Triggering high-interest savings accounts

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Last month I wrote about two high-interest savings accounts linked to the Mango and Union Plus prepaid debit card products. At that time, Mango was no longer available for new signups, and I speculated that Union Plus would soon be closed to new cardholders as well.

Doctor of Credit reported yesterday that, sure enough, that day has come, and it's no longer possible to open new Union Plus prepaid accounts.

If you were lucky enough to open accounts in time, however, you still have access to those accounts, including their linked high-interest savings accounts, and you may be wondering how to trigger those high rates.

Rêv gives detailed information on deposits

When you make a deposit to a Mango or Union Plus account, it appears in your transaction history with a fair amount of detail. Here are four different transaction types I tried in order to trigger my second Mango card's high-interest savings account (I did two of each):

An Amazon Payments transfer:

A transfer from the Stripe account where my monthly blog subscriptions are deposited:

A TopCashBack redemption:

And a Chase Ultimate Rewards cash redemption:

And sure enough, in June I earned 6.02% APY on my savings account.

The problem is, Mango doesn't tell you which transactions triggered the higher interest rate!

Narrowing it down to 2

That's where the process of elimination comes in, since I opened both a second Mango account and a Union Plus prepaid account. But I haven't made a TopCashBack or Amazon Payments deposit to my Union Plus account: I've only made Stripe transfers and Chase Ultimate Rewards cash redemptions.

But in June, I earned $0.27 on an average daily balance of $66.66 in the savings account linked to my Union Plus prepaid card. Since these savings accounts compound daily, that puts me right in the ballpark of the promised 5.10% APY. In other words, one or both of Chase Ultimate Rewards redemptions or Stripe transfers qualified as direct deposits for the purposes of triggering the high-interest savings account.

If I had an additional account, I would see if Chase Ultimate Rewards cash redemptions alone are enough to trigger the higher interest rate, as I suspect they are.

I'll be maxing out these accounts as quickly as possible

Now that new applications are closed for both products, it's unclear how long existing cardholders will be allowed to keep their accounts. With that in mind, I'll be maxing out these accounts as quickly as possible in order to earn the full interest rate for as long as possible before existing accounts are closed.

"The $100 Startup" is not a very good book

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This is a review of "The $100 Startup," by Chris Guillebeau. For a previous book review, see "Pound Foolish" is a pretty good book.

Chris Guillebeau has a lot of interesting friends and acquaintances

The conceit of "The $100 Startup" is that entrepreneur extraordinaire Chris Guillebeau had a flash of inspiration: everywhere he went, he met people who shared their stories of achieving "freedom" (a concept we'll return to in a moment) through low-startup-cost enterprises: at its most basic, just a website, an e-mail address, and a PayPal account.

So Guillebeau, being an entrepreneur extraordinaire, decided to survey, compile, and analyze the experiences of those entrepreneurs to see if he could identify the general principles which led to the success of their micro-enterprises, and share them with the world.

Unsurprisingly, Guillebeau's profiles of entrepreneurs are the highlight of the book. It is genuinely interesting to read about a variety of ways people are getting by in an era where anyone can be paid by anyone for anything they feel like paying for.

Guillebeau is not a particularly effective storyteller

If that sounds familiar, it's because for the last 15 to 20 years, anyone with access to the internet has access to thousands of stories of entrepreneurs starting with virtually no capital developing successful online products. Many of those articles are well-written and informative for people considering starting their own online businesses.

This is a fascinating topic that has been treated extensively by the news media, which knows a good story when it sees one. But Guillebeau brings no particular expertise to this storytelling project. Rather, he roots around in his survey data until he finds a piece of Talmudic wisdom, like, "Offer an incredible guarantee, or don't."

Well, yes, Chris, those are the options.

For someone supposedly concerned with "freedom," Guillebeau is oddly obsessed with financial success

Guillebeau frames his book as a series of stories, including his own, of entrepreneurs who, often accidentally or via unexpected misfortune, find themselves forced to support their families through small businesses of their own design.

But the more you read, the more you find that he's talking about businesses that are so profitable they replace the income the entrepreneur was earning through traditional employment. In other words, this is a world much closer to traditional entrepreneurship than he lets on: it's ambitious, money-oriented, self-motivated people making middle-class incomes through sole proprietorship.

