Strategy

I haven’t been in the points game as long as some, but I can say with 100% certainty that I value redeeming flexible points for premium air travel over premium hotel stays.

The way I see it, airline miles truly enhance travel when redeemed for the right route, with the right seating, on the right airline – especially in a premium cabin on long haul flights. To reach all travel destinations, most of us have to fly anyway. The people in economy class spend the same amount of time on the plane as the people in first class suites – but the experience is vastly different.  In the points game, it’s possible to choose whether to be miserable or delighted. And I think most of us can agree that a 16 hour flight in economy class is not a delightful experience. Redeeming for business class can make the trip to and from your destination just as enjoyable as all the time spent in between.

On the contrary, hotel points just don’t seem to yield as much perceived value as a business class redemption. Over the past year I’ve stayed in a high end Marriott Autograph property, as well as a Starwood Westin in a major metropolitan city. Both times I left feeling like I “burned” my points – as in wasted them.

Here’s the thing: the way I travel, I value getting up close and personal with a new city, often walking 5+ miles in a single day just to explore. I’m rarely inside my hotel room beyond sleeping or a quick change of clothes before dinner. Unless of course my girlfriend needs a nap. I just can’t get enough of the thrill of the adventure.

So for people like me who are there to suck the marrow out of every new experience, the premium hotel redemption just doesn’t seem to make sense. I’m often much happier to pay for a mid-tier hotel that has a good location, a decent view and adequate amenities to meet my needs for the limited time I’ll be there. I don’t need pampering, and frankly I feel it can detract from my travel experience. Most importantly, I often feel guilty when I don’t make full use of a hotel’s amenities. I either leave feeling as if I’ve spoiled myself unnecessarily, or that I didn’t take advantage of all that I could. I’d much rather stay at a well located mid tier hotel where I can affordably pay cash and build my point balances for my next airline redemption.

And let’s be honest, hotels devalue their programs all too frequently. There hasn’t been a year yet that I haven’t heard about Hyatt, IHG, Marriott, and the like “upgrading” their hotels a category or two higher on the award chart. It goes without saying this makes redemptions that much more challenging. The airlines aren’t the easiest to deal with either, but I can guarantee you these widespread devaluations do not occur with as much frequency or as great a  magnitude as with the hotel mega-chains. To be honest, I’d practically call it extortion.

I recommend you spend some time considering the relative value of your point redemptions, and prioritizing where you get the most value for your hard-churned points. As for me, my next vacation will be spent flying on one of Europe’s finest business class products and staying at an AC Hotel. And I will be perfectly happy. Cheers!

Award enthusiasts love debating between American Express and Chase, the kings of transferable point currencies. Both programs have a lot going for them, namely a great set of partners, and a large portfolio of credit cards to help increase points earnings. Incredible value can be had from both, but for now I’m picking my favorite of the two: American Express Membership Rewards. My logic coming to this decision isn’t typical, though.

Let’s take a moment to refresh you on my personal travel style:

• I like using my points on international premium flights above all else
• I often forgo using points on hotels and domestic airfare
• I usually travel to Europe once a year
• I have one big international trip a year that is not to Europe
• I do not actively chase airline or hotel elite status, at least as of 2019

Also for reference, my biggest three spending categories are as follows:

• Dining (including restaurants and bars)
• Groceries
• Hotels

Luckily my travel habits and spend profile allow for maximizing points with earning multipliers offered by both American Express and Chase, a key criteria for success with a program. I’ve found great opportunities to earn with both currencies, but the edge goes to American Express Membership Rewards (MR) with the Gold card. I can accrue 4x on all US dining and grocery purchases. International dining is a component of my spend, but not large enough to make a significant impact if I shifted spend elsewhere.

In terms of transfer programs and program value, I prefer the partners at American Express over Chase, as I love redeeming points with Aeroplan, ANA, Avianca and Iberia. As for Citi (yes, I’ll mention them for a brief moment), I don’t find their partners worthwhile aside from Avianca, which is already covered by Amex.

In terms of earning American Express Membership Rewards (MR) points, I also use the Blue for Business Plus card. 2x points per dollar on my unbonused spend with no annual fee as a base, plus multipliers up to 4x on my big categories gets me into 6-figure MR point territory every year just from my normal spend. This is HUGE!

