Credit Card Industry Charts: Visa, Mastercard, American Express, Discover

Here’s a quick infographic for followers of the credit card industry. As part of the Bloomberg Businessweek article How Bad Will It Get for American Express?, there was an informative graphic comparing the number of cards, number of accepting merchants, and total dollar amount of purchases processed by the four major US payment networks: Visa, Mastercard, American Express, and Discover. (Click to enlarge.)

amex_stats

I was a little surprised that the gap between the number of Visa’s and Mastercard’s was so big. I thought they were roughly equal. It was also interesting that the number of Discover and AmEx cards out there were about the same, and while Discover has more accepting locations, AmEx process over double the amount of payments.

Square IPO, Direct Deposit Loans, and Controlling Your Cashflow

squaredongleAs you’ve probably heard, the Square IPO was completed last week. For a while, I didn’t understand how a company could have a $4 billion valuation when they basically offer a simplified merchant account. They let small businesses accept credit cards, which means they skim a tiny bit off the 2.75% they charge while most of it goes straight to the networks. (Add in their other expenses, and Square has never made a profit.) Wouldn’t you rather own Visa or American Express directly?

Then I read this Bloomberg Businessweek article How Two Guys Lost God and Found $40 Million (And sold Wall Street on a shady new kind of finance). Although I try my best to avoid carrying any debt, I do try to keep up with the industry. With a normal credit card, you are waiting around for the borrower to pay you back your principal + interest. The borrower gets their paycheck, pays for rent and food and whatever else, and hopefully gets around to pay you some interest. Here’s a cashflow visual:

cashflow_classic

What these guys profiled in Businessweek did is give struggling small businesses a merchant account, and also lend them money. The key difference of their “merchant cash advance” service is that they would take the loan payments (including interest) directly from their gross credit card receipts! They were lending to horrible credit risks at sky-high rates (because nobody else would lend to them), but they knew they’d be fine because were first in line to snatch any incoming money before the business owner could even touch it. Here the modified cashflow visual:

cashflow_square

Hmmm… if Square can pull something like that off on a big scale, maybe they can be worth billions. It turns out that both Square and Paypal do this same sort of lending. They lend to small businesses and taking money out from the incoming transactions. From a WSJ article dated May 2015:

Paypal said it has doled out $500 million in loans in the first year-and-a-half since it introduced the lending program. And rival Square recently said it had extended more than $100 million in cash advances in the year since it started its own version. […] PayPal, like Square, deducts money from merchants’ accounts based on their receipts, so that they aren’t on the hook if business slows.

From another WSJ article dated September 2015:

At both PayPal and Square, payments are taken as a portion of transaction volume, meaning merchants repay more when sales are high and don’t pay on days without sales. That allows for easier repayments, but makes it difficult to calculate an annual interest rate.

Wow. Ingenious or evil genius? It would be like lending to everyday people but being able to intercept their paychecks before they even landed in their bank accounts. You’d get the money before people could even have the chance to default (or pay for food). Some banks already have something called “direct deposit loans” allow them direct access to bank accounts, taking payments almost immediately after your paycheck arrives. It is possible for motivated people to switch off their direct deposit or move banks, but you’re giving the lenders a built-in advantage.

(A problem for Square is that competitor PayPal also does the free credit card swiper thing, but PayPal can avoid paying Visa and Mastercard whenever a user buys something with their existing PayPal balance. They just move some money around internally and pocket the savings.)

So what’s my point? For one, Square may have a growing profit source from these first-in-line loans to small businesses. Second, as a smart consumer, you should be careful to stay in control of your cashflow. I’d never give a lender permission to withdraw money at any time from my bank account. They should have to wait for me to pay them.

PSA: Beware When Shredding Your Chase Sapphire Preferred Credit Card

csp_shred0Every credit card is getting a smart chip these days, which means a lot of expired cards. My shredder is rated for 12 sheets of paper at a time, and up until recently handled every credit card, CD, and DVD sent its way. But not the Chase Sapphire Preferred credit card. I knew it had a little extra heft due to some sort of metal (aluminum?) sandwiched between layers of plastic, but that fact somehow didn’t register in my shredding fervor… until I heard an awful crunching noise:

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The results: The numbers on the back of the card are still visible, and the magnetic strip may still be readable. My shredder still works, although it has been making some funny noises. Not sure what to do with it now, perhaps industrial-grade shredder could finish the job? Now you know why Chase has started sending folks a prepaid mailer to send back your card when they replace it. :)

Chase Sapphire Preferred Card New Bonus: 50,000 Points = $625 In Travel, Plus 5,000 Points For Authorized User

Chase Sapphire Preferred Image

The Chase Sapphire Preferred® Card is a premium rewards credit card, now with an upped sign-up bonus to new cardholders that is the best publicly-available bonus in years. Bonus highlights:

  • Earn 50,000 bonus points when you spend $4,000 on purchases in the first 3 months from account opening. That’s $625 in travel when you redeem through Chase Ultimate Rewards®
  • Earn 5,000 bonus points after you add the first authorized user and make a purchase in the first 3 months from account opening
  • Introductory Annual Fee of $0 the first year, then $95

Note the following text:

This product is available to you if you do not have this card and have not received a new cardmember bonus for this card in the past 24 months.