Here's one of his informants talking about her business philosophy: "Remember that the goal of business is profit. It's not being liked, or having a huge social media presence, or having amazing products that nobody buys...Business is not a popularity contest...There's nothing wrong with having a hobby, but if you want to call it a business, you have to make money" [165].

Needless to say, that philosophy is deeply ingrained in American society — yet Guillebeau appears to believe he can claim to have discovered the profit motive by cloaking it in the language of "freedom."

Of course anyone would be excited to discover that they can make as much money from a small business as they do from formal employment; it's no doubt an incredibly exciting thing to discover. But Guillebeau never gives a coherent explanation for why formal employment is "less free" than self-employment; why making wedding dresses at home is "more free" than making wedding dresses in a factory; why making award bookings for strangers (yes, Gary Leff is one of the case studies) is "more free" than running a North Carolina research center. More profitable, maybe, but that's a much less interesting claim than the one Guillebeau seems to think he is making.

"The $100 Startup" misses the trees for the forest

Guillebeau repeats variations on the following mantra throughout the book: "You can open a PayPal account in five minutes and receive funds from buyers in more than 180 countries" [xvi].

But astonishingly, his only anecdote from an actual entrepreneur using PayPal is devastating: "The problem was access to money. Because Naomi is Canadian but has lived in the United States, the United Kingdom, and elsewhere, she often has issues with her PayPal account being closed as she travels the world, leaving her with plenty of funds in the account but no way to access them" [181, emphasis in original].

Instead of turning this into a teachable moment about the vagaries of using PayPal for your online payments processing (which I'd be happy to tell Chris all about), he describes her borrowing money from a stranger to pay conference registration fees. I'm glad Naomi worked something out, but for your typical entrepreneur who foolishly depended on PayPal for worldwide payments processing, this situation would be simply devastating.

And indeed, the entire book is full of inspirational aphorisms rather than concrete advice on the mechanics of running a small business.

Guillebeau is either gullible or naive about the 1099 economy

Repeatedly through "The $100 Startup," Guillebeau refers to people "deciding" whether to work or employ workers as employees or independent contractors.

Regarding a designer who returned to work after leaving her job to start a small business, he writes, "Also, Tsilli now worked as a contractor instead of an employee, and that gave her an unexpected but important sense of still earning all her income 'on her own,' with roughly half coming from the studio and half from her business" [230].

Regarding a transcription service: "Then she made another key decision: not to hire employees but only hire contractors. By building the team on a contract-only basis, she had more flexibility to increase or downsize the numbers, depending on market needs...(The contractors all understand that the work is cyclical and future projects aren't guaranteed)" [222].

Let me be clear: a wide swath of the American workforce is improperly classified as independent contractors in order to reduce the payroll tax burden on their employers. Employee and independent contractor status is not properly a "decision" made by either the employee or the employer: it's a legal determination based on the facts and circumstances of their employment. And the default, absent a raft of mitigating circumstances, is for employee status.

Guillebeau's studied ignorance of this problem treats the classification as a "business decision." It's not, and he invites abuse by suggesting it is.

I run a $205 startup, and I'm glad I didn't read this book before I started

Over two years into this project, I've made a lot of mistakes, many of which I recognize in the stories in this book (can you say affiliate links?). But if I had in mind the mechanistic, profit-oriented vision this book proselytizes when I started, I don't think I would have made it to my one-year anniversary, let alone still be blogging over two years later.

Guillebeau's vision of entrepreneurship is deadening, profit-oriented, and capitalistic, red in tooth and claw. That's fine: American culture is deadening, profit-oriented, and capitalistic. But his attempt to reimagine that culture and the role of the entrepreneur within it as a lone voice crying out in the wilderness for freedom does a disservice to those who truly reject the relentless pursuit of wealth as the principle goal of life.

Thinking about Starwood Preferred Guest

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Since my American Express "old" Blue Cash card was closed late last year, I've carried just two American Express-issued credit cards: my trusty Hilton HHonors Surpass, and my ill-advised but so-far-irresistible Delta Business Platinum card.

