Mar 22

Should You Buy Miles Directly From American?

If you don’t have enough miles for your next great trip, the airlines are always happy to sell you the difference. Usually, the amount that they charge you per mile is punitive. In other words, the cost of the miles greatly exceeds their value. Sometimes, though, they’ll offer a discount. And while I don’t normally advise buying miles, there are times when it works.

American Airlines Mileage Sale

american

Buy American miles for 1.9 cents each. But there are a few conditions…

American is currently offering a pretty good discount if you buy miles in bulk. Buy 150,000 miles, and they’ll give you a bonus of 100,000. That brings the cost of miles down to 1.9 cents per mile. It’s not the best deal that they’ve ever offered, but it’s decent. So should you be a buyer?

When You Should Buy

  • You should only buy miles if you buy the maximum amount available. In this case, the maximum amount is 150,000 miles. If you drop your purchase by even 1,000 miles, the bonus drops precipitously (in this case, to 75,000 miles). That pushes your cost up to 2.1 cents per mile, an increase of over 10%.
  • Only buy if you already know when you want to use them. If you were planning a trip with cash, but the cost to buy miles and immediately redeem them for the same trip is less, consider doing so. You won’t earn miles on the flight if you redeem for a trip, so be sure to add that into the cost of what you’re giving up.

When You Shouldn’t Buy

Anytime else. Don’t buy just to build up your “bank” of miles. You never know when an airline will choose to devalue, meaning that the miles you paid thousands of dollars for aren’t worth as much.

Normally, I’m not a fan of buying miles. They’re often expensive and can be difficult to use. But if you have an opportunity to buy a ticket immediately, it’s worth a look.

 

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And finally, you can apply for credit cards through the Credit Cards for Charity link above. All card proceeds are donated to charity, so please do well by doing good!

Mar 19

Starbucks “Enhances” Rewards Program

Uh oh. Today, I got an email from Starbucks about the rewards program. The headline, of course, is a positive one. More choices for rewards, starting April 16. And what could be bad about more choices?

More Rewards, Less Value

Starbucks rewards

New rewards, higher prices

The problem with these “enhancements” are that they are anything but. Because while you now have more choices, they will cost you more.

Starbucks has clearly been learning from the airlines. They’re moving from a flat redemption price of 125 for any reward, prices are now on a sliding scale. Extra shot? Sure, it should be about 25 points. But the best value had always been from the sandwiches, boxes and drinks. They’ve increased the price of breakfast sandwiches, oatmeals and drinks 20% to 150 stars, and boxes or lunch sandwiches are up 60% to 200 stars. Ouch.

Of course, a sliding scale makes sense. It should cost more for a more expensive product. But sadly, it also represents the continued devaluation of one of the most popular loyalty programs in the world.

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Mar 19

Mastercard Introduces New “Free Trial” Rules

I’m surprised that I missed this one. Starting April 12, Mastercard will introduce new rules regarding free trials. And while it will only apply to physical products, it’s an important step in helping consumers who subscribe for something and then can’t figure out how to get the merchant to stop. It’s big enough that I’m willing to ignore the fact that the press release author doesn’t know the difference between “unsatisfied” and “dissatisfied.” Here are the details.

Mastercard Free Trial Rules

credit card, mastercard

One thing about the internet: It’s pretty easy to sign up for “stuff.” Prepared meals? Check. Fancy soaps? Sure, why not? It almost makes me nostalgic for the days of Columbia House and BMG. Almost.

Hopefully, though, that craziness could be coming to an end. Starting April 12, Mastercard is introducing a “free trial” policy. Merchants who sell a physical product through a subscription can no offer a “set and forget” it. Rather, at the end of the free trial period, you will have to “opt in.” If you don’t choose to continue to receive the item, the merchant can’t bill you. I’m sure that it saves Mastercard time and money, as well, by cutting down on the phone calls. Good. Nothing like a win-win scenario.

It’s not perfect. It only applies to physical items, so they can still charge you for that credit protector that you accidentally signed up for. But I hope it’s a move in the right direction to restore a little bit of power to the consumer.

 

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And finally, you can apply for credit cards through the Credit Cards for Charity link above. All card proceeds are donated to charity, so please do well by doing good!

