lines in order to have my Slate application approved.

That wasn't ultimately necessary. My online application was not immediately approved, and I was given an application reference number and phone number to call (877-260-0087). When I called last night, I was told Chase's "systems were not available." But when I called back this morning, after providing some information, I was told my application was approved, with a $500 credit limit.

Once the card arrives I'll call and have $15,000 of my existing Chase Freedom credit lines reallocated to my Slate card.

Conclusion

Of course, as great as long-term negative-interest-rate loans are, what's almost as great is being able to request a product change from my Slate card to a third Chase Freedom in 16 months!

My super-boring Sam's Club Amex offer strategy

I've now finished off the last of my American Express "Offers for You" at Sam's Club, and it was nothing special: I bought a bunch of Sam's Club gift cards, which I'll use to buy cheap stuff (realistically, beer) at Walmart at a hefty discount.

This was my strategy.

Round 1: $20 Sam's Club gift card for $2

When the Offer for You first launched, risk-averse as I am I purchased a $20 Sam's Club gift card to see how they would be coded. I paid $22 (including the 10% non-member surcharge), and a few weeks later when the charge finally cleared, I received a $20 statement credit.

Unfortunately, by that time Sam's Club had implemented two changes: they started charging shipping fees on their own gift cards, and had eliminated $20 gift cards as a purchase option.

They finally relented on the first change, but $50 gift cards currently remain the lowest denomination available for purchase online.

Rounds 2 through 4: $50 Sam's Club gift cards for $15

Fortunately, thanks to Doctor of Credit I knew how to split online Sam's Club purchases between two enrolled American Express cards. So I placed 4 orders for $50 Sam's Club gift cards, putting $20 on one enrolled card and $35 on the other (including the $5 non-member penalty). I received immediate "Congrats!" confirmation e-mails for each of the four orders.

Ultimately, I'll get $200 in Walmart store credit for $60 — a 70% discount on stuff I'm going to buy anyway. My theory is that I spend a lot of time at Walmart already, and they have competitive prices on a few things I purchase regularly. This is the part of our hobby that is closer to extreme couponing than travel hacking, but the price is right.

Conclusion

In many circumstances travel hacking favors the brave: due to my risk-aversion I ended up getting a mere 70% discount on my gift cards, when I could have received a 90% discount if I'd gone all-in while $20 Sam's Club gift cards were still available.

Over the course of a career in this hobby, those differences can add up to tens of thousands of dollars, if not more. On the other hand, sometimes those big, all-in plays backfire: Frequent Miler's scheme to stock up on fruit and nut baskets springs to mind.

Ultimately, I don't have the financial resources to hit every deal as hard as possible the day it launches. So I'll just keep reporting on the slow, steady, and safe methods that make up the bulk of my miles, points, and cash back strategy.

Do this now: Discover it double cash promotion

Via Doctor of Credit, Discover is currently offering a potentially lucrative promotion: for the 12 complete billing cycles after registering, they will double all the cash back you earn with your Discover it card. The cash back will be deposited in the 13th billing cycle after registration.

There are a few nuances here: if you're an existing cardholder, you have to call to register for the promotion — registration isn't available online. However, by all accounts Discover's phone representatives are happy to register anyone who calls; my phone call took about 4 minutes, beginning to end.

Additionally, registration doesn't take effect immediately: since the promotion is based on 12 complete billing cycles, you only start earning double cash back on the first day of your next billing cycle after registration. In my case, that's June 3, but if you have a statement closing date later in the month you might not be able to maximize the rest of this quarter's "Restaurants and Movies" rotating 5% cash back category (Doctor of Credit helpfully suggests asking Discover to change your statement closing date in this case).

Doubled cash back earning — 10% cash back in bonus categories — might make a few otherwise-boring deals worth pursuing. In the third quarter of 2015, for instance, department stores are a bonus category. 5% cash back on $200 Visa gift cards from Sears is a good deal, but 10% cash back on Visa gift cards is a great deal (netting $13.75 per card). You can also do whatever it is people do with Sears gift cards.

If gas stations return in the first quarter of 2016, PIN-enabled Visa prepaid cards will be a great option, and hopefully the always-popular restaurant bonus category will return next year as well.

One thing that's unclear is whether cash back earned through Discover's lucrative shopping portal will also be doubled. I believe it likely will be, but regardless of what Discover's phone representatives say, there's no way to know for sure until 13 months from now!