An individual is allowed to carry up to four American Express-issued credit cards and four charge cards, so I have, in principle, two "slots" I can use for additional credit cards. Casting about, there are two obvious candidates: the Amex EveryDay Preferred, which gives (up to) 3 Membership Rewards points per dollar spent at gas stations and carries a $95 annual fee, and the Starwood Preferred Guest business or personal credit card, which has an annual fee going up to $95 on August 11, 2015 (the first year's annual fee is waived).

I've written about the EveryDay Preferred card before, so for now I want to focus on the Starwood Preferred Guest American Express card.

Starpoints are expensive

Since the Starwood Preferred Guest card doesn't offer any bonus categories (besides Starwood stays themselves), any Starpoints earned with the card are by definition expensive: even if you displace only unbonused manufactured spending, you're buying one Starpoint for 2 or 2.22 cents, depending on your highest-earning card for unbonused spend.

Starpoints can be valuable for award stays

At the low end and the very high end, Starwood's award chart is intensely fair: a weekend night at a Category 1 hotel costs just 2,000 Starpoints (a $44 imputed redemption value!), and a 30,000-to-35,000-Starpoint night in a category 7 property, while having a steep $660-$770 imputed redemption value, may still offer a discount at an expensive property like the the St. Regis Princeville Resort on Kauai, where 30,000 Starpoints will get you a $992.34 room at the beginning of January:

For mid-tier award stays, unfortunately, Starwood are just too expensive: a 16,000-Starpoint stay, with its $352 imputed redemption value, will get you a night at the Westin Dublin, while just 50,000-60,000 HHonors ($185-$222 IRV) points can be redeemed for a night at the nearby Morrison, a DoubleTree by Hilton Hotel.

This is fundamentally the same problem I had with chasing Hyatt Diamond status.

Starpoints can be valuable for Cash & Points awards

If you earn your Starpoints exclusively through manufacturing spend on the American Express Starwood Preferred Guest card, you are always better off redeeming them for Cash & Points awards than for award stays (except on stays of 5 or more nights at Category 3-7 properties, where the 5th night is free).

That's because Cash & Points awards allow you to "buy back" Starpoints at between 1.1 cents (for high-season, Category 5 stays) and 2 cents (for Category 1 stays), while each Starpoint you buy through unbonused, manufactured spend costs between 2 and 2.22 cents. Here's my quick guide to how much you're paying for Starpoints when you redeem for Cash & Points awards:

On stays of exactly 5 nights, the math changes, since each Starpoint is worth 1.25 Starpoints: in other words, you're buying Starpoints at 1.776 cents each, not 2.22 cents each (the proof of this is left to the reader). In that case, low-season Category 5-7 Cash & Points awards are no longer strictly superior to points-only award stays.

Starpoints are the only way to earn bonused Alaska and American miles

Delta SkyMiles and United MileagePlus miles are trivially easy to earn. You can earn SkyMiles with any flexible Membership Rewards-earning credit card, like the aforementioned Amex EveryDay Preferred, or 1.4 and 1.5 SkyMiles per dollar spent on the American Express Delta Platinum and Reserve co-branded cards, respectively. You can earn MileagePlus miles (and lots of them!) with a Chase Ink Plus card and any number of Chase Freedom cards.

But the Bank of America Alaska Airlines co-branded credit card earns just one Mileage Plan mile per dollar spent, as do the Barclaycard and Citi American AAdvantage co-branded cards.

The only way to earn more than one Mileage Plan or AAdvantage mile per dollar spent, let alone both, is with the Starwood Preferred Guest American Express card, since Starpoints can be transferred to both Alaska Airlines and American at a 20,000:25,000 ratio, year-round.

While I wouldn't buy all my Mileage Plan miles or all my AAdvantage miles at 1.776 cents each, I'd conceivably buy some miles at 1.776 cents, for example to top up a high-value international business class award.

Conclusion

So that's where I am in thinking about my next American Express application.

There really are times when Starwood Preferred Guest properties offer the best possible value: I booked a stay at the Sheraton Memphis Downtown Hotel during a national fencing tournament for just 7,000 Starpoints per night, when the entire area around the convention center was sold out. That was a steal.

On the other hand, I get a tremendous amount of value from my Delta SkyMiles, and would certainly be able to get a lot of ongoing value from a card that earned 3 SkyMiles per dollar spent at gas stations.

What do my readers think? What considerations have I overlooked?