Mar 17

Discover Announces Spring 5% Categories (For An Easy $75)

The Discover It cash back card represents one of the best unknown values in credit card land. It doesn’t come with a sexy sign-up bonus, but it’s quarterly bonuses more than make up for that. Let’s take a look at the card.

Discover Cards (Overall)

Discover is one of the strongest cards when it comes to soft benefits and fee-free living. At one time, it was hard to find merchants who took the card, but partnerships and the greater use of credit cards overall have brought the company into the mainstream. It’s now one of the easiest, and least expensive, cards to use. Among other benefits:

  • Discover cards have no annual fees. They’re free from day one.
  • For those of you who travel abroad, you can say goodbye to foreign transaction fees. Discover cards don’t have any.
  • Customer service is all US-based and, more importantly, they actually pick up the phone when you call. No endless phone menus.

The Quarterly Bonuses

discover it

Five percent cash back categories for April through June

One of the best perks of Discover cards, though, is one that changes every 90 days. Each calendar quarter, Discover offers a spending category that turns the traditional one percent cash back into a five percent juggernaut. It may be online shopping, warehouse clubs or supermarkets. And for the period from April through June, you’ll get cash back from local travel. For the first $1,500 that you spend during that period, you’ll get a five percent rebate on all purchases from ride sharing companies Lyft and Uber, as well as gas purchases. That’s $300 per year by making purchases that you’d probably be making, anyway.

Discover cards definitely have a place in your wallet. Consider getting one and using it for the quarterly bonuses.

 

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And finally, you can apply for credit cards through the Credit Cards for Charity link above. All card proceeds are donated to charity, so please do well by doing good!

Mar 13

Marriott Double Take Offer (Double Points)

I still can’t get used to calling the Marriott Rewards program “Bonvoy.” I’m sure they paid consultants millions of dollars to come up with that ridiculous name. I would have done it for half of that price.

Marriott Bonvoy Double Take

Bonvoy

Marriott Double Take Promotion

At least their next promotion is decent. Double Take is as the name sounds: Double points on all of your stays. The program runs from March 19 until June 4 and does require registration. There’s a big downside that seems to be becoming a habit. Namely, you don’t earn the bonus until your second stay during the promotion period.

Marriott has been pulling back from the double points promotions but, given the recent debacles during the Starwood integration, they won’t object to a little goodwill. You might as well sign up. It takes two seconds and costs you nothing.

 

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Mar 11

Traveling To Europe Could Get Tougher…

Quick, but important, note today.

Starting in 2021, Americans (as well as citizens of several other countries) will need authorization to travel to Europe. While not a visa per se, it’ll still cost you about $8 and have to be done in advance of your trip to the continent. Called ETIAS, it’s similar to the US ESTA system which is already in place. The authorization will allow US travelers to enter any of the 26 Schengen nations, a collection of countries that all people to move freely within them.

It’s not a huge burden, but it represents one more step in making travel that much more difficult. Hopefully, this law will be the extent of that burden.

 

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Mar 08

It’s Tax Time, So Make A Few Bucks

With changes in the tax laws this year affecting refunds and potentially kicking you from a refund to a payment, it’s time to try and figure out a few ways to minimize the pain. So how about using your credit card to pay the IRS?

How to Make Money by Paying Taxes

 

Sadly, tax time is in six more weeks. Screw that groundhog.                         Photo Credit: Creative Commons

Remember, nothing on here is tax advice. I know my miles and points programs, but you should use a real accountant for your IRS inquiries.

 Nobody likes doing their taxes and, certainly, nobody likes paying taxes. But if you have to pay, you might as well make a bit of money while doing so.

You may not know this, but you can actually pay your federal taxes, including estimates, with a credit card.* If you have a credit card whose rewards are greater than the fee (See below for three options.), you’ll come out ahead. There are three major companies that the IRS partners with to process secure payments, and all of them charge a fee. The fee may be tax-deductible.

Pay 1040: 1.87% fee, minimum $2.59. Accepts Visa, MC, Discover and American Express

 Pay USA Tax: 1.96% fee, minimum $2.69. Accepts Visa, MC, Discover and American Express

 Official Payments: 1.99% fee, $2.50 minimum. Accepts Visa, MC, Discover and American Express

 Beginner’s Hint: You can also pay with a debit card for a $2-3 flat fee, but strong debit card rewards programs are hard to find.

