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April Catch-Up

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April Devaluations Don’t Bring May Flowers

Last month we touched on United’s move to dynamic award pricing and Korean Air’s removal of the stopover benefit. This month, as expected, American blindly followed United into the world of dynamic award pricing. On top of that we have seen announcements of devaluations/changes/enhancements (whatever you want to call them) from British Airways, JetBlue, and Avianca.

American’s switch is not at all a surprise, but this coupled with the loss of the 10% discount (up to 10,000 miles per year) on award redemptions for holding AA cobranded credit cards really stings. As I have said many times before – dynamic pricing hurts customers as it makes it impossible to plan for award redemptions and to set targets. It is an opaque (at best) system that leaves customers guessing. Like United, partner awards remain unchanged (for now), but only because implementing such a system with partners is difficult. It will be something to watch for across the carriers over the next year.

JetBlue’s change may have been somewhat minor, affecting only their Mint product, but does show that they can value points used on their products differently. Historically JetBlue points have been worth roughly 1.3-1.5 cents per point when it came to award bookings. Last month JetBlue has been setting award prices on their Mint product to provide a point value closer to 1 cent per point. This represents a ~15-33% devaluation on those seats. JetBlue points have never been the most valuable, but the Mint product is one of the best ways to fly across the country. This devaluation makes it 33% more expensive to book and potentially out of the reach of the average JetBlue customer.

LifeMiles (Avianca’s loyalty program) announced that they are adjusting rates on their US award redemptions starting July 15. Currently US redemptions cost between 7.5k-12.k with a flat fee of $25. That will be expanding to 6.5k-13.5k and with a fee between $10-25. Overall these changes aren’t bad and they provided this example chart (which does show both increases and decreases).

I’m not entire sure how this would work, but my gut tells me this chart “adjustment” is somehow related to United’s move to a dynamic award pricing model. Avianca claimed this was to align the program with other award programs. Let’s take a guess at what Avianca’s only US partner is…. yup. United! Again, these changes are pretty benign and for short-hauls are actually positive, but the timing is a tad suspect.

Right at the end of April, British Airways announced that it would be changing its award chart as it relates to partner redemptions. Avios historically has been one of my favorite currencies to use for short-haul flights. Although the days of 2.5k point flights are long gone, there were still a number of very reasonable routes clocking in at 4.5k and 7.5k. There have been a few leaks over the past few days surrounding this new chart (which is formally being released on May 30th), and we will have a separate article addressing those changes and how to best maximize Avios going forward.

Delta Renews Partnership with American Express

Delta and American Express have renewed their partnership through 2029. This relationship has been in existence since 1996, so a 10 year renewal will push this relationship to over 30 years. WOW. Delta expects to see a financial benefit of roughly $7 billion per year by 2023 from this relationship. DOUBLE WOW. That is massive and is double what they are seeing today. But what does all mean for current cardholders, prospective cardholders, and passengers?

According to Delta, we can expect to see continued investment in Delta SkyMiles benefits offered by American Express. They will continue to offer Sky Club access for their Delta Reserve cardholders as well as American Express Platinum Card Members. This also provides reassurance of the continuance of SkyMiles as a transfer partner of Membership Rewards.

In some ways this sounds as business as usual (and it is). This is a good thing though and doesn’t leave customers wondering what will happen to the cards, benefits, and relationships as we have seen with AA/US Airways and Citi/American Express, Marriott/SPG and Citi/American Express, and Hilton with Citi/American Express.

Chase offers First Transfer Bonus; Rocky Relationship with United?

First the good news – Chase has launched its first transfer bonus, a 30% bonus when transferring Ultimate Rewards to British Airways’ Executive Program. In the past American Express had routinely had some handsome Avios bonuses (most recently 40%), so seeing Chase enter this type of promotion is welcome news – especially in the face of a potential Avios devaluation.

This bonus offer is good until June 16th and Ultimate Rewards members can partake as many times as they’d like. While I generally dissuade speculative transfers, this could be a good opportunity to do so if you are relatively certain of upcoming travel utilizing British Airway’s program.

During United’s Q1 earning’s call the topic of the United-Chase relationship came up and the response was essentially that United was keeping their options open. They acknowledged that the MileagePlus program is
“one of our single biggest margin growth opportunities,” but that it was felt that the co-brand performance didn’t match that of their peers. That is an interesting note, especially in the face of the renewed Delta-American Express partnership.

With American Airlines with Citi, that doesn’t leave many choices for United. I can’t see United moving to Barclay’s (with AA having products there as well). In my mind that leaves the door ajar for banks such as Capital One, Bank of America, Wells Fargo, or US Bank. Bank of American has a fairly cozy relationship with Alaska, which may have some protective covenants preventing a United Relationship. Capital One has dabbled in co-branding over the years, but has never had an large airline. Wells Fargo and US Bank just aren’t competitive in the reward space, so it is unlikely that they would make such a commitment, but I could be completely wrong on this one.

I think passengers care very little about with which bank the cobranded card is affiliated. Cardholders want benefits and value. The airlines want the cash and the multi-channel marketing opportunities. This will come down to whomever can offer the best. For what it is worth, my money is on United staying with Chase.

Extra Fee to Guarantee Entry to Priority Pass Lounges?

