Category Archives: Uncategorized

Amex Offers have always been pitched as ways to save cash in order to justify the annual fee on an Amex card. And since the offers vary from card to card (and sometimes from offer to offer), there can be value in casting a wide net by carrying multiple cards. I rarely take advantage of them, however, because I’m usually either too lazy, or the offer is at some store I don’t want to go out of my way to patronize. Sometimes I get lucky and an offer pops up for a store I was going to shop at anyway, but most of the time I ignore them or let them expire.

(I was going to write a whole separate post about this, but I broke my sunglasses on a plane this past winter and had to replace them – so I went straight to Sunglass Hut and bought a new pair for around $200. Then I remembered that I had an Amex offer for $50 off $200, so I went online to buy a new pair, figuring I’d return the one I just bought when I got home. (Not to plug Sunglass Hut too much, but their return policy is incredible.) When I went online, I saw that they were running a promo for a free $50 gift card in exchange for $200, so I ended up with the same pair of sunglasses for $150 plus a gift card after I redeemed the Amex offer. It’s a good example of how lucrative the offers can be, since I was already going to spend that amount at that particular retailer.)

However, one type of offer that always piques my interest is when Amex throws out bonus points instead of cash back. I realize that this probably has to do with my irrational preference for points over cash, since the more personal-finance minded among you would obviously prefer to have cash than points – especially when Amex often offers the same deal with cash back substituted for points at $.01 per point. At that point, I’m pretty much admitting that I’d by Membership Rewards points for that amount (even though it’s not a choice – you either see the offer for points or for cash, not both). In any case, lately I’ve been seeing more and more bonus point offers, and I love it. There were a couple notable ones last year — I took advantage of a hotel promotion that was for 7500 bonus points on prepaid hotels booked through Amex Travel, and then there was the Verizon deal for 2500 points after paying my cell phone bill (up to two times) — although I’ve never seen so many of these offers at once as I do now. Check it out:

So far, the only one I’ve actually redeemed is the Dollar Shave Club one, and unfortunately the lip balm that I bought didn’t rock my world the way I had hoped it would. But at least I got 1000 points. Still, I keep adding them to my account, since I never know when I’m going to need some dope new threads from Hugo Boss.

What about you nice people? Do you gravitate toward Amex Offers that give cash back, or do you also prefer the points?

Welp, Alaska is shutting down the Virgin America brand, and if my Facebook feed is any indication, people in the Bay Area are losing their shit.

Here’s the thing, and I’m pretty sure anyone who flies even somewhat often already knows this: Virgin America isn’t that great. Don’t get me wrong – their first class product is the best domestic non-transcon option, their food is pretty good, and their flight attendants are all pretty nice. However, I keep seeing people on social media acting like Virgin’s planes were kitted out with hot tubs and massage chairs or something – and these aren’t people who ever fly first class, by the way. I think the real success with the Virgin brand was to make people think that flying was already worse than it actually was, and then to make some fairly cosmetic adjustments and trumpet how much better it was as a result. Mood lighting and hip EDM boarding music is cool; standard pitch and seat width isn’t. And when you fly for five hours, the cool boarding atmosphere lasts for a few minutes, and then you’re stuck in basically the same situation you’d be in on any other airline save for Spirit or Frontier.

Even more annoying, however, is the idea that Alaska is some cut-rate downmarket carrier that’s trying to shit all over everything Virgin accomplished. In general, Alaska has my favorite flight attendants of any airline. And while their planes aren’t as stylish as Virgin, they’re no less comfortable – the seats on a 737 might be slightly narrower than an A320, but it’s not anything I’ve ever been able to discern in situ. People in San Francisco are like that, though – they make up their mind about something that’s really not all that great (sourdough bread, the SF Giants, 3rd wave coffee, the city of San Francisco), and then act like the world is ending if anything ever changes. Alaska Airlines could fly planes where each passenger had their own private suite, and San Franciscans would still complain that it wasn’t as nice as Virgin America because [insert some dumb bullshit that only someone from San Francisco would ever say].

What I find fairly shocking in this day and age is how Alaska anticipated exactly this response and has gone out of their way to ease people into the transition. While I don’t think anyone reasonably expected them to keep the Virgin brand alive just to placate a bunch of whiny San Francisco whiners (especially with the royalty that Richard Branson required them to pay), I think they’ve done a good job of setting expectations on the integration. Even better, they’re upgrading their own planes and introducing a lot of stylistic aspects of the Virgin brand, actually making Alaska better (arguably better than Virgin was in the first place, although the loss of Virgin’s first class is a downgrade any way you slice it). Still, this doesn’t look that bad – in fact, it looks a lot better than most domestic first seats, including Alaska’s existing product.

