It has been a while since I posted anything about our hoard of travel reward points. This seems to be the most popular topic I post about (maybe the transparency of the values and balances is intriguing to people). Anyway, there has not been a lot of movement in the last few months since I posted my reward point balances in July.
That being said, our estimated value is now up to $13,390 on 1,058,000 points! After using some in March for our Hawaii trip, we have just been adding over the summer. I just added a British Airways card and we will get one for my wife next. Other than that, most of our spending has been on the Chase Sapphire card or the Starwood card (mostly Costco).
With Marriott buying Starwood Hotels sometimes in 2016, I am worried that I might lose some juice when the programs combine. I guess that could also be seen as an incentive to take a vacation and use them up!
Thinning the Credit Card Herd
I think it is time to look at our 20+ cards and decide where it makes sense to purge (I already dumped the United Explorer Cards due to poor customer service). We will keep at least 1 American Airlines card open as the bag fees on 1 flight pay for the annual fee. I also like the Marriott free night that more than covers the annual fee (as long as we use it). We might keep both cards actually. The IHG cards we added this year also give a free night for the $49 annual fee. If we think we will use it, this is a steal.
Also, if you decide to close a card, the retention department might just offer you reduced or eliminated fee and sometimes extra points! Be sure to think about what it would take for you to keep a card before you call.
There are some good offers out there, but I think we are covered on hotels with the IHG and Marriott balances for now. Otherwise I would add a Hyatt card. I still will do the status match with Hilton as well, even though we don’t have any points with them (just in case). I think sometime in 2016 it will be time to add another hotel point stash, but for right now it would just increase our risk of a point devaluation.
For airline cards, there are also a couple of options (these are usually more valuable than the hotel points, too). Alaska Airlines has good access for us on the West Coast and can be used on American Airlines as well. I already added a British Airways card and will get one for the wife soon that will give us at least 1 round trip for the whole family. We could also open a business version of the American Airlines card to to off our points.
If I run out of other ideas, we might amass some Citi Thank You cards for points. At worst they could be a stop gap to get a bunch of gift cards with!
Next Moves for Our Reward Points
I have the hotel and air miles for our trip to Cancun now (was going to be Grand Cayman, but I think Cancun is an easier fit). Less air points needed and my wife has relatives there as well. In fact, we might end up just using miles for the flights and staying with her cousin. While I like staying right next to the beach, we might do more activities and have better food if we stay with her family. I need to get it booked soon!
I think planning for a Disney trip in early 2017 or the NY trip for my wife’s 30th birthday are next on the list. The United points would probably be used for either of those, but we would need to, gasp, get more or transfer from Chase for that flight. IHG points or opening a Hyatt card for the 2 free nights anywhere (4 total if we each get one), would be the most likely combination used to go to New York.
If we go to Disney World, the Starwood Nights and Flights deal starts to make a lot of sense. Too bad I could not resist transferring points to American a couple of weeks ago. We could still get the needed points from our regular spend and maybe a big purchase or two. We are using the Starwood card a lot at Costco, so the points will add up quickly. That reminds me, I haven’t seen what the new Costco card with Citi will look like. I know its a Visa, but haven’t seen any other details about it and it is only a few months away (switch happens April 1, 2016).
Topping Off Balances
There are a few ways to top off your balances if you are getting ready for a redemption in the near future. If I said you could buy 1,500 Starwood points each month for a net cost of $3, would you do it? If I were to be short a few thousand points I could pay my mortgage through a credit card processor for about a 2.5% charge. Let’s look at the math versus the point values gained. Obviously, this is not something you would want to do if you carry balances or are tight on cash flow.
|$1,500 mortgage payment|
|2.5% transaction fee (earns points, too)|
|Total spent of $1,537.50 for 1,538 points|
|1,538 Starwood points valued at $38.45|
|Net gain of $.95 (if you believe TPG’s valuation of 2.5 cents per point)|
In his latest monthly point valuation, the Points Guy has increased Starwood points up to 2.5 cents each from 2.3 cents a few months ago. The scenario above was a $2.13 cost when the valuation was 2.3 cents, so it has moved in my favor. It still costs you almost $38, so be aware that while it provides value, there is an out of pocket cost associated with it.
Does this make sense for everyone? Definitely not. But if I am short 4,000 points, it might be cheaper to spend $112.50 to earn 4,614 points versus buying them for 3.5 cents each from Starwood. In fact, even with the current 20% bonus, it would be about $30 cheaper to pay my mortgage on a credit card. Would I do it every month if I didn’t have a plan or a need for a certain amount of points? No, unless there was no transaction fee attached.
Also, check out this crafty points thread from flyer talk, it involves 37 rental cars in 2 days to get 185,000 points! Any time I think I am going down the travel hacking rabbit hole, I see something like this and I am both awed and thankful that I am not spending that much time chasing points! It is a truly epic points story (I use the term epic sparingly, unlike millenials). Until next time, thanks for reading.
Please let me know if you have any questions about my strategies or plans. Also, I welcome input if you know of any great offers out there!
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