Business Insider Gets Credit Card Advice Mostly Right

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Business Insider carries a piece on the two best credit cards for 2017. It contains mostly good advice and even one sort of obvious point that hadn’t occurred to me before.

They recommend the Chase Sapphire Preferred Card as the very best card, and then also recommend the Capital One Venture Card.

The piece makes the point – as I often do – that while airline co-brand cards are fine, cards that offer points transfers to several different airlines are more valuable. Why earn 1 United mile when you can earn a point that transfers to United, Korean Air, British Airways, Southwest, Air France and more?

Airline cards are good for flight benefits (checked bags, priority boarding) and for signup bonuses but don’t make sense for most customers to spend money on. The Citi / AAdvantage® Platinum Select® World Elite™ MasterCard® offers 50,000 points after $3000 spend within 3 months, and waives the $95 annual fee the first 12 months. It even exempts you from the more draconian aspects of Basic Economy fares. But you don’t want to use it for ongoing spend.

Oddly, the author consults NerdWallet who compares Sapphire Preferred’s transfer partners with those of Citi Prestige and… Capital One (which has no transfer partners) and Barclaycard Arrival Plus™ World Elite MasterCard® which has a nice limited-time bonus offer to earn 50,000 points but which doesn’t have transfer partners either.

“Compared to other options, like Capital One Ventures, Citi Prestige, [and] Barclaycard Arrival Plus… Chase has the best transfer partners [where] you can use those points with different airlines,” McQuay said.

The one argument they make for Capital One Venture is that “you can book a ticket before you earned your sign-up bonus and then retroactively put those points toward your travel costs via a credit on your statement” once you earn the bonus. There’s that. But I certainly don’t recommend Venture for ongoing spend, I’d rather have the equivalent cash back from the no annual fee Citi Double Cash Card than a travel credit.

I certainly agree that Chase Sapphire Preferred should be towards the top of wallet especially as a first, good all-around, entry into miles and points-earning. It has one of the very best signup bonuses at 50,000 points after $4000 in spending within 3 months plus 5000 more points for adding a free authorized user to the account and making a purchase within that same timeframe. It earns points quickly with double points earning in that most valuable of programs on all travel and dining spending. And those are among the very best currencies of any loyalty program.

The transfer options with this card are:

  • Airlines: United, Southwest Airlines, British Airways, Virgin Atlantic, Singapore Airlines, Korean Air, Air France KLM
  • Hotels: Hyatt, Ritz-Carlton, Marriott, IHG Rewards Club

United gets you all of the Star Alliance with no fuel surcharges.

Singapore Airlines is great because the airline makes tons of premium cabin awards available to their own members that aren’t available using miles from partners.


Singapore Airlines Airbus A380 Suites Class

And Korean Air is fantastic because their first class awards are plentiful, too, and generally not accessible through most partner programs so there’s little competition for the seats.

If you’re considering Sapphire Preferred, most of the people I think it’s most appropriate for would be eligible to get it but look at whether you’ve had 5 or more new cards in the past 24 months. That doesn’t prevent everyone from getting approved, but it does prevent many people. I’ve heard reports of approvals for people with more new cards than that, usually with high incomes and credit scores.

Chase Sapphire Preferred

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community Milepoint.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. Gary –

    Please explain your logic to me. Perhaps I’m missing something as I have far less experience then you and many of your readers.

    Forget about the sign up bonuses and other perks for the moment as they are about the same.

    Assume I spend $120, 000 a year buying computers and other technology. 99.9% for resale.

    On Chase or any other 1 point per dollar that’s 120,000 end of year.

    On Capital One Venture or Barclay Arrival it is 240,000 end of year. Plus 5% rebate on Barclay.

    At almost $500 domestic ticket I could get 5 tickets with Cap/Barc. With upgrade capability plus point earning.

    With Chase I would get nowhere near the same amount of tickets plus they would not be upgradeable/point earning.

    If we shop for bus/first class then depending on worldwide (non-US) destination and seat availability maybe I could get one with Chase. Though may have to kick in backend money such as fuel surcharges etc…

    With the other two I should be able to find one business ticket to many destinations, either through specials I’ve seen on your site, other sites or consolidators.

    Now, if one is a heavy spender in buying tickets, restaurants, etc.. vs spending a lot monthly on other purchases perhaps Chase is better. Otherwise, I don’t get why you knock Venture and Barclay down so much often. Perhaps it matters more how one spends each dollar the most?

    By the way, I did take advantage of the Amex Business Platinum 100,000 offer you mentioned over the past few months. That worked out great. First charge for $35,000 racked in a whole lot of points and bonuses so thanks for that tip!!

  2. Todd, A possible reason: most miles bloggers tend to value the ability to use awards for premium cabin air travel. Whenever points are “valued” they look at how much a cash ticket would cost vs the number of points. Thus, when booking economy flights currently, the cash back cards tend to come out ahead, due to so much competition and low fuel prices meaning cheap fares. However, when the point is not just to get somewhere, but to add some comfort (or, depending on your view, luxury), the points cards are better.

    To compare a recent sale posted on another blog: Chicago to Tokyo in April –

    Economy: $560 round trip. or 70K miles on AA (flying Japan Airlines)
    Business class through $3500, or 120K round trip

    Capital One/Barclays is a better deal if you’re flying coach (4 trips plus some cash left over vs 1.5 trips with points. If you’re flying business you’re paying another $1000 with cash back cards, but getting the full trip (aside from a small amount of taxes/fees) paid for. It depends on your desires, circumstances (are you bringing multiple people; most mile bloggers seem to travel alone), airlines (BA would change a ton in fuel charges), etc. But in general, miles bloggers value getting a $5K airline ticket once more than a $1K airline trip 5 times. Your literal mileage may vary.