The short version is 50,000 points can be redeemed for $625 in travel when you redeem through Chase Ultimate Rewards™. Using it is flexible as well, as you can buy a more expensive ticket (or tickets) and simply pay the difference. You can also transfer the points to various airline mileage programs as well and redeem miles for even better value. This card has a lot of other small features that other cards don’t offer. Full review below.

Rewards Program Summary

The Chase Sapphire Preferred® Card earns 2X points on travel and dining at restaurants. Earn 1 point for every dollar in other purchases. Travel includes airfare, car rental, hotels, and more. Restaurants include both table-service dining and fast food. There are no earning caps or expiration dates. The Ultimate Rewards points that you earn offer great flexibility:

  • Simple cash rewards. Cash redemptions are easy – you can redeem in $1 increments as long as above $20, so you could cash out $27 or $253 without anything left over. 100 points = $1.
  • Simple travel rewards. Points redeemed towards travel are worth 25% more, and you can apply them to any hotel or flight available on their travel portal. Redemptions can also be maximized because you can book wherever you want and simply pay the difference. For example, 25,000 points can be used for any ticket up to $312.50, but if say you wanted a $325 ticket you could just pay the $12.50 difference. You’re able to use every last point on this program, and you don’t have to worry about room or flight availability.
  • Flexible transfers to airline miles. If you prefer, you can also transfer to United Airlines, British Airways, Singapore Airlines, Korean Air, Southwest, Hyatt Hotels, IHG Hotels, and Marriott Hotels. 1 Sapphire point = 1 mile/hotel point for these transfers. Miles redemption continue to offer great value for savvy travelers, especially for last-minute travel and business class seats. If you collect miles, this is really lucrative as I don’t know of any other card that gives 2 miles/dollar spent on travel and dining.
  • Sharing points. Ultimate Rewards points are instantly transferable to other accounts like family members, as long as they have their own card as a (free) authorized user. This way, you can pool points together for transfers and redemptions if you like.

More Features

Just nice-to-have perks:

  • Premium, dedicated customer service line with a live person, 24/7. I tested this out and it works. A real person picks up after a couple rings, no phone trees or typing those darn 16 digits over and over. You can use this feature to redeem cash rewards over the phone for free, although booking rewards tickets over the phone costs $20 (doing so online is free).

Travel-related perks:

  • $0 foreign transaction fees, plus chip-enabled for enhanced security and wider acceptance when used at a chip card reader
  • Primary car rental collision damage waiver insurance. Decline the rental company’s collision insurance and charge the entire rental cost to your card. Coverage is primary and provides reimbursement up to the actual cash value of the vehicle for theft and collision damage for most rental cars in the U.S. and abroad. Most other cards only offer secondary insurance, which means it only kicks in if your personal auto insurance does not cover an accident (which can trigger an increase to your premiums).
  • Travel and shop with confidence with premium Travel and Purchase Protection Benefits, including Trip Cancellation/Trip Interruption Insurance, Auto Rental Collision Damage Waiver, Purchase Protection and more
  • Trip delay reimbursement. If your common carrier travel is delayed more than 12 hours or requires an overnight stay, you and your family are covered for unreimbursed expenses, such as meals and lodging, up to $500 per ticket.
  • Lost luggage reimbursement. If you or your immediate family members’ checked or carry-on bags are damaged or lost by the carrier, you’re covered up to $3,000 per passenger.
  • Baggage delay insurance. Reimburses you for essential purchases like toiletries and clothing for baggage delays over six hours by passenger carrier up to $100 a day for five days.

Retail shopping and purchase-related perks:

  • Extended Warranty Protection. Extends the time period of the U.S. manufacturer’s warranty by an additional year, on eligible warranties of three years or less.
  • Purchase Protection. Covers your new purchases for 120 days against damage or theft up to $500 per claim and $50,000 per account.
  • Return Protection. You can be reimbursed for eligible items that the store won’t take back within 90 days of purchase, up to $500 per item, $1,000 per year.
  • Price protection. If a card purchase you made in the U.S. is advertised for less in print or online within 90 days, you can be reimbursed the difference up to $500 per item, $2,500 per year.

I share the opinion with many others that this is a strong bonus backed by a solid rewards card for the savvy traveler. I say “savvy” because if you can wrangle 2 cents per mile of value out of a frequent flier program (quite possible), then this card is great value. During your first year, you should see if you can get enough value to justify the $95 annual fee. For someone who charges very little on their credit card and/or does not travel much, it is likely not a good rewards card for that situation.

