Read the comments!

I've mentioned before that I rarely read other blogs anymore. Of course the affiliate bloggers just repeat the same bought-and-paid-for content over and over, but even the good guys only occasionally post something that piques my interest. There are a few reasons for that:

• deals come in waves, and the current wave involving buying and reselling discounted gift cards while earning bonus Ebay credit doesn't have any interest for me;
• even many non-affiliate bloggers focus on earning huge airline mile balances for premium cabin international travel. I only take one or two international trips per year, so those aren't awards I chase as diligently as other bloggers do;
• I'm already earning the miles and points I need for the trips I want to take, so big signup bonuses or earning rates in unrelated programs don't interest me much.

There are exceptions: I'll certainly hop on the Discover/Apple Pay 10%/20% cash back deal, for example.

The experiment

Having said that, I know that a lot of the best information on my blog is found in the comments that readers leave about their own experiences testing out the ideas I write about and sharing their own tips and tricks. That being the case, I decided to run a fun experiment: I'd take a popular blog with a focus on manufactured spending, and go back and read every single comment in a range of recent posts (excluding weekend reviews, roundups, and summaries).

I was hopeful that there would be gems even more valuable than those found in the posts themselves. Here's what I found.

Hack Uber surge pricing

In order to avoid Uber surge pricing, reader Mike commented:

"You could also be dishonest and drop your pin somewhere outside the surge zone, then call the driver and tell them where you actually are. I’ve never done this before but it works if he driver agrees."

Open American Express Offer-eligible subaccounts

Since Serve and Bluebird (but not Prepaid REDcard) accounts are eligible for Amex Sync offers, you might want to create multiple subaccounts, each of which can be synced with a separate Twitter account. Frequent Miler responds to a reader by saying:

"You can use your own name if you want to. You might want to change something each time to be able to tell them apart."

Use American Express offers to buy cheap Southwest and Delta miles

Over the holidays last year 1800Flowers offered 30 Southwest or Delta points per dollar. Frequent Miler reminded a reader how to use these offers to buy Southwest and Delta miles for 1.33 cents each.

Amtrak's new program won't allow "saver" redemptions

In the comments to his review of the new Bank of America Amtrak co-branded credit card, Frequent Miler points to this FlyerTalk post where an Amtrak representative says "saver" fares won't be eligible for redemption under the new Amtrak Guest Rewards program.

Acme Markets accepts Apple Pay

If you live in New Jersey, you might be excited to know that Acme Markets, "a supermarket chain in the Delaware valley," sells $500 Visa gift cards and accepts Apple Pay, according to commenter DavidNJ.

Conclusion

Keep in mind that these are just the five comments that jumped out at me from the first three pages of Frequent Miler's blog archives. But there are many, many pages of blog archives, and there's also a search function!

So if there's a particular technique you're interested in datapoints about, you should search for posts about it, and read every comment.

There's no telling what you'll find!

Topping up accounts, or, throwing good points after bad

Marriott Rewards is the worst hotel loyalty program: it has all the low earning rates and high property costs of IHG Rewards, with none of the potential upside offered by IHG's PointsBreak list and occasional lucrative promotions.

Nonetheless, I have a small balance of Marriott Rewards points that I'd love to redeem if an opportunity ever presented itself. The problem is that the kind of downtown Marriott properties I wouldn't mind staying at are so expensive that I only have enough points for a single night. In that way, my balance is like a free night certificate: great if you only want to stay one night, but worthless if you're trying to plan an actual vacation.

When topping up an account can make sense

Of course, Marriott Rewards is a transfer partner of Chase Ultimate Rewards, which means I can top up my account at any time and suddenly have enough Marriott Rewards points for a longer stay.

Under most circumstances that would be crazy: Ultimate Rewards points are worth 1 cent each when redeemed for cash, which is virtually never true of Marriott Rewards point redemptions.

Here's where the worthlessness of unredeemed points is such a useful framework. Since I have no plan to redeem my existing Marriott Rewards points, they're worth nothing to me as long as they're just sitting in my account.