What’s most surprising to me is how Alaska has used the merger as a way to get better. It’s the rarest of the rare: a merger actually helping consumers by providing more robust competition with the big four and forcing the merged company to up its game in order to sell itself as the dominant player on the West Coast. In the past year or so, American Airlines has made it clear that it wanted all along to participate in the United/Delta race to the bottom, it just couldn’t for operational reasons as it merged with US Airways. (Arguably, that bottom has been reached, since both United and Delta have had to add amenities to lure customers back. It’s arguable, because basic economy is still a thing, so who knows how much lower we can really go.) Now that American is done with the merger, they have gutted their award program, drained away most availability on their own flights, rejiggered their boarding order to create 174 individual boarding groups, changed to a revenue based frequent flyer program, and added a new status tier (“Platinum Pro,” because you want your elite status to sound like what you’d call the extended warranty coverage on a laser printer). It’s honestly as if American Airlines executives realized that most people considered them to be the best domestic airline and were upset how much money they were leaving on the table. “We’re the best?!? Well clearly we have to take a weed whacker to everything people like about us, since no one ever got rich by being popular!!”

That’s what makes me happy about Alaska – so far, at least. First they improved short-haul redemptions, so it only costs 5000 miles for me to fly from Oakland to Seattle. Then they gave me 10,000 points just for being an awesome dude (points which I just redeemed for a roundtrip flight to Seattle). Then they instituted a generous point transfer ratio with Virgin’s loyalty program, then they announced new Bay Area service, then they announced terminal/lounge upgrades. The list goes on – meanwhile American is instituting basic economy fares and advertising how they have the youngest fleet, as if that makes up for the fact that their planes are usually about as comfortable as a sock made out of steel wool.

I’m excited about the future of the combined Virgin/Alaska carrier. Sure there are things I’ll miss about Virgin (I may be the only person in the world who likes their safety video, for instance). But overall, I think the merger will actually be better for passengers on the West Coast, and it’s really rare to be able to say that about a merger.

 

 

 

 

 

 

 

 

 

 

 

A while back, Swiss announced that they were going to start charging business class passengers to reserve throne seats. To refresh your memory, Swiss crams 5 seats per row into their 777, in a staggered 1-2-2 configuration. That means that each row has a single “throne” seat with a huge amount of room on either side of the seat. Of course this is the seat that any sane person would want to book, since it has more space and is more private than any other seat on the plane. It’s basically a first-class-lite option, since the amount of personal space is almost equivalent to what you’d get in first (although the pitch is smaller and the space for your feet is pretty small).

Previously, as explained in the article linked above, most of the throne seats were blocked for elite members, leaving mostly undesirable paired seats, some even without aisle access. When I booked my flight on Swiss, there were three throne seats available, all toward the back of the cabin. I managed to grab 15K, which was the best one available, although 4A is really the best business class seat on the plane. The reason: first, there’s even more room due to it being a bulkhead seat. More importantly, Swiss has a two-row mini cabin behind first class and then a very large business class cabin behind that. Getting into the mini-cabin would make for a much more pleasant flight, and of the two throne seats to choose from, 4A is a clear winner given that 5K is missing a window.

Just for shits and gigs, I set a seat alert on ExpertFlyer for 4A, and I made sure to exclude blocked seats but to include paid/premium seats in the alert. I fly longhaul business class so rarely, it would honestly be worth a few bucks for me to upgrade to the best seat in the house. That’s why I was excited when they announced that they’d start selling access to the seat in late March, since I figured it would be my only shot to get it. In general, I’m opposed to business class cabins where there’s such a massive disparity in seat quality that some seats are legitimately worth more money than others, but buying access is preferable to needing elite status that I’ll never conceivably earn.

Anyway, I got an alert early this morning that 4A was available, and I called Swiss customer service on my way into work to see if I could reserve it. I had my credit card out, since I assumed I’d have to pay for it, but the agent confirmed it for me without requiring any payment. Score! (Also, both times I have called Swiss’s customer support line, I have connected to a rep on the first ring. Are you listening, Aeroplan? THE FIRST RING.)

 

Anyway, here’s my theory: Swiss has unblocked all those seats, but they haven’t yet instituted the fee structure. This is what the seat map looks like for a flight around the dates of my flight – contrast this to the seat maps in the One Mile at a Time article linked above, where all the best seats are blocked.