PSA: If you structure transactions, the government will ruin your life. Don't do it

I've shared a couple news articles on Twitter recently about people being charged by the federal government with structuring transactions.

• In the first case, after being warned by the IRS not to continue, a businessman regularly deposited just less than $10,000 in order to "avoid some hassle for the bank tellers and everyone else involved."
• In the second case, former Speaker of the House Dennis Hastert was arrested for withdrawing just less than $10,000 in order to conceal alleged criminal activity.

Structuring is about reporting requirements

It's a federal crime to structure your transactions in any way with the intent to evade reporting requirements. It's not a crime to interact with the banking system in any (legal) way you want with any other intent.

Criminals structure transactions

For reasons I cannot begin to fathom, the first case I cited is being cast by the news media as a sob story about an undereducated ("10th-grade education") business owner being the victim of federal overreach.

But as the second story makes clear, criminals structure transactions and bank reporting requirements are a key way federal authorities are made aware of potential criminal activity. When people who are not committing any other crime structure their transactions to avoid federal reporting requirements, they detract scarce federal resources from investigations into criminal wrongdoing, like former House Speakers allegedly receiving bribes and paying off blackmailers.

Do whatever you want, just don't structure transactions to evade reporting requirements

If you're worried your bank or credit union will close your account if you repeatedly deposit or withdraw more than $10,000 at once, the solution is not to break up your deposits into smaller amounts in order to evade reporting requirements. That's structuring, it's a crime, and it exposes you to criminal prosecution and civil forfeiture.

The solution is to find a better bank or credit union, one that won't mind filing the Currency Transaction Reports required for transactions exceeding $10,000.

If you think that's too much of a hassle, consider the alternative.

Conclusion

We live in a society governed by laws. As long as you don't break any of those laws, the federal government will leave you alone the overwhelming majority of the time (state and local governments pose additional problems).

Structuring transactions to avoid reporting requirements is a federal crime. If you don't do it, you won't be charged by federal authorities with doing it.

Down to the wire: booking speculative Club Carlson vacations, with examples

As faithful readers know, in the next few days the Club Carlson program will undergo two catastrophic devaluations: co-branded credit card holders will lose the free last night on award reservations of two or more nights; and a vast swath of Club Carlson's lame mid-tier properties are being bumped up to their highest rewards category, and will cost 70,000 Gold Points per night.

As has been pointed out ad nauseam, going from being able to book 2 nights for 44,000 or 50,000 Gold Points to being forced to spend 140,000 Gold Points is a disaster for those of us who have been taking advantage of Club Carlson's generosity for the past few years.

Fortunately, we were given enough notice to mitigate the pain somewhat, since we can continue to book last-night-free reservations for the next few days.

Club Carlson properties can be booked far in advance

It's an interesting fact that I find it psychologically easier to book trips speculatively far in advance than concrete plans in the near future. After all, to go on a trip next weekend we need to check out social calendar, the schedule of local music and food festivals, etc. To book a trip for next summer, we just have to come up with something that would be fun to do.

Fortunately, Club Carlson allows their properties to be booked far — in some cases years — in advance.

The Club Carlson program is not going away

The next thing to keep in mind is that the Club Carlson program is not going away. They'll continue to operate a loyalty program and you'll still be able to earn Gold Points with their co-branded credit card and redeem them for free nights at their properties all over the world.

The only thing that's going away is the last-night-free benefit, so that's the only benefit you need to worry about maximizing before June 1.

Use Award Mapper to find clusters of Club Carlson properties

Award Mapper has a terrific advantage compared to Hotel Hustle: your hotel selections persist when changing your city search term, so in order to develop a Club Carlson redemption strategy, you can just select Club Carlson as your hotel chain choice and start searching.

There are two ways to go about planning a Club Carlson vacation. You can find clusters of Club Carlson properties within a single city, like London:

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If you want to spend any even number of nights in London, you could book alternating pairs of dates at next-door properties like:

• Radisson Blu Edwardian, Kenilworth & Radisson Blu Edwardian, Bloomsbury Street (100,000 Gold Points for 4 nights);
• Radisson Blu Edwardian, Hampshire & Radisson Blu Edwardian, Leicester Square (94,000 Gold Points for 4 nights);
• Park Plaza Westminster Bridge London & Park Plaza County Hall London (100,000 Gold Points for 4 nights).