I am not so sure what to think about this one, but early in April a handful of UK based Priorty Pass lounges began offering the option to pre-pay a £5 reservation fee per person to guarantee entree. On the one hand, having been in some really crowded lounges (and turned away from others), I like the idea of this nominal fee. The other side of me has me wondering how much exclusivity is left to the lounge benefit if everyone else also has access. It is clearly a double edged sword. For roughly $7, it seems like a small price to pay to guarantee entry and presumably some snacks, drinks, and more comfortable seating than would be found elsewhere in the terminal.

Currently, these are the lounges offering this option:

  • Birmingham (BHX)
    • No1 Lounge
  • London Gatwick (LGW)
    • My Lounge (North)
    • No1 Lounge (North)
    • No1 Lounge (South)
  • London Heathrow (LHR)
    • No1 Lounge (T3)

T-Mobile Introduces Mobile Banking Paying 4% APY!

T-Mobile officially rolled out their mobile banking program that they had been piloting since late last year. The notable pieces of this program are that they pay 4% APY on balances up to $3,000 provided the account holder deposits at least $200 per month into the account. The balance above $3,000 earns a much more modest 1% APY.

There are no fees with this account and T-Mobile will even cover the first $50 if you overdraft, provided you repay that amount within 30 days. The account is fully insured by the FDIC and is run by Bank Mobile. Users will have access the Allpoint network of ATMs, which currently number about 55,000. Users can withdraw there for no fee and will have access to traditional services like mobile check deposit and bill pay.

New Benefits for All Holders of World and World Elite Mastercards

In the same way our card issuers (American Express, Chase, Citi, etc.) provide us with benefits such as travel insurance, price protection, the network owner, Mastercard has announced a long list of new benefits coming to their World and World Elite cards on July 1.

From Mastercard, here are the new benefits:

  • Lyft : World Elite cardholders will receive a $10 credit for every five rides taken in a calendar month, which will be automatically applied to the next ride, capped at once per month.
  • Fandango : World Elite cardholders will earn double Fandango VIP+ points for the movie tickets they buy. This means cardholders will get 500 Fandango VIP+ points (worth $5) for every two movie tickets they purchase via the Fandango app or Fandango.com, which can be used towards purchasing movie tickets on Fandango or towards streaming movies and TV shows on FandangoNOW.
  • Boxed : World Elite cardholders will earn 5% Cash Rewards on their Boxed purchases, which can be used towards future purchases on Boxed.
  • Postmates : World and World Elite cardholders will receive $5 off every order of $25 or more.
  • Cell Phone Insurance: World and World Elite cardholders will be eligible for Mastercard Cellular Telephone Protection when they charge their monthly telephone bill to their World or World Elite Mastercard. This benefit—with a maximum liability of $600 per claim for World cardholders and $800 for World Elite cardholders—covers stolen or damaged mobile phones as well as cosmetic screen scratches even if they don’t affect the ability to make or take a call. Cardholders simply have to submit a claim if they incur a loss, up to $1,000 per year.
  • Mastercard ID Theft Protection™: Cardholders who register for Mastercard ID Theft Protection will have access to an enhanced Mastercard ID Theft Protection™ benefit suite that provides end-to-end digital servicing to monitor their personal information. Additionally, cardholders have access to a team of identity theft resolution specialists, available 24 hours a day, seven days a week, 365 days a year to help quickly resolve any identity theft incidents that may occur.

To me the Lyft, Postmates, and Boxed deals are the most enticing, especially if the cardholder is already using these services on a regular basis. The Postmates offer is great as it is effectively unlimited in regards to the number of times it can be used. If your orders are consistently around $25, this is a nice free 20% off on every purchase.

So how do you know if your Mastercard is a World or World Elite? It isn’t consistent from card to card, but look for the words “WORLD” or “WORLD ELITE” either above or below the Mastercard logo on either the front or back of the credit card. Looking at my cards I have found multiple variations. If you are unsure, you can always call the issuing bank using the number on the back of the card and ask.

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Opinion: Award Chart Disappearances

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Every so often we get news of a devaluation, merger/acquisition, or some other major event that causes major shifts in the world of loyalty programs. The most recent one was that of United eliminating their award chart as of November 15, 2019, and American signaling their impending drop of their award chart as well.

Personally, this was never a matter of “if,” but a matter of “when.” When Delta made the move, I knew the others would follow suit – why? Because US legacy carriers don’t innovate, they imitate. They don’t look to their competitors and think “what can we do to stand out, to be unique?” Instead they continue to devalue and offer sub par products claiming that it is in response to customer demands for increased flexibility and the like.

In a discussion with a friend the other day, he pointed out improvements made by American with their Flagship Lounge upgrades, United with their Polaris product and lounges, and Delta with the Delta One Suite. First off, let me say, that I appreciate ANY improvement that an airline makes, but take a step back from these and remove the US airline branding and just think about the product. Polaris and Flagship lounges are good, but there are far better business class lounges offered by other airlines. United’s “upgraded” Polaris product merely brings it in-line with market offerings. The Delta One Suite is the closest to a true product innovation, but only from the standpoint of the door (but remember, it was JetBlue that was the first to offer this option). The soft product on Delta, in my opinion, doesn’t compete with what is offered globally by many other airlines.