Even though ExpertFlyer is showing it as a premium seat, Swiss isn’t currently taking payment for it. That presents a window of opportunity for anyone who got in on the transatlantic business class availability that Swiss had a few months ago. If you have a flight coming up and were hoping to get one of the throne seats, definitely check and see if you can book it for free before it either gets re-blocked or costs a bunch of money.

The bottom line is that no rule is ever set in stone, so always set alerts and assume you might get lucky. Speaking of Lucky, he flew Swiss in first class due to a similar blip during which the rule that only elite members can book Swiss first class with points wasn’t in force. This is another one of those situations. It’s not applicable to very many people, but if you happen to be in this particular circumstance, you could end up with a previously unavailable seat for free.

Woohoo! Longtime readers of this blog will know that I have a thing for KLM… I’m not even really sure why. Maybe it’s the fact that I love their logo and brand identity, maybe it’s the fact that I’m a sucker for all things Dutch (except fascist Geert Wilders and his comic book villain hair), or maybe it’s just unrequited love from my last trip (when I was all set to transfer miles to FlyingBlue before realizing I had fallen victim to Fantom Blue award space).

Love makes you do crazy things, by the way. But let’s back up for a sec. I wrote yesterday about how I’m in the initial stages of planning our next trip overseas, which means I’m obsessively checking award availability calendars to see when new flights get loaded in. I was going to set up alerts on ExpertFlyer for KLM 606 (SFO-AMS) every week in March, but since the schedule hadn’t yet been loaded at that point, ExpertFlyer couldn’t find the flights to query and came back with an error. I really didn’t plan to book anything until next month, since mid-March is the target timeframe for the trip, and no airlines are selling seats that far in advance yet. And, as I wrote yesterday, British Airways first class is almost definitely going to be choice to come home, so I had to find a way to limit fuel surcharges on the flight over.

But then… I pulled up the FlyingBlue award calendar tonight “just to see,” and I saw a few days with two seats on KL 606. For those that haven’t been reading the blog for very long, this is the flight I had planned to fly on our trip this past summer, only to find out that the availability on the calendar wasn’t real. We settled for Delta One from Seattle to Amsterdam instead, but there’s been this pang of what could have been ever since. Yes I know I’m probably building it up too much in my head. I don’t care. Here are some examples of how I express my fandom for KLM:

• Following them on every possible social media platform
• Collecting KLM books and other memorabilia
• Dragging Justine with me to San Francisco one weekend to see the KLM pop-up at Union Square
• Asking Justine to take a photo of me sitting in the business class seat mockup at the KLM pop-up (which she refused to do out of embarrassment)
• Standing on the Boeing factory’s runway viewing platform for an hour because there was a KLM 787-9 sitting there, and I wanted to see if it would take off (it didn’t)
• Browsing auction websites for vintage KLM posters
• Buying Delft houses on eBay

You get it… So imagine how excited I was to see some award space – especially space which didn’t evaporate when I clicked onward from the 5-week calendar. As a bonus, the flight is on KLM’s 787-9 (f0r now), which features their newest business cabin. I said to Justine, “I’m about 30 seconds away from booking us a flight to Amsterdam in late February next year,” to which she responded, “Why don’t you?” Why don’t I indeed.

Like I said, love makes you do crazy things. Chief among them was transferring 125,000 points to FlyingBlue to book a ticket when you’re never sure if they’ll actually ticket your reservation. Even worse, since I didn’t want to deplete any one of my flexible point balances too much, I spread the 125k across three different accounts, basically playing chicken with FB’s overzealous fraud department and daring them to shut down my account. Happily, all three transfers went through instantly, and it was go time. I booked the tickets, paid the ~$425 in fees, and then started working on this blog post.

Here are some hedges that I’ll consider in the coming few weeks. First, FlyingBlue has a pretty good cancellation policy – 45 euros per ticket. So if something goes sideways and this turns out to have been dumb, I won’t be out that much money, although I will then have a bunch of miles tied up in FlyingBlue. Also, British Airways hasn’t opened up the award calendar to partners yet, so I’ll still need to wait a month before I can book the return leg. Every day in January and February has first class availability for two people, and I’m banking on that continuing into March, which is certainly not a given. If the space doesn’t come through, I may have to move the entire trip and give up my precious KLM flight – that’s why I don’t want to celebrate too much just yet. I also want to keep an eye on Delta, since I would definitely cancel and use my stash of Delta miles to get the same flights without the fees. I have found KLM space to be pretty tight through Delta, though (as if it’s not tight enough through FlyingBlue), so I’m not counting on seeing a bunch of space pop up when Delta’s award calendar loads past 2/15/18. As it is, there are currently days in January and February where space is available on KLM through FlyingBlue and not through Delta. (Also, I think it’s interesting that the “Delta Head Start,” which I wrote about previously, is now flipped on its head. FlyingBlue just changed to an 11-month booking window in the last couple months, and good for me that they did, since it’s how I was able to get this flight.)