Or you can look for regional clusters of Club Carlson properties, like this one in Eastern Europe:

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Or this one in the Baltic States:

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I ultimately decided to pursue the regional option, since I find it endlessly annoying to switch hotels in the middle of a visit to a city.

Think strategically about how long you'll stay in each city

Just like in London, it's possible to plan an Eastern European vacation (Budapest-Bratislava-Vienna-Prague) or Baltic vacation (Vilnius-Riga-Tallinn) using only 2-night stays to maximize your pre-devaluation Club Carlson points.

But that's not actually necessary, because of the point I made above: the Club Carlson program is not disappearing on June 1, and (except for property-specific changes in prices) you'll still be able to redeem your Gold Points for free nights. The only benefit you need to maximize today is the last-night-free benefit.

Here's a Baltic vacation I was considering with my remaining Club Carlson points:

• June 10-12, 2016: Radisson Blu Astorija Hotel, Vilnius
• June 13-15, 2016: Radisson Blu Hotel Latvija, Riga
• June 16-18, 2016: Radisson Blu Hotel, Tallinn

As you can see, each individual reservation is 2 nights long, since that's the benefit I need to maximize before June 1. Once it comes time to actually plan the trip, we could add an extra night in Vilnius before or after our reservation, an extra night at the beginning or end of our stay in Riga, and an additional night before or after the final stay in Tallinn. There's no point tying up Gold Points reserving those third and fourth nights now: there's plenty of time for that after June 1, even if it's at annoyingly-higher rates.

In addition to two two-night stays I already had booked, here is the vacation I ultimately designed with my remaining Club Carlson points:

• June 10-12: Radisson Blu Beke Hotel, Budapest
• June 13-15: Park Inn Danube, Bratislava
• June 17-19: Radisson Blu Style Hotel, Vienna

As in the example above, this itinerary both maximizes the last-night-free benefit and leaves flexibility should we decide to extend our stay in any of the 3 cities. The longer gap between Bratislava and Vienna is in case we decide to take a trip to Brno or Prague, two relatively-close Czech Republic cities I love and where I've spent a fair amount of time.

Conclusion

After booking a few close-in trips to Texas, I only had about 82,000 Club Carlson points left in my account. Now that I've got our Central European trip squared away, here's how many points I'm left with:

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Getting as close to that number as possible should be everyone's goal in the time we still have left.

Price compression and mileage running

I like to use the term "price compression" to refer to the interaction of two benefits to travel hacking:

• The out-of-pocket price paid for travel is lower;
• The difference between the out-of-pocket price paid for more-expensive and less-expensive travel shrinks, even if the ratio between them stays the same.

The ideal cases are more-convenient or more-luxurious award redemptions that cost the same fixed number of miles and points, but you also see price compression when redeeming cheaply-acquired, fixed-value Ultimate Rewards, Membership Rewards, or ThankYou points: more expensive flights will cost more points, but the out-of-pocket expense of acquiring those points will be (in some cases much) closer than the cash prices.

Theory of mileage running

A traditional mileage run is a flight taken exclusively to earn airline miles, and will ideally cost less than 4 cents per mile flown if credited to a distance-based frequent flyer program. Personally, I understand the logic behind the traditional 4-cent-per-mile cap in the following way:

• a high-level elite will earn at least 2 redeemable miles per mile flown due to elite mileage bonuses;
• a travel hacker will attempt to redeem miles for at least 2 cents each;
• so by pre-paying for future, non-elite-qualifying travel through mileage runs, the mileage runner receives elite-qualifying miles in the present, which help them maintain high-level status and the perks that go with it.

Of course it's possible to mileage run speculatively or purposefully: someone can take every sub-4-cent flight available with the goal of earning the highest elite status possible, or they can take one or two mileage runs in order to top off an award or earn the last few elite-qualifying miles needed to reach the next level of elite status.

Price compression and mileage running

Looking at mileage runs through the lens of price compression results in some interesting conclusions.

In programs like Alaska Airlines Mileage Plan and American AAdvantage, which still feature distance-based redeemable-mile earning, price compression has no effect (besides making mileage runs cheaper): since booking more expensive flights (within a cabin of service) doesn't yield any additional redeemable or elite-qualifying miles, the goal of minimizing the cent-per-mile cost of each mileage run is still paramount. Reservations in excess of the 4-cent-per-mile "breakeven" point may still be worth making, but more expensive flights would have to be justified by an unusually high value placed on elite-qualifying miles — perhaps if you're a single flight away from the next elite status level.