For me, I keep this card around after looking at the whole picture. I have accumulated nearly 300,000 Ultimate Rewards points from this card and other sources including the Ultimate Rewards cashback portal and the Chase Freedom card, but I need to keep this card open to retain the flexible transfer options as I like to keep these UR points around to transfer over to specific partners as needed. I try to specifically put travel and dining out on this card, as I prefer 2 Ultimate Rewards points per dollar over 2% cash back. This works out because the travel protections on this card are stronger than most and only apply if you actually charge your travel on this card. Primary car rental CDW insurance is pretty valuable on its own.

Chase Sapphire Preferred Banner 50000

“Disclaimer: This content is not provided or commissioned by the issuer. Opinions expressed here are author’s alone, not those of the issuer, and have not been reviewed, approved or otherwise endorsed by the issuer. This site may be compensated through the issuer’s Affiliate Program.”

“The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.”

BankAmericard® Credit Card Review

Bank of America BT CardBank of America is the issuer behind many different credit cards, but only a few of them carry the “BankAmericard” co-branding. I have written up reviews of the BankAmericard Cash Rewards™ Credit Card and the BankAmericard Travel Rewards® Credit Card, but this brief review is specifically to cover the “classic” BankAmericard® Credit Card.

Rewards programs. The BankAmericard® Credit Card does not come with a rewards program. There is no cash back, there is no points system.

There is no annual fee. The card also comes with chip technology for security and ease of use internationally.

  • 0% Introductory APR for 18 billing cycles for balance transfers made in the first 60 days, then 11.24% – 21.24% Variable APR.
  • Balance transfer fee of either 3% of the amount of the transfer or $10 (whichever is greater) applies
  • No annual fee
  • The perfect card for those seeking a simple yet convenient-to-use credit card
  • $0 Liability Guarantee, so you’re not responsible for any fraudulent charges made on your account

Be careful with the naming structures when picking among cards. The BankAmericard® Credit Card is best if you are looking for the longest 0% APR period. Otherwise, if you are primarily interested in rewards cards then I would look at the BankAmericard Cash Rewards™ and the BankAmericard Travel Rewards® credit cards instead.

“Disclaimer: This content is not provided or commissioned by the issuer. Opinions expressed here are author’s alone, not those of the issuer, and have not been reviewed, approved or otherwise endorsed by the issuer. This site may be compensated through the issuer’s Affiliate Program.”

“The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.”

BankAmericard Travel Rewards® Credit Card Review: Great with Preferred Rewards Bonus

bofa_travelrewards191The BankAmericard Travel Rewards® Credit Card is the main “travel rewards” credit card branded by Bank of America. In this review, I’ll cover the card features but also focus on a lesser-known opportunity – if you’re a Preferred Rewards client, you can increase that bonus to 25% – 75%. For such “relationship” customers, the bonus can change this card from good to great. Read on for details.

Here are the highlights of this card:

  • Earn unlimited 1.5 points per $1 spent on all purchases, with no annual fee and no foreign transaction fees and your points don’t expire
  • 20,000 online bonus points if you make at least $1,000 in purchases in the first 90 days –  that can be a $200 statement credit toward travel purchases
  • Use your card to book your trip how and where you want – you’re not limited to specific websites with blackout dates or restrictions
  • Redeem points for a statement credit to pay for flights, hotels, vacation packages, cruises, rental cars, or baggage fees
  • Now with chip technology for enhanced security and protection at chip-enabled terminals
  • 0% Introductory APR for 12 billing cycles for purchases, then 15.24% – 23.24% Variable APR
  • Get an additional 10% customer points bonus on every purchase when you have an active Bank of America® checking or savings account
  • If you’re a Preferred Rewards client, you can increase that bonus to 25% – 75%. Click “Apply Now” to learn more about Preferred Rewards.

The Preferred Rewards program is designed to rewards clients with multiple account and higher assets located at Bank of America banking, Merrill Edge® online brokerage, and Merrill Lynch® investment accounts. Here is a partial table taken from their comparison chart:

bofa_pref1

Let’s consider the options. Bank of America’s interest rates on cash accounts tend to be lower than highest-available outside banks, so moving cash over to qualify may reduce your interest earnings. Merrill Lynch advisory accounts also usually come with management fees. However, if you have brokerage assets like mutual funds and ETFs, moving them over to Merrill Edge may actually reduce your costs because at the Platinum and Platinum Plus levels they will actually give you 30 to 100 free online stock trades every month.

I recently did a partial transfer of a little over $100k of brokerage assets (Vanguard funds) over to Merrill Edge to qualify for Platinum Honors. I should mention it may take a while for your “3-month average combined balance” to actually reach the $100k level and officially qualify for Platinum Honors. Only after that will the 75% rewards bonus on credit card rewards kick in.