Paying credit card bills with money orders

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Today's post is about an issue that I've found causes the occasional misunderstanding in the travel hacking community.

Some banks are (rightly) suspicious of large money order deposits

If you've ever searched Craigslist for a job, you've no doubt come across exciting opportunities in the field of check-kiting. How this scam typically works is that you'll receive a bundle of money orders, which you are instructed to take to your own bank to deposit.

Banks are required to make the funds available within a certain number of days, whether or not the funds have in fact been made available by the bank against which the check is drawn. Once the funds become available to you within the statutory period, you're instructed to wire the funds back to your "employer," deducting a certain percentage to cover your own time and expenses, of course.

When your bank discovers the money orders are fraudulent, they deduct the entire sum from your checking account and hold you responsible for the money.

Besides being aware and wary of the above scam, banks may also be suspicious of customers who conduct large transactions in cash-equivalents like money orders. The larger the bank, the more likely they are to be unwilling to humor customers who insist on depositing vast sums of untraceable funds. That's one reason why one of the most valuable resources any travel hacker can draw on is an accommodating local bank or credit union.

Paying credit cards with money orders is no big deal

I've recited the above well-known facts because, not unreasonably, many people seem to think that the implication is that money orders are inherently suspicious. Nothing could be farther from the truth.

If you have local branches of the banks that issue your credit cards, they will be happy to accept money orders as payments against your credit cards. For example, I have local branches of both Chase and US Bank:

  • In the case of US Bank, I simply hand my credit card and money orders made out to "US Bank" to the teller and ask to make a payment.
  • In the case of Chase, I make the money orders out to "Chase Card Services" (the payee on my Chase credit card bills) and fill out the light blue "payment" slip found at the customer island.

While I've read (occasional, rare) reports of Chase and US Bank checking accounts being closed for making a single large money order deposit, I make tens of thousands of dollars in payments against my credit cards every single month, all of which my clerks are invariably happy to process.

Distinguishing between deposits and payments

The essential thing to remember here is how the bank treats the two kinds of transactions:

  • Deposits into a checking account, made available within the statutory period, can be withdrawn as cash. If money orders turn out to be fraudulent, the bank is responsible for getting the money back from you — money you may no longer have access to.
  • Payments against a credit account, on the other hand, merely reduce the outstanding balance owed. If your money orders turn out the fraudulent, the bank will versus the payment and charge a returned payment fee.

This different is key to understanding why, in general, payments against credit accounts pose a much lower risk to the banks than deposits into demand deposit accounts.

Warnings, cautions, etc., etc.

I make money order payments against my credit card accounts constantly, and my local bank branches are always happy to process them.

But as I'm fond of saying, I'm not a banker, and I'm especially not your banker. If banks in your area have been recently hit by fraudsters, they may be more cautious than necessary about money orders, regardless of the actual risk they incur by processing them.

So start slow, get to know your tellers, make sure they know what they're doing, and build relationships. Then stop worrying, and make any credit card payments you please using money orders.

Use Amazon Allowance to meet monthly transaction requirements

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[edit June 28, 2015: this post originally said Bank of America BBR cards pay $20 and $25 per quarter; in fact they pay $25 and $30 for non-BoA and BoA customers, respectively, as correctly indicated on the second mention. We regret the error.] 

Via Doctor of Credit, earlier this month Amazon introduced a service called "Amazon Allowance." With Amazon Allowance, you can configure recurring purchases of Amazon gift credit in denominations as low as $0.50, which are automatically deposited into the gift card balance of the recipient.

And yes, you can set yourself up as both the sender and recipient of an Amazon Allowance.

4 ways to use Amazon Allowance

Amazon Allowance simplifies and automates an aggravating problem: how to meet monthly transaction requirements while using the least possible cognitive bandwidth. Here are four use cases for Amazon Allowance:

  • American Express Amex EveryDay and EveryDay Preferred. These two cards give a 20% and 50% bonus on all points earned each statement cycle you make 20 or 30 purchases, respectively. By setting up 15-25 recurring monthly Amazon Allowance transactions, you can automate those monthly transaction requirements and get back to manufacturing spend.
  • Bank of America BankAmericard Better Balance Rewards. This card gives a $25 ($30 for Bank of America deposit account customers) quarterly cash reward for customers who both make a purchase that posts to each statement during the quarter and who make at least the minimum payment on each statement during the quarter. By automating a $5 monthly Amazon Allowance and payment of your balance each month, you can earn $120 each year without a second thought.
  • Waiving monthly fees and triggering high interest rates. I recently opened a Wells Fargo checking account that carries a stiff $10 monthly fee each month I don't make at least 10 purchases with the linked debit card. By setting up ten $0.50 Amazon Allowance transactions, I'll never have to worry about that monthly fee being charged. Likewise, the high-interest checking account offered by Consumers Credit Union requires 12 debit and 12 credit card transactions each month to earn 4.09% APY on up to $20,000 [edit: see the comments for an additional, excellent idea].
  • Microhacking! The only purchases I ever make with my Barclaycard AAdvantage Aviator Red card are $0.99 Amazon gift card purchases each month, which are then forgiven each time a statement cuts. I used to make those purchases manually; now it's automated.

Thoughts towards best practices for Amazon Allowance

While it certainly seems possible to simply create all your allowances for the same date, three risks to doing so suggest themselves.

  • First, Amazon may have issues processing 50 small transactions on the same date.
  • Second, your credit cards and banks may have questions about a flood of identical transactions on the same date.
  • Finally, if any issues do arise, you may have trouble telling which same-day Amazon Allowance payments were processed and which were cancelled or otherwise affected.

That's why for now, I have each of my Amazon Allowance transactions set up to execute on different (sequential) dates each month.

Annual Twitter recommendations

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At a reader's request, last year I wrote up a list of Twitter feeds that I follow, and consider essential to keeping my miles and points game in top form. Since the game is always changing, I thought I would turn it into an annual tradition.

When I wrote this post last year, I included a few of the biggest affiliate bloggers, simply as a way to keep your finger on the pulse of the mainstream. In the intervening year, those blogs have degenerated further into corporate advertising engines, and I can no longer recommend following them even purely for informational purposes. It's reached the point where I think they'd receive a stern warning if they ever did write something worth reading.

What do you think: are there any other essential Twitter feeds that belong in this list?

Do this now: activate third-quarter bonus categories

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Is everybody else as excited as I am about the beginning of the third quarter, just a few short days away? Here are the cash back bonus categories and activation links for the quarter beginning July 1 and ending September 30, 2015.

  • Chase Freedom. 5 non-flexible Ultimate Rewards point per dollar spent at gas stations. If you have gas stations that sell PIN-enabled prepaid debit cards or PayPal My Cash cards, this one takes care of itself. Otherwise, you can either buy actual gasoline, or see what other gift cards your local gas stations carry. Make sure you activate your third-quarter bonus earning for each Chase Freedom card you hold.
  • Discover it. 5% cash back at "Home Improvement Stores, Department Stores, and Amazon.com," doubled to 10% if you call to enroll in the current double cash promotion. Ordinarily I load my Bluebird card with $200 Visa prepaid debit cards purchased at Staples with Ink Plus; in July, I'll instead load Bluebird with $1,500 in prepaid debit cards purchased at Home Depot or Sears.
  • Citi Dividend Platinum Select. Earn 5% cash back on airline purchases and at any hotel in the Hilton portfolio. I won't personally be taking advantage of this offer.
  • US Bank Cash+. Select one of gas stations, grocery stores, or restaurants where you'll earn unlimited 2% cash back, and two additional categories where you'll earn 5% cash back on up to $2,000 in spend during the quarter. Charity remains a 5% cash back category, so if you have recently taken out a large negative-interest-rate loan, low-risk, short-duration Kiva loans continue to be an option. Cash+ registration takes a few days to become effective, so don't delay.

One weird old trick to get American Express business gift card orders approved

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Until today, I had never had an American Express business gift card order approved. In the good old days, this wasn't a big deal: business and consumer gift cards both typically paid out at the same high rates, and I didn't (and still don't) have enough credit lines worth manufacturing spend on outside of bonus categories to justify buying more than $20,000 in American Express gift cards per month (the limit on consumer gift card orders).

Since cash back payouts on American Express gift cards dropped from the 4% that used to be typical to the roughly 1.5% they seem stuck at these days, my inability to get business gift card orders approved started to rankle, since payouts on business, but not consumer, gift cards would occasionally be increased 50% to 2.25%, where they sit today on TopCashBack. But even though I have an IRS-issued EIN, and an American Express small business credit card issued under it, my streak of failures continued unbroken.