So, What Now?

At the very least let’s take these actions from the airlines as stark reminders that the airlines control the loyalty programs which means they control or have influence over:

  • mileage/point earn rates
  • redemption rates
  • redemption availability
  • redemption rules
  • routing rules
  • transfer partners

…and the biggest thing to keep in mind: POINTS AND MILES ARE NOT INVESTMENTS! They inherently devalue, so please don’t horde them, but USE them.

That being said, if you are looking to book, now is the time to do it. I expect to see bookings increase as people look to dump their miles before the devaluations take effect. The good news here is it doesn’t appear that these devaluations will affect partner bookings, but that doesn’t mean that they won’t make that change in the future.

Other Questions/Thoughts Related to Devaluation

I hold co-branded cards from all three of the legacy US airlines, but never spend on them. Why do I hold them? Well – obviously the perks. Having free checked bags is nice, a bump in the boarding order is always a bonus and in the case of the United – the additional availability of Saver space. This is a perk that I have used many times over the years, but the problem now is that without knowing how much a “Saver” ticket costs, we don’t have a clear idea of the value. American directly devalued their cards when they lost the 10% annual mileage rebate, but this United perk could still remain with a very hazy valuation.

For any airline using a dynamic pricing model for award flights, the associated credit card sign-up bonuses also lose value and clarity. Right now, I know exactly what I can get with 50,000 MilagePlus points, thus making the decision on whether to get the card and spend the required amount a fairly easy decision.

This devaluation also impacts both Marriott and Chase. One of my favorite transfer partners of Chase has historically been United, but their reliability as a transfer partner goes way down in my book without an award chart. Does this makes Chase points worthless? Hardly, but it does add an additional wrinkle and certainly lowers the value slightly. Much like Chase, Marriott has United as a transfer partner (and even offers a 10% bonus on transferred miles). The same situation applies here where the points and the bonus are difficult to accurately compare to other potential transfer opportunities.

Profitability of Loyalty Programs

Loyalty programs generate a large amount of revenue for the airlines and is one of the most profitable areas for them, so it should come as no surprise that they work to reconfigure programs to make them more confusing, opaque, and profitable. In a fun exercise, I went through the 2018 10Ks of American, Delta, and United to look at the revenue from their loyalty programs as well as their PRASM (Passenger Revenue per Available Seat Mile) and CASM (Cost per Available Seat Mile). PRASM and CASM give a glimpse into the profitability of flying passengers around the world.

As you can see there is a hefty amount of revenue from the loyalty programs and I would expect Delta’s to increase in the coming years with the newly renewed deal with American Express. The more interesting figures in this table are PRASM and CASM. None of the legacy airlines are actually profitably transporting passengers. Any profitability that they are recording is coming from freight, loyalty programs, or other minor items. Does this mean that the airlines fail at their supposed core competency – transporting passengers? The short answer is that I don’t know. What I do know is that the airlines are heavily reliant upon their loyalty programs and co-brand relationships and going forward we should never be surprised when the airline use various levers to manipulate those programs to become more profitable and less passenger friendly.

The reason that this blog and our community exists is to help individuals navigate the confusing world of points/miles and efficiently and effectively earn and burn their accrued points. If you take away nothing else from this article, leave with this: Points aren’t collectors items and don’t appreciate in value. Earn your points, use your points, and most importantly enjoy your points. You have earned it!

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March Catch-Up

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Some quick highlights (and lowlights) from the month of March…

New Routes – yes, maybe, and probably not.

Southwest started flying to Hawaii in early March and really kicked things off with a bang offering $49 fares.  This has been a long time coming and is good for consumers adding lower cost competition on these routes.  Hawaiian Airlines is the one that will most likely suffer the most as Southwest also began flying intra-island routes.  Time will tell how this affects Hawaiian air travel, but overall, this should be seen as a positive.

JetBlue has been dropping hints about expansion (specifically to Europe) and with their east coast base, this actually does make some sense and they do have the infrastructure to pull this off.  There is a company-wide meeting on April 10th to discuss the vision and strategy of the company, so perhaps some details will be released at that time.  

I have a personal soft spot in my heart for Mongolia, and upon hearing that MIAT Mongolian had filed with the USDOT to begin service to the US I was equally excited and confused.  They have filed to fly to Los Angeles and Washington as Fifth Freedom routes with intermediary points in either China, Japan, or South Korea.  In my opinion, we are more likely to see 1,000 new orders for A380s this year than these routes become a reality.  It is nice to dream though.

Interesting Acquisitions

American Express announced that it will be acquiring LoungeBuddy, an often cited lounge review site that also offers the ability to research airport lounges and even purchase day passes. While I am not entirely certain what this means I have a few predictions and thoughts. First, LoungeBuddy does partner with lounges that are outside of Amex’s current (and quite robust) lounge network. This partnership could expand the already large network even further. Second, more so than any other card issuer, I feel American Express looks to curate a strong travel lifestyle association around its cards and this acquisition only continues to reinforce that. Lastly, I am curious to see what (if any) impacts this has on other premium cards in the market. As if one bit of Amex lounge news wasn’t enough – they also announced another extension with Lufthansa lounges in Frankfurt and Munich through Oct. 31, 2019. So now the question is- how will Chase and Citi respond? WILL Chase or Citi respond?

