What's In Your Wallet: The Credit Card Points/Rewards Thread

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Unfortunately, we are in the cattle class (economy). It ended up costing us about 125k miles.

We won't be driving to Barcelona. We will just jump on a Ryanair/Easyjet flight to get there. Still should be a great trip though!
Serious, and that's a pretty good price actually for RT for 3 people. Most RT flights from CA are ~60k ea to Italy or Spain.
 
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Quoted for the paywall. Had to cut some.
Blake DiCioccio and her husband, Jason, flew around the world in business class in 2017, from San Francisco to Taipei, Tokyo to Belgrade, and Frankfurt back home. They didn’t pay for it. JPMorgan Chase & Co. did.

The DiCioccios signed up for two Sapphire Reserve cards from the bank several months before their trip, on an offer that scored them hundreds of thousands of points, which they combined with points from their other rewards cards. They use credit cards as much as possible—even for small purchases—and strategize when to use Sapphire Reserve versus their other cards based on the points each offers. Mr. DiCioccio recently signed up for an American Express Platinum card, and the couple is now thinking about canceling one of their Sapphire Reserve cards to avoid the $450 annual fee.

The ultra-premium rewards of the kind that JPMorgan has championed have turned into financial albatrosses. Big banks calculated that giant rewards would make consumers spend more, earning the banks more interest and boosting their returns. They calculated wrong.

Consumers have figured out how to game the system, spending just enough to earn generous sign-up bonuses—then abandoning the cards in a drawer. Others pay their bills in full and avoid interest charges and late fees.

After ratcheting up the perks for several years, banks hit peak rewards frenzy about two years ago. Now banks face increasing costs associated with the cards. Rewards costs grew an average of 15% in the third quarter of 2018 from a year earlier at Bank of America Corp. ,Citigroup Inc., JPMorgan, U.S. Bancorp and Wells Fargo & Co., according to bank analyst Charles Peabody.

As of the third quarter, JPMorgan’s credit-card holders had accrued $5.8 billion in rewards they had not yet redeemed, up 53% from the end of 2016, according to securities filings.

“For a lot of consumers, a credit card is the first step in a bigger financial relationship, and we’re already seeing success with Sapphire customers doing more business with Chase,” said JPMorgan spokeswoman Mary Jane Rogers.

Compounding the problem for banks: Interchange fees—paid by merchants to banks whenever customers shop with a credit card—are under pressure.

The fees are a primary source of funding for rewards programs, but retailers are trying to lower them. Merchants including Amazon.com Inc., Target Corp. and Home Depot Inc. are pushing through lawsuits for changes that would lead to lower fees, and bank executives worry that such a shake-up could make some of the more generous rewards programs unsustainable. Merchants paid card issuers $43.4 billion in Visa Inc. and Mastercard Inc.credit card interchange fees in 2017, up 68% from 2012, according to the Nilson Report.

Mercator Advisory Group, a payments consulting firm, predicts that credit cards will deliver a return on assets in 2019 of 3% to 14 large banks highly concentrated in the card business, down from nearly 5% in 2014.

JPMorgan, Citigroup and other large banks, including American Express Co. , are discussing how to cut back or rejigger some of their cards’ rewards, according to people familiar with the matter. The banks don’t plan to end rewards, but want to shift them in ways that encourage more card usage and scale back upfront bonuses, the people said.

Getting the calculation right—without alienating customers—is crucial. Credit cards account for an average of about 14% of revenue at Citigroup, Bank of America, JPMorgan Chase and Wells Fargo, according to an analysis by Autonomous Research.

JPMorgan executives debated whether to stop letting cardholders pool together points from multiple cards, according to people familiar with the matter. JPMorgan’s Ms. Rogers said the bank has no current plans to stop cardholders from pooling points.

Citigroup plans to cap the number of times each year its Prestige cardholders who stay at hotels four consecutive nights can get the fourth night free. A Citigroup spokeswoman says the bank is focused on fostering long-term relationships with cardholders.