A couple final thoughts:

1. If the plane changes to a 777 or 747, I won’t be super bummed, since the other business class is still really nice (and it would be pretty nice to sit next to Justine instead of behind her). However, I’m just praying it doesn’t revert to an A330, which still has recliner seats.
2. I did see a bunch of availability on Air France’s SFO-CDG flight via Delta, which has been the norm as of late. However, we’re talking about flights in goddamn 2018, and Air France STILL has their shitty angled seats on the 777s that operate this route. FINISH YOUR RETROFIT ALREADY! KLM’s 787 business class is basically the same seat with better design, so it’s not like I’m super missing out or anything, but this continues to annoy me.
3. A nice new hotel option in Amsterdam is opening in May – the Hyatt Regency Amsterdam. It’s not far from the Intercontinental, which is where we stayed last time. It’s not right on the canals or anything, but the location is still reasonably walkable to the city center, and the immediate vicinity is pretty fun. Even better, it’s a category 4, so it’s way cheaper on points than the Andaz, and you can redeem a free night certificate there as well. (Plus, the basic rooms in the Andaz don’t even have windows to the outside, and while I appreciate interesting design, I think Hyatt let Marcel Wanders go a little too crazy with that one. The lobby looks great, but the giant fish on the walls? Gross.) Right now, only points & cash rooms are available, but I’d imagine that normal award nights will show up once the hotel is open.

 

 

 

 

 

 

 

 

 

 

 

I’ve long sworn off British Airways, insulted as I am by their egregious fuel surcharges and business class that presents the possibility of both sitting in the middle and sitting backwards. I certainly wouldn’t be “chuffed” to be in that situation, that’s for sure. However, it turns out that I’ll probably book BA on our big trip next year. Yes, I know it’s only March, but I plan way in advance because I’m insane. Seriously, I have major OCD about travel, and knowing I’m going to travel without knowing every exact detail about what flight I’ll be taking or where I’ll be staying drives me crazy. It means that I often miss out on last-minute deals, but if I plan it well enough to start, that shouldn’t matter.

Big surprise, this trip will be built around a week-long stay in the Faroe Islands, which (as I’ve detailed in a past post) can be a pain to get to using points. I had thought that SAS flying to Vagar airport meant that you could route all the way there through a Star Alliance booking engine, but that’s not true. United’s ass-butt system will only get you as far as Copenhagen, so if you want to get all the way there in one shot from the US, you’d need to use SAS Eurobonus miles. Hope you still have that Diner’s Club card, since they’re the only US-based program that transfers to SAS. (Some European iterations of Membership Rewards transfer to SAS as well.)

However, CPH isn’t the only gateway airport to the Faroes, and as I dug into it some more, a couple other options popped up. First is Reykjavik, which is only an hour away. Biggest downside there is that the trip would involve a long haul flight on Icelandair, which doesn’t have a “real” business class. However, for 50,000 Alaska miles and ~$100, it’s not awful. Sure there are better redemptions out there, but I could live for 7-8 hours in a wide recliner seat. It’s not like I can sleep on planes anyway, so that’s an option. Another one is Edinburgh, which has flights to Vagar on Atlantic twice a week. It probably wouldn’t work for both legs, since it would be too hard to fit the trip around the twice-a-week schedule back and forth to EDI, but I’m almost definitely going to use it in one direction.

We’re aiming to go in March, which means I’m about a month out from being able to book the trip, since most airlines haven’t loaded schedules through March yet. However, from what I can see in January and February, if you want to go to the UK in the early part of next year, you shouldn’t have any trouble. If you want to get there without fuel surcharges, you’re a little more constrained. Virgin Atlantic has a handful of days from SFO through Delta for only $5.60, although I personally will never fly a herringbone seat, given that having my back to the window would really stress me out. British Airways is much better – here’s what it looks like via American:

Let’s try that again:

BTW, First sAAAAAAver awards are the same – a sea of fuchsia. Of course, the difference here is that I searched SFO to EDI, not London. When I first found out about journey control on Swiss, I thought I had uncovered the conspiracy of the century, but Gary Leff set me straight in the comments, basically saying “Bro, this happens all the time, so use it to your advantage bro.” (Gary and I are totally bros.) So I am: I need to go to Edinburgh anyway, so I can take advantage of this frankly ridiculous policy of blocking off availability for routes with connections.

