One of the events at Frequent Traveler University was a Credit Card Tournament of Champions, the goal was to get a large amount of information out comparing credit cards in a short period of time while having fun doing it.
Credit cards represent a plurality of all mileage earning. Signup bonuses represent an incredible way t earn a large number of miles quickly. And there’s a ton of clutter in the space. So we staged short debates, two cards faced off and after a short presentation the audience voted for a winner. Then the winners of each flight faced off at the end, and an overall winner was declared. The top card based on voting by Frequent Traveler University participants was the Starwood Preferred Guest American Express card.
These were the brackets:
- United Explorer vs. British Airways Visa (Mommy Points versus Gary)
- Chase Sapphire Preferred vs Starwood Preferred Guest American Express (Deals We Like vs Million Mile Secrets)
- Chase Ink Bold Charge Card vs. Alaska Airlines Visa Signature (Million Mile Secrets vs Gary)
- American Express Preferred Rewards Gold vs. Capital One Venture Card (Million Mile Secrets vs Tommy777)
- American Express Platinum vs. Ritz Carlton Visa (Deals We Like vs Tommy777)
- Fidelity Amex 2% Cashback vs. Citi AA Mastercard (Gary vs Tommy777)
Mommy Points wrote about the debate she and I had over United vs. British Airways, two Chase products. I argued for the value of the bonus offered by the British Airways Visa — the richest bonus in the market, up to 100,000 points (the standard offer is 50,000 points with first purchase, 25,000 more after $10,000 in spend, and 25,000 more after the next $10,000 in spend… some folks have luck making a dummy booking on the BA.com website, getting all the way to the purchase phase, and getting offered 50,000 points after first purchase and 50,000 more points after a year without a minimum spend requirement).
I’ve written in the past about leveraging this offer through family accounts (multiple people signup for the bonuses, one person spends all the points) and through the companion award ticket after $30,000 in spend in a year (you get to spend the points twice on a travel companion).
Ultimately I won the debate based on audience voting, with the argument that this is the richest signup bonus of any credit card currently on offer. The line that stuck though, since British Airways adds fuel surcharges onto awards where paid tickets also have them, is that my willingness to pay those dubbed me “Mr. Fancy Pants.” I was, however, wearing jeans… and she has finally booked her own premium cabin award trip…
Audience members made two good points that didn’t come through clearly enough in the compressed format. We were debating specific cards, which meant that the discussion was over the British Airways Visa versus the United Explorer. How would the BA Visa have done against the United Club card? Based on several questions I’ve gotten I’ll re-analyze that shortly, it’s an important question since that card earns 1.5 miles per dollar on all spend, not even as a promotion and not just for a subset of spending categories.
The other key point, and something I’ve emphasized here many times in the past, is that different cards have different uses. I think of three main categories:
- Cards you get for the signup bonus alone. It’s a great offer, you get the card, but you don’t want to put more spending on the card than necessary to obtain the bonus. That’s how I think about the British Airways Visa, despite its earning 1.25 points per dollar and offering no foreign currency transaction fees.
- Cards you get for the benefits. You don’t necessarily want to put (much) spending on the card, but having the card is useful. The American Express Platinum is the very best way for most U.S.-based non-United flyers to secure lounge access, worldwide, in my opinion. It has other benefits like no foreign currency transaction fees. But spending on the card earns just one Membership Reward point per dollar. You can do better. There are also cards which offer help towards elite status based on spend. You may value that, and put spending on the card for that reason, but don’t want to put more spending on it than necessary to obtain the benefits. This is how I view the Hilton Surpass American Express, which is how I get my Hilton Diamond status.
- Cards you get to actually put spending on. That’s my one-two punch of Chase Sapphire Preferred (for travel and dining expenses which earn double points, for merchants that don’t accept American Express, and for foreign currency transactions since the 3% conversion fee is waived) and Starwood Preferred American Express for most other charges.
And here’s how I prioritize spend. First, to meet minimum spend thresholds for whatever cards I’m currently seeking signup bonuses on. Then, for everything else. And whether or not you have enough spend on ‘everything else’ determines whether an annual fee card is even worth it for you.
Another important point — an argument I advanced in favor of the Fidelity Investment Rewards American Express which earns 2% cash back on all spend — is that whenever you are putting spend on a points-earning credit card, you are buying those points for 2 cents apiece. That’s because the opportunity cost is 2 cents cash back from this card.
I asked folks in the audience how many people buy points at 1.87 cents apiece when US Airways offers a 100% bonus on purchased miles. Very few hands shot up. Folks were surprised when I told them every time they were putting purchases that only earn one point per dollar on their card they were buying points for 2 cents.
Now, I actually think the US Airways offer is a good deal, so points cards make sense for many. But it’s important to understand the tradeoffs and not underestimate the value of cash…
At the end of the day, the Starwood Preferred Guest American Express card was voted Best Credit Card in the Universe. It’s certainly a versatile card, I’ve been a cardholder for 11 years. It doesn’t have much in the way of bonuses but one Starpoint is worth more than any other currency in my view. The only real drawbacks are that category bonuses makes other cards better for specific spend, the foreign currency transaction fees, and the length of time it can take to transfer points to some airlines (versus the speedy transfers with American Express Membership Rewards and Chase Ultimate Rewards).
(As is often the case, some of the links above offer referral credit to me, however since I want to share the best available offers many of the links in this post do not. When you use my links I genuinely appreciate it, but want my advice to be the best it possibly can be.)