AmEx has been introducing cards with fewer sign-up bonus points. An AmEx spokeswoman said the company is offering other bonus options, such as statement credits based on restaurant charges.

The banks face rewards enthusiasts who take pride in wringing the most benefits from each card.

For example, many cards offer “tiered rewards,” where only certain purchases qualify for the most generous cash-back terms. That’s no obstacle for customers like Tony Rodriguez, a 34-year-old Ph.D. student in Knoxville, Tenn.

Mr. Rodriguez and his girlfriend, Whitney Forbes, use the AmEx Blue Cash Preferred card for groceries, earning 6% back on up to $6,000 of purchases a year, and for gas, which earns 3%. They use Discover Financial Services ’ “it” card and a Chase Freedom card for purchases that qualify for 5% cash back. Those items change every quarter, so Mr. Rodriguez keeps a list on a slip of paper in his wallet. Everything else goes on their Citi Double Cash card, which gives 1% back on all purchases and 1% back when they pay off the bill.

Mr. Rodriguez, who is studying industrial engineering, began shopping around for cards about 2½ years ago. “Soon, I realized there’s all sorts of free money,” he said.

Big banks pushed into credit cards after the financial crisis to offset a slowdown in their trading and mortgage units. JPMorgan and Citigroup poached top executives from AmEx, which made premium rewards—with a high annual fee—its calling card for decades, and copied the strategy.

Rewards competition began to heat up in 2013 when Discover launched the it card. A year later Citigroup created the Double Cash card, which also offered hefty rewards at no annual fee. Many banks view the rewards as a way to reach younger consumers and turn them into bigger clients by selling them other products, including wealth management services, as they graduate to bigger jobs and paychecks.

Merchants also typically pay higher swipe fees on the more generous Visa and Mastercard rewards cards—typically more than 2.1% of a purchase on premium rewards cards, compared with roughly 1.2% to 1.7% on more standard rewards cards.

For the next couple of years, banks competed to come up with increasingly flashy cards. The frenzy reached a peak when JPMorgan introduced Sapphire Reserve in August 2016, offering 100,000 bonus points for consumers who charged $4,000 in the first three months, three points per dollar spent on travel and dining and a $300 credit on travel purchases, among other perks.

JPMorgan’s Ms. Rogers said two years in, the bank had seen record retention levels topping 90% for its Sapphire Reserve customers.

At an investor conference, AmEx called it a “full frontal assault” to its longstanding Platinum card. Despite Sapphire Reserve’s $450 annual fee, customers flocked to it so quickly that JPMorgan ran out of the metal cards and reached its first-year goal for new accounts in two weeks.

Within a few months, JPMorgan had misgivings about the card’s costs. It halved the bonus points to 50,000 and dialed back in-branch promotion of the card.

The Sapphire Reserve card proved great for business for Brian Kelly, who started the rewards website The Points Guy as a hobby in 2010, while working in human resources atMorgan Stanley .

His website helped spawn an ecosystem of rewards fanatics across the internet who swap tips about card deals. The banks covet his favorable reviews of their cards and often turn to the site to promote them. In December, Mr. Kelly hosted a card awards ceremony in New York City, sponsored by JPMorgan, Wells Fargo and others.

JPMorgan had approached Mr. Kelly in spring 2016 to ask how his company would market an upscale card it had in the works. He learned more details about the card, which turned out to be the Sapphire Reserve, a couple of months later while on vacation in Tanzania with his parents. The bank agreed to pay The Points Guy each time readers visiting the website started an application and received the card. The site earned millions of dollars from the card in the months after it was introduced.

Despite misgivings about the rewards programs, banks are still competing for the customers who use them, and chipping away at rewards is risky.

James Fuller of Ellijay, Ga., used to charge about $30,000 a year to his Starwood Hotels & Resorts personal and business credit cards. He and his wife, Allison, used the points to stay for free at hotels in 17 states where they ran half-marathons.