That means that even if it doesn't make any sense to transfer all 35,000 Ultimate Rewards points required to stay at a Category 7 Marriott like the Courtyard Portland City Center, it can make sense to transfer 5,000 points to top up your account from 30,000 to 35,000:

View fullsize

For an upcoming trip to Portland, I have 2 nights booked at the Hilton Portland & Executive Tower for 80,000 HHonors points, with an imputed redemption value of approximately $280 ($13,333 in bonused spend with an American Express Surpass co-branded card). Since I have a Marriott Rewards balance of just over 58,000 points, I'd have to transfer 12,000 Ultimate Rewards point to replace those two nights with two nights at the Courtyard Portland City Center.

Since my current, unredeemed 58,000 Marriott Rewards balance is worthless, that means I have the opportunity to pay $120 and recoup at least $280 in value from HHonors points. That's a no-brainer.

Conclusion

Remember, besides saving money, redeeming your existing points balances whenever possible has a unique upside: it gives you an instant snapshot of what your points are actually worth, which lets you decide critically whether to continue earning them, or to shift your earning to other, more valuable loyalty currencies.

Are office supply store Visa gift cards cheap or expensive?

This post was inspired by a comment left by reader net netty to my post on dealing with the new Visa gift cards being sold at Staples. S/he wrote:

"And I agree that everyone might have their own priorities but you are doing it wrong and giving bad advice if you are paying 6.95 per 1,000 UR pts."

This reminded me that it might be useful to write about how I decide between various methods of manufacturing spend: which techniques to use; which cards to use them with; and which to set aside for later.

Liquidation bandwidth is usually more limiting than purchase bandwidth

The simplest way to think about developing a manufactured spend strategy is by allocating your liquidation bandwidth across your current (and potential future) credit cards.

That usually means assigning bandwidth to your bonus-earning cards first; if the same $500 in spend will earn 500 Marriott Rewards with one card or 1,000 Ultimate Rewards points with another, the bonus-earning card is strictly superior, not least because Marriott Rewards is an Ultimate Rewards transfer partner.

A slightly different situation arises when trying to compare two different techniques with different price points and earning rates.

For example, Chase Ink cards earn 2 Ultimate Rewards points per dollar spent at gas stations, and 5 Ultimate Rewards points per dollar spent at office supply stores. The higher earn rate, however, comes at a higher cost: $6.95 per office supply store 1,000 Ultimate Rewards points, versus $4.95 or less per 1,000 gas station Ultimate Rewards points.

That means on a cost-per-point basis, gas station manufactured spend is the cheaper, and therefore "better," technique.

And indeed, in a world with unconstrained liquidation bandwidth, that would be the end of the analysis.

But in the real world of liquidation constraints, the analysis is turned upside down! The same 1,000 Ultimate Rewards points earned at office supply stores use up just $200 in liquidation bandwidth, compared to the $500 used up by gas station gift cards.

A travel hacker with access to only these two techniques and $5,000 in monthly liquidation bandwidth could earn 15,000 more Ultimate Rewards points monthly by choosing office supply stores over gas stations. Even if you value Ultimate Rewards points at just 1 cent each, office supply stores produce a small profit of $25.75 over gas stations.

That's because $1,000 in liquidation bandwidth costs $34.75 in office supply store activation fees and earns 5,000 Ultimate Rewards points ($15.25 in profit). Gas station fees for $1,000 in liquidation bandwidth are just $9.90, but that spend earns just 2,000 Ultimate Rewards points — and just $11.10 in profit.

Of course there are other liquidation constraints: office supply stores may sell cards that are easier to liquidate at Walmart, while gas stations may sell harder-to-liquidate Vanilla-branded gift cards.

On the flip side, for many people time is the most important liquidation constraint, and 25 $200 cards are without question more time-consuming to liquidate than 10, $500 cards.

Conclusion

Hopefully this post illustrates the importance of taking a liquidation-first approach as you develop your own manufactured spend strategy: allocate your liquidation bandwidth across all your credit cards and manufactured spend techniques, starting with the cards which maximize the value of each liquidated dollar. Usually, that means using your highest bonus spend categories first, and only then working your way down to unbonused (but hopefully still-valuable!) credit card spend.

Is the 100k British Airways Avios offer the worst major signup bonus?

