January Catch-Up

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At the beginning of each month we will be writing a “catch-up” article highlighting important or noteworthy events from the prior month. While this certainly won’t be a recap of everything that happened across all airlines, hotels, banks, and credit cards, the hope is that we will be able to touch on the things about which you should be aware as well as others that may have slipped through the cracks in the prior month.

In no particular order…

1) American Express and Chase Issuing 1099s for Referral Bonuses

Starting on January 30, some American Express and Chase customers that had received referral bonuses for having friends/family sign up with their links in exchange for receiving points have reported receiving 1099s from the banks.

This is problematic as the banks have effectively applied a valuation to the points given. This reddit thread shows several examples and breaks down the valuations.

What can you do about it? First and foremost, consult your CPA or a tax professional. For some individuals it may have no impact, while for others that have a lot of referrals it could add thousands of dollars of income.

2) Bank of America Adds 24-Month Language to Certain Credit Cards

Similar to restrictions places on bonuses by Citi and Chase, Bank of America joins in by adding restrictions to four of their cards. Below are the cards and the specific terms.

Alaska Airlines Visa Signature : “This card will not be available to you if you currently have or have had the card in the preceding 24 month period.”

Bank of America Premium Rewards: “This Premium Rewards card will not be available to you if you currently have or have had a Premium Rewards card in the preceding 24 month period.”

Cash Rewards: “This Cash Rewards card will not be available to you if you currently have a Cash Rewards card unless you have had that Cash Rewards card for at least 24 months.”

Travel Rewards: “This Travel Rewards card will not be available to you if you currently have a Travel Rewards card unless you have had that Travel Rewards card for at least 24 months.”

3) Herb Kelleher, Founder of Southwest Airlines Passes Away at 87

An innovator in the air travel space, Herb Kelleher passed away on January 3, 2019. Southwest published this notice honoring their founder and his accomplishments.

4) American Express Restricting Centurion Lounge Access

Beginning March 22, Centurion Lounges will become pre-departure lounges only. From their website:

NOTE: FOR PLATINUM CARD MEMBERS ONLY The Centurion Lounge is a day of departure lounge. We will not admit arriving Platinum Card Members with boarding passes for flights that have just landed. We will admit Platinum Card Members with layovers or connecting flights who produce proof of connecting flight.


 We will not admit Platinum Card Members more than 3 hours before the departure time on the Platinum Card Member’s same-day, confirmed boarding pass. This does not apply to Platinum Card Members with a connecting flight.

 
 We will admit children under 2 years of age free of charge, provided an accompanying parent or guardian is able to produce a “lap infant” boarding pass or proof of age. “

I think this is a reasonable move for American Express to make and will help to control overcrowding while not affecting most lounge users. These changes were inevitable as the number Platinum Card holders has increased and the lounges are some of the best in the United States.

5) Citi Prestige Begins to Rollout New Features

As of January 4, the Citi Prestige earns 5x on dining and airfare and 3x on cruising. While these changes have been viewed as positive, more changes are coming.

  • May 1: Cell Phone protection will be added
  • August 31: The 2x entertainment category will be dropped
  • September 1: The highly coveted “Fourth Night Free” benefit will be capped to two uses per year
  • September 1: The annual fee will increase to $495
  • September 1: Fixed-value redemptions of ThankYou points using the Citi Prestige drops from 1.25 cents to only 1 cent per point.

This is quite a mixed bag of changes and the strategy for maximizing the card’s value becomes slightly different as well. I will be looking closely at my usage of the card in its new state and will be making a determination before my annual fee comes due (mid year) as to whether or not I’ll be keeping this card. The fourth night free benefit has been majorly devalued, but still offers extremely high potential value compared to the annual fee.

6) Citi Offers New Fee-Free Rewards+ Credit Card

Highlights of this new card include:

  • 15,000 points sign-up bonus
  • Rounds up purchases to the nearest 10 ThankYou points
  • Earns 2x ThankYou points at gas stations and supermarkets, on the first $6,000 per year (similar to the Amex Everyday card)
  • Provides 10% rebate on the first 100,000 ThankYou points redeemed each year

Be aware that the language regarding the bonus covers the Premier AND Prestige card: Bonus ThankYou® Points are not available if you received a new cardmember bonus for Citi Rewards+℠, Citi ThankYou® Preferred, Citi ThankYou® Premier/Citi Premier℠ or Citi Prestige®, or if you have closed any of these cards, in the past 24 months.