Then Mr. Fuller, a 28-year-old high-school teacher and small-business owner, saw on online forums that the hotel, which was recently acquired by Marriott International Inc., and AmEx might scale back the cards’ rewards. Sure enough, Marriott and AmEx made the cards’ points significantly less valuable last year when redeemed for hotel stays. Mr. Fuller canceled the business card and slashed his spending on his personal card to about $300 a month, from a typical $2,500.

Mr. Fuller now puts most of his purchases on JPMorgan credit cards.

“We feel confident that the majority of our current SPG AmEx card members will get more value out of the card’s new value proposition,” said an AmEx spokeswoman. A Marriott spokesman said the card remains popular and is “a tremendous value proposition.”

Rob Broadhurst, who lives in West Sacramento, Calif., saw on an online forum that JPMorgan planned to end price protection on Sapphire Reserve. In late March he and his wife, Katie Anderson, hurried to buy a new fridge for $1,599. Weeks later, when they found an online ad for the same model for $1,399, they rushed to submit a claim for the $200 difference, and soon got a check in the mail.

JPMorgan removed the card’s price protection feature in August. “It was definitely a bummer,” said Mr. Broadhurst, 34. The couple still use Sapphire Reserve, though, because they redeem the points for travel.
 
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If you had to have one single rewards card..... which one would you all keep and use the most?
Chase Sapphire Reserve.

3x points on travel and dining, with 1:1 transfer to a large number of travel partners. ~14 of which are instant conversion (e.g., turning Chase Ultimate Rewards points into United miles is an instant transaction). If you can find a good deal through Chase's own Sapphire Reserve Ultimate Rewards Travel Portal, you get a 1.5x redemption on points. This means you are getting 4.5 cents per dollar spent on travel and dining. This is rare, and I end up just converting my points most of the time.

$100 toward Global Entry or Pre-Check every 4 years (so essentially your annual fee becomes $125), free Priority Pass membership (~$99 value), and tons of Travel and Purchase Protections (e.g., trip insurance, auto collision insurance, travel accident insurance, lost luggage reimbursement, purchase protection against damage or theft, item return protection, and extended warranties).

Also has Visa Infinite Concierge if you use concierge services for booking travel, events, etc.



Generally speaking, if $150/year is too much, then I'd look at the Chase Sapphire Preferred which has a lot of the same benefits but is only $95. But for the small price increase I see no reason not to use the Reserve.
 
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Chase Sapphire Reserve.

3x points on travel and dining, with 1:1 transfer to a large number of travel partners. ~14 of which are instant conversion (e.g., turning Chase Ultimate Rewards points into United miles is an instant transaction). If you can find a good deal through Chase's own Sapphire Reserve Ultimate Rewards Travel Portal, you get a 1.5x redemption on points. This means you are getting 4.5 cents per dollar spent on travel and dining. This is rare, and I end up just converting my points most of the time.

$100 toward Global Entry or Pre-Check every 4 years (so essentially your annual fee becomes $125), free Priority Pass membership (~$99 value), and tons of Travel and Purchase Protections (e.g., trip insurance, auto collision insurance, travel accident insurance, lost luggage reimbursement, purchase protection against damage or theft, item return protection, and extended warranties).

Also has Visa Infinite Concierge if you use concierge services for booking travel, events, etc.



Generally speaking, if $150/year is too much, then I'd look at the Chase Sapphire Preferred which has a lot of the same benefits but is only $95. But for the small price increase I see no reason not to use the Reserve.

Will look into this. Thinking about paying off a card outright that I’ve kept a decent amount of debt on, but thought about finding a well rounded rewards card and seeing if a balance transfer and then pay off would net me some extra perks.
 
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Chase Sapphire Reserve.

3x points on travel and dining, with 1:1 transfer to a large number of travel partners. ~14 of which are instant conversion (e.g., turning Chase Ultimate Rewards points into United miles is an instant transaction). If you can find a good deal through Chase's own Sapphire Reserve Ultimate Rewards Travel Portal, you get a 1.5x redemption on points. This means you are getting 4.5 cents per dollar spent on travel and dining. This is rare, and I end up just converting my points most of the time.