[Editor's note: I'm currently traveling so responses to comments and e-mails may be slightly slower than usual. —FQF]

Regular readers know I don't chase signup bonuses any more, for two simple reasons:

• if I need some particular loyalty currency for my strategy, then I can't wait until an elevated signup bonus comes along to start earning it;
• and if I don't need that loyalty currency for my strategy, then I don't need a lot of points any more than I need a few of them!

Think of signup bonuses as temporary bonus earning rates

The appeal of large signup bonuses to travel hackers is that they offer much larger earning rates than even the bonused earning rates of cards you'd otherwise use to manufacture spend.

For example, signing up for a Chase Sapphire Preferred card with a 40,000 Ultimate Rewards point signup bonus after spending $4,000 in the first three months produces a net earning rate of 11 Ultimate Rewards points per dollar spent for the first $4,000.

Since the next-highest earning rate is 5 Ultimate Rewards points per dollar spent at office supply stores with the Chase Ink cards, if you value Ultimate Rewards points highly enough you might rationalize applying for the Chase Sapphire Preferred card (but please product change to Freedom as soon as possible!).

Comparing bonus earning rates

Before we can say whether a particular signup bonus is good or bad, we have to establish a frame of reference. So here are 11 popular signup bonuses and their associated earning rates (data from Frequent Miler's Best Offers page). These aren't the absolute best offers out there, just what I hope is a representative sample; in other words, the cards I'd apply for if I were building a strategy from scratch.

View fullsize

The mean signup bonus from these cards is an earning rate of 21 miles or points per dollar spent meeting the minimum spending requirement.

The British Airways bonus is tiered — but only the first tier makes any sense

The 100,000 Avios signup bonus for the Chase British Airways Visa is earned in three stages:

• 50,000 Avios after spending $2,000 within 3 months;
• 25,000 additional Avios after spending a total of $10,000 within 12 months;
• 25,000 additional Avios after spending a total of $20,000 within 12 months.

Since the card earns 1 Avios on every dollar spent, that means this card has three bonus earning rates:

• 26 Avios per dollar on the first $2,000;
• 4.13 Avios per dollar on the next $8,000;
• 3.5 Avios per dollar on the next $10,000.

In other words, the signup bonus is slightly above average for the first $2,000 you spend (although there's an identical offer with the annual fee waived the first year), but radically below average for the next $18,000 in spend.

Even if you relentlessly chase signup bonuses, you should use the $18,000 in spend this bonus requires meeting the minimum spending requirement for the signup bonuses of other, better cards.

The second and third bonus tiers are better than manufactured spend for earning Avios and only Avios

Spending $18,000 on the Chase British Airways Visa, above and beyond the $2,000 bonus tier, will earn a total of 68,000 British Airways Avios.

Spending $18,000 on the Chase Ink Plus at office supply stores will earn 90,000 Ultimate Rewards points, which can be transferred to Avios at a 1-to-1 ratio.

That leaves you with a 22,000 Ultimate Rewards point surplus. If your cheapest method of manufacturing non-bonused spend costs $7.90 per $1,000 in spend, and office supply store manufactured spend costs $34.75 per $1,000 in spend, you'll spend $483.30 manufacturing spend at office supply stores instead of putting your cheapest manufactured spend on the British Airways Visa.

Since 22,000 Ultimate Rewards points are worth $220 when redeemed for cash, you'll end up with a $263.30 surplus using the British Airways Visa instead.

Is that worth doing? You already know my answer: it's worth doing if you have a specific, high-value use in mind for those Avios.

Conclusion

Avios are a valuable, but not versatile, rewards currency. If you can find domestic low-level American or Alaska award space, Avios will almost always be the best way to book it.

Many bloggers will tell you that Avios are best for nonstop flights, and they're right: they're best for nonstop flights, but you'll often end up paying the same or fewer Avios even on itineraries with connections.

Likewise, if you can fly on Iberia metal to Spain and then connect to your final destination (or just visit Spain!), Avios provide a cheap way to get across the pond.

But since Avios are only rarely the best way to book long-haul awards, unless you have a plan for such a large balance, you're better off not earning them.