(Side note: Stack this offer with their Merrill Edge brokerage sign-up bonus.)

Cash Back Rewards Tiers for Preferred Rewards

This card has a relatively simple rewards structure; you earn 1.5 points per dollar spent on all purchases. 1 point = 1 cent statement credit against any travel purchase made on the card (flights, hotels, vacation packages, cruises, rental cars, or baggage fees). As long you as you travel at least occasionally, I feel it is okay to value them at 1 cent per point, which means you could call this a “1.5% back on all purchases, if applied towards travel purchases” rewards card. Here’s how the bonuses then work out:

  • Platinum Honors: 2.625% back, if applied towards travel, or 2.625 points per dollar spent on any purchase (75% bonus).
  • Platinum: 2.25% back, if applied towards travel, or 2.25 points per dollar spent on any purchase (50% bonus).
  • Gold: 1.875% back, if applied towards travel, or 1.875 points per dollar spent on any purchase (25% bonus).

Note that the terms state “The Preferred Rewards bonus will replace the customer bonus you may already receive with the card.”, which I interpret to mean that you will lose the 10% bonus for redeeming your cash back into a Bank of America® checking or savings account.

(Update: Here are my redemption tips and experiences on qualifying for and receiving 2.625% back towards travel.)

Well, I think their plan is working because Bank of America has managed to convince me to go from only having a checking account with them to now also having a Merrill Edge brokerage account and a Bank of America credit card. I definitely realize not everyone will have this level of assets to move around, and so this is somewhat a restricted offer. But if you do then it is worth considering. Both Platinum and Platinum Honors levels allow you to reach tiers that effectively give you over 2% back on all purchases, with the important caveat that your rewards must offset previous travel purchases on the card.

Not all Bank of America consumer credit cards qualify for Preferred Rewards. Another card that does qualify is the BankAmericard Cash Rewards™ Credit Card. I picked this BankAmericard Travel Rewards Credit Card myself, but for other folks the grocery and gas bonuses specifically available on the BankAmericard Cash Rewards™ Credit Card might give you higher rewards.

“Disclaimer: This content is not provided or commissioned by the issuer. Opinions expressed here are author’s alone, not those of the issuer, and have not been reviewed, approved or otherwise endorsed by the issuer. This site may be compensated through the issuer’s Affiliate Program.  “The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.”

Chase Ink Plus Business Card Review: 60,000 Rewards Points Bonus

Chase Ink Plus Card Art

One of Chase’s small biz credit cards is called the Ink Plus® Business Card. It turns out to be very similar to the Chase Ink Bold Business card, but with the important difference that the Ink Plus is a credit card where you can carry a balance and the Bold is a charge card that you must pay in full each month. See terms for pricing details.

This means that the Ink Plus is a separate card with its own sign-up bonus, currently a 60,000 Ultimate Rewards points after your after spending $5,000 in the first 3 months your account is open. You can read about my Ink Bold bonus experience here.

Ultimate Rewards points are very flexible:

  • Cash. 1 point = 1 cent in cash, so 60,000 points = $600 cash.
  • Travel. 1 point = 1.25 cents towards travel, so 60,000 points = $750 towards travel at the same prices at Expedia or Travelocity (no % markups), split up however you like into multiple tickets, down to the penny. Good for people who don’t like to bother with miles.
  • Frequent flier miles and hotel rewards points. Transfers directly to United miles, British Airways miles, Hyatt hotel points, and Marriott hotel points. Best for folks that are willing to research and maximize their miles. Top up your account to reach an award, an transfer over only what you need..

Here are the important features of this card:

  • Earn 60,000 bonus points after you spend $5,000 on purchases in the first 3 months from account opening. That’s $750 toward travel when you redeem through Chase Ultimate Rewards®
  • Earn 5X points per $1 on the first $50,000 spent in combined purchases at office supply stores and on cellular phone, landline, internet and cable TV services each account anniversary year.
  • Earn 2X points per $1 on the first $50,000 spent in combined purchases at gas stations and hotel accommodations when purchased directly with the hotel each account anniversary year.
  • Earn 1 point per $1 on all other purchases—with no limit to the amount you can earn
  • No foreign transaction fees
  • Chip-enabled for enhanced security at home and abroad when used at a chip card reader
  • Employee cards at no additional cost
  • $95 Annual Fee

Based on past experiences, you should be able to get this card and bonus in addition to the Ink Cash card as they are different cards. I already have the Chase Sapphire Preferred personal card, so I’ll probably wait for a bit and then try out this new card as well for my business. Gift cards purchases are also useful for satisfying the spending requirement for the bonus.