In revenue-based programs where mileage earning is based strictly on the amount paid for tickets (although with a multiplier for elites in the case of Delta and United), it's only ever worth mileage running for the benefits of elite status (for example, free award changes and redeposits). In such programs, since more-expensive flights also earn more redeemable miles, part of the increased price is rebated in the form of more redeemable miles earned.

Consider the following stylized case: a United Premier 1K with the American Express EveryDay Preferred and Business Platinum combination wants to maintain her top-tier elite status with United. She manufactures spend at gas stations at roughly 1 cent per dollar in manufactured spend, and is able to redeem her Membership Rewards points for 4.29 cents on United flights after her 30% Pay with Points rebate. In other words, she is able to buy United tickets at a roughly 77% discount. As a MileagePlus Premier 1K, she earns 11 miles per dollar spent on United fares. Valuing each United mile at 2 cents each, as above, she's receiving a 22% discount on (the fare component) of each United revenue ticket she buys, meaning her net cost is just 1% of the fare, plus taxes and fees, which don't earn redeemable miles.

Let me be clear: this result only holds for someone who actually values the benefits of elite status, and is sure they'll redeem each one of their United miles for at least 2 cents (remember, unredeemed miles and points are worth nothing). But for someone positioned in this way, the cent-per-mile calculus is almost irrelevant, given the up-front discount and redeemable-mile rebate they receive on each revenue ticket they buy.

Conclusion

I don't fly United or credit my paid Delta flights to Delta, and I don't hold any super-premium credit cards since I don't find their annual fees worth paying. Still, I wanted to share this analysis to demonstrate the power of price compression when applied to a range of everyday problems in travel hacking.

Pro tip: flying as a dual Alaska-Delta elite

I've written before about my transition this year from Delta Platinum Medallion to Alaska MVP Gold 75K status. In short, I couldn't justify crediting my paid Delta flights to the SkyMiles program now that they've moved to revenue-based earning and voodoo-based redemption.

My Alaska Mileage Plan elite status means I can freely choose between American- and Delta-operated flights, which is a huge luxury when pricing out paid itineraries.

Given similar-enough prices and convenience, however, I'll typically choose Delta for my paid flights because they run a fantastic airline. But while I earn elite-qualifying and redeemable miles in Alaska's Mileage Plan for those flights, I don't get free Comfort+ seating or free checked bags, and that's not ideal.

For that reason, I also keep Delta Silver Medallion status. Here's how I leverage the two elite statuses.

Don't request Medallion Complimentary Upgrades

If you book a paid reservation through a third-party booking engine like the US Bank Flexperks site and add a SkyMiles number, your Medallion Complimentary Upgrade will be automatically requested.

That's a problem because once a Medallion Complimentary Upgrade has been requested, you won't be able to remove your SkyMiles number from the reservation.

After booking the ticket, you'll need to manually add your SkyMiles number.

If you're buying a ticket directly from Delta, you can simply uncheck the "Request Upgrade" box during booking.

If you did accidentally request an upgrade, you'll need to contact Delta to cancel the request (this is not an unusual request; often couples or business travelers want or need to be seated in the same cabin).

Check in with your SkyMiles number

24 hours before departure, Silver Medallions can request free Comfort+ seats (higher-level Medallions can request them earlier).

If you're checking a bag, you'll also need to drop your bags off at the airport while your SkyMiles number is attached to the reservation in order to avoid checked bag fees.

Remove your SkyMiles number and add your Mileage Plan number

I've had mixed success asking airport agents to remove my SkyMiles number from reservations after check-in. But fortunately, it's simple to do online, as long as you haven't requested an upgrade. Just access your reservation (in the app this is called "Trip Details") and click "Remove" next to your SkyMiles number. Then add your Mileage Plan number. The website will automatically add 3 leading zeroes, but in the app you'll need to type them in yourself, so your Mileage Plan number is a total of 12 digits long.

Reprint your boarding passes

This isn't strictly necessary, but as a precaution I always fly on boarding passes showing my Mileage Plan number and elite status.

Final note

Obviously for the sake of convenience it's easier to do this on one-way rather than round-trip reservations, since the more times you have to remove and add frequent flyer numbers, the higher the chance of something going wrong, either on your side on in Delta's reservations system. If I were checking a bag on a roundtrip reservation, I might even consider simply leaving my Mileage Plan number attached to the reservation and paying the checked bag fee, in order to ensure proper crediting to my Mileage Plan account.