Quick hit: new Bluebird/Serve/Redbird scheduled adds

[Editor's note: I'm currently traveling so responses to comments and e-mails may be slightly slower than usual. —FQF]

When writing about simplifying and automating debit card transactions back in July, I wrote:

"Unfortunately, as with Evolve Money, I am no longer able to create new so-called 'scheduled add' transactions. What I am able to do is edit existing scheduled add transactions and change the funding source to a new credit or debit card."

Turns out there's an easy workaround that allows users to create new scheduled adds.

Once you're logged into your Serve, Bluebird, or Prepaid REDcard account, simply navigate to:

• https://secure.bluebird.com/Manage/ScheduleAutoAdd/ for Bluebird scheduled adds;
• https://secure.serve.com/Manage/ScheduleAutoAdd/ for Serve scheduled adds;
• https://secure.prepaidredcard.com/Manage/ScheduleAutoAdd/ for Prepaid REDcard scheduled adds.

Using this technique, you can create as many scheduled adds as you like, either in order to meet monthly debit transaction requirements or, in the case of Serve, simply to schedule the manufacture of $1,000 per month in third-party (not American Express-issued) American Express credit card spend.

Timeshares?

Everything I need to know about timeshares I learned from The Queen of Versailles. Still, it's the kind of product — complex, opaque, little-understood — that should be worth at least a passing glance from a travel hacker. Not least because it's travel-related!

Unfortunately, after spending a day researching this post, there's a simple answer: the numbers behind timeshares just don't work out.

Having said that, I already wrote the post, so keep reading if you're interested.

Never buy a timeshare from the developer

I know this goes without saying, but when you buy a timeshare from its developer, in addition to whatever value the timeshare itself has, you're also paying the salary of the salesman and overhead for the sales office. Don't do that.

When buying a timeshare, pay attention to the sales price, maintenance fee, and transfer fees

The Timeshare Users Group is one secondary timeshare marketplace where you can search and filter timeshares currently being offered by their owners, sometimes at a substantial discount, for example, free:

View fullsize

The sale price, however, is only the amount that is paid to the current titleholder. In addition, the developer collects an annual maintenance fee. You can also sort TUG by the amount of those maintenance fees, which can start quite low:

View fullsize

And end up astronomical:

View fullsize

The timeshare developer will typically charge a range of transfer fees as well, which may be paid by the seller, the buyer, or split between them depending on the agreement they come to.

So, what are these points?

If there were a deal in timeshares, this is where it would be: many timeshare developers are subsidiaries of the major hotel chains, and allow you to convert, each year, your physical timeshare (i.e. a week in Florida at a specific property) into that chain's loyalty currency at a fixed rate.

Unfortunately, those transfers are usually restricted by the kind of timeshare you bought and the channel you bought it in. For example, Marriott only allows transfers from their Marriott Vacation Club points to Marriott Rewards points for people who bought their timeshares through official Marriott channels. Everyone else is stuck with their Marriott Vacation Club points.

Hilton Grand Vacations Club is the only timeshare program I looked into which appears to allow more or less unlimited transfers of their HGVC points into Hilton HHonors points. They allow you to convert 1 of their points into 25 Hilton HHonors points. At a 0.35 cent imputed redemption value, that makes 1 HGVC point worth 8.75 cents.

If that's what these timeshare points are worth, the next question is what they cost. To run this test I had to devise a kludge. Since maintenance fees are higher at properties which give more annual points, and lower at properties that give fewer annual points, what we're interested in in the cost per point. But TUG doesn't let you sort by that value, so instead I calculated the cost per point for the 5 lowest and 5 highest maintenance fee properties currently for sale on TUG.

Here are those values for Hilton Grand Vacation Club:

View fullsize

In the very best case scenario, you can pay $80,000 upfront for the right to buy 600,000 HHonors points annually at 0.43 cents each. If, like one of my regular commenters, you're able to consistently get 1 cent per HHonors point in value on redemptions, you'd be earning a roughly 4.3% return on your $80,000 investment.

The much cheaper $23,500 property would give a 7.5% annual return, by the same measure.

Conclusion

This was a fun post to write, if for no other reason than to satisfy my curiosity: are timeshares ever a good deal? The short answer is that they are not, at least not as arbitrage opportunities.

If, on the other hand, some timeshare developer buys up a piece of land you're in love with, and the only way to visit your favorite beach or ski resort is to buy a weeklong timeshare, then don't let me stop you.

