I've been fortunate enough this year to be able to more or less sit out the signup bonus carousel. Sure, I applied for a few new cards in April when I had some upcoming travel needs, but besides my 2% cash back Fidelity American Express and 2.22% travel rewards Barclaycard Arrival World MasterCard, I've been focusing on getting the most out of my 5% cash back Citi ThankYou Preferred card. Now that I'm in the home stretch of my promotional period, my thoughts have naturally turned towards finding a new "workhorse" card for next year: a card which earns points or miles that are more valuable than the average of 2.1% cash back I earn with the cards I mentioned above.
One obvious choice is the Citizen's Bank 5% cash back offer, which lasts for the first 90 days of card membership. I happen to have a Citizen's Bank checking account where I receive some direct deposits, which hopefully would weigh favorably in their calculation of my credit limit, so it's certainly possible I could earn $2000-$3000 in cash during the promotional period.
There's a long thread on the FlyerTalk forums about the Wells Fargo version of this offer, which lasts for 6 months instead of 90 days. Unfortunately, those applying without a Wells Fargo checking account have found themselves with credit limits so low that it's difficult to imagine getting much value from the card.
On the other hand, I already have a Club Carlson Business Rewards Visa that gives me 5 Gold points per dollar spent on all purchases and – crucially – the last night free on award reservations of 2 or more nights. Thanks to that "last night free" benefit, the conventional wisdom is that the points are best used on award stays of exactly two nights. That's all well and good as far as it goes (I spent 2 nights at the Radisson Blu Aqua in Chicago in November, which cost me around $75 thanks to this card), but it's also fairly restrictive: sometimes you want to stay in a city for more than 2 nights, sometimes you don't want to move between properties every 2 nights, and some cities only have 1 Club Carlson property in the first place.
That being the case, I thought it would be useful to do a speculative analysis of the value of a Club Carlson point across various hotel categories and lengths of stay. I might have my next workhorse card in my pocket already!
Before I share the results, a couple of quick points:
- I assumed that you can manufacture spend at an average of 0.75 cents per dollar. If that's low for you (for example, if you primarily use MyVanilla Debit cards you might be paying somewhat more for that portion of your spend) then this analysis would have to be adjusted slightly;
- There's no easy method of selecting a value to use for a single hotel night. Price is almost always misleading, since there are hotels so expensive that you'd never pay to stay there (and hotels too horrible to pay any price for). I picked what seems to me a sensible compromise: the most I could ever conceive of paying for a hotel room is $250, and the least is $60, so I applied a linear regression between those numbers for a "hypothetical value" of one night at each category of Club Carlson property. This method isn't perfect and there's no substitute for researching the actual properties you want to stay at.
Here's what I came up with:
This follows the pattern you'd expect: when you stay 1 night at any property, you don't get to take advantage of the "last night free" benefit, so your value per point is just the hypothetical value divided by that category's point cost. Then your value per point is maximized when you stay exactly 2 nights, since that serve as a 50% discount on the cost per night. Finally, the more nights you stay, the less your free night decreases your average value, until it is just a 16% bonus on your points' value when you stay 7 nights.
As I mentioned, this analysis is very sensitive to assumptions, especially our assumptions about the value of a free night, so I want to suggest an alternative approach: at what hypothetical value per night is a dollar spent on the Club Carlson Business Rewards Visa worth less than a dollar spent on the Barclaycard 2.22% cash back Arrival World MasterCard? Since the Club Carlson Visa earns 5 Gold Points per dollar, we'll need to get less than 0.444 cents in value per point to justify using the Barclaycard instead. Here are those "break-even values:"
Strictly for the sake of comparison, here are some midweek refundable (AAA) rates at Category 5 and 6 Club Carlson properties I pulled up, including tax (since taxes and fees are included on award redemptions):
- Radisson Blu Aqua Chicago, mid-February, Category 6: $207.88
- Radisson Blu Alcron Hotel, Prague, mid-March, Category 5: $123.61
- Radisson Blu Hotel Champs Elysees, Paris, mid-April, Category 6: $524.42
- The May Fair, London, mid-May, Category 6: $596.31
- Radisson Martinique on Broadway, New York City, mid-June, Category 6: $292
This analysis has its limitations of course: you need to know in advance that you're traveling to cities with Club Carlson properties, for example, and the properties have to be convenient to the part of city you intend to visit. That's far from always the case. However, I know of no other card that offers such consistent value above that earned by a cash back card. To put it another way, while you may get more than 2.22 cents per value out of your United miles, you only get that value when you redeem for last minute domestic travel or premium-cabin international trips. A dollar spent on a Club Carlson Business Rewards Visa, on the other hand, is worth over 2.22 cents on stays of virtually any length at virtually any Club Carlson property.