Many people aren’t aware of the fact that they can apply for business credit cards, even if they are not a corporation or LLC. The business type is called a sole proprietorship, and these days many people are full-time or part-time consultants, freelancers, or other one-person business. This is the simplest business entity, but it is fully legit and recognized by the IRS. On a business credit card application, you should use your own legal name as the business name, and your Social Security Number as the Tax ID. This is how I got all my cards before incorporating, and how my wife gets her business cards for her small side business.

“Disclaimer: This content is not provided or commissioned by the issuer. Opinions expressed here are author’s alone, not those of the issuer, and have not been reviewed, approved or otherwise endorsed by the issuer. This site may be compensated through the issuer’s Affiliate Program.”

“The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.”

Chase Ink Cash Business Card Review: $200 Cash Bonus, 5% Back Categories, No Annual Fee

inkcash200

The Chase small business credit card that I have written the least about is the Ink Cash® Business Credit Card. The Ink Cash usually doesn’t come with as big of a sign-up incentive as its Ink Bold and Ink Plus siblings, but is also has no annual fee for the first year and all subsequent years. The Ink Cash actually offers a better combination of upfront bonus and ongoing rewards utility.

If that sounds like you, someone who want a “keeper” business card with no annual fee, read on to learn about a few lesser-known quirks.

Card highlights:

  • Earn $200 bonus cash back after you spend $3,000 on purchases in the first 3 months from account opening
  • Earn 5% cash back on the first $25,000 spent in combined purchases at office supply stores and on cellular phone, landline, internet and cable TV services each account anniversary year
  • Earn 2% cash back on the first $25,000 spent in combined purchases at gas stations and restaurants each account anniversary year
  • Earn 1% cash back on all other card purchases with no limit to the amount you can earn
  • 0% introductory APR for 12 months on purchases and balance transfers
  • Employee cards at no additional cost
  • No annual fee

Digging into the features:

Sign-up bonus. Now, that cash sign-up bonus actually comes in the form of Ultimate Rewards points as 1 point = 1 cent in cash. So 20,000 points = $200 cash. However, you don’t get the 25% boost in value as you would with the Ink Bold or Ink Plus cards (that’s one reason why those have an the annual fee). However, if you already have one of those cards or a Chase Sapphire Preferred consumer card, you could transfer your points between Ultimate Rewards accounts and redeem using that other card’s 25% travel bonus.

Basically, if you partner this no-annual-fee card with one of the annual-fee cards (Ink Plus, Ink Bold, Chase Sapphire Preferred) at the time of redemption, you can boost the value. (You can have an Ink Plus and an Ink Cash card for the same business.)

Leveraging the 5% back bonus categories. Putting all of your small business cell phone, landline, and internet bills on the card and getting 5% back is pretty handy. For example, even just $200 a month x 12 months x 5% back is $120 back a year without changing your spending habits. Now let’s take the office supply store category and the fact that you can buy gifts cards to Amazon.com and other retailers at such office supply stores like Staples and OfficeMax… now you can effectively discount many of your other purchasing needs by 5% as well. Putting those purchases on such gift cards upfront can also help you meet the spending requirement for the bonus.

Many people aren’t aware of the fact that they can apply for business credit cards, even if they are not a corporation or LLC. The business type is called a sole proprietorship, and these days many people are full-time or part-time consultants, freelancers, or other one-person business. This is the simplest business entity, but it is fully legit and recognized by the IRS. On a business credit card application, you should use your own legal name as the business name, and your Social Security Number as the Tax ID. This is how I got all my cards before incorporating, and how my wife gets her business cards for her small side business.

“Disclaimer: This content is not provided or commissioned by the issuer. Opinions expressed here are author’s alone, not those of the issuer, and have not been reviewed, approved or otherwise endorsed by the issuer. This site may be compensated through the issuer’s Affiliate Program.”  

“The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.”

British Airways Credit Card Review – 50,000 Bonus Avios!

British Airways Visa Signature Card

Here’s an offer that we took advantage of previously for multiple free flights both within the US or internationally. The British Airways Visa Signature® Card is offering 50,000 bonus Avios after you make $3,000 in purchases within the first 3 months of account opening.

In addition to the bonus Avios, you will also get 3 Avios for every $1 spent on British Airways purchases and 1 Avios for every $1 spent on all other purchases. Another perk is no foreign transaction fees, handy when traveling and saving you up to 3% off everything compared to cards that have the fee. Every calendar year you make $30,000 in purchases on your British Airways Visa Card, you’ll earn a Travel Together Ticket good for two years. Smart Chip Technology allows you to use your card for chip based purchases in Europe and beyond.

The Avios reward chart is now based on how far you want to travel in terms of miles. So what can you do with all those points?

Redeem awards domestically on partner American Airlines. Within the US, it’s usually easiest to find flights on partner American Airlines. There are no fuel surcharges when booking with American. Seating availability will be limited, but if you are flexible there is decent inventory.

