A Very Boring Post of CC Reward Calculations
I realized I might be leveraging my credit cards wrong if I want to use to reduce travel costs. I have used my Delta AmEx card for travel but have still been using the Unlimited Cash Rewards Visa for other day to day expenses and scheduled payments with no fee. I figured the cash back was nice as it could be used for anything which still is true. However, I get a straight 5 miles for every dollar with the AmEx, any purchases, calculated out that comes to an average of 4.5% reward per dollar for future flights. I figured this out by looking a variety of flights using pay by cash or pay by mileage. Sometimes the return in points came to nearly 7%, but was also as low as 2%. It's complicated that certain flights can be purchased with fewer miles proportionate to $$ value. For example I looked at a flight that was $299 or 40,600 miles, but another that was $387, was 41,500, and yet another was $229, but could be bought with a mere 16,500 miles. The Unlimited Visa Rewards is 1.5-3% depending on the purchase type or if there's any "bonus" periods, but I just use 1.5% as the straightforward norm.
Now of course the Delta AmEx mileage would only be used on Delta Flights, whereas I can shop around and maybe get less expensive flights like I did with Greece. However, it's likely at least one trip a year I'd use Delta because those I travel with tend to be Delta loyalists due to their own rewards programs or work accounts. My Delta AmEx though has a $99 per year fee, but I get free checked bags, so that fee is off set with just one trip. Often the cheaper airfare come with exorbitant baggage fees, including charging for carry on, which for longer trips must be factored in. This playing the rewards game is tricky. But if my math is right, if I transition to Am Ex starting in August, by the end of the year I'll have an additional 36,000 miles, which roughly translates to $350 in Delta flights, but cash rewards through Visa would be in the range of $136.
I had a younger coworker who thought she had mastered the game. I got a few recommendations from her on the cards and perks and will calculate out to see if upgrading my current Delta card is worthwhile. Her husband is Irish so they travel internationally at least once per year so she both accumulates miles with flights and spending. They prioritize travel over just about every other consumable too, and regularly take spur of the moment long weekend trips based on pop up deals. Her card gives her lounge access so they factor that as the start of the trip, enjoying a leisurely light meal and drinks.I got in on that with her once on a work trip and once with my sister. It felt like a whole different lifestyle for me who packs an empty water bottle and granola bars.
I plan to do more domestic and international travel, so learning every tool to help is important to me, but I don't want it to be such a mental gymnastics exercise that I just end up stressing myself out. If travel and credit card hacking is your niche feel free to share your recommendations with me either in comments or email me at samandcoffee65@gamil.com.
I know Hawaii Planner has done the lounge access before too and it sounds so nice. I'm not a traveler, so I can't help, but I wish you much success in finding all the tricks of the trade to save money.
ReplyDeleteShe planted the seed to start looking at this a bit more.
DeleteI don't travel. either. But I seem to remember that with my Hubby's VISA he could choose either miles or cash back and he had saved quite a war chest by the time he passed. I used it to buy essentials for the house.
ReplyDeleteI'm glad you got to use his points. I've got a sizeable amount on my Visa cash rewards that will offset some fun costs. I also used a chunk of that last summer when my TV died to replace before the Olympics. The flexibility is nice..
DeleteI like airport lounges and use them , but I miss the hustle
ReplyDeleteand bustle of people and pretending that I am in a scene from Love Actually…
You are doing well at working out which card works better for you . I find the whole air miles game a complete mystery
Siobhan x
Cards that offer lounge access include the Chase Sapphire Reserve, the AMEXPlatinum (Business or personal, The Capital One Venture X (business or personal). Each of these offer Priority Pass lounge access as well as access to the lounges which they operate for their customers. The annual fees are high, so you have to calculate whether the lounge access and other benefits are worthwhile to you. You may want to look at hotel credit cards Hilton, Marriott, and IHG all offer a certificate for an annual free night with some of their cards. Those cards vary in annual fee amounts, but several have a $95 annual fee. They don't work for all hotels in the chain, but you can't stay many places these days for $95, so it is worthwhile to get those cards.
DeleteI'm not overly looking for lounge access, that was more a mention of a nice perk. It's offsetting the travel costs is my priority so likely would just get the lounge access by happenstance. To Siobhan, I'll have a whole lot of time on my multiple layovers to Greece to people watch, but the price was so right.
Deleteah yes, the CC game. I quit shopping for best deals decades ago and stayed with my Capital One. $19 annual fee. Points on every dollar spent, no rotating categories or games to play. I can buy travel or reimburse my travel (hotel, Uber, plane Tx), or buy stuff or get cash back. I get 2 free Lounge visits annually. (the one perk I don't really care about). We each have to figure out what games we want to play and what they are worth to us.
ReplyDeleteI travel light and don't check a bag. I checked a bag last year because I went shop hopping with a friend and hit some major sales on quilt fabric (I go through 400 yards plus each year). She gave me an old larger suitcase and vacuum packed that sucker to 49.75# ;-)
Happy researching!
Two a year might be worth it to me depending where they are as I easily could spend $19 picking up water, coffee and a snack. I will check it out.
DeleteI'm terrible at points and cc tricks and such. I do like flying Delta and like their points membership as they don't expire. I tried to fly to England with them the last couple of years but the prices were several hundred dollars more than AA and I couldn't justify the cost. I would much prefer to fly with Delta! When I was flying with them and got the points I managed a couple of trips from Kalamazoo to MN with them.
ReplyDeleteThe cards don't make it easy to understand the difference either. I'll have to balance cost and comfort/ preferences. Other major airlines do fine. I'm flying Air Canada for Greece, but as you said, hundreds and hundreds less than Delta for that particular trip.
Delete