But please, buy it on the secondary market. Those salesmen are just terrible; let's starve 'em out.

Fun with award mapper and Hotel Hustle

There are two free, online tools designed to help make it easier to find the best values when searching for paid or award stays at chain hotels: award mapper and Seth Miller's Hotel Hustle. I use them both all the time, and want to share my thoughts on the strengths and weaknesses of each tool.

Award mapper cleanly shows all a city's loyalty program properties

There are two things I love about award mapper and one thing I hate about it.

First, what I love: the selection of hotel chains and range of points is persistent across searches, and it shows all the corresponding properties within your search area. That lets me select all the chains whose points I'm considering using, then plan a whole trip by simply changing the city being searched.

This is fantastic when you're planning something like our winter jaunt to Italy. I know which chains I have points in, so all I need to do is change the city being searched to see which cities have properties that are conveniently located and within my points budget.

What I hate about it is that it simply wasn't designed to show the actual points cost on a given night, so you end up with absurd results like this for the Hilton Prague:

View fullsize

All award mapper knows is that the Hilton Prague is in the Hilton category that ranges from 30,000 to 50,000 HHonors points per night; it's not interested in telling you the price you'll pay. To find that out, you'll have to use the HHonors Points Search Tool, or search for the dates you're actually interested in (only in June does the Hilton Prague cost 50,000 HHonors points; the rest of the year it costs 30,000).

Similarly, Category 1 and 2 Starwood Preferred Guest properties cost 1,000 fewer Starpoints during the weekend, but award mapper can't give you the actual points price on a given date.

Hotel Hustle shows your actual cost, but requires your actual nights

Before using Hotel Hustle, you should create a free account with Wandering Aramean Travel Tools. Then when you navigate to Hotel Hustle you'll be able to configure the value you assign to each hotel chain's rewards currency. Here are the values I use:

View fullsize

For Hyatt, IHG, and Marriott rewards I use 1 cent, since that's what my transferrable Ultimate Rewards points are worth when redeemed for cash, instead. Hilton's 0.35 cent value is based on a comparison of 6 HHonors points per dollar spent with the American Express Surpass card versus 2.105 cents per dollar spent with a Barclaycard Arrival+ card post-devaluation. The same logic applies to the Starwood American Express (1 Starpoint per dollar) and Barclaycard Wyndham Rewards (2 Wyndham Rewards points per dollar).

Once you've configured your values, you can search for the actual cash rates available at each property in a city, and the actual points cost of those same properties. You can also filter by rewards program (click the asterisk by a program to show only those properties), but those filters are not persistent across searches, unfortunately.

Finally, Hotel Hustle lets you filter your search by "Hustle Hotness." Seth is not fantastic about documentation, but here's how it works:

• if you filter by 3 Hustle Hotness stars, you'll see all properties where a points redemption saves you more than 85% of the value you assigned to the points;
• if you filter by 4 Hustle Hotness stars, you'll see all properties where a points redemption saves you more than 115% of the value you assigned to the points;
• if you filter by 5 Hustle Hotness stars, you'll see all properties where a points redemption saves you more than 145% of the value you assigned to the points.

In other words, the more stars, the higher the revenue cost compared to the value of the points required for a redemption. Since I can usually bring down the revenue price by searching for AAA rates or using corporate codes, I always filter by 4 or 5 Hustle Hotness stars.

Conclusion

Award mapper and Hotel Hustle are complementary tools, and I use both many times each week, especially when I'm planning a trip to a new country or city.

I use award mapper to get a feel for what chains and properties are available in a city, then as my plans come together I use Hotel Hustle to narrow in on the specific dates and properties I'm interested in.

Finally, I go to the hotel's website to verify rates, see whether additional discounts are available, and to make my points reservations.

Earn the miles you redeem, redeem the miles you earn

While I didn't coin the aphorism, I repeat it every chance I get: the least valuable point is the one you don't redeem.

It doesn't matter how big the portal bonus, or how cheap the manufactured spend, if your balance in a single account never dips below 900,000 you have 900,000 worthless miles.

I'm not judging; we all make mistakes. But the first thing to do when you find yourself halfway up a mountain is to stop climbing!