7) Marriott Overhauls Co-Brand Credit Cards

This visual shows the current and new cards for both American Express and Chase.

While there are a lot of changes as a result of the acquisition of SPG by Marriott and the rebranding to “Bonvoy,” the most immediate for bonus seekers will be the fact that both the SPG Amex and the Marriott Premier Plus Business cards will stop accepting new applicants on February 12. So if you have been considering grabbing those while they still exist, act fast!

In the interest of full disclosure, we will earn a referral bonus for anyone that is approved from our links.  These are publicly available offers and all claims made in this post as of the posting date can be found in the offer language for the card.  We only provide the best publicly available offers and thank you for your continued support.

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Plastiq.com Overview

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In the various forums, groups, blogs, and articles out there revolving around the world of points and miles, Plastiq is often mentioned as one of the tools that can allow an individual to pay a bill with a credit card.  In this post, I’m going to go over the basics of Plastiq, some considerations, and some additional tips on earning extra points through using this service.

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What is Plastiq?

Plastiq is a company founded by two college students who in their words “believed that making a payment as important as tuition should be as simple as buying a coffee.”  The website launched in 2015 and since then millions of users have been making monthly payments covering everything from rent, utilities, mortgages, and phone bills to paying for a variety of additional services like contracting and landscaping, as well as the purchasing of goods.

This is done through simply creating an account with Plastiq and entering various credit cards and the billing information of institutions that need to be paid.  Bills can be scheduled in advance or paid immediately.  The overall process is quite simple and while Plastiq often offers promotional deals, the standard fee applied is 2.5%.  Plastiq will charge your credit card and then cut a check (or send an ACH payment) on your behalf.

Why use Plastiq?

For anyone that is hooked into the points game there is this pain felt anytime something is paid for and points are not earned.  One of the most common areas for this (and most individuals’ single largest monthly expenditure) is the home mortgage.  By being able to pay these kinds of bills with a credit card, no longer are these valuable points being left on the table.

What limitations exist?

Just because Plastiq enables the ability to pay virtually any bill doesn’t mean that it is a free-for-all without restrictions.  Currently Plastiq notes that the following payments are not allowed:

  • Payments to friends/family (note that payments for legitimate services from a business run by a friend/family member are fine)
  • Deposits into retirement accounts or other savings plans
  • Payments to be sent outside of the US or Canada
  • Credit card statements

Another item to note is that on occasion Plastiq will require verification of a legitimate recipient.  This issue came up for me when I entered the name of an individual for payment.  This individual has a construction business that is just his name and he had done work on my roof.  I received an e-mail from Plastiq asking for an invoice and I provided the invoice and resolved the issue in under 24 hours.  I have had tenants pay me via Plastiq and they provided a copy of a lease and they too had the issue resolved in under 24 hours.

Plastiq allows Visa, Mastercard, American Express, and Discover to be used on the site, but while Mastercard and Discover can be used for any type of payment, Visa and American Express have the following restrictions:

Visa: can be used for any payee with the sole exception of mortgages

American Express: can be used on the following payee types (from Plastiq’s website) – “Government, Utilities, Education, Residential Rent and Club Fees and Memberships”

Fees and Spend Coding

The overall fee is 2.5% for credit cards and 1% for debit cards.  While I wouldn’t recommend using a debit card on Plastiq, do note that the fee is lower.  Visa, Mastercard, and Amex gift cards CAN be used to pay bills and are treated as credit cards and charged the 2.5% fee.  Occasionally Plastiq offers discounts for specific card types or bill types or for scheduling payments in advance.  Taking advantage of these promotions can add up to a decent amount of savings.

A lot of people ask how these payments code on credit cards (are there category bonus opportunities) and currently I see the payments coding on my cards as “Utilities.”  Up until earlier this month the Citi AT&T Access More was coding as 3x, but that seems to have fallen off.  At this point, it COULD be reinstated, but I’d personally bet against that.

Plastiq also offers a referral bonus program where users can refer others and earn $1,000 fee-free dollars for themselves and $500 fee-free dollars for the new user.

Maximizing Value

Folks that are newer to the points and miles game might look at a 2.5% fee and view that as a losing proposition up against a card only earning 1 or 2x on the transaction.  Like most things in this world, “it depends.”  If you are using a straight cash back card, then yes, you are absolutely losing money.  In this instance, avoid using Plastiq.