Now, I know that fuel surcharges are an issue, but BA first also looks pretty nice. Nicer than any of the business class options I would have – and assuming I book it with Alaska miles, definitely worth 20,000 miles and a couple hundred bucks more than Icelandair Saga class. Speaking of Alaska miles, I put together a little chart to keep track of the various options booking BA First. Assuming a flight from EDI to SFO, here’s how it looks:

• Alaska: 70,000 miles + $374
• American: 85,000 miles + $509
• British Airways: 85,000 avios + $486

I don’t understand why the cost of the fuel surcharge varies by so much, but Alaska certainly looks like a good deal here. (Also, adding to my annoyance around the ever-mutating fuel surcharge amount, the surcharge actually DROPS by over $100 on Alaska by flying from EDI via LHR than flying from LHR directly.) $374 is a lot any way you slice it, but it stings less than the other two, especially since I usually figure money for fuel surcharges into my budget. Taking this option just means I have to figure out a surcharge-free way to get overseas, meaning my options are either SAS or Swiss via Aeroplan, anyone via United, or Air France/KLM via Delta. Not exactly a dearth of choices.

Now comes the even harder part: which plane do I choose??? (Knowing full well that booking 11 months out leaves me very exposed to equipment swaps.) The 777 is out, since the plane holds no mystique for me. Sure it’s big, efficient and has some impressively-sized engines, but it really lacks personality. The A380 is so hideous from the outside, I can’t help but love it. It’s like the Airbus engineers had access to the same demon at the end of Ghostbusters, and they also thought of the Stay-Puft Marshmallow Man… but instead of a giant ghost, the demon made them a plane. Put a giant sailor hat on it, and I swear you couldn’t tell the difference. The 747 is iconic, and both the 787 and A350 have that brand new, sleek appeal to them.

 

Initially, my thought is to pick the A380, since I’ve never flown on one before, and I’ve always wanted to. Plus, the BA first class cabin looks nice and spacious – way better than photos I have seen on the 747 and 777. However, the 787 features the newest version of BA’s First suite, and I do love the 787’s higher humidity and giant windows. It’s quite a bit narrower than the A380 lower deck, though, so I’m wondering how much more cramped it feels. (Also, I’d have a more expensive taxi ride home, since I’d arrive at San Jose instead of SFO.) Either one looks pretty cool to me, and pretty obviously superior to most business class seats out there. (Are there any reverse herringbone seats in business class where your feet don’t go under the console of the seat in front of you? To me that’s what sets this apart from a normal business class seat.) Anyway, here’s where I could use the expertise of my legions of jetsetting readers. I’m sure there are enough British business travelers reading this blog who shuttle back and forth from the UK in first class and can weigh in here… as long as they aren’t too offended by my use of the word “chuffed.”

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aside from a person with severe alopecia, I’m probably the last guy who would want a membership to dollar shave club. Despite having a naturally shiny top cap, I’m not one of those bald guys who wants the rest of my head to match the dome. I usually have a nice healthy horseshoe going on the sides and back, and I don’t care if it makes me look ten years older and 20,000 leagues lamer. As for shaving, I hate it and have always hated it, so I let my scruff grow out until it’s time to trim everything back with an electric clipper. I don’t think I have owned a razor in 15 years.

However, Amex does have a good offer going for 1000 points after spending $10 or more at Dollar Shave Club. Since that’s basically $.01 per point, I figured it was worth checking out the site to see if there was anything I might want. (Yes, I realize that’s exactly the point of the offer – to make me spend money somewhere I otherwise wouldn’t. But when points get that cheap, I look at it as “$.01 per point and free __________.”)

Turns out there are some decent items on there for fairly cheap, so I decided to snag a 2-pack of lip balm which, with shipping, came to exactly $10. There’s the additional upside that this could potentially be the world’s best lip balm, which I’m always on the hunt for. The best stuff I’ve ever used in my life – no joke – is the little tube that came in my SAS amenity kit, and I’ve just about exhausted every last useable smidgen of it. Unfortunately, you can’t buy it at retail, so I either need to find a comparable lip balm or spend the rest of my life flying SAS business class ever few months. “REN Skincare Biomimetic Lip Balm: Only $3995 per tube, but each tube comes with a free business class flight.” Actually, that’s not a bad marketing campaign.

