Thinking about the 2018 changes to Delta co-branded credit card MQD waivers

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I've been reading with interest about the recently-announced change to how Delta will handle Medallion Qualifying Dollar waivers starting with the 2019 qualification year (January 1, 2018). Frequent Miler has an interesting post from the perspective of someone who is already maximizing a set of 4 American Express Platinum and Reserve co-branded credit cards.

I've personally been bouncing back and forth between Silver and Gold Medallion status for the past few years, after two glorious years as a Platinum Medallion, so I don't expect this change to affect me personally unless I suddenly have to start flying a lot more. But I know some readers still gun for top-tier status with Delta, so I thought it'd be worth sharing a few thoughts.

Rollover MQM are very valuable

Delta is the only airline to allow you to roll elite qualifying miles over from one year to the next, but they allow this only if you achieve at least Silver Medallion status each year. In other words, if you only earn 20,000 Medallion Qualifying Miles in 2017, you'll start 2018 with zero MQM. If you earn 40,000 MQM in 2017 (and meet the Medallion Qualifying Dollar requirements or have them waived through credit card spend) you'll start 2018 with 15,000 rollover MQM.

When the $25,000 MQD waiver applied to every level of Medallion status, the maximum number of MQM a Platinum Medallion who qualified with a MQD waiver could roll over was 49,999. Any more MQM than that, and they would qualify for Diamond Medallion status, resetting their rollover clock to zero and having to start their requalification from scratch the following year.

With the Diamond Medallion MQD waiver threshold raised to $250,000, Platinum Medallions will be able to rollover an unlimited number of MQM, giving them a big head start in the next year's requalification.

Why does this matter? Because if you experience a variable amount of travel from year to year, you might prefer to smooth it out by remaining Platinum every year (and enjoying free award changes and cancellations), rather than bounce up and down between Gold and Diamond Medallion statuses.

How much do MQM cost?

Frequent Miler did a good job explaining the value he perceives from earning MQM and achieving Medallion status, but I'm naturally much more interested in the cost of doing so. Assuming you have or are eligible for both personal and business Platinum and Reserve Delta American Express cards, it's easy to calculate the cost of chasing Medallion status:

  • Your first 60,000 MQM cost $900 in annual fees ($450 for each Delta Reserve card) and $2,400 in foregone cash back (the value of charging $120,000 to a 2% cash back card instead), for a total cost of 5.5 cents per MQM.
  • Your next 40,000 MQM cost $390 in annual fees ($195 for each Delta Platinum card) and $2,000 in foregone cash back, for a total cost of 5.98 cents per MQM.

This pattern of spend would yield 100,000 MQM and 320,000 redeemable SkyMiles, and leave you 25,000 MQM (and $30,000 in spend) short of Diamond status, and cost a total of $5,690, for an average MQM cost of 5.69 cents and cost per SkyMile of 1.78 cents.

Timing matters

At this point you have two options: you can earn 25,000 MQM through actual flight activity (and spend another $30,000 on your co-branded credit cards) in order to earn Diamond status, or you can roll over 25,000 MQM into the following calendar year.

In my view, which decision is best depends on how long it takes you to meet the high spend thresholds on your credit cards. That's because when you earn Medallion status it's valid through the rest of the year it's earned in and the entire following year.

Consider two cases:

  • You spend all of 2018 meeting your high spend thresholds and flying on paid Delta tickets (foregoing the opportunity to redeem the haul of SkyMiles you're also accumulating) and qualify as a Diamond Medallion on December 31, 2018. Your status is valid through January, 2020.
  • You spend 2018 meeting your high spend thresholds and aggressively redeeming your SkyMiles. You end the year with 100,000 MQM and Platinum Medallion status. Then in January, 2019, you spend $250,000 across your co-branded credit cards. Together with your 25,000 rollover MQM, you now have 125,000 MQM and a Diamond Medallion MQD waiver. Your Diamond Medallion status is valid through January, 2021.

In other words, if you're confident you can meet your high spend thresholds early in the year, either through manufactured spend or legitimate expenses, you only need to actually requalify as a Diamond Medallion (and meet the $250,000 MQD waiver threshold) every 2 years. And during any gap between the expiry of your Diamond status and your requalification you'll still get to enjoy your Platinum Medallion benefits.

Of course you'll only receive your Diamond Choice Benefits every other year, as well.

Conclusion

As I mentioned, it's been a few years since I had Platinum Medallion status, but I was very satisfied with it and think for the casual travel hacker it is probably adequate in terms of domestic upgrade chances, Sky Club access when traveling internationally, and free award changes and redeposits. You can also achieve it with just 3 co-branded credit cards, saving either $195 or $450 depending on whether you decide to cut a Platinum or Reserve credit card (2 Platinums and 1 Reserve will earn you just 70,000 MQM after $160,000 in spend, so you'd also need to earn at least 5,000 MQM from flying each year).

However, I can easily see how international business travelers who want to redeem global upgrade certificates or those forced to travel in domestic economy who want to maximize their chances of an upgrade might decide to stretch for Diamond Medallion. Depending on how much value you get out of Sky Club access and Delta companion tickets, the co-branded credit cards may be a cost-effective — though far from cheap — way of achieving it.