$100 toward Global Entry or Pre-Check every 4 years (so essentially your annual fee becomes $125), free Priority Pass membership (~$99 value), and tons of Travel and Purchase Protections (e.g., trip insurance, auto collision insurance, travel accident insurance, lost luggage reimbursement, purchase protection against damage or theft, item return protection, and extended warranties).

Also has Visa Infinite Concierge if you use concierge services for booking travel, events, etc.



Generally speaking, if $150/year is too much, then I'd look at the Chase Sapphire Preferred which has a lot of the same benefits but is only $95. But for the small price increase I see no reason not to use the Reserve.
Will caveat this is only if you like to travel, and you're good about treating the points as money. Otherwise I'd go with something like the Citi double cash or similar that just pays 2% flat.
 
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Not huge on travel, couple times a year maybe at best.

Would ideally just like to put our gas/groceries/amazon/etc purchasing on something and get max cash back, or other perks/point we can use for other purchases or thing with a little freedom.

Citi seemed like one they caught my eye.
 
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Not huge on travel, couple times a year maybe at best.

Would ideally just like to put our gas/groceries/amazon/etc purchasing on something and get max cash back, or other perks/point we can use for other purchases or thing with a little freedom.

Citi seemed like one they caught my eye.
For Amazon, get their card directly. Even if you just park it in a drawer after linking it to your account, it's 5% on Amazon purchases if you have prime. Otherwise, ya, I'd look into a cash back card. Don't sleep on cards with yearly fees, as they can pay for themselves if the perks line up.
 
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It kind of makes me laugh that the banks thought these cards would be good for them originally. You have to be in pretty good financial standing to even get approved in the first place for most of them. Did they think the users were going to forget how to be savvy spenders and carry large debts all of the sudden?

That being said I thank this thread for tipping me off in the first place on the Sapphire Reserve. I signed up right before they pulled back the 100K sign up bonus. So far I've redeemed points for 4 international flights with my wife. Then between the 2 of us we have an additional 300K points banked for future travels. Everything earned by just spending money and living our lives like we would have anyways. If you are a responsible and have good enough credit scores to sign up in the first place playing the CC game is an absolute no brainer.
 
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Not huge on travel, couple times a year maybe at best.

Would ideally just like to put our gas/groceries/amazon/etc purchasing on something and get max cash back, or other perks/point we can use for other purchases or thing with a little freedom.

Citi seemed like one they caught my eye.
Get the Amazon card for 5% back on purchases if you're a Prime whore like I am. Then look into the AmEx Blue Cash Preferred Card: 6% cash back at grocery stores and 3% at gas stations and department stores. Rewards offset the $95 annual fee if you spend $31/week at a grocery store per this summary:

https://www.nerdwallet.com/reviews/credit-cards/american-express-blue-cash-preferred
 
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Get the Amazon card for 5% back on purchases if you're a Prime whore like I am. Then look into the AmEx Blue Cash Preferred Card: 6% cash back at grocery stores and 3% at gas stations and department stores. Rewards offset the $95 annual fee if you spend $31/week at a grocery store per this summary:

https://www.nerdwallet.com/reviews/credit-cards/american-express-blue-cash-preferred

We do have prime. Wife usually ends up spending hundreds if not close to a thousand a month with amazon. Grocery won’t be a problem, 31 bucks is nothing a week!

Thanks for the link!
 
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Thinking about making the jump from Delta to Alaska and getting their card. They’ve opened up non-stop flights between Seattle and Pittsburgh thus eliminating one of my main reasons to not fly them more regularly. My second hangup is trips to Europe, though I see they’re partnered up with Iceland Air so you can use Alaska mikes to book Iceland air flights. Does anyone have any experience doing just that?
 
