Thursday, May 15, 2014

Mother's Latest Credit Card Churn

After a few months off, my parents are back at it racking up frequent flyer miles and hotel loyalty points. The good news is that there are still some interesting cards they can apply for. The bad news is that we're not sure how much more free time we have to spend our family's miles/points.

So far, since 2012, my mother has applied for credit cards in several different rounds, each spread out by about 3-5 months. Her most recent was in January 2014, when she was approved for the American Express Blue card (5% back on gas, grocery and drugstores) as well as the Chase British Airways Visa (100,000 BA Avios after spending $20,000 in the first year).

Then in March, my father applied for several different credit cards including the Barclays Arrival, Chase Ink Bold, Citi Thank You Premier, US Bank FlexPerks and Discover IT. By early May, we successfully hit our minimum spend requirements and collected our lucrative sign up bonuses.

So by mid-May, my mother was due for another few cards to add to her wallet (or sock drawer, as the case may be). There were a few attractive cards to apply for, including:
  • Chase Ink Plus (60,000 UR points after spending $5k; annual fee waived 1st year)
  • Citi AAdvantage Mastercard (50,000 AA miles after spending $3k; annual fee waived 1st year)
  • US Bank Club Carlson Visa (85,000 points after spending $2.5k; $75 annual fee)
A. Chase Ink Plus
My mother already had the Chase Ink Bold charge card, but the $95 annual fee was coming due in July, so she decided to take advantage of a limited time sign up bonus of 60,000 Chase UR points (normally 50,000) for the Chase Ink Plus credit card. 

At a very minimum the 60,000 UR points are worth $750 in free travel (airfare, hotels, etc) if you redeem them for the minimum 1.25 cents/point on the Chase UR travel website. However, if you have the premium Chase cards (anyone with an annual fee), then you can transfer your 60k UR points to United Airlines miles or Hyatt hotels points where you can extract 2.5-5.0 cents/point as we've done in the past (implying $1500-3,000 of redemption value)!
The Bold and Plus versions are just about the same except that the dark blue Bold is a charge card (balance must be paid in full each month) while the teal blue Plus card can hold a balance into the next periods (with interest of course). Chase considers them separate products so you can earn the sign up bonuses on each card.

As you may recall, the Ink cards are small business cards, so to successfully be approved, you need a business. Keep in mind that many businesses can be sole proprietorship (ie, no more than just 1 person) including dog walking, selling things on eBay, blogging, babysitting, etc. So my mother applied but was given a "Decision Pending." 

My father then called up the Chase Reconsideration Line and spoke with a credit analyst about my mother's account for quite some time. After verifying business information (what it does, annual income, monthly expenses, etc), they reviewed her application again, but unfortunately, given the number of past credit inquiries on her credit file, they didn't feel comfortable opening a new account for her.

My father offered to "trade in" the existing Chase Ink Bold card she currently had open, but they said that can only be done if she would otherwise be approved for the Chase Ink Plus card.

Result: FAIL

B. Citi American Airlines Mastercard
My parents never get too upset with a set back. Instead, they just march forward until they find success. So next they applied for the Citi AA Mastercard. My mother had already applied for the Amex and Visa versions of the card in 2012. Since the Mastercard would be considered a separate product, she would be eligible for the sign up bonus.

Note, the official Citi offer for their AA Mastercard is only 30,000 miles after $1k of spend with the annual fee waived. 

But thanks to the million bloggers and Flyertalk forums, we were able to find a link that would offer 50,000 miles for $3k of spend and still waiving the annual fee. So by that math, spending the additional $2k would result in an additional bonus 20,000 miles plus 2,000 miles for the regular spend. That's an incredible 11x earning on that marginal spend. No brainer!

Many people value 50,000 AA miles at around 1.8 cents/mile each, which would mean the bonus was worth $900. Of course, there are opportunities to get even more value than that.

This time during the online application, we were asked to participate in an online chat with a Citi representative to help process the application. They asked us to confirm the information we used on the application including annual income, rental expenses, etc and then my mother was approved with a $10,000 credit limit.

After hitting the $3,000 of minimum spend, we should have at least 53,000 AA miles.

Result: SUCCESS!

C. US Bank Club Carlson Premier Visa
The last card that my mother applied for was from US Bank. While it's not a popular bank or a popular hotel chain, there is a lot of value you can extract from both (1) the sign up bonus, (2) benefits of having the card and (3) annual bonus of keeping the card each year.

First, let's be clear that Club Carlson point are not worth the same as other hotel loyalty points. It's easiest to consider them a different currency, similar to 100 Japanese Yen is only worth 1 US dollar. Most people consider a CC point worth 0.8 cent each, though (as I'll mention below) you can get almost 2 cents/pt of value on select hotel redemptions. So the 85k CC points would be worth between anywhere from $680-1700 of value.

Club Carlson hotels include Radisson Blu, Radison, Park Inn and Country Inn. While these may not be the "best" brands in the United States, the international properties are much more interesting, including the May Fair in London, the Radisson Blu Resort in St. Martin; and Radisson Blu Le Metropolitan Hotel. For more Club Carlson options, check out One Mile At A Time's Top 10 List. I mean, there will always be a special place in my family's heart for Starwood hotels and some amazing Hyatt properties, but who wouldn't take a free hotel night in an aspirational international city.

Here's how the Premier Visa card (not to be confused with the regular Visa) works:

For the first purchase, you earn 50,000 Carlson points. For spending $2,500 over 3 months, you earn an additional 35,000 Carlson points for 85k total. Each dollar you spend on the card earns 5x, so after spending $2,500, you should earn a grand total of 97,500 Club Carlson points.

The second best feature is that each anniversary of having the card open (after paying the $75 annual fee), you receive an additional 40,000 Carlson points (aka $320-800 of value).

The absolute best perk, however, is their "Last Night Free" on award redemptions. That means that if you use points for 2 or more nights, the final night will be free. Clearly, being half Asian, I realize that the optimal way to redeem points is to use them for 2 night stays, implying a 50% discount in points.

The Points Guy already did the work of identifying some of the best Club Carlson redemptions using this perk, which you can read about here. But for the best example, you can get a 2 night stay at the Mayfair London ($1,320 for the stay) for a total of 50,000 CC points, implying 2.6 cents/pt of redemption value.

Our online application was approved immediately and we were on our way to some free Club Carlson hotel nights!

Result: SUCCESS.

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