So anyway, even though I hate shaving and generally look like a wooly mammoth, I found something useful to buy to get my 1000 points. If you have this Amex offer in your account, I recommend checking it out, since you might also find something you like. Oh, and if you have a great lip balm recommendation for me, please let me know in the comments.

Hooray! It’s almost April 1st, which means that grocery stores (and drug stores) will soon be the Chase Freedom’s 5x categories du jour. Because I don’t go out of my way to maximize the Freedom categories every quarter like I should, I get excited about the grocery one, because that’s the category that absorbs the highest amount of my “natural” spending. I could probably root around for gas stations that sell gift cards, or stock up on beef jerky to milk this category’s bonus for more points, but I haven’t bothered. Same thing last winter when the 5x category was drug stores. Sure, I earned some extra points on my antidepressants (and isn’t earning extra points the real antidepressant?), but I didn’t really do that much else to hit the $1500 quarterly limit.

I’ll tell you what this has to do with minimum spending, which I admit is kind of circuitous. Because I spend so much on groceries (Justine and I make almost all of our meals at home, and I get lunch from Whole Foods every day), the Amex Everyday Preferred’s 4.5x bonus on groceries earns us a ton of points. However, as everyone knows, you only get the 4.5x bonus if you use the card 30 times in a month. When it’s my main card, I hit the 30-swipe threshold within a couple weeks, but when I’m working on a minimum spend requirement, it’s harder. While I’m willing to sacrifice the extra half-point to get whatever bonus is attached to that minimum spend, I don’t like sacrificing 3.5 points on groceries if I can avoid it. In fact, this year has been an even bigger example of this struggle, since I’m trying to use the Blue for Business on all unbonused spend, which means I’m right on the bubble every month getting 30 swipes.

However, for three glorious months every year, the Freedom card gets 5x on groceries, meaning I can sock-drawer the Everyday Preferred and still maximize my earning. (Also, I’d probably max out the $6000 per year limit on the Everyday Preferred’s grocery bonus if I used it year-round, so it’s nice to give it a break.) That’s why – assuming I can line up a few cards with increased bonuses – I like to work on minimum spending requirements during the 2nd quarter (or really whatever quarter the Freedom gives 5x on groceries). Any time you use an airline co-brand or hotel card for everyday spending, you’re foregoing more valuable earning opportunities, so it’s nice to minimize the impact by not letting the change in my card usage for unbonused spend spill over to other categories. The only danger would be if I take on more minimum spend requirements than I can reasonably meet through unbonused spending and have to start using those cards for my precious groceries. I try to be disciplined enough in my card-opening habits to avoid that, though.

Oh, speaking of card-opening, I did end up getting approved for that Korean Air card after all. I don’t know my credit limit or anything, just that I got approved and will get the card in the mail soon. Now that I have it, I’m focusing on all the reasons I shouldn’t have applied for it… Anyway, not really related to the above, but also not worth its own post, so it gets tacked on here like a half-formed appendage.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

I got home from work and saw a US Bank-branded envelope in the mail. “Oh good,” I thought to myself. “I’m finally going to find out if I got that Korean Air Visa card, since apparently it’s 1987, and banks only communicate via the postal service.” I eagerly opened the letter, realizing that this was the first time in at least a decade that I have excitedly opened the mail to learn something I had been waiting to find out. Imagine my annoyance, then, when I saw this bullshit:

Another targeted offer?! Well, now if I don’t get that Korean Air card, I’m really going to lose it. Look at the first line of the letter: MY EXCELLENT CREDIT HISTORY! Not excellent enough to auto-approve me, though… Certainly not as excellent as when I was a 23-year old fuckup making minimum wage and you instantly gave me an REI Visa, I’m sure.

Obviously, something in my credit file triggered US Bank’s customer acquisition algorithm, which is why I’m now getting these offers. I had assumed it had more to do with my dormant Korean Air frequent flyer account, but perhaps not. In any case, I suppose it bodes well for my current application if they’re continuing to send these to me. I’ll be sure to report back once the pony express brings me news of my application status.

Also: I was gonna say that this sounds like a fantastic cash back card, at least to someone who doesn’t pay all that much attention to the cash back card ecosystem. However, after looking online at the 5% cash back categories you can choose from, I’m not so sure.