  • Los Angeles to Honolulu, Hawaii using only 25,000 Avios points roundtrip. I ran a quote in Fall and it cost $659 broken down to $621 fare and only $38 in taxes. So in this case you could save $621 in exchange for 25,000 points, which is 2.5 cents per point. You can also do JFK to LAX for 25k points roundtrip.
  • Shorter-distance flights can be a good deal as well. Round Trip from Chicago to New York City is only 15,000 Avios points + about $30 in taxes. Charlotte, NC to New York City is only 9,000 Avios roundtrip. Los Angeles to Las Vegas is also 9,000 Avios roundtrip. Los Angeles to Portland, Oregon is 15,000 Avios roundtrip.

More details below:

Finding partner awards on BA.com is better than is was in the past, so try it first. Type in your to/from cities within the US, choose to book flights with Avios points, and then click to include partners:

If you have the flexibility, you can also search for additional dates for more available seats. Here’s a trip I found for a short flight from San Francisco (SFO) to Los Angeles (LAX) for just 9,000 miles + $5. So with 50,000 bonus miles, you could take 5 of these flights and have points left over!

You may find more space going business class in the US. If you’re travelling on set dates, you may want to look for business class tickets instead. Why use 50,000 miles on some “anytime” Economy ticket when you could flight in business class comfort? Here’s a cross-country business class trip I found from San Francisco (SFO) to New York (JFK) for 50,000 miles + $5.

Use the American Airlines AA.com website and look for “MileSAAver” awards. Record the exact flight dates and numbers, and then call at British Airways at 1-800-452-1201 to book them. If you can’t find the same flight on BA.com, they should waive the phone book fee (they did for me). Don’t be discouraged if you have to use this method, especially if you aren’t flying nonstop. Also, call back and talk with a different agent if they aren’t helpful initially.

Redeem Avios points for business class to South America. There are also no fuel surcharges with booking on LAN Airlines. You can get New York to Buenos Aires, Argentina for 50k Avios roundtrip.

Redeem Avios points for business class to Europe. Since business class is so expensive, but the flight across the Atlantic is so long, redeeming points for business class tickets can be a good value as well, but there are big fuel surcharges. But if you really want to go this route as we did, they are a much smaller proportion and your trip will be so much more comfortable and truly an experience.

A roundtrip business class flight quote from New York City to London was $3,640, with $2,540 in fare and $1,100 in taxes. I could book the same award ticket for 80,000 Avios points plus $1,100 in taxes. Now we’re talking 3.2 cents per point.

Therefore I figured, why not use this card as an excuse to go to Europe in style, because I would never have done so otherwise. When booking my trip, I ended up calling in and getting a really nice customer service rep that used her tricks to nab me a combination of American and British Airways flights from my city to both London and Rome and back, all for under 100,000 miles. The flight was a first-time experience for me… priority check-in and boarding, first class lounges with showers and buffets, multi-course inflight meals, actually sleeping on seats that were fully flat, etc.

How not to use your miles. Don’t use Avios for a economy class transatlantic flight from USA to Europe, because you’ll still be subject to taxes and fees on award redemptions, which are often half the entire cost of the ticket. I ran a quick search for a random New York City (JFK) to London (LHR) flight that cost $1,050, the taxes and fees alone were $650. You can get the $400 “fare” for 40,000 Avios points, but that’s only 1 cent a point value.

Finally, you can also use partner airlines such as LAN Airlines or Cathay Pacific to get from the US to both Asia and South America on business class for 100,000 Avios or less.

Finally, if you can manage to spend $30,000 a year on the card, you can even earn a 2-for-1 Travel Together Ticket good for two years when you redeem for a flight on British Airways. With the Travel Together Ticket, you can bring a companion on your next reward flight without using any additional Avios points. Fees and taxes do still apply, but the voucher is valid to any destination and includes first/business class. Another family tip is that you are allowed to pool miles between multiple people in a “household account” to make redemptions easier. So you, your spouse/partner, and other relatives can share points.

To get the max bonus requires a decent amount of spending, but the value is so high that it may be worth the effort. This was actually done x2 for Mrs. MMB and we traveled together. We householded accounts and that way I could redeem flights for both of us. It worked well because we could all book tickets together on the same flight all at once.

“Disclaimer: This content is not provided or commissioned by the issuer. Opinions expressed here are author’s alone, not those of the issuer, and have not been reviewed, approved or otherwise endorsed by the issuer. This site may be compensated through the issuer’s Affiliate Program.  “The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.”

Citi Thank You Points Now Transfer to Virgin America + Limited-Time 25% Bonus

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Citi has gradually been improving the flexibility of their ThankYou (TY) Points rewards program. In the last couple years, they have added several internationally-based airline partners on a 1:1 basis including Cathay Pacific, EVA Air, Etihad, Flying Blue by Air France and KLM, Singapore Airlines, and Thai Airways. Today, Citi announced that eligible cardholders can now transfer their ThankYou Points to US-based Virgin America Elevate® points. The list is currently restricted to “premium” cards including the Citi ThankYou Premier® Card and Citi Prestige® Card. (As long as you have one of these cards, you can transfer in ThankYou points earned from other cards.)