The fee chart for paying tax bills online at Pay 1040

You’re not going to make a lot of money paying taxes. It’s kind of a good-news-bad-news situation: The more you owe, the more you can take advantage of credit card rewards when paying. It’s about the psychic joy of getting a little something back when you get to April 15. As of 2014, the latest year for which I could find data, the average taxpayer among the 20% or so who owe money will be paying a bill for about $6,000.

The sites are simple to use and self-guided. You’ll input your personal info, choose what kind of taxes you are paying and they’ll charge you instantly.

Using The Right Credit Card – Three Options

credit card

Photo Credit: Creative Commons

Given that the various payment agencies are basically the same, I’d just go with the cheapest one. In this case, that’s Pay 1040. They’ll charge you 1.87% to pay either your annual federal taxes or quarterly estimates (Most of these companies limit you to two payments per calendar quarter, although you may be able to call them and get an agent who is willing to go over the limit for you.).

There are many cards available that will make you money, but here are a few options that I like. If there’s one that you want, you have plenty of time to do so before tax day and, if the card has a sign-up bonus, anything you spend toward taxes will, of course, count toward that minimum.

 Citi Double Cash 

The simplest, no-muss no-fuss solution is the Citi Double Cash card. It pays you a flat 2% on every purchase, no matter where you make that purchase. No annual fee, no huge sign-up bonus, no bonus categories. It’s the card for that’s probably best for the 99% of the population that simply doesn’t want to have to worry about every bonus category.

Your profit: You’ll make 0.13% (2% reward minus the 1.87% fee) on the transaction. For a $6,000 bill, the average person will make a whopping $7.80.

Barclaycard Arrival Plus World Elite Mastercard

Next up is the Barclaycard Arrival Plus World Elite Mastercard. It tells you that you earn “double miles,” but they don’t actually give you miles. Rather, you get money toward a travel purchase (and their definition of “travel” is pretty broad, not just airlines and hotels, but it doesn’t matter, since the “miles” never expire. If you don’t have a travel purchase this month, you may next month.). The use of the term “miles” is simply a gimmick. So it’s a 2% card. Here’s where it gets interesting:

  • New cardholders get a $700 statement after spending $5,000 on purchases in the first 90 days.
  • A 5% rebate on any miles that you use, meaning that your reward rate is actually slightly above 2%.
  • The annual fee is waived for the first year. You have 12 months to decide what you want to do with the card.

Your profit: You’ll make 0.13% plus a bit extra. For a $6,000 bill, you’ll earn $8.19 from the bill, plus an additional $735 for the sign-up bonus. The $743.19 bonus includes the 5% kicker.

Discover It Miles

But the biggest potential winner is the Discover It Miles card. I’ve praised Discover on more than one occasion, for reasons ranging from its cash back shopping bonuses to lack of nuisance fees to all-around excellent customer service. But what separates the Discover Miles card in this transaction is the big return that you will get. This is a card worth having even if you don’t use it to pay taxes.

Like the Barclaycard above, the It Miles card pays you in “miles” that are really cash. You’ll earn a flat 1.5% rebate that can be used for anything, not just travel.

The good stuff: At the end of the first year, Discover will double any and all points that you earn throughout the year, meaning that, for the first 365 days, it’s actually a 3% rebate card, not just a 1.5% card. I can’t find a better flat rate return on any card out there, particularly for one without an annual fee. They’ll also double any bonus miles you get so, if you shop through the Discover portal and earn points there, you’ll get those doubled, as well.

Your cash back will be 1.13% (3% minus the 1.87% fee), or a whopping $67.80, today’s winner.

The Bottom Line: Get rich paying taxes? Unlikely. But getting just a little bit of “revenge” for your bill? Priceless.

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And finally, you can apply for credit cards through the Credit Cards for Charity link above. All card proceeds are donated to charity, so please do well by doing good!

Mar 06

IHG Credit Card Now Up To 120,000 Points

Part of the problem with having your computer repaired is that you miss out on a lot of the current buzz. For some, it’s celebrities and TMZ. For me? Miles and Hotel Points.

IHG Credit Cards

ihg rewards, credit card

You’ll be able to get at least one night here.

