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A reader whom I will not name (we wouldn’t want to tip his hand to a future potential spouse) asks,
Love your blog! Though I’m a relative novice to the points game, I’ve learned a ton from you.
Question: I’m getting ready to buy an engagement ring, which will be the largest purchase I’ve ever put on a credit card, and I’m looking for advice on how best to maximize point-earning.
The ring I’m likely to buy will probably come in in the $10,000 to $13,000 range and will be purchased from a small jeweler. They take payments by PayPal, in case that’s useful information.
My main airline loyalty is with American …and my main hotel loyalty is with Marriott…
My main spending right now is on the Citi AAdvantage Platinum MasterCard and an American Express Everyday card, which I just picked up recently for the bonus. I also have Barclay USAir-turned-AA card, the IHG MasterCard (also recently picked up for the bonus) and the Marriott Visa.
I had but canceled my AA Citi Executive card earlier this year. I’d love to get the bonus again, but figure that’s unlikely. I also have had and canceled the BA Visa twice now, so that may be out too.
Any advice on how best to make this big purchase?
Thanks very much —
In the mid-1990s the Citi AAdvantage credit card launched an ad campaign, the first iteration of which was a diamond ring and the question, “Was it love… or was it just the miles?” I don’t have a copy of that ad, but I know that Randy Petersen does because he put it up on screen at the 2003 Freddie Awards before he asked his wife Julie to marry him.
Here’s my second favorite ad from that series:
Of course, some were known to buy diamond rings online at costco.com with a visa and then return them in-store. You want to give one to your hopefully future spouse.
I’m not sure how I feel about the whole idea, though I did it myself. Historically diamond rings represented a substantial portion of the man’s net worth as so the expense meant they were likely to be able to give out only one, ensuring they’d be marrying only one person, and since the’re so valuable the rings served as a hostage to help ensure fidelity. I’m not certain they fulfill either role any longer.
That said, let’s assume that you’re going to do this, and at that price point as well.
- If the jeweler will take Paypal, where they’re paying ~ 3%, they’re likely to give you the 3% back to not use paypal so consider whether it’s worth paying by credit card.
- Nonetheless I do like credit cards for large purchases as it gives you extra security over what you’re buying.
- Comparison shop, most jewelers will negotiate on price but there are plenty of online vendors as well who may participate in shopping portals where you’ll earn miles or rebates for the purchases, independent of the points earned via credit card.
Assuming you’re not going to earn any spending category bonus for the retail purchase, your most leveraged play is using the purchase to meet the signup bonus for a newly acquired credit card.
- You’re not going to be eligible for another bonus on the Citi Executive card if you’ve cancelled within the past year. You note you’ve had the British Airways card twice, but not how recently, I’ll assume you’ve gotten a bonus on the card within the past two years and so you’re not eligible for that one again either.
- You mention 7 different cards. If you haven’t gotten had 5 new cards within the past 2 years then Chase Sapphire Preferred would be at the very top of my list. Their 40,000 point bonus after $4000 in spend within 3 months would be easy to meet.
- More generally it’s hard to tell you what points to focus on because I don’t know your reward goals, whether you’ve got a honeymoon planned, and if you already have all the points you’ll need. I like Sapphire Preferred because of the flexibility to put those points into different programs.
If you don’t sign up for a new card, then I’d say of the cards you have now the most valuable points are earned with the Amex Everyday card. So without a signup bonus, that’s the card I’d use.
But with such a big purchase the most important thing is getting a quality product and getting that product at the best price.