HotelTonight is a nifty app that can be used for last minute bookings with a network of over 25,000 hotels. While that isn’t exactly a massive number (considering there are over 50,000 hotels in the US alone), their recent acquisition by Airbnb is a potential game changer. In recent years Airbnb has been listing more hotel rooms and resorts and with the the bed-and-breakfast/boutique hotel focus of HotelTonight, it would appear Airbnb is willing to invest quite a bit into that area of their business, pivoting slightly from apartment/home/private room rentals for which is more traditionally known.

OneWorld Member Quick Hits

For the past 4-5 years Qatar Airways has hinted at a possible exit from OneWorld and it appears that within the next month or so they will come to a final decision on the matter. I’m really not sure if this is more posturing or if it is for real. A departure would certainly hurt airlines like American and British Airways that rely on Doha as a major node in their partner route network. However, with the isolation facing Qatar from neighboring nations, I would think they would want to solidify another alliance partnership or agreement, or work to get the embargoes lifted before alienating themselves further.

In more uplifting Qatar Airways news, the US will see additional cities getting Qsuite service between now and early June. Boston and JFK got the Qsuites on April 1, with Houston, Philadelphia, and another JFK route getting them in the beginning of June, and Dallas receiving Qsuite service starting in July. This is arguably the best business class seat flying right now, so it is great to see this continued increase in availability to and from the US.

Qatar isn’t alone in the suite space, and British Airways announced that it is joining the party with their Club Suite product. It is being rolled out first on their new A350-1000 which will be available this summer for bookings between London and Madrid before moving in the fall to the London-Toronto and London-Dubai routes. By the end of the year the expectation is to have four of these planes flying and two reconfigured 777s. This product looks gorgeous and is definitely on my list. British Airways current business class product doesn’t hold up well against most of the competition, so this is a fantastic upgrade and I look forward to the wider rollout.

As of March 20th, you can earn and redeem AA miles on China Southern. On its own this is a win for flyers – another airline with whom to use and earn AA miles. The strengthening of the China Southern and AA relationship should cause concern over the Cathay Pacific-OneWorld relationship. With the two airlines being physically so close, it is odd to have them both in the alliance. At this point nothing is changing with Cathay, but it is worth monitoring this situation for future developments.

End of Korean Air Stopovers

Had this happened a couple of years ago the sting would have been far worse, but since the removal of Korean Air as a transfer partner of Chase, the number of people potentially impacted is probably far fewer. That being said, this still is bad news. Beginning July 1, 2020 free stopovers in Korea will no longer be allowed on reward flights. This is a huge benefit as you can book the stopover on both the inbound and outbound of your round-trip flight. The silver lining here is that there is still over a year to take advantage of this great benefit!

Cheaper United Flights and Dynamic Award Pricing

Delta’s dynamic award pricing has been met with criticism and has cost Delta a lot of long time loyal followers. United appears to be moving in the same direction, which has me worried. The current upside is that there are a number of short-haul domestic flights pricing at 5-6k points and even some international premium cabin flights coming in below the “chart” rate. What is to be seen is whether they begin to jiggle the handle on inventory and if there is any rhyme or reason to their pricing. I am hopeful they use this dynamic pricing to lower costs on less popular flights or for severely undersold legs, but only time will tell!

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Apple Card – A New Player in the Credit Card Space

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Available this summer, the Apple Card is a co-branded Mastercard issued by Goldman Sachs. This is somewhat of a major move for Apple as the slowing of device sales creates the need for additional diversified income streams.

What Apple Card Offers

Apple Card promises no fees, low interest rates, and a simple rewards structure that delivers the cardholder’s cash back when a purchase posts. The card is tied to the user’s Apple Wallet and doesn’t have a card number or CVV2 code. Apple also promises that Goldman Sachs will not be selling customer information to third party vendors as a nod to the increased privacy and security focus of the card.

The rewards structure is extremely simple and users will see the cash back once a transaction posts. The card offers 3% cash back on purchases made from Apple, 2% cash back on purchase made using Apple Pay, and 1% cash back on purchases using the physical card. While the physical card looks quite impressive, the rewards structure is geared towards using the card through the app. The physical card is intended for use only with vendors that don’t accept Apple Pay.

Interestingly (to me at least), Apple is promising no late fees, no over limit fees, no annual fees, no FX fees, and interest rates that are “among the lowest in the industry.” When pressed on the interest rate Apple responded that the rates are variable and “the lowest rate you might expect today would be 13.24%, all the way up to 24.24%. But these rates are subject to change by this summer’s launch.”

What’s Missing?

There are a few things missing that a “normal” credit card would offer. The first is a sign up bonus and Apple has no intention of offering one. Second, the ability to add authorized users will not be present when the card is launched and it is unclear if that functionality will be added in the future. Last, and most important, this card will only be available to those with iPhones that support Apple Pay. Due to the need for Apple’s proprietary Security Element it is unlikely that we will see this card available on non-iOS devices.