One of the things that I missed out on was an increase in the sign-up bonus for the IHG Rewards Credit Card, which has gone from 80,000 to a potential 120,000 points. IHG has a number of different brands, with the best-known being InterContinental, Kimpton, Holiday Inn and Crowne Plaza. A night at one of their properties ranges from 10,000 to 70,000 points, so you’re likely going to end up with at least a few nights from the card.

To get the bonus, you’ll need to hit minimum spend thresholds. Spend $2,000 in the first three months from account opening and you’ll get the first 80,000 points. And after you spend $5,000 in the first six months, you’ll get another 40,000 points. Not too bad.

The card also comes with a free anniversary night each year (at hotels where rooms cost up to 40,000 points per night), Platinum status (which is largely useless) and the fourth night free on award stays. That’s not a bad deal for $89.

The “best-ever” perk with the card, a free night each year at any property, is gone, but the sign-up bonus is valuable enough that you should consider getting the card if you are going to use the nights.

 

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And finally, you can apply for credit cards through the Credit Cards for Charity link above. All card proceeds are donated to charity, so please do well by doing good!

Mar 04

The Basics Of Hotel Points Redemptions

A few weeks ago, I did a piece on redeeming miles. It can be a complicated process, if you’re lucky enough to get a seat at all.

Redeeming points for hotel rooms is a somewhat easier process, and a bit more rewarding. As a whole, rewards per dollar spent at hotels come at a higher rate than those spent at airlines. In other words, spending a dollar with an airline will get you 1-2 cents in rewards. At hotels, that number starts at about 3%. Why is that? Because when you stay at a hotel, chances are good that you have a lot of choices. When you’re flying, you will likely have far fewer options.

Redeeming Points at Hotels

The number of points that you’ll need is generally related to the cost of a room night. Different brands do it different ways, but most companies put their various hotels in categories. The nicer the hotel, the higher the category. And the higher the category, the more points it costs.

Hotels usually break down redemption levels one of two ways. First, many of them have a fixed chart. Levels don’t vary and prices don’t vary, although hotels can move categories each year. Some are easy, like Wyndham, which just went from “all rooms at 15,000 points” to a range:

wyndham, hotel points

Wyndham Rewards

And chains like Marriott, which have dozens of brands, are more nuanced. They’ve got eight categories, so be prepared to search.

Marriott Bonvoy, hotel points

Marriott Bonvoy chart

The other option is “floating rates.” That’s the direction that Hilton is going. It will likely be followed by the other brands. Floating rates give Hilton the option to change the price in points, depending on demand. They’ll no longer be locked into a chart. On the one hand, you’ll never know how many points your room is going to be until you do your search. On the other hand, though, they’ll probably be able to open up more rooms in the reward inventory. By controlling the pricing, they can offer rooms at high prices when there’s high demand.

 

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Feb 27

Interesting Article On Advantage Gambling

Today’s article isn’t about miles per se, but rather, an adjacency.

My friend Mike writes the blog TravelZork, which is always a good read. It’s specialty is gambling. Mike knows the programs inside out and has a number of suggestions on what you should join and when. This morning, he linked to an interesting article.

Advantage Players

cosmopolitan las vegas

Someday, this could all be yours. Okay, not really.

The “Advantage Player” is one of the true rarities in gambling. They’re the player who can beat the house. Often, it’s a temporary benefit, and they’re still at risk of losing money. You’re probably familiar with many of them, such as counting cards (which can get you booted from a Las Vegas casino) or “match coupons,” that double your winnings without doubling your bet. There are even a few forms of video poker that give the player a long-term advantage, but few have the bankroll to take advantage of it.*

The article in the first paragraph is interesting because it addresses a situation that we don’t often see: Trouble getting your money back from the casinos. It also addresses some of the issues that we are likely to see as online gambling becomes more widespread.

Bottom Line: The house may not always win, but it’s gonna try.

 

*You may ask why a casino would even offer a game that has a player advantage. It could be one of several reasons, but the most common is that few players have the ability or bankroll to take advantage of the game, although the player often thinks that he/she does.. Other times, as in the piece above, some players can take advantage of others’ missteps or misfortune.

 

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And finally, you can apply for credit cards through the Credit Cards for Charity link above. All card proceeds are donated to charity, so please do well by doing good!