Earn the miles you redeem

There are two typical strategies for an affiliate blogger promoting the flavor of the month increased signup bonus (or increased affiliate payout):

• explain how great a loyalty program is and how valuable the signup bonus is;
• or highlight specific destinations or properties that the signup bonus can get you to.

So you can find Bankrate.com employee Jason Steele discussing free one-ways on United award trips in order to sell Chase credit cards, or Summer Hull name-checking aspirational Marriott properties to promote an increased signup bonus on their co-branded card.

But if United miles aren't the miles you redeem and Marriott properties aren't the properties you stay at, you shouldn't be thinking about these cards at all!

Even if you do read a review of Lufthansa First Class and think to yourself that it wouldn't be too bad to try it sometime, you need to do a reality check first: are you going to learn the nuances of Lufthansa award availability? Are you willing to buy a tag flight to Lufthansa's US gateways if you can't find United award space? Are you able to plan your vacation time around those flights?

My point is that mere interest isn't enough to waste a credit card application on — you need a plan you're willing to commit to. Otherwise you risk ending up with a pile of worthless United miles or Marriott points.

Everyone's miles and points strategy is different, and I'm not going to tell you what miles and points you should be earning, or which are the most valuable, because you already know which loyalty currencies are the most valuable: they're the ones you're able to consistently redeem for the trips you actually want to take.

Redeem the miles you earn

So you got snookered into earning a bunch of miles and points that have been collecting dust and are slashed in value every 18-to-24 months. It's true they're worthless until you redeem them, but the good news is they're only worthless until you redeem them, and that's completely in your power.

So here are some suggestions for cleaning out those stuffy old accounts and finally turning your aging miles and points balances into real-world value.

• Pay with points. I get e-mails a few times per month from readers who are frustrated that after earning a few hundred thousand Membership Rewards points, they find they're virtually unusable for the supposed "sweet spot" redemptions: Delta and Frontier are the only US-based airline transfer partners, British Airways is distance-based and imposes fuel surcharges, and the other airline programs have learning curves too steep to quickly master. But if you ever pay cash for airline tickets, you're in luck — you can simply buy those airline tickets with your Membership Rewards points and unlock one cent per point in value (more with the Business Platinum American Express)!
• "Worse" transfer partners and rates. It's true that Membership Rewards points transfer to Starwood Preferred Guest at a 1000:333 ratio. It's also true that Starpoints are both more valuable and more flexible than Membership Rewards points. If Starpoints are the ones you're comfortable aggressively redeeming, 50,000 of them are worth more than 150,000 unredeemed Membership Rewards points.
• Standard awards. I wrote about "standard" or "high-level" awards in a slightly different context last month, but they fit right in here. If you are sitting on hundreds of thousands of AAdvantage miles from multiple Citi Executive / AAdvantage signup bonuses because you can't find low-level Business or First award space, book an AAnytime award instead. Yes, between the US and Tokyo you'll pay 120,000 AAdvantage miles for Business or 170,000 miles for First class each way, but you'll also have your pick of dates and American-operated flights.
• Hotel stays. You'll hear many bloggers tell you that airline miles are best redeemed for flights and hotel points for hotel stays. My question is, compared to what? If you're sitting on millions of miles while paying cash for hotel stays, you're missing out on an opportunity to save money, whether or not you're "maximizing" the value of your miles. Kenny at Saverocity wrote last week about redeeming AAdvantage miles for hotel stays and getting up to 1.6 cents per mile, but even getting 1 cent per mile in value is 1 cent more per mile than you're getting while they sit in your account unredeemed.
• Give away and sell awards. Are your friends and family planning a trip? You may not be able to find award space for the dates you want to travel, but you might have better luck searching for their dates. Have them pay you for economy and book them into first. In my experience, people tend to like that.

Conclusion: remember why we play this crazy game

Everyone's motivation is different for travel hacking. Maybe you want to travel more. Maybe you want to pay less for the trips you were already taking. Maybe you want to travel in classes of service and stay at hotels you wouldn't be able to otherwise afford.

Whatever your motivation is — and no motivation is right or wrong — it's realized only at the moment of redemption, not the moment of earning!