My Personal Take

Apple loves fanfare and has a rabid following and because of that, this card got a lot of press this week. Take a step back though, and look at what the card offers in terms of rewards, sign up bonus (or lack thereof), interest rate, etc. If Citi or Chase issued this exact card, would the reception be the same? Would you be excited? I wouldn’t be and this card doesn’t seem to provide much to me. We know that we can do far better than 3% cashback on Apple devices by using gift cards (easy 4x-5x) AND you can sometimes stack with portals for a nice double dip. On top of that, transferable rewards offer outsized value when compared to simple cash back.

I will say that I do appreciate the security and privacy moves that the virtual card offers and can’t say that I have any complaints about the lack of fees. The interest rates on the other hand are in no way groundbreaking and are in-line with essentially every major credit card on the market.

There are two questions I have regarding this product: Will Apple be able to keep their no-fee promise – and if so, at what point do they start closing accounts for consistent abuse of late payments and over limit activity? The second question is what sort of credit score will be necessary for approval on this card? Credit scoring is a solid indicator of behavior, but for a card that offers noncompetitive rewards will high credit score individuals accept noncompetitive interest rates as well?

What are your thoughts on this new product? Do you think other cards will follow with fee reductions? Do you plan on getting this card? Let us know in the comments or on the Credit Card 101 Facebook group!

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Strategies to Meet Minimum Spending Requirement to Earn Sign Up Bonus on new Credit Cards

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Does your excitement of getting a shiny new credit card and an excellent sign-up bonus boil down quickly with the thought of meeting a high spending requirement? Are you someone who holds themselves back from applying for great cards because of a high spend requirement? You might want to think again and consider these options to quickly meet your minimum spend requirement.

PS: I won’t talk about methods where a huge sum of money is blocked for a couple of months or so. Most of these ideas are reliable (though, as always, YMMV), and with fairly quick turnaround time.

1.    Bluebird/Serve

Your mileage will vary highly based on the store, location and the customer service representative assisting you when trying to load these giftcards to serve or converting them into money orders as they are pin enabled. If they say you can’t do it, simply walk away without arguing much. It also helps to start slow, with say a $100 load or a $500 load. You can pay back your credit card directly from the funds loaded on to the serve account or even send payments to Mortgage lenders, car payments, utility companies that do not accept credit cards, IRS to name a few.

Serve and Bluebird are prepaid re-loadable cards issued by AMEX, and they basically act as a debit card. The way to use this to your benefit is to buy visa gift cards from a store like Staples or Office Depot/Office Max when they run the no-fee visa gift card promotion using your credit card (Ink Business Cash gives you a 5% return, which makes this a profitable venture). You then visit a Walmart and use these prepaid visa gift card to load your Serve card. Not all Walmart are friendly with the use of visa gift cards to load these prepaid cards. You can buy Visa giftcards from giftcards.com for $500 denomination (limit $2500 a day including fees) and make sure to go through a website like Topcashback, Ebates and Mr. Rebates to get back 1% of the purchase price bringing down the cost of these giftcards. Make sure to not purchase Mastercard brands as they are difficult to liquidate with these strategies.

Topcashback offers 1% cashback on Visa Giftcards

Amit used sign up bonus from the Hyatt Credit Card for 50K points and Free night certificates with the old Hyatt card (good for any Hyatt worldwide now limited to category 1-4) to spend 5 nights at Hyatt Ziva Cancun.

2.    Plastiq

A lot of expenses, like rent, utility payment, etc. usually require you to pay via a debit card or check and do not generally accept a credit card. In cases like these, you can use a service called Plastiq (this link will get you $500 fee free dollars). You can make these payments through Plastiq, which will charge your credit card and make your payments, usually for a fee that ranges between 2-3%. This method is usually only used when you are very short of meeting your minimum spend and will lose out on a bigger sign-up bonus rather than the 3% fee. We also recommend keeping an eye on their promotions, which offers fee-free transactions frequently.

Do check out our detailed post on Plastiq .

You can visit the leaning tower using points from several portals such as Ultimate Rewards, Thank you points, membership rewards, City National bank Rewards
Business Class seat North America to Italy for 55K United miles just from one sign-up bonus

3.    Gift Card Reselling

Most online and brick-and-mortar stores, especially grocery chains, have discounted gift cards every now and then or provide you with a multiplier rate on fuel-points. You can simply resell the gift cards on portals like raise.com, gyft.com, cardpool.com etc. and will break even or even make a slight profit with your discounted gas and the money you received from selling the gift card. In fact, Amit never pays a full dollar to top off two of his cars. You can actually profit by purchasing these gift cards if your local store has a rewards program that earns points towards groceries or fuel.

Note: It is never a good idea to head to a store and get thousands of $$$ worth of gift cards. Please be cautious especially with American Express, who do not want their customers buying gift cards to meet minimum spend requirements for the sign-up bonus.

4.    More Gift Card Tricks

Additionally, not only can you use gift cards to resell or for personal use, but you can also buy visa gift cards and convert them to a Money Order in a store like Walmart. These are highly YMMV, depending on the cashier and store-policy.

5.    Tax Payments

If you’d like to meet minimum spend and are okay to spend some money on fees, you can pay federal taxes using any of the sources that the IRS mentions on this link. One of the processors on the IRS website charges a 1.87% fee and paying a small fee out of pocket may make sense for some based on the card used and sign up bonus offered. Not only can this help you meet MSR but also provides some float on the funds.