What are Virgin American Elevate points worth? To keep things simple, the overall best redemption option is for US flights on Virgin America. (There are other partner airlines available, but that gets more complicated.) Here is Virgin America’s US route map [pdf], which includes New York City, Boston, Chicago, San Francisco, Los Angeles, Cancun, and soon Hawaii.

Assuming you are interested in one of their routes, Elevate points are pretty easy to use. There are no blackout dates or capacity restrictions, so you can redeem points for any domestic Virgin America flight. The amounts of points for a reward flight is vary with the cash cost of the ticket (before taxes and fees). As long as you have an Elevate account, you can poke around and get an idea of the ratio. For the flights I looked at, it varied from 1.6 to 2.6 cents per Elevate point.

Here’s an example San Francisco to Honolulu flight at 2 cents per point for Main Cabin:

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Here’s an example Austin to Los Angeles flight at 2.6 cents per point for Main Cabin:

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Transfer ratio and value details. ThankYou points will transfer to Virgin America Elevate® points at a 2:1 ratio, with a 1,000 points minimum. In other words, the minimum transfer would be from 1,000 ThankYou points to 500 Virgin America Elevate points. At this standard redemption ratio of 2:1, that gives you a value of 0.8 to 1.3 cents per Citi ThankYou point using this transfer option.

Limited-time 25% transfer bonus. If you make such a transfer by 10/21/15 (11:59 p.m. ET), you will get a 25% bonus on your Elevate points. During this promo, every 1,000 Thank You points = 625 Virgin America Elevate points. At this promotional redemption ratio of 2:1.25, that gives you a value of 1 to 1.6 cents per Citi ThankYou point using this transfer option.

Better to book through ThankYou Travel Center? The problem is that the transfer are only limited to the premium cards, which already have a pretty good redemption option via the Travel Center, which is a aggregation site like Expedia, Travelocity, and Orbitz that sells flights, hotel stays, car rentals, and cruises at similar prices.

  • The Citi ThankYou Premier® Card offers 1 ThankYou point = 1.25 cents toward any travel booked through Citi ThankYou Travel Center. You also still get to earn elite qualifying miles on your redeemed flights.
  • The Citi Prestige® Card offers 1 ThankYou point = 1.33 cents toward any travel booked through Citi ThankYou Travel Center. You still get to earn elite qualifying miles on your redeemed flights. In addition, you get 1.6 cents per points when redeemed towards American Airlines or US Airways flights. You also still get to earn elite qualifying miles on your redeemed flights.

I am interested in this development because I am currently in my first year of owning the Citi Prestige card and have already earned a 50,000 Thank You point bonus and want to spend them. For me, the two best redemption options value-wise are now on specific Virgin America flights depending on the point/price ratio and all American Airlines flights where I can get close to 1.6 cents per point value. The added flight choices make it easier to find a redemption overall.

I’ve never flown on Virgin America myself, but I wouldn’t mind trying them out as they seem to be at the top of many “best US airlines” lists for customer service and flying experience. (Not that the competition is all that great.)

American Express Gift Card Class Action Settlement

amexgcpicI’ve written about American Express gift cards several times in the past, mostly when they had a promotion waiving both their purchase fees and shipping fees. In such cases, they were a cheap and efficient way to “time-shift” your purchases if you needed to meet a spending threshold soon to obtain a sign-up bonus, or if you needed some miles sooner for a reward.

American Express recently agreed to a class action settlement regarding these gift cards. Per the official settlement website, here is a summary:

The lawsuit claimed that American Express did not fully disclose all gift card contract terms, and misrepresented the value of the cards. The gift cards were subject to various fees, such as monthly fees and check issuance fees, resulting from trying to make transactions using multiple forms of payment. American Express denies that it did anything wrong, and the Court did not decide which side was right.

The dates for this settlement have been in flux, but the current deadline for claim submission is November 16, 2015. You can also exclude yourself from the settlement by this date. There is a scheduled court hearing on January 22, 2016 to consider final approval of the settlement.

You are a Class Member if you purchased, received, held or used a gift card issued by American Express from January 1, 2002 through September 21, 2011. Any gift card with an American Express logo counts. If you bought a card and gave it to someone else as a gift, you cannot get a payment for that card. The gift receiver should make a claim.

  • Depending your specific claim details, if you have a record of your gift card number the settlement offers from $5 to $20 per gift card ($40 per Class Member max, total) from a total fund of about $6.75 million.
  • If you don’t have a record of your gift cards and American Express can’t find your records based on your personal information, your max total is $5.
  • You can also request to buy a $100 AmEx Gift Card without paying the purchase fee or the shipping/handling fee.