Declined gift card orders wouldn't have bothered me so much, except that each failed order would tie up valuable credit lines for 7-10 days, effectively shutting down my manufactured spend on some of my most lucrative credit cards for weeks at a time.

Use your last name and Social Security number to get business gift card orders approved

A few weeks back I read in the comments on Frequent Miler's blog that he had success being approved for business gift cards using his last name and Social Security number, rather than the name of his business and EIN.

With payouts on business gift cards up to 2.25% again today, and having just freed up a fair-sized chunk of credit on my Barclaycard Arrival+ MasterCard, I decided I had nothing to lose, and placed an order for two $2000 business gift cards, using my last name and Social Security number. Then I went about my day.

Less than 3 hours later, American Express notified me that my order had been approved — my very first business gift card approval ever.

Why I won't chase Hyatt Diamond status

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[Update 6/22/15 8:17 pm: This post originally said the Hyatt Diamond status challenge requires 12 qualifying stays. It requires 12 qualifying nights.]

The travel hacking blogosphere seems to be in a tizzy lately over the return earlier this month of the Hyatt Diamond status challenge. The challenge awards Diamond elite status after 12 qualifying (i.e. not award) nights within 60 days, and the status is good through February of 2017 — a pretty long time!

People who like Hyatt Diamond status seem to value it most for the 4 confirmed suite upgrades and lounge access (or full breakfast at properties without a lounge).

Let me start by saying that no one doubts that it's possible to design a vacation schedule for the next 20 months that maximizes the value of those benefits and makes it well worth arranging to credit 12 paid stays to Hyatt in 60 days in order to earn them.

But personally, I won't be participating. Here's why.

Hyatt is a terrific transfer partner of Chase Ultimate Rewards

Hyatt is almost the only Ultimate Rewards transfer partner I take advantage of, since I don't fly United or Southwest. I transfer points to Amtrak once or twice a year for long-haul sleeper-car redemptions, but that's a rounding error with respect to my earning rate. On the other hand, where Hyatt properties are available, they frequently have extremely affordable points redemptions, like the Hyatt Place New York/Midtown-South, which costs 20,000 Hyatt Gold Passport points per night.

Since Hilton properties in New York start at 60,000 HHonors points (a $222 imputed redemption value) and Club Carlson's Radisson Martinique on Broadway costs 70,000 Gold Points (a $310 imputed redemption value), paying $200 in Ultimate Rewards points offers a relatively good value.

Hyatt has a small footprint — but that's not the problem

It's frequently noted that Hyatt has vastly fewer properties than Hilton or Marriott: just 587 hotels. But I don't actually treat this as much of a drawback. Since I only transfer points to Hyatt when I plan on making a reservation, it's not like I have an ever-growing supply of Hyatt Gold Passport points that I can never redeem. When there's a Hyatt property that's a good value, I stay there, and when there isn't, I stay at a Hilton HHonors (or, until recently, Club Carlson) property instead.

Furthermore, as I pointed out above, you can just plan a vacation around one or more Hyatt stays! Sure, people will look at you strangely when you explain that you're visiting Ekaterinburg in order to stay at the Hyatt Regency, but if we cared what people thought of our hobby we wouldn't talk about it all the time.

The problem is that Hyatt's footprint is a subset of Hilton's

Some light Googling allowed me to compile a list of some of the Hyatt properties travel hackers (and affiliate bloggers promoting the overrated Chase Hyatt Visa card) believe are the best Hyatt properties in the world. My value-added here is adding the closest equivalent Hilton property and points required:

  • Park Hyatt Beaver Creek (no close equivalent);
  • Park Hyatt New York (New York Hilton Midtown, 60,000-80,000);
  • Park Hyatt Sydney (Hilton Sydney Hotel, 60,000-70,000);
  • Park Hyatt Tokyo (Hilton Tokyo, 50,000-60,000);
  • Park Hyatt Maldives Hadahaa (Conrad Maldives Rangali Island, 95,000);
  • Park Hyatt Paris (Concorde Opéra Paris, 80,000)
  • Park Hyatt Milan (Hilton Milan Hotel, 50,000-70,000)
  • Park Hyatt Zurich (no close equivalent)
  • Grand Hyatt Kauai Resort and Spa (no close equivalent)
  • Hyatt Regency Hakone Resort and Spa (Hilton Odawara Resort & Spa, 70,000-95,000)
  • Ararat Park Hyatt Moscow (Hilton Moscow Leningradskaya, 40,000-60,000)