We highly recommend a card like the Amex Blue Business Plus Card where you can earn 2 MR per dollar spent, up to $50,000 per year, in any category.

6.    Everyday Spending

Perhaps the most uncreative way to meet your minimum spend requirement, but if you are only a few hundred dollars short of meeting the spend requirement, it might make sense to hit your nearest wholesale club or grocery store and stock up on non-perishable items. If you have friends or family who are okay with you paying for them in return for cash or a bank transfer, this could minimize the effort required to meet the spend requirement by doing things that you already do.

7.    Spend With Delayed Reimbursements

We previously covered a couple of methods that the members of the Credit Card 101 community are using. The first and more consistent option is to use RebateKey, where you buy products from Amazon and get refunded for the cost of the product after a month. The rebates on these products vary and some are 100% free. Even if you do not have a need the products can be donated to charity or given our as gifts.

The second option is to buy special edition coins that the US Mint releases time and again and sell them, at least at break even, though most times it’s at a decent profit. PFS Buyers club is one company that several members of Credit Card 101 have successfully used in the past.

We’ve covered both these methods extensively on our website here for RebateKey and PFS Buyers Club.

JAL Business class can be scored from North America to Japan for 80k to 90k miles depending on program

8. Electricity and Gas Bills

To specifically pay for your gas and electricity bills, be sure to check Arcadia Power . If you sign-up for Arcadia energy, they will source 50% of the energy from renewable resources, and as an incentive eat up the credit card fee that your utility provider would charge otherwise. This helps you earn points on your card, buys you time with the payment, and save the environment. All this without spending an additional cent!

9. Flipping Items on Amazon and eBay

The founder of Credit Card 101, Amit Desai has been using this strategy for the last two plus years to not only generate profit but a whole lot of credit card miles and points. Again, there is risk involved with starting any business and credit card points should not be the sole reason for starting any business, let alone e-commerce, with the risks involved. But if you ever want to learn more on how to get started, Amit recorded a podcast for Side Hustle Nation

We have specialists in our Premium Group who can guide you with the most ideas discussed above. You can also learn other tips, tricks, and opportunities to help increase credit card rewards.

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Brexit and Travel

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We are only a handful of days away from Brexit and at this point the British Parliament still has yet to approve a deal. So, what does this mean? The short answer is we don’t really know. What we do know is that one of three things will happen on March 29th – 1) Parliament agrees to a deal with the EU, 2) The UK requests an extension, or 3) The UK crashes out with what is known as a “Hard Brexit.” While many articles could be written on each of these scenarios, we are going to focus on some of the travel related aspects and how your trip(s) may be affected.

Businesses and certain government entities are preparing for the unknown. Airline caterer Gate Gourmet is stockpiling meals in the UK to avoid an potential disruption while Heathrow is making sure they have enough of the various EU-sourced goods that allow them to properly do their jobs, such as gloves and scanners.

British Airways stated that customers should expect to see no disruptions of service and that they will continue to service all of their destinations regardless of whether a deal is reached. easyJet created a new company, easyJet Europe and physically moved planes to the continent as the uncertainty grows. Going back to BA, they are in an interesting spot, as their parent company IAG has stakes in a number of European airlines – Iberia, Aer Lingus, Norwegian, and Vueling. With IAG’s headquarters located squarely in the UK – they are currently decidedly British. IAG is currently working to ensure that it is seen as a European company post-Brexit in a no-deal scenario to protect its European routes.

The part that most readers will care about is the future state of air travel to and from the UK. The best case scenario (in my opinion) is that everything stays the same. In a no-deal scenario would certainly lead to higher fares and immigration issues. On top of those unwanted affects, there is the potential for as many as 5 million tickets to be canceled due to flight caps that could be imposed in the face of no-deal.

Citizens of the United States will need to obtain travel authorization to enter the EU beginning in 2021 and a no-deal scenario would certainly place British citizens in the same boat. While the financial burden would amount to under $10 USD for a 3 year authorization, this process and cost is a far cry from the free movement to which British citizens are currently familiar.

I am no expert on any of these matters, but from where I sit it appears that the uncertainty isn’t receding and anxiety is only growing. Perhaps one of you smarter readers can figure something out for Europe??

…so, if you want to read the 585 page agreement as it currently stands, please go right ahead!

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2019 State of the Wallet Address

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I tend to do a lot of my personal financial reviews at the beginning of the year – preparing my taxes, checking my retirement investments, managing recurring bills (cable, cell phone, etc.), and looking at my open credit cards. While I’m sure you all want to hear about my home office deduction, my 1099-INTs, and the like…I’ll just keep this focused on the credit cards. 

I broke down my analysis into three sections:

  1. Open Cards I am Keeping
  2. Open Cards I am Closing/Converting
  3. Cards I am Considering

There are so many fantastic products available to us these days and with every company competing for market share there is a lot of overlap among products.  Each reader has his/her preferred airlines, hotels, and lifestyle needs and for me there are a few important items to note. First, I live in a secondary market (Richmond, Va), so our airport has no lounges, and I have no airline loyalty.  Because of this, co-branded airlines cards don’t have as much value as they would for someone consistently flying American Airlines out of Charlotte, for example. Second, I value transferable points above all else and look to maximize value in that way as opposed to maximizing cash back.  Third, diversification is important, as to allow for more options when it comes time to book award travel.