Each Class Member who unsuccessfully tried a split-tender transaction can get up to $20. Those who incurred monthly fees can get up to $8. Those who paid a check issuance fee can get up to $5. A Class Member can claim one or all of these amounts, but no Class Member may get more than $20 per gift card or $40 total. Class Members who held an American Express Card and unsuccessfully tried a split-tender transaction and as a result incurred either a monthly fee or a check issuance fee, and who do not know their American Express gift card number, can get a total of $5. If these claims total more than $1,000,000, the $5 payments will be reduced.

Anyone, even if not a Class Member, can cash out any AmEx gift card with a balance of $25 or less. Fill out a claim form, provide your e-mail, and if the settlement is approved they will send you claim instructions. They will refund your unused balance at no cost. Useful if you don’t want to use the Amazon gift card trick (or have less than 50 cents on it).

If you’re the type of person that keeps detailed records or all your old cards in a drawer, you may be eligible for the max $40 benefit per Class Member. Otherwise, anyone can ask to cash out their small balances. You must fill out one claim form for each gift card and submit it no later than midnight November 16, 2015.

Southwest Airlines Rapid Rewards Premier Credit Card Review: 50,000 Point Promo

swa_200Southwest currently has a 50,000 point promo for the Southwest Airlines® Rapid Rewards® Premier Credit Card. Card applicants* can get 50,000 points after you spend $2,000 on purchases in the first 3 months of opening your account. You can redeem 50,000 points directly for airfare with unlimited rewards seats and no blackout dates, or also for $250 in Amazon.com gift cards. Here are the highlights:

  • Earn 50,000 points after you spend $2,000 on purchases in the first 3 months your account is open
  • Named 2015 Freddie Award Winner for Best Loyalty Credit Card
  • NEW – Chip-enabled cards with 24/7 fraud monitoring
  • Points Don’t Expire, No Blackout Dates, Bags Fly Free®
  • 2 points/$1 spent on Southwest Airlines® purchases and participating Hotel and Car Rental partners
  • 1 point/$1 spent on all other purchases
  • 6,000 points after your Cardmember Anniversary

* Had this card before? You can get the bonus again if it has been 24 months since you got your last bonus:

This new cardmember bonus offer is not available to either (i) current cardmembers of this consumer credit card, or (ii) previous cardmembers of this consumer credit card who received a new cardmember bonus for this consumer credit card within the last 24 months.

Value of Southwest Rapid Rewards points. Before April 17th, 2015, the redemption ratio for points was set at 70 points = $1 worth of Wanna Get Away airfare, which meant you get 1.43 cents of value per point. But then they made this announcement which applies after April 15, 2015:

We created Rapid Rewards® because we think you deserve to actually feel rewarded. And, from time to time we must make some updates to our program. Beginning April 17, 2015, the number of Rapid Rewards Points needed to redeem for certain flights will vary based on destination, time, day of travel, demand, fare class, and other factors. However, there are still many flights which will stay at the current redemption rate. And don’t forget that when fares go on sale, so do the points needed for redeeming for a reward flight on those fares.

In practice, many flights are still available at around the previous 70 points = $1 worth of Wanna Get Away airfare (1.43 cents per point), but many are now either cheaper or more expensive. Based on a few searches, you can find rewards redemptions between 1.2 and 1.7 cents per point. At the lowest value, that would make 25,000 points worth $300 in Wanna Get Away airfare, broken up into however many flights you wanted. I would use this conservative value myself, even though you could potentially get more value than that.

Another lower boundary would be gift card redemptions. You can still redeem 5,000 points for a $50 a Amazon.com or Wal-Mart gift certificate. That makes 50,000 points still worth $500 in Amazon or Wal-Mart gift cards.

Companion Pass. One of the neater feature of the Rapid Rewards program is the Companion Pass.

Your spouse, your best friend, or maybe your mother. Whomever you choose, your Companion can fly with you when you have Companion Pass status. Simply fly 100 qualifying one-way flights or earn 110,000 Qualifying Points in one calendar year.

Besides a lot of purchases on a Southwest credit card or flying on Southwest Airlines, the small business version of this card also has a 50,000 point bonus. Points earned from Southwest Airlines Rapid Rewards Credit Cards count:

“Companion Pass Qualifying Points” are earned from your revenue flights booked through Southwest Airlines, your points earned on Southwest Airlines Rapid Rewards Credit Cards, and your base points earned from Rapid Rewards Partners.

All those points will also be worth a good chunk of free flights for the non-Companion.

“Disclaimer: This content is not provided or commissioned by the issuer. Opinions expressed here are author’s alone, not those of the issuer, and have not been reviewed, approved or otherwise endorsed by the issuer. This site may be compensated through the issuer’s Affiliate Program.”

“The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.”