When you consider a card like the Citi Double cash that gives you a 2% cash back baseline on everything, the 2% categories here are pretty meaningless. I suppose it’s a good opportunity to get 5% back on certain purchases, and with no annual fee, sure why not. Especially if you spend a lot of money on couches and basketballs. However, even if I did use cards to maximize cash back, these categories are narrow enough that I’d have a hard time remembering to use the card, and it would annoy me to carry it around in my wallet all the time when I only use it at McDonald’s and Crunch Fitness (although I do go to each multiple times each week).

Bottom line: Fuck you-(s bank).

I was thinking about this the other day, since I received an offer for the Korean Air Visa that awarded 15,000 points for every $1000 spent in the first three months, up to 45,000 points. I feel like we’re seeing more and more cards offer tiered bonuses as a way to induce people to spend on the card, rather than sock-drawering it as soon as they hit the minimum. I can think of a bunch off the top of my head, but what motivated me to write this post was a targeted offer I received from Citi today to apply for the AAdvantage Platinum card. (The fact that I opened this card a few weeks ago hasn’t propagated through Citi’s systems yet, I guess). The bonus on the offer is 40,000 miles after $3000, and then an additional 10,000 after spending an additional $2000 over the first year. Others that come to mind: Chase’s Marriott Visa offer where you earn 5 points per dollar up to 150,000, Amex’s Blue for Business giving double points for the first year, and the recently-ended 100,000 point Business Platinum bonus that gave 50,000 points after $5000 and another 50,000 after $10,000 more. Amex has also offered 10 points per dollar up to 100,000 on the personal Platinum and tiered bonuses up to 250,000 on the Business.

Interestingly, Citi used to do this on the Premier card – I think it was 20,000 points after $X in the first year, and 30,000 more after paying the annual fee in year two. I can’t remember if there was a min spend the second year or not. However, Citi got rid of this when they revamped the ThankYou card lineup and changed the bonus to 50,000 points after $3000 (same as the Prestige, which is how I got 100,000 Citi points in the space of a couple months). They have since dropped that bonus down to 30,000, but I think it’s interesting that they scrapped the tiered bonus altogether, since it was obviously cutting into new customer acquisition. That seems to be the outlier, though, since the trend definitely seems to be cards that encourage you to spend over a longer period of time than just the first three months.

Honestly, this makes more sense to me than other strategies to keep churners away. While churners aren’t profitable customers most of the time, they’re extremely profitable customers when it suits them. Of course, the holy grail for a bank is someone who carries a balance and neither pays it off nor defaults, and most churners don’t do that. However, churners funnel as much as humanly possible onto their credit cards, so if a card can be top-of-wallet for these folks, there’s a lot of interchange revenue to be had. Not to mention, churners are much more likely to pay high annual fees.

I don’t work in the financial industry, so I don’t really know what I’m talking about. However, Chase’s 5/24 rule has never made sense to me. If you don’t give a churner a bonus, they’re probably not going to apply for a card unless they want it for everyday spending. In that case, why deny it to them? It would make sense to do what Amex did and only offer one bonus per lifetime, or even increase the 24-month threshold to 36 or 48 months. What 5/24 says to me is that Chase doesn’t want people who open lots of cards, because those people are savvy enough to know how to milk each card for every last drop of value, and Chase doesn’t want those people doing that with Ultimate Rewards (or United, Marriott, etc… Hyatt and IHG, sure fine go ahead, no one cares about those). If that’s the case, it presents an interesting scenario in which Chase’s rewards program has become too lucrative, and so they have to try to prevent people from taking full advantage of it.

Gary Leff has written extensively about interchange fees trending downward, and I’m wondering if 5/24 is Chase’s admission that interchange fees are no longer high enough to cover the cost of providing Ultimate Rewards (assuming a high percentage of program members know how to maximize its value). When Amex talks about surgically removing churners (sorry, “gamers”), maybe this is what they’re talking about… not opening multiple cards in a year or manufactured spending, but simply people who know how to maximize Membership Rewards. It will be really interesting to see how surgical they can get. As I joked on Twitter, if they really had that level of surgical precision, they wouldn’t have targeted my wife for a 50,000 point bonus on the Premier Rewards Gold (with no once-per-lifetime restriction) less than a year after she closed a PRG for which she was targeted with a 50,000 point bonus. In around 26 months, she will have earned 100,000 points and $400 in airline credits while paying $0 in annual fees. While that’s probably an outlier, my hope is that “surgical precision” is something fancy to say on investor day and not actually a reflection of how good Amex is going to be at rooting “gamers” out.