Is the American Express Rocketmiles deal a dud?

If you followed the instructions in this post, all your American Express cards, including authorized user cards issued by American Express, should now be enrolled in an offer for $50 off Rocketmiles reservations of $200 or more, valid for purchases processed by Rocketmiles by October 30, 2015.

What is Rocketmiles?

Like Pointshound, a service I've written about in the past, Rocketmiles allows you to pay rates which can be comparable to those offered directly by hotels, while earning airline miles instead of the hotel loyalty points you'd earn by booking directly.

Is Rocketmiles a good deal at chain hotels?

If you're booking at chain hotels, which don't participate in the near-constant promotions being run by the big online travel agencies like Expedia and Hotels.com, then you have a straightforward choice. Will you get the most value:

• earning airline miles using a portal like Rocketmiles or Pointshound;
• earning an OTA's proprietary currency, like Orbucks through Orbitz or free hotel nights through Hotels.com;
• or earning a hotel's proprietary currency by booking directly through the hotel's website?

Keep in mind that in the latter two cases, you also have the option of earning cash back by clicking through a portal like TopCashBack.

For all the dates and properties I searched, among these choices Rocketmiles is strictly inferior to the others.

At the Hilton Portland & Executive Tower, for October 22, 2015, here are my search results:

• Pointshound. $214.06 rate, $31.04 taxes and fees, $245.10 total. 1,700 Alaska Airlines Mileage Plan miles (2,300 if you're Level 3 with Pointshound). Net rate (valuing Mileage Plan miles at 1 cent each): $228.10 (Level 1) or $222.10 (Level 3).
• Hotels.com. $229 rate, $33.21 taxes and fees, $262.21 total. 17% back clicking through TopCashBack and earning a Hotels.com Rewards night. Net rate: $223.28.
• Hilton.com. $218 AAA rate, $31.61 taxes and fees, $249.61 total. 4% cash back clicking through TopCashBack, 2,180 base HHonors points, plus any elite, "Points & Points," and promotional bonus points (up to 2,180 additional HHonors points). Net rate (valuing HHonors points at 0.35 cents each): $229.44 (general member) or $225.63 (Diamond elite member).
• Rocketmiles. $229 rate, $54.96 taxes and fees, $283.96 total. 2,000 Alaska Airlines Mileage Plan miles. Net rate: $263.96.

Note in this case that Pointshound is both cheaper and earns more Mileage Plan miles (for Level 3 members).

Is Rocketmiles a good deal at non-chain hotels?

Once you've decided to stay in a non-chain hotel, you're suddenly eligible for the fantastic discounts the online travel agencies are always offering, and Rocketmiles will simply never be able to compete with those massive, upfront savings.

Here's the hotel we stayed at in Florence, the C-Hotels Club Florence, for the same October 22 date as above:

• Pointshound. Net rate: $153.90 (net 700 Mileage Plan miles).
• Hotels.com. Net rate: $109.54.
• hotelclubflorence.com. Net rate: $139.79.
• Rocketmiles. Net rate: $175.34 (net 1,000 Mileage Plan miles).

Does the American Express Rocketmiles promotion make Rocketmiles a good deal?

Obviously in the above two scenarios I haven't taken into account the $50 American Express offer this post is supposed to be about!

The best use case for this Rocketmiles offer seems to me to be the following:

• individual nightly room rates very slightly above $200, and
• Rocketmiles room rates that are the same or only slightly more expensive than the cheapest option otherwise available.

In this precise situation, your $50 American Express offer will bring the net price below the otherwise-cheapest option, and you'll be rewarded with a handful of airline miles for your trouble.

Price compression strikes again

Unfortunately, all of the above analysis ignores the single most important thing about travel hacking: price compression.

Price compression is a term I coined to describe two related benefits of generating miles and points through manufactured spend (and to a lesser extent, through credit card signup bonuses):

• More expensive trips don't cost more miles and points;
• Even when more expensive trips cost more than less expensive trips, the difference is smaller in absolute terms — the prices of the two trips are compressed.

You can see this at chain hotels, like the Hilton Portland & Executive Tower, where rooms cost 30,000 or 40,000 HHonors points per night, depending on season. Buying HHonors points at 0.35 cents each at grocery stores buys you a night for far less than any of the OTA's are asking.

