Tags: travel news
Categorised in: Travel News
How fat do you want your wallet to be?
It’s not a rhetorical question, and not a cash count. In the competitive world of eye-popping credit-card travel rewards, the way to maximize benefits these days is to load your billfold with multiple cards.
You may want one card for everyday spending, one for travel and restaurant purchases, one to get lounge access and one to waive baggage and priority boarding fees if you don’t have elite status. You also might want one more for free hotel stays. And just signing up for a new card every year can get you a free ticket or multi-night hotel stay.
“The rate at which you earn has never been better,” says Brian Kelly, founder and chief executive of The Points Guy, a travel news and reviews site.
Sign-up bonuses, which once topped out at 100,000 miles for a few programs, have been fairly steady of late at 50,000 points or miles per sign-up for many cards. That’s still generous—it alone can get you a free ticket or two—and is worth doing once every year or two if you have good credit. Opening a new account can temporarily ding your credit score, and banks do track card churning—opening five new credit cards within two years can cause a bank to decline a new application, banks say.
One magic number for credit-card travel rewards is 2%: You should be getting at least 2% of your purchases back. If you have a card that pays airline miles and you’re using it for domestic coach tickets, you’re not close to 2%. You’re better off with a card that pays 2% cash back with no annual fee, like Fidelity Rewards or Citi Double Cash.
Co-branded airline cards are losing their luster, credit-card watchers say. The airline cards typically pay one mile for each dollar spent (and more for airline purchases). As award seats become more expensive and harder to find, the payback you get on those cards weakens.
Airline cards are best for waiving baggage fees if you don’t have elite status. Most will get you a free checked bag and some kind of priority boarding.
Bank cards unaffiliated with a specific airline or hotel, like Chase Sapphire, American Express Platinum and the new Barclays Arrival Premier World Elite, do more, experts say. You can earn more points, use them with more flexibility and collect some seriously useful perks.
Gary Leff, co-founder of frequent-flier community InsideFlyer, likes that flexibility. You have a better chance of landing the trips and dates you want if you can buy in a variety of programs.
“Is there one card that’s best? I don’t think so,” he says. But having multiple cards “is more rewarding than ever before.”
Lounge access is a major perk. The deals are remarkable at the premium level, which have an annual sticker price of $450 to $550 but end up costing a lot less with credits and rebates.
With Chase Sapphire Reserve you get you a 50% bonus on trips booked through Chase Ultimate Rewards, and you earn triple points on travel and dining. In addition, you get a Priority Pass membership, which lets you use any of more than 1,000 lounges world-wide. At Los Angeles International that equals access to the Virgin Atlantic Clubhouse, the Alaska Airlines lounge or the Korean Air lounge.
But the Sapphire Reserve card, which has developed a cultlike following among frequent travelers, isn’t the best card for everyday purchases. It gives you triple points for travel and dining purchases, but only one point per dollar spent on everything else.
Bottom line: You’re getting about 1.5% back on your everyday purchases. You can easily get back 2% with other cards, and more if you’re strategic about it. I get between 2% and 4% back on the American Express Starwood Preferred Guest card through free Starwood and Marriott hotel nights, plus I get gold status at both Starwood and Marriott after I spend $30,000 a year on the card. If you turn airline miles into international business-class seats, your payback is about 4% or 5%.
The American Express Platinum card significantly out-perks Chase Sapphire in lounges. Amex Platinum offers Priority Pass as well as Delta Sky Lounges when you fly Delta. But the big benefit is access to American Express Centurion lounges, open in eight U.S. cities plus Hong Kong so far.
The Amex platinum card costs $550 but it will credit back to you $200 a year of airline fees at one airline of your choosing, $200 worth of Uber rides spread over 12 months and one $100 Global Entry or $85 TSA PreCheck membership. You also get gold status at Hilton, Starwood and Marriott hotels. (Starwood and Marriott haven’t merged their rewards programs yet.) That sometimes gets you upgrades, free premium Wi-Fi, lounge access or free breakfasts.
The Centurion lounges are the big differentiators if you fly where they are located and consider lounges a priority. American Express decided to build its own airport lounges to outflank and out-swank other banks after both United and American airlines cut off access to their lounges for Amex cardholders. The Centurion lounges have spas, bars with free beer and wine, celebrity-chef food buffets and fancy seating and work tables—better than domestic U.S. airline clubs.
Jill Gonzalez, a WalletHub analyst, cautions that often only very frequent travelers take advantage of perks like lounge access.
She likes the Radisson Rewards Premier Visa Signature card, which has a sign-up bonus of 85,000 points if you spend $2,500 within the first 90 days. That’s good for up to nine free award nights world-wide at a handful of the cheapest hotels, fewer nights at nicer hotels. You earn 10 points for every dollar spent at Radisson hotels, and five points on other purchases, and several other ways to amass a large points war chest.
“That $75 annual fee will quickly pay for itself,” she says.
Write to Scott McCartney at email@example.com