As you can see, with a few exceptions luxury hotels get built because there's a demand for them. And if there's enough demand for a luxury Hyatt property, there's likely to be sufficient demand to justify building a nearby Hilton hotel, as well.

Earning Hilton HHonors points (and Diamond status) is easy and fun

The point of this exercise is that unless you are planning a trip to Beaver Creek, Zurich, or Kauai — and tens of thousands of people do indeed visit those cities each year — the Hyatt property is not your only option: there's also a convenient nearby Hilton that will be happy to serve your award redemption needs.

But unlike Hyatt Diamond status, which requires paying at least some surcharge on top of the stays you'd otherwise book, Hilton Diamond status can be earned strictly as a by-product of manufacturing $40,000 in spend on their co-branded Surpass card offered by American Express, and I find it worth my while to manufacture that much (and indeed, more) spend with the Surpass card each year purely for the value of the HHonors points I earn. Diamond status is a nice bonus, but doesn't have any effect on my decision-making.

How to think about directing paid stays to Hyatt

I don't draw a neat distinction between paid and award stays; my imputed redemption value calculations are designed to make booking stays a seamless process of comparing hotel options, whether a given stay is paid for with cash or with points earned at the sacrifice of cash back.

In other words, if you have a Barclaycard Arrival+ MasterCard, every stay is an award stay: the only question is whether to pay for it with a hotel chain's own currency or Arrival+ miles.

This means that when you book a paid stay in order to secure Hyatt Diamond status under the challenge, you don't need to consider the entire cost of your paid stay as "payment" for Diamond status. The only payment you're making for (one twelfth of) Diamond status is the difference between the price you pay to stay with Hyatt and the price of the hotel you would have stayed at instead – the "surcharge" I mentioned above.

Who should take the Hyatt Diamond challenge?

So that's where I stand: I earn enough Hilton HHonors points to cover my mid-range and luxury hotel needs, and redeem my Ultimate Rewards points only for the Hyatt stays they make incredibly cheap, where breakfast is often included anyway.

But you're not me! So here's who should at least consider taking the Hyatt Diamond challenge:

  • You have 12 paid Hyatt stays in the next 60 days. This may go without saying, but that's what I'm here for.
  • You're planning a luxury vacation. At the very top end, Hyatt award stays are actually cheaper than the imputed redemption value of Hilton stays: $300 in Ultimate Rewards points versus $352 in Hilton HHonors points. If you're deciding between such properties (for example, in the Maldives or in Hakone, above) Hyatt Diamond status can add additional value by giving up to 4 people per room the benefit of lounge access or a full breakfast.
  • You really need a suite. If there's some reason you actually need a suite upgrade on a paid stay, and especially if you actually need 4, week-long suite upgrades, then paying a small upfront surcharge for Hyatt Diamond status can get you those suites at a vast discount. I've enjoyed every suite I've been upgraded to, but personally wouldn't assign any actual value to it. If you're traveling with a family, or need to host meetings in your hotel room, then you may assign a concrete dollar value to having a guaranteed-at-booking suite upgrade.

I want to stress that the second two categories are, while not mutually exclusive, also not complementary in any way: the suite upgrades in the third category cannot be applied to the award bookings in the second category, and at such expensive properties the idea of booking a paid, instead of award, stay merely to secure a suite upgrade is not rational behavior.

I don't fall into any of the above categories. But if one or more of them applies to you, you have my blessing to consider taking advantage of the Hyatt Diamond status challenge!

Galveston, TX, is a weird place to take a vacation

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Last weekend my partner and I took a 3-night vacation to Galveston, Texas, to visit some friends of hers who decided, for reasons I cannot begin to fathom, to spend a week in Galveston.

We had fun, but I'll readily confess it was in spite of Galveston, rather than because of it. Here are some of the highlights.

