Introduction to Category Bonuses

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Introduction to Category Bonuses

Transcript of Introduction to Category Bonuses

Page 1: Introduction to Category Bonuses

Introduction to Category Bonuses

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- Extra Points or Cash Back for

Spending in Certain Categories

What are Category Bonuses?

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- 3X Points Airfare

- 2X Points Gas/ Groceries

AMEX Premier Rewards Gold

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- 2X on Travel/Dining on Chase Sapphire Preferred

Sapphire Preferred

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- Displaces spending on sign-up bonuses for other credit cards

Worth It or Not?

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$50,000

*2010 US Census

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- Spend everything you earn, you’ll get only 50,000 miles/points

- Pay-off is with the SIGN-UP BONUS,

NOT everyday spending!

Earning Miles & Points – Credit Cards

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- Incremental Earning

- 3x on airfare. Actually 2 EXTRA points (or 1 EXTRA point if you have Sapphire)

- 2x on groceries. Actually 1 EXTRA point

- 2x on gas. Actually 1 EXTRA point

Worth It or Not?

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- $750 a month on gas and groceries = 750 extra points per month or 9,000 points per year $ 175 Annual Fee - Worth it or not?

Worth It or Not?

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- Annual Fees - $175 for Premier Rewards Gold - $95 for Chase Sapphire Preferred - $95 for Chase Ink Bold

Worth It or Not?

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- Complex

- Time Consuming

Worth It or Not?

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- Keep your partner happy!

Worth It or Not?

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Worth it!

No fee for many of the best 5X and 6X bonuses!

• Chase Ink Classic, Ink Cash: 5X

• US Bank Cash+ 5X (choose 2)

• Chase Freedom, rotating 5X (limited to $6K / year)

• Citi Forward 5X

• American Express Hilton HHonors: 6X

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Worth it!

Best alternative is sign-up bonus spend. Let’s look at some sign-up offers…

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Ink Bold / Ink Plus

• Current offer: 50K points after $5K spend.

• If spend within 1X categories, total 55K points

• Earnings: 11X

• Prior 50K offer: 25K points free + 25K points after $10K spend

• If spend within 1X categories, total 35K additional points

• Earnings after free bonus: 3.5X

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Sapphire Preferred

• 40K points after $3K spend

• If spend within 1X categories, total 43K points

• 14.33X

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BA 100K offer

• 50K Free, 50K more after $20K spend

• BA card earns 1.25 points per dollar

• Total 75K additional points

• Earnings: 3.75X

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More… • Citi AA: 50K after $2500 spend

• Total 5250 points

• Earnings: 21X

• Amex SPG: 10K free + 15K after $5K spend

• Total 20K additional points

• Earnings: 4X

• CitiBusiness ThankYou: 50K after $6K spend

• Total: 56K points

• Earnings: 9.33K

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Worth it!

• Sign-up bonus spend ranges from 3.5X to 21X

• Better than category bonuses, but not by orders of magnitude

• Category bonuses available year around

• Ideal:

• Meet sign up bonus spend within each card’s bonus categories

• E.g. Meet Hilton HHonors min spend at grocery stores, drug stores, and gas stations

• Otherwise, meet spend where no good 5X categories exist

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Worth it!

Use tools to make card selection easier

(more on this later)

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6X groceries, gas, drug

stores

2X Travel, Dining

5X restaurants, bookstores,

movies

5X telecom, cable,

internet, office supply

Best Category Bonuses

5X Rotating

categories

5X Select two categories

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Cash+

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•2X Travel/Dining •$95 Annual Fee •No Forex Fee

•5X Rotating Categories •Gas/Drugstores/Amazon •ZERO Annual Fee

And/Or

Chase Ink Bold/Plus/Classic/Cash • 5X Office Supply Stores, Cable, Internet • 2X Hotels & Gas • $95 Annual Fee/ No Annual Fee

Category Bonuses – Simple Solution

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• $200 monthly telecom = 5 X $200 = 1,000 Pts (Ink)

• $300 travel & dining = 2 X $300 = 600 Pts (Sapphire Preferred)

• $500 monthly Chase Freedom = 5X $500 = 2,500 Pts

Simple Solution - Payoff

= 4,100 Points Monthly or 49,200 Annually

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• ~2 United domestic coach tickets or $821 Southwest

• $615 in travel through Ultimate Rewards portal

• 2 Category 6 Hyatt nights

What to do with 49,200 points?

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Another Simple Solution

6X groceries, gas, drug stores, telecom

5X restaurants, bookstores,

movies

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Simple Solution 2 Payout

Hilton Amex: 5400 monthly, 65K annually • $200 monthly telecom = 6 X $200 = 1,200

• $500 monthly groceries= 6 X $500 = 3000

• $150 monthly gas = 6 X $150 = 900

• $50 monthly drug stores = 6 X $50 = 300

Citi Forward ThankYou: 1250 monthly, 15K annually • $200 dining = 5 X $200 = 1000

• $50 books & movies = 5 X $50 = 250

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What to do with 65K Hilton & 15K ThankYou points?

• Two nights category 5 Hilton

AND

• $200 airfare

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Advanced Solution 6X

groceries, gas, drug

stores

2X Travel

5X restaurants, bookstores,

movies

5X telecom, cable,

internet, office supply

5X Rotating

categories

5X Select two categories

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Advanced Solution Payout

• 60K Hilton HHonors

• 50K Ultimate Rewards

• 15K ThankYou

• $800 cash back

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What to do with all that?

A trip for two:

• Two round trip award flights on United

Plus

• $200 revenue flight or car rental via ThankYou points

Plus

• Two nights Hilton

Plus

• Cash for dining, excursions, extra hotel nights, etc.

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Tools to find and use Category Bonuses…

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Frequent Miler page

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Best Category Bonuses

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Wallaby

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Wallaby iPhone app

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- I-Phone App

- Easy to Add Cards

- More locations

Tools: Glyph

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- Tracks Your Rewards

Tools: Glyph Wallet

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- Shows You How Much You Lost

Tools: Glyph – Dashboard

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- Not Accurate all the Time

- Doesn’t Explain How “%” is Calculated

- Crashes

Tools: Glyph – Guru

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TAKE IT FURTHER

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Use Gas Station Gift Cards at Affiliated Grocery Store

- E.g Kroger/Kwik Trip

Gift Cards at Grocery Stores / Gas Stations

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- Buy Gift Cards from Grocery Stores/ Gas Station With Category

Bonuses

Amazon Gift Cards Restaurant Gift Cards

Gift Cards at Grocery Stores / Gas Stations

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Reload cards

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Questions?

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Program Card(s) Point Value (cents per point)

Value at ~2X

Value at ~5X

Ultimate Rewards

Ink, Freedom, Sapphire

1 (2) 2 (4) 5 (10)

US Bank Cash+ 1.875 3.125 6.875

ThankYou Forward 1 (1.33) N/A 5 (6.65)

Hilton HHonors

Amex .5 1.5 (at 3X) 3 (at 6X)

Membership Rewards

Premier Rewards Gold

1.5 3 4.5 (at 3X)

Backup slide: Point values