  3. Gary can you clarify what high income/credit score is?

    I’m 200K income ~815 credit score and 12/24 but will not be 4/24 until 10/2017. Wondering if I should give it a try online- no branches in Massachusetts.

  4. Todd, you’re onto something with the Amex. You can get 1.5 points per dollar on all of those computer purchases with it instead of 2 Barclay points. Those 1.5 Amex points are worth 3 cents total on airfare through Amex (they have the same prices as the airlines in my experience, too), or more than the 2.1 cents the Barclay points would’ve been worth.

    Now, that’s a more restrictive 3 cents, sure, but still 3 cents.

    You could use the Freedom Unlimited from Chase for 1.5 points per dollar that are worth 1.5 cents per point if you also have the Sapphire Reserve card, too. That’s a total return of 2.25%. Yes, you’d have more in annual fees, but you’d also be getting a 4.5% return on dining and travel as well instead of 2.1% from the Barclay option, and those points are transferable to boot!

    So, you have 2 options worth more (but with more restrictions) that can also be transferred to partners by ditching Barclay/Cap One. All 3 could be the right call.

  5. @Noname – don’t have enough specific data to know for sure, it just seems like anecdotally when people report being at 5/24 or over and still being approved and they share $$ and credit score both are high. I’d guess you’d fall into that category but can’t say whether you’d be approved. Unless you’re about to get a mortgage I see little downside in applying, recognizing that you might be declined.

  6. @Noname, my income is considerably higher than yours and my credit score is higher as well; and I was declined on 5/24 for the Reserve card last year, even after applying for it in-branch and being told by the rep that I was pre-approved. So I don’t think there is any specific set of numbers that will exempt applicants from 5/34. Totally short-sighted and dumb on Chase’s part since I would have shifted all of my restaurant and hotel spend to that card.

  7. Todd, I think each person has to make their own choice based on their travel patterns. I agree with you that cash back or travel cash back is best for many types of travel, such as domestic coach. It’s very hard to do as well with miles/points on domestic coach. But for international business class where a ticket is $4000-$6000 vs 100,000-150,000 miles, you get much more bang with miles. I switch back and forth depending on how many miles I have built up and my future travel plans. For example, I had spent most of my miles flying my extended family to Hawaii, so spent the last year building my balances back up. Now I have switched over to putting non-bonused spend on the Barclay Arrival Plus..

  8. Thanks all for the feedback/advice.

    Generally at this point in my life with a young family we make one trip a year in July. NYC to WAW. Since my wife and two kids go ahead of me and stay for two months it seems my best choice is pay the airfare for them in coach and Aeroplan a business one way for myself. I did that last year and found SAS business class very comfortable. 57000 miles and 20 dollars in fuel/taxes. Already booked the same SAS ticket for this summer.

    Question…

    With the Amex Platinum I see some coach tickets for around 85,000 ($850) points. Unfortunately, on the airlines like United, American and Delta where I could get 50% back all the one ways are overpriced at $2000. So, doesn’t seem like a good way for me to join them using the 50% back. Overall, anyone have a preference between the three above to choose $200 credit/50% bonus? Mostly it will be economy flying, whether domestic or Europe. At this point I only have grandfathered American Airlines Platinum, which sounds like it isn’t worth much. Perhaps I should burn up the 800,000 miles I have from years ago with AA as they seem to be worth less and less each year? Put my earnings to Amex instead.

    Looks like I just buy all three tickets on LOT from their site at around $990 each( plus the one way for me on LOT (where I can buy at $625) and be done with it. At least LOT is flying new 787’s that were fairly comfortable last year and the trip is non-stop.

    Todd

  9. Todd, if you are buying the equpiment you describe at office supply stores, then you might consider getting an Ink Cash or Ink Reserve and/or simply cash Busines card from Amex which will all give you 5% cash or 5 points/$ and this changes your calculations

  10. Thanks Beth for the reply. Unfortunately, to get best pricing office supply stores are not the place I shop.

  11. @Todd,

    Here’s how I see it: if you get both a Chase Sapphire Reserve *and* a Chase Freedom Unlimited, you get a minimum of 2.25% travel back for any ticket on (most) any airline. That’s better than the 2% that Capital One offers, and you get the option of transferring to airlines for an award ticket, if that’s a better deal.

    The Freedom Unlimited earns 1.5 points per dollar, and those points can be transferred to the Sapphire Reserve; and the pay-with-points portal that the Chase Sapphire Reserve provides makes each point worth 1.5 cents. So even if you never spend on the Sapphire Reserve itself, you’re earning 1.5x miles, or 2.25% travel back, per dollar spent. And if you do spend on the Sapphire Reserve for dining/travel/transportation/lodging, you earn 3x miles, or 4.5% travel back.

    And if you really just prefer a single 2% card, then 2% actual cash back with no annual fee (Citi Double Cash) is better than 2% travel-only cash back with an annual fee (Capital One Venture Rewards), apart from the lack of sign-up bonus.

    (More detail, if you wish, is all over VFTW, plus at my own blog, at http://ivanx.nyc).

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