However, for cards that earn airline or transferable points, even a 1x earn rate can be lucrative if you are able to redeem those points for greater than $0.025 each.  Many premium cabin redemptions using Ultimate Rewards, Membership Rewards, SPG, or Thank You points can easily top $0.10 per point.  Another consideration is using Plastiq to hit the spend necessary to trigger the sign-up bonus.  This is a great way to knock out an extra thousand dollars that would otherwise be inaccessible to hitting the credit card.

Lastly, my favorite way to utilize Plastiq is to pay bills by liquidating gift cards.  I purchase gift cards using my Chase Ink Plus and Chase Ink Cash at office supply stores in order to earn 5x points and thus am effectively earning 5x on the payment of a mortgage.

Hypothetical Annual Earning 

Looking at monthly expenses that can’t typically be paid by credit card, we can get a sense of the value that Plastiq can add.

 Expense Monthly Amount
Mortgage/Rent $1,500
Utilities $250
Car Payment $400

This comes to a monthly total of $2,150, which on an annual basis can give you the following based on these respective earn rates:

1x : 25,800

2x : 51,600

3x : 77,400

5x : 129,000

At 2.5% in fees on $2,150 per month, the annual total in fees is $645.  The ability to purchase 5x gift cards at break-even or even negative cost can greatly bulk up that earning power and with close to 130K in points just from paying bills is enough for a first class ticket anywhere in the world.

Bottom Line

Plastiq is a great option to pay bills on a wide range of services and also offers a very reasonable fee for the service.  This can allow for a boost to the monthly points accrual, creating significant value provided solid redemptions are made.  One thing to remember is that while Plastiq does offer reasonable fees, there are some specialized payment services that do beat them.  For example, I had been paying my power bill via Plastiq until I realized that my power company charges a flat $1.65 to pay direct on their website (up to $1000 per payment).  As always, do your homework and know that Plastiq is a great additional tool to have in your points earning arsenal.

In the interest of full disclosure, we will earn a referral bonus for anyone that is approved from the link above.  These are publicly available offers and all claims made in this post as of the posting date can be found in the offer language for the card.  We only provide the best publicly available offers and thank you for your continued support.

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Act Fast: 35K SPG Business Amex Sign-Up Bonus until 3/28

One of my favorite credit cards, the SPG Business credit card from American Express is offering an extremely generous sign-up bonus of 35,000 points if you apply through March 28, 2018.

The required spend is $7,000 within three months, so including the bonus, you’d be sitting on (at a minimum) 42,000 points.

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Why should you get this card?

  • SPG points are some of the most valuable transferable points available. They partner with over 30 airlines and offer a 25% transfer bonus when transferring 20,000 points.
  • We know that Marriott has acquired SPG. We know that American Express will continue to issue business cards.  We don’t know however, how the SPG and Marriott programs will be combined.  We also don’t know when this specific card will stop being issued.  In my opinion, get it sooner rather than later.
  • It will NOT count against Chase 5/24 rule as this is a business card (although you don’t need to have a business to get the card).
  • You get multiple perks:
    1. Sheraton Club Lounge access any time you stay at a Sheraton property (regardless of if you pay using this card). While the lounges vary in quality – they always offer a hot breakfast, heavy hors d’oeuvres, and complementary beverages.  Overseas they can offer some exquisite spreads and sometimes have free alcohol.
    2. Two elite qualifying stays and five elite qualifying nights towards status each year
    3. Unlimited Boingo WiFi
    4. Complimentary in-room premium internet access
  • The $95 fee is waived for the first year.
  • On the low end, the bonus of 35,000 points is worth ~$800

While this is a great bonus offer, the value of SPG points makes this card my go to for all my non-bonused spend.  You might as well get it while the bonus is hot and make it part of your suite of credit cards.  Last year I was able to redeem 40,000 SPG points for 50,000 Alaska MileagePlan miles which I then used to book a Cathay Pacific business class flight from JFK – HKG – MLE with a 10 day stopover in Hong Kong.  This flight priced out at $5,623.34 giving me a per point value on my SPG points of ~$0.14.  It is redemptions such as this that make the Amex SPG Business card one of my favorite credit cards currently available.

To apply, click here: Apply for the Starwood Preferred Guest® Business Credit Card

 

In the interest of full disclosure, we will earn a referral bonus for anyone that is approved from the link above.  These are publicly available offers and all claims made in this post as of the posting date can be found in the offer language for the card.  We only provide the best publicly available offers and thank you for your continued support.