But you can also see it at non-chain hotels, like the C-Hotels Club Florence. Even if Rocketmiles did have the best rate for the nights in question, the $50 discount off a $200 room rate requires you to pay with an American Express card, and therefore forfeit the ability to redeem Arrival+ miles against the reservation. In other words, it requires you to pay with cash (albeit at a steep discount).

Conclusion

This post isn't meant as a promotion or indictment of Rocketmiles in general, but rather to show how I think about these periodic promotions that come along (like the generous resale opportunity Marriott offered late last year).

This specific Rocketmiles offer may pose an opportunity: if you pay for rooms with cash; and you don't have an Arrival+ card; and Rocketmiles rates are competitive with other OTA's; and nightly rates are above, but only slightly above, $200.

In that situation, it would be well worth considering making Rocketmiles reservations with all your American Express cards (one per card!).

Optimizing Hilton points and nights earning across cards

In general, I prefer the American Express Hilton HHonors Surpass to the Citi Hilton HHonors Reserve. To review, the American Express card's three big advantages are:

• issuance by American Express, so the primary user's card and all authorized users are eligible for American Express Offers for You;
• Better bonus categories (gas and grocery versus airline and car rental) and higher earning in bonus categories (6 HHonors points instead of 5);
• Lower annual fee ($75 instead of $95).

Both cards grant Diamond elite status after $40,000 in purchases each calendar year.

The comparison isn't completely one-sided, however. In addition to the fact that some people have success making payments against Citi credit card accounts over the phone using debit cards, the Citi Hilton HHonors Reserve card also grants an annual weekend night certificate each cardmember year you spend $10,000 or more with the card.

What's the imputed redemption value of a free weekend night?

Since the card earns 3 HHonors points on purchases outside of bonus categories, we can find the imputed redemption value of the annual free night certificate by comparing it to earning 6 HHonors points per dollar at grocery stores or gas stations with the Surpass card. Assuming you value HHonors points earned with the Surpass card at precisely their imputed redemption value (0.35 cents each), you have to get at least $105.25 in value from the free night certificate in order to justify earning it instead of 30,000 additional HHonors points or $210.50 in Arrival+ miles.

That is relatively easy. There are only 3 Hilton HHonors price points (5,000, 10,000, and 20,000) lower than 30,000 and 7 HHonors price points at 30,000 or above. That would imply that under most circumstances, if you value HHonors point enough to earn them in the first place, it's worth carrying the Citi Hilton HHonors Reserve card.

Keep in mind how imputed redemption values work: they show the breakeven point that justifies earning hotel points instead of cash back, not the actual value of the points when redeemed. The more value you typically get from your HHonors points above and beyond their imputed redemption value, the higher the value you need to place on the free night certificate to justify earning it instead.

And then there's the annual fee

If the Citi HHonors Reserve card didn't have an annual fee, the analysis would end there — the free night certificates would be so valuable it would be worth carrying multiple copies of the card and earning as many free nights as possible.

But there is an annual fee, and not a cheap one. Adding back in the $95 annual fee raises the breakeven imputed redemption value from $105 to $200, the equivalent not of a 30,000-HHonors-point hotel redemption, but a 60,000-point one!

That leaves the free weekend night certificates competitive with HHonors point redemptions at many high-end properties, but it makes them much less competitive with the typical mid-tier urban properties I stay at.

And of course weekend night certificates can only be redeemed over the weekend. That doesn't radically reduce the value for me (since I like taking trips over the weekend), but it's something to keep in mind.

Conclusion

The Citi Hilton HHonors Reserve card can provide a value competitive with the American Express Hilton HHonors Surpass card under two conditions:

• during the first year, thanks to its signup bonus of 2 free weekend night certificates and a $100 statement credit;
• and during subsequent years, if the cardholder has a plan to work the free weekend night certificate into a redemption at Hilton properties costing 60,000 or more HHonors points per night.

Of course, if you can talk Citi into waiving the annual fee in subsequent years, the value proposition reverts to the first one I outlined above.

Otherwise, the Surpass card's increased earning rate in lucrative categories makes it my go-to card for manufacturing HHonors points.