Open Cards I am Keeping

American Express Gold – In its revamped form, this is a recent addition to my wallet.  With its 4x dining and 4x grocery (up to $25k) per year, it makes the short list.  To add icing on the cake, the airline ($100) and dining credits ($120) take quite a bite out of the $250 annual fee. While the card also offers 3x on airfare and 1x on everything else, this card doesn’t see action in those areas

American Express Platinum – I recently wrote an article on why this card is so valuable to me.  It simply comes down to the fact that while I don’t do a lot of purchasing on the card (aside from airfare at 5x), the benefits offered by American Express make the $550 annual fee seem insignificant.

American Express Blue Business Plus – With no annual fee and 2x on all purchases up to $50k per year, there is nothing not to love about this card

American Express Bonvoy Brilliant – This is the odd one out on my “keep” list.  The earn rates aren’t competitive, it has a high fee (albeit with some decent perks), and I think the name is stupid, but this card performs two very important duties for me.  First, I do enjoy SPG Marriott Bonvoy points as they offer access to unique transfer partners with an amazing array of award chart sweet spots.  The second thing this card provides is a nice path to Platinum Elite status.  By spending $75k the cardholder obtains that status for the remainder of the year and for the next calendar year.  While I don’t stay in hotels as often as most, it is nice to have that in my back pocket. This card may be jettisoned if Marriott continues to water down the statuses and have inconsistent delivery of benefits from their hotels.

Chase Ink Plus – As long as Chase continues to keep this card “active” it’ll have a home in my wallet.  Offering 5x on phone, cable, internet, and office supply stores up to $50k per year, it is easy to justify the $95 fee

Chase Ink Cash – Ink Cash matches the Ink Plus in categories and while it does have a lower cap at $25k per year, there is no fee, making this card a no-brainer.

Chase Ink Preferred – Offering 3x on up to $150k annually on travel, shipping, phone/cable/internet, and online advertising provides a great way to pull in major Ultimate Rewards hauls each year.  It also offers the most comprehensive cell phone protection of any major credit card.

Chase Freedom – Rotating quarterly 5x categories capped at $1500 per quarter, the ability to pool points between accounts, and no annual fee make this an easy keeper

Balance Transfer Cards – I hold a slew of other no-fee cards as well that have very high limits that I don’t intend to close.  These cards routinely send me access checks which can allow me quickly to invest in something or create cash if needed.  Additionally, the high limits and 0 balance currently on these cards helps keep my overall credit utilization in check, leading to a more stable high credit score.

Open Cards I am Closing/Converting

American Express Everyday – While I have no specific plans to close this card (as it has no annual fee), it only offers 2x on grocery up to $6k per year and a 20% bonus on all points if 30 or more purchases are made in a calendar month.  My plan with this card is to potentially convert to another Amex product or wait to see if something new comes out that is worthy of an Amex slot.

American Express Hilton Ascend – This card made the long march from a Citi Hilton Honors to an Amex Hilton Surpass to now its current form.  I can see where some would get value from this card, but for me it is just taking up room and has an annual fee (that I have been able to get waived for the past 2 years).  It its current state it doesn’t add much value to me, but I am still contemplating what my hotel moves will be for the latter half of 2019 into 2020

Chase Sapphire Preferred – For some it is probably shocking to see this card in this section of my list but compared to the other items on this list and my spend patterns, this card is eclipsed in each of it’s spend categories by another card with only 2x dining and travel.

Citi Premier/Prestige – I am lumping these two together as I will only be closing one, but at this stage I don’t know which.  Why am I keeping one?  Although Citi has some odd rules about combining ThankYou points, keeping open a card that allows access to transfer partners is important.  The Citi Premier has an annual fee of $95 and for that price point, some solid earn rates with 3x travel and 2x dining and entertainment.  The Citi Prestige is a premium card with a $495 fee with some very solid earn rates (5x airfare, 5x dining, 3x hotels and cruises), but the big winner on this card is the coveted 4th night free benefit.  With Citi limiting this benefit to two uses per year, it does put a damper on what was a 4th night bonanza, but the $250 travel credit is still very much alive.  At this point I am leaning towards keeping the Citi Prestige and dumping Premier.

Cards I am Considering

Citi Rewards+ – If you haven’t heard of this card, listen up!  This is hands down the best points card for a person that makes a lot of small purchases.  It earns 2x gas and grocery (capped at $6k per year), but the kicker is that all purchases are rounded up to the nearest 10 points.  That $4 coffee = 10 points, the $1 soda = 10 points, the $0.01 Amazon reload = 10 points. You COULD say that this card earns 1000x on certain purchases!  Regardless, this is a great card and since I haven’t opened OR closed Premier or Prestige in the past 24 months, I AM eligible for the bonus. 

Chase Ink Unlimited – I have every other Ink card under the sun, so what’s one more?  The reality here is that when I’ve maxed out my Amex Blue Business Plus, am not working on a sign-up bonus, and am not purchasing in a category with a bonus this card (and Freedom Unlimited) offer the best value at 1.5x on everything.  What is even better?  This is a no fee card and the points can be pooled with my other Chase accounts.