Transportation to and from Galveston is an expensive disaster

Let me start by saying that if the Galveston Express shuttle has service that's convenient for you, it's an absolute no-brainer to take it in either or both directions. It costs $20 per person for transportation to or from Galveston and Houston's Hobby airport ($35 roundtrip) and $25 per person to or from George Bush Intercontinental ($45 roundtrip).

Unfortunately, the Galveston Express is designed to serve the cruise industry which operates a massive port in Galveston, so it only runs on days the ships are loading and unloading passengers. If you're not, in fact, arriving or departing Galveston on a cruise ship, it's just luck of the draw whether the shuttle will be operating. Check in advance using their straightforward online booking engine.

With that said, if you're traveling with several people, Uber is a fantastic choice for getting to Galveston. We paid $36.48 to get from George Bush Intercontinental to downtown Houston to meet up with my partner's friends, then $66.05 to get all the way to Galveston, with a stop for gas along the way. In other words, if we'd all arrived in Houston at the same time we could have ridden all the way to Galveston for well under $25 per person (and you can buy Uber credit in redeemable chunks).

Getting back from Galveston isn't so simple. Uber isn't allowed to depart from Galveston, and taxi rides to the Houston airports will cost multiple hundreds of dollars. If you can't take the Galveston Express shuttle, the next best option is Amtrak thruway bus cabotage, using Henry's trick in the comments to pay as little as $25 per person. But that only works if you're departing on a day the Amtrak thruway bus operates.

Finally, all the Galveston beach hotels offer airport shuttle services, at a range of prices. The Country Inn & Suites shuttle was the cheapest we found, at $135 for two people. Since we were staying there anyway, that's the route we ultimately took.

An honorary mention goes to simply renting a car. The only "sights" worth seeing in Galveston are quite far from the beach hotels, so if you're not a big walker you may find it convenient to have a vehicle, plus you can stash gear there while you're on the beach, an extremely popular choice among locals and visitors alike.

Drinking in Galveston is fun and legal

Since we were hanging out with Russians, it was imperative to find out when and where they could drink as quickly as possible. Turns out, the answer is Galveston is "virtually everywhere."

The Texas Alcoholic Beverage Commission hosts a delightful webpage regarding the public consumption of alcohol. I'm not a lawyer (and I'm definitely not your lawyer), but as far as I can tell it's legal to drink everywhere in Galveston, including on the public beaches, with the exception of Galveston Island State Park.

The Galveston boardwalk is a commercial dead zone

Between the Country Inn & Suites where we stayed and the Red Roof Inn where our friends stayed are 2.3 miles of beach, and virtually nothing else.

The one exception is a Kroger store across the street from the Red Roof Inn; we did a lot of shopping there over the course of our trip.

At the Country Inn & Suites front desk there's an adorable cartoon map showing all the businesses along the beachfront. But as I joked, and the front desk employee agreed, in between all the adorable, oversized cartoon bubbles is, in reality, miles of empty, sun-baked sidewalk.

"Downtown Galveston" shows some promise

On our second day, we decided to strike out towards "downtown Galveston." This is an area that's difficult to describe because it's identical in every way to every other part of Galveston we explored. But it showed some signs of life.

Geographically, it's something like the area North of Avenue J and East of 25th Street. We ended up having lunch at a cafe called Board Game Island, which was absolutely delightful. The new owner explained that their pizza was so good Trip Advisor sent them a sticker to put in the window. It was certainly the best meal we had in Galveston.

But downtown Galveston is a long way from the beach.

What Galveston needs is a lot of ambitious Yankees

I don't believe I've ever visited a place with so many obvious commercial opportunities that are, by law or custom, not being taken advantage of. And the reason for that, I presume, is that I haven't spent much time in the South.

There's nothing to eat in Galveston. There's nothing to do in Galveston. The people of Galveston are clearly desperate for opportunities. This is a situation that in a multiplicity of northern cities has resulted in food trucks, bowling alleys, farmer's markets, yoga studios, bike taxis, etc.

But in Galveston, there's nothing. Nothing but poverty and beaches. This is a solvable problem. But it's not being solved by the current residents of Galveston. So if you're an ambitious Yankee with a love of the ocean and a high tolerance for Southern bureaucracy, Galveston is as good a place as any to make your first fortune.