Sunday, August 31, 2014

Citi Hilton Reserve Challenge

About a year ago, my mother applied for the Citi Hilton Reserve Visa card. We had plans to travel to Hong Kong that following March and wanted to use the 2 free weekend night certificates that came with the card after spending $2,500 in three months. We completed the minimum spend requirement by September 2013.

We redeemed our free night certificates for a 2 night stay at the Conrad Hong Kong, which was pricing out at about $400+ per night. Because the card also comes with Gold status in their Hilton HHonors loyalty program, we also received complimentary breakfast at their lobby restaurant - an amazing spread of Western and Chinese breakfast foods.

But after we reached the $2,500 (and received our 2 free weekend nights), we pretty much put the Reserve card away and didn't spend on it any more, with the one exception of our 1 day stay at the Hilton Zurich Airport hotel ($201 USD).

The less popular benefit of the Hilton Reserve card is that you can earn another free weekend night certificate each year if you spend $10,000 on that card in a cardmember year. However, for my father, it just seemed like so much more spending for minimal benefit and he was happy with the 2 free nights after the first $2,500.

Then a few months ago, my father read a compelling post on explaining why it could be worth it to spend an additional $7,500 on the card to earn a third free night certificate - relative to using other cards to spend that much with. So while we were in Greece enjoying our July vacation, my father decided to go for the third free night certificate.

Unfortunately, he found out that his cardmember year would be ending with the September 4, 2014 statement. So with about 5 weeks, he crafted a plan to "spend" another $7,300 in the month of August to hit the $10,000 annual goal and earn an additional 22,500 Hilton HHonors points and a free weekend night certificate.

The real challenge was complicated by my father's OCD on "optimizing everything." He refused to use the Hilton Reserve card (and earn just a 1% rebate in Hilton points) on spending categories where we would otherwise earn 2-5x bonus points if we used a different credit card. For example, spending on restaurants earned us 3x Citi Thank You points (valued at a 4% rebate) when using our Citi Thank You Premier card and spending on groceries earned us a 5% cash back rebate when using our Amex Blue card. So what was left to use this Reserve card?

1. Daycare - $1,060
As I mentioned in an earlier post, my daycare used to allow payment using a Visa or Mastercard without any additional fees. So we made about 3 weeks worth of payments (2 regular payments and we prepaid the first week in September).

2. Charitable Donations - $200
Now, to be clear, we did not make a donation just for the purpose of meeting this minimum spend requirement nor was this related to any buckets of ice. Each month, we support a handful of organizations, including our church, the nonprofit my father sits on the board of, as well as individuals through Kiva microlending. Again, we're not spending more than we do normally.

3. Public Transportation - $72
We used to have a Chase Sapphire Preferred card that would earn us 2x Ultimate Reward points (worth about a 4% rebate), but we cancelled that when the $95 annual came due, so we were without a card that gave a bonus on transportation.

So we used our Citi Hilton Reserve for a $60 metrocard reload and a $12 taxi fare. Now we didn't need to refill our metrocard, but figured that we'd definitely use up the full value over the next few weeks. So we were just prepaying something we were certain that we were going to use.

4. TD Bank Go Card Reloads - $4,004
My friend Peyton's parents told my parents about a neat little scheme where you could get a TD Bank Go prepaid debit card and load it up using a credit card. You were allowed up to three $1,000 loads in a rolling 30 day period, for just $1 fee per load. The way the calendar rolled out, we were able to get 4 loads in (three in August and one on September 1st).

The true beauty of this scheme (no longer working as of Sept 3) was that you could load the TD Go card using a point earning credit card and then use it to pay off any Citi credit card. And our Hilton Reserve card just so happened to be issued by Citi. So we'd use our Citi Hilton Reserve to load our TD Go, then call up to use our TD Go Debit card to pay off the Citi Hilton Reserve. The only "loss" was $1 each load cycle, so $4 total.

5. Paypal Reload Cards - $2,016
Photo from Million Mile Secrets
Now, after figuring out the math, we were going to fall short, so we had to compromise on my father's "always optimize" mandate. So we took the easy route and went to a few nearby pharmacies that sold Paypal Reload cards. First, we gave up on earning 5% cash back on $2,016, which was about $100 of cash rebate. Second, we had to pay a $3.95 fee on each of the 4 cards we loaded with $500, so another $16 of fee leakage.

However, we did achieve the annual $10,000 goal earning 22,500 Hilton HHonors points (worth up to $225 of redemption value) and a free weekend night certificate at just about any Hilton property in the world, including the stunning Conrad Koh Samui we visited last year which retails for $800-1000/night.

Final Tally
  • Hilton HHonors Points:  $180-225 of value (at 0.8-1.0 cents/Hilton point)
  • Free Weekend Night Certificate:  $400-800 of value
  • Less: Fees Incurred:   $20 loss
  • TOTAL:   $560-1,005 of net value
If we had to replicate the same spending on the "optimal" cards instead of our Hilton Reserve Visa, then we'd probably have used the Amex Blue for drugstore spend, Starwood Amex for everything else - unless they only took Visa/Mastercard where we'd use our Barclays Arrival+.

Tallying those totals up using our point valuations, we'd get to about $219 of value, so it's pretty clear that we were better off going for the Free Weekend Night certificate. Now, the fun part of finding a Hilton property to redeem it at!

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