American Express Hilton Aspire – I have the Ascend card and it isn’t do anything for me now.  If I move away from Marriott, the EASIEST place to go is Hilton, as the Aspire card has a slew of great benefits and credits and provides Hilton Diamond status just for holding the card.  While it is a less generous program, many of the changes to Marriott are lowering the value of the program, so if I can grab status for no spend, that is a better bargain in my opinion.

Chase World of Hyatt – Much like the Aspire if I move to Hilton, this is card to grab if I move to Hyatt.  Hyatt’s top-level status – Globalist is the best of the top tier statuses out there, but Hyatt doesn’t have as many properties, so sometimes you have to go out of your way to stay in their properties.  The spend required to hit that top tier status is at least $125k, depending on your current Hyatt status.  Earn rates on this card aren’t fantastic, but along the way to gaining status there are multiple free night certificates to be picked up.  For a fee of only $95 per year, it may be the way I go.


There you have it…I have bared my um…wallet?…to you all and I’m curious as to what you all think.  On what points do you agree?  Where do you think I’m a total idiot (let’s keep it specific to credit card and points to save on time)?  What would you do differently? 

I’ll be revisiting this later this year when I have a better idea as to what I’m going to do with hotel loyalty.

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February Catch-Up

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Some quick highlights (and lowlights) from the month of February…

American Airlines Credit Cards to Lose 10% Points Rebate

One of my favorite benefits of holding AA credit cards (Barclays or Citi) is that they offered a 10% rebate on redeemed miles up to 10k per year.  This more than offset the $89, 95, or $99 fee and I am extremely sad to see this go.  The silver lining here is that some new perks are coming to the cards on May 1 including additional statement credits, companion tickets, and a new program called “Flight Cents,” all of which we be detailed in an upcoming post.

TWA Hotel Now Taking Reservations

JFK’s iconic Eero Saarinen designed TWA Terminal has been turned into what has to be the most AvGeek hotel in the world and it looks stunning.  Not only is it conveniently located to JFK (it used to be a terminal!), but offers chic accommodations that harken back to the golden age of jet travel.  Rates are starting at $249 per night and rooms for May 15th and onward, when the hotel officially opens.

9 Airlines Added to TSA PreCheck Program

TSA added nine new airlines to the PreCheck program: Air India, Asiana Airlines, China Airlines, Eastern Airlines, Elite Airways, EVA Air, Japan Airlines, TAP Air Portugal, and Volaris.  This brings the grand total to 65 airlines. Click here to see all 65 participating airlines.

Airbus Announces End of A380 Production

Airbus formally announced the end of A380 production earlier this month. First flying in 2005, production will end in 2021 with roughly 250 airplanes having been built, far fewer than the originally anticipated 1,000+. While this move hardly comes as a surprise, it is still sad to see this iconic plane end production. With the introduction of lighter and more fuel efficient wide-bodies such as the Boeing 787 and Airbus A350, the need for jumbo jets has decreased and smaller markets have been opened up leading to a pull-back from the hub and spoke system. While the A380s and 747s will be in the skies for years to come, their numbers are dwindling. Don’t worry too much though, as many great opportunities still exist to fly these fantastic planes.

AirAsia to Open Fast-Food Restaurant Serving Airline Food

This is a bit of a weird one, but AirAsia CEO Tony Fernandes announced on Larry King Now that the airline plans to open up a fast food restaurant called Santan. The restaurant will be serving the same food that is available from their on-board menu. While not every meal I have had on an airplane has been bad, there are very few items which I have actively desired while on the ground. That being said, I haven’t ever flown the Malaysia-based AirAsia, so can’t speak directly to their food. This could just be a marketing stunt, but I am certainly intrigued.

Ebates to Allow the Earning of American Express Membership Rewards

Is “game-changer” too strong a statement to use here? Ebates, which is a popular cash-back site is now offering new users the one-time choice to earn cash-back or Membership Rewards. With this change, the Ebates Visa credit card offers a minimum 3x on online purchases made through Ebates, which makes this card arguably the best card for online purchases for which one can apply. A full write up on this change will be forthcoming in a separate post.

Simon Mall Increases Daily Gift Card Purchase Limit to $25K

It is rare that a company makes FRIENDLY changes to the world of manufactured spending, but in the case of Simon Mall, they have done just that. The prior limit had been $10k per person per day and while this bump in purchase limit probably doesn’t change the behavior of most people, it is nice to see a positive change. This could be a sign of more friendly changes from Simon Mall.

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Start saving with Qapital Banking App for Automated Savings plus $20 Sign-Up Bonus and $20 Referrals

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Qapital is a free banking app that can save you money automatically towards your financial goals. Right now they are running a promotion until Feb 15th and for everyone who signs up with a referral link will earn $20 sign-up bonus after linking a checking account and making a first deposit. You can also refer others and when they sign-up using your link they can earn $20 as well.

You have to first download the Qapital app. Next, create an account and link a checking account to Qapital app (enter login credentials). You can set up a savings “goal” and a “rule” (how much to be deposited each week etc to qualify for the $20 bonus). As soon as the first deposit is made as per your rule you will be awarded with the $20 sign-up bonus. Makes sure you use a referral link for this offer to be valid as simply downloading the app from playstore will not trigger the bonus.

You can leave your referral links in the comments below or use our link here

Hat tip – DoC

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