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Thinking about making the jump from Delta to Alaska and getting their card. They’ve opened up non-stop flights between Seattle and Pittsburgh thus eliminating one of my main reasons to not fly them more regularly. My second hangup is trips to Europe, though I see they’re partnered up with Iceland Air so you can use Alaska mikes to book Iceland air flights. Does anyone have any experience doing just that?
Shit, Alaska has nonstop PIT-SEA now?!?!?
 
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Thinking about making the jump from Delta to Alaska and getting their card. They’ve opened up non-stop flights between Seattle and Pittsburgh thus eliminating one of my main reasons to not fly them more regularly. My second hangup is trips to Europe, though I see they’re partnered up with Iceland Air so you can use Alaska mikes to book Iceland air flights. Does anyone have any experience doing just that?
I have the Alaska card. I haven't used miles to fly internationally yet, but their program seems pretty generous. It looks like for Europe you can use miles on American, British, Finnair, Condor, Emirates and Iceland Air.

https://www.alaskaair.com/content/mileage-plan/use-miles/award-charts

You also get an annual $100 companion ticket anywhere Alaska flies which is a nice little perk too.
 
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I have the Alaska card. I haven't used miles to fly internationally yet, but their program seems pretty generous. It looks like for Europe you can use miles on American, British, Finnair, Condor, Emirates and Iceland Air.

https://www.alaskaair.com/content/mileage-plan/use-miles/award-charts

You also get an annual $100 companion ticket anywhere Alaska flies which is a nice little perk too.
Yeah, I’ve read all of that as well and I’ll definitely get the card if I go that route. Their flight schedules leave quite a bit to be desired though, yeesh. Lots of many multiple hour layovers or next day arrivals even flying domestically. Will never fly American though. Ever.
 
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Yeah, I’ve read all of that as well and I’ll definitely get the card if I go that route. Their flight schedules leave quite a bit to be desired though, yeesh. Lots of many multiple hour layovers or next day arrivals even flying domestically. Will never fly American though. Ever.
Yeah, I definitely use Alaska (and my miles with them) to fly domestically.
 

dan

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My current credit card strategy is kind of all over the place. I have a wedding coming up and am thinking that I might as well take advantage of a sign-on bonus as I start paying all of my vendors (don't worry - I have cash saved up; I'm not completely charging my wedding). I signed up for a Chase MileagePlus Visa a few years back when I started my current job. I travel some for work and being in Chicago, flying United usually works out to be cheapest. The free checked bags and boarding priority benefits have definitely come in handy.

Between hotels and the wedding venue (which codes as dining), I have some big purchases coming up. I don't think I have the spending discipline for an AmEx card - so even their revamped Green card isn't appealing. The Sapphire Preferred or Reserve are the most obvious contenders - though now the Reserve's annual fee is going up to $550 and I really don't see myself benefiting from enough of the bells whistles to justify the annual fee. Obvisouly, x3 is better than x2 when it comes to points.

We aren't able to take last minute trips - and since airlines are increasingly moving towards a dynamic redemption model for flights anyway, I don't anticipate striking gold with last minute trans-Atlantic business seats. So far, I've had good redemptions with domestic flights. I'm probably not getting the most "value" out of my United miles but if I can spend 30K miles for a $500+ ticket, I won't complain.

The Preferred has a great sign-on bonus - but also an annual fee. I'm tempted to just pick an easy to use cash back card with no annual fee and be done with it. Charge hotel/dining/United flights to my MileagePlus Visa and the rest to a cash back card. Once upon a time, I would have been much more likely to play the rewards game and make the most out of my spending. That same me also stood in line for rare beer. And just like how I'm happier today to walk into a brewpub and drink what they have and not worry about what I'm missing out on, I'd rather pick a cash back card and forget about playing the cc rewards game.

I was looking at the Capital One SavorOne Cash Reward - but since it has a 3% dining category, that would work against keeping the MileagePlus Visa. Wells Fargo has a straightforward rewards card, Propel - but it doesn't sound like the rewards currency is easy to use. Is the Citi Double Cash card the best (or least worst) option to pair with my MileagePlus Visa?
 
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