But the earn side is not what sets the program apart. In fact, what I value about the Amex MR program is slightly odd and counterintuitive. I value the “lock-in” effect requiring points transfers to partners, rather than redemptions through a travel portal. I am easily encumbered by many choices, so the “lock-in” effect guarantees I stick to the path that I value most: international premium flights. Amex’s lack of a portal requires that I save points for my specific use case, acting as a “travel bank” for these preferred redemptions. Again, counterintuitive for most, but for me, the lack of a viable travel portal makes decision making straightforward.

I’m sure I could be reasonably successful accruing Chase Ultimate Rewards (UR) points for international premium travel. My likely path would be transfers to United, except the award chart isn’t particularly friendly. For example, the typical business class one-way flight to Europe costs 70K miles one-way…hardly a bargain. Alternatively, I could book through Iberia to get to Europe, but Amex covers Iberia as well, leading me back to Amex MR for a better earn rate. When you look at this scenario, I don’t see how Chase UR can be competitive for my desired travel.

This is the exact reason why I do end up using the Chase travel portal from time to time when I have some UR lying around. If all I need is an economy flight, I can book through the Chase portal to save some cash, and avoid the search for award availability. But if I’m looking for international flights, Chase doesn’t offer many great earn and burn scenarios that play in my favor. Not to mention the decision fatigue with the myriad of redemption options.

For some people, the optionality offered by Chase UR is awesome. Flexibility is ever present, and Chase offers many ways to redeem points for acceptable value. But for me, a domestic or economy class flight redemption is not optimal. And these redemptions are the sweet spot for Chase UR. By sticking with Amex, I don’t worry about the opportunity cost of redemptions. I know I am banking on premium flights when I accrue MR points.  

I believe there is a time and a place for the Chase portal, but that time is not today. To put it simply and bluntly, my take is that American Express is the choice for luxury travelers, and Chase is the choice for budget and family travel. I choose American Express, and have gone all-in. How about you?

To be blunt, hotel loyalty programs are getting hammered. Devaluations are coming left and right for all of the major hotel chains. The Marriott Bonvoy program is live, full of hotels going up in points. For example, a top tier property will move from 60K to 85K points overnight effective March 5th, representing a 42% devaluation for luxury properties in the portfolio.

Hilton has now launched a new hotel in the Maldives, effectively raising the bar on a standard points redemption night from 95K to 125K points per night, introducing a 26% devaluation. The two largest players in the space that hold the lion’s share of the market are making it hard for consumers to attain solid value out of currencies promised to unlock the vacation of our dreams.

Hyatt is the one leader in the space that has not devalued charts to the level of Marriott or Hilton. It’s still possible to redeem only 30K points for a stay at a top tier property like the Park Hyatt in New York City. A truly luxurious experience.

And forget about IHG. Their program died years ago, offering no real way to accrue points unless you want to stay often at crappy Holiday Inns, or spend a ton of money exclusively on Intercontinental hotel experiences.

In 1.5 years, the market has turned sour for hotel loyalty. Point devaluations are one thing, but decreased benefits for putting real money into a corporation’s pocket is another. Marriott elite status across the board has been devalued, especially for SPG members. Hilton gives away Diamond status with the Hilton Aspire card, allowing for every Tom, Dick and Harry to acquire elite status.

For some reason, there is a big pull to a hotel loyalty program if it provides the free breakfast benefit. I actually was all about the free breakfast benefit, too. But I’ve changed my mind, for a couple of reasons. Accuring status and paying extra money for a benefit used perhaps a dozen times a year for the average traveler isn’t that lucrative (i.e. breakfast at $15 / person * 2 people for 12 stays will equal roughly $360). $360 is the cost of an annual fee on a credit card that could help get more value from additional nights somewhere as opposed to banking hotel credit cards for perks like free breakfast.

On a personal level, I tend to not want many hotel breakfasts simply because they are filled with foods I shouldn’t be eating often: bagels, pastries, toast, cereal, etc. Not only is avoiding breakfast good for my health, it’s also helpful in getting away from feeling loyal to a hotel simply because they offer free breakfast. Let’s discuss more important criteria of a hotel stay, like quality of sleep and aesthetics of the room. Don’t those matter?

To end my rant, I really do believe that accruing for hotel points is rather meaningless unless you want to experience the best top tier properties. Opting for transferrable currencies with cash back equivalents (think Chase Sapphire Reserve or Citi Premier) likely will get you equivalent or better value if you are aiming to stay in low to mid tier hotel properties. I will not dive into the math because this is highly debatable, but the thinking here is that hotel points aside from Hyatt will now range in the .4-.6 cent range. On the higher end you can get close to 1 cent on a top tier property at Marriott or Hilton, but they are largely few and far between post devaluation.

Largely, I believe hotel elite status is overrated due to the heavily weighted free breakfast benefit. When you take this out of the equation, what are you really left with? Increased points earning and a chance to receive an upgrade. Note I say “chance” because it’s clear upgrades are not doled out frequently.

As for my hotel elite status, I will continue to hold the Hyatt card, and the IHG card for the annual free nights. They do their job, and they get me “status”, but that largely offers no benefit. At Hilton, I hold the Aspire Card to get the free annual night and the math works out that the card virtually pays for itself. However, Hilton Diamond status does not offer me anything I yearn to earn.

Marriott is the one program where I earned status organically in 2018. I am a Platinum Elite member and will not actively choose to maintain this status unless I have stays for work where Marriott is the logical choice. As of now, I have 39 nights planned this year, largely two trips, credit card elite credits, and elite bonuses. If I happen to stay an additional 11 nights in Marriott hotels this year, great. If not, I won’t be losing sleep over falling to Gold.

I knew this moment would come, but I didn’t think it would come so fast. I have been hitting the banks HARD. Very hard. As in, I’ve been approved for 27 credit cards in 22 months. I’m sure many of you have a more impressive portfolio, but this is a large quantity compared to the average American. Whatever. I’m having a blast, but I do believe I am getting shut out by the banks. Let me explain.

For anyone following bank activity, the banks are getting very tight with extending credit to people like me (read: churners & point pigs!). Chase has their 5/24 restriction, Bank of America has their 2/3/4 restriction, Citi has there 8/65 restriction, Barclays doesn’t like you holding onto more than 3 cards, and American Express only lets you get a signup bonus once per lifetime (aka 7 years) and is now getting more stringent with special IT technology identifying people with aggressive credit seeking behavior and denying bonuses.

That’s a lot of proper work done by the banks to limit unprofitable customers. After you get 27 credit cards, you start to wonder what cards you can still acquire with all of these restrictions. In fact, I’m starting to wonder what cards I can still acquire!

This brings me to my recent spur of applications. In light of the bonus returning on the Citi ThankYou Premier, and the Barclays AAdvantage Business cards coming out, I figured now is the best time to strike while the iron is hot! After applying, getting denied, and going through the reconsideration process with both banks, it’s safe to say I am being shut out.

I was denied for the Citi ThankYou Premier with a 755 credit score for “too many recent inquiries” although my record only shows 3 inquiries on my Equifax report in the last 12 months. I would hardly say this is too many inquiries, but Citi believes it is. I find it comical this is the reason for denial. If the reason stated “too many recent accounts opened”, I would have an easier time believing them. Take this for what it’s worth, but I find the denial reason odd. I even contacted the Citi Executive Office to see if they could help out, and I was still denied for the same reason. Interesting. Citi is the only bank I have been denied twice for the same card, and both times trying reconsideration through the Executive Office. I do want to accrue Citi ThankYou points, but they are making it hard.

Fast forward three more months, and I STILL was not able to snatch the Citi ThankYou Premier card. Unbelievable. I added zero new inquiries to my Equifax account, didn’t open any new lines of credit, and increased my FICO score into the mid 760’s. All of these actions would lead me to think I would be in prime contention to finally get approved for the card, yet I was denied again.

Citi is becoming my achilles heal in this game. Time and time again, I have found them to be super stringent, and they clearly don’t like my credit profile. My gut tells me my lack of a student loan, car loan or mortgage makes me less than desirable due to the absence of any form of an installment loan. I am being penalized for not having these “adult-like” debts in my name. They should be thankful I don’t have any of these so I can pay off their credit cards! At least that’s how I’m thinking of it…

All of these observations with Citi are leading me back to one question: is Citi tightening up their approval criteria for their own proprietary ThankYou Point earning cards? I haven’t applied for a new Citi AAdvantage Platinum Select in a few months, but I imagine I would be approved for another one of those, go figure. Full disclosure, I’ve had 6 of those already!

Again, there aren’t too many banks where I’ve been denied repeatedly for the same card. In fact, there are none. Of my four outright application denials, 3 have come from Citi, and 1 from Barclays. In the case of Barclays, I waited 3 months after the denial and applied again for the same card, and was approved. No cigar with Citi, they have clearly told me they don’t want me as a customer.