To sum it up, my hope is that more banks use positive reinforcement to cut down on people abusing sign-up bonuses by offering tiered bonuses and incentives to use the card long-term. This would obviously be preferable to shutdowns and one-size-fits-all restrictions like 5/24 or Citi’s new once-per-family restrictions. The next couple years will be pretty interest, though. Yet another reason I’m trying to get as much as I can right now, since I don’t know how much longer the buffet is going to stay open.

I usually put a lot of thought into what credit cards I’m going to apply for. I work out a general strategy over a six-month period – what trips I’m likely to plan, where I want to focus my earning, etc. Then I adjust the plan as new offers hit the market or the field changes. Last year, for instance, I didn’t have any intention of signing up for an Ink + card from Chase, but when I read that it was going to get absorbed by the 5/24 rule, I applied right away.

This year has been a little different, since I have enough points to cover my immediate travel goals, so I’ve been a little less careful about what direction to go. I will concede up front that this is probably dumb. I’m basically taking my own advice from my Million Mile Secrets interview and earning points I don’t have an immediate need for. My basic feeling is that there’s no reason not to apply for big bonuses as long as they’re available – and with the way the anti-churning winds are blowing, who knows how much longer banks are basically going to look the other way when people apply for 10-15 cards in a year.

I also have a bunch of expenses coming up in the next 4-6 weeks, which is a good opportunity to meet minimum spend requirements. That got me looking for other cards I want to apply for, and the first one I jumped on was the Citi AAdvantage Platinum card on the last day of the 50,000 mile bonus. My application went to pending, so I called and moved some credit off of my Prestige card (which I plan to cancel in a few months anyway), and they approved me over the phone. It’s my fourth card with Citi, so I’m not surprised that I maxed out my line of credit with them. Between that card and the Aviator Red, I’ll have 93,000 AAdvantage miles banked by the time I meet the minimum spend, so even after another round of devaluations (assuming it happens before I get around to using those miles), that should still be enough to have a lot of fun.

Now to the Korean Air card. The nice thing about Korean Air miles, besides the excellent Sky Team redemption rates on business class awards to Europe, is that they partner with both Chase and SPG, so any miles I earn from the Korean Air card are basically points I don’t have to transfer away from Chase or SPG. I was going through a pile of junk mail to see what I could recycle and what I had to shred, and I realized that I had ignored a targeted offer for 45,000 miles after $3000 in minimum spending. (The bonus is actually tiered, so every thousand dollars of spending gets you 15,000 miles.) The normal bonus on this card is 15,000 miles, so this represented a pretty good opportunity.

Almost without thinking about it, I decided to apply. Again, I think this was probably dumb, especially since I didn’t consider how it might cause me to have to adjust my strategy. (To wit: I completely forgot that I intended to put $5000 on my SPG Amex in order to get the 5000 bonus that some folks were targeted for. Now there’s no way I’ll hit that and the minimum spend on this card.) Also, I really have no use for Korean Air miles right now. I’m planning a trip to Europe soon, but my priority is burning the Delta miles I earned last year, since I’m sitting on a six-figure balance, and I’m expecting those to devalue any minute now. I mean, they’ve already devalued since I earned them, but I’m referring to the hypothesized hammer-drop to make them worth $.01 across the board. So, using the Korean Air miles on that trip would cost me less miles net, but it would also prevent me from burning the Delta miles. This is the reason I plan a strategy in advance, but I’m not immune to “impulse buys” when the opportunity strikes.

Another reason I shouldn’t have applied: the annual fee isn’t waived the first year, AND there’s a minimum spend. I usually don’t apply for cards where both of those things are true – I’ll pay the fee like I did on my Aviator Red, since I was able to earn 40,000 miles for $95 and one purchase from a parking meter. And the AAdvantage Platinum has a minimum spend requirement, but no fee the first year. Korean Air hits me both places, which is generally a reason for me to pass on an offer.

It may all be moot, though, because I don’t know that I’m getting approved for the card in the first place. In more evidence that I didn’t really think this through, I didn’t realize that US Bank (who issues the card) is one of the toughest banks when it comes to new account approvals. It’s also recommended by Doctor of Credit to freeze two lesser-known credit reports that only US Bank pulls, and I didn’t do that either. (However, someone mentioned on Twitter that US Bank didn’t run their application as a result of those reports being frozen, so I don’t know if it would have helped or hurt me.) I went to pending, which is the first time that’s happened with a new bank since I started churning. I tried calling reconsideration to see if it was just a question of confirming some info, but the rep said he couldn’t help me, no one could help me, and that I was truly alone in the world. Oh, and that I’d get a response in 3-5 days. We’re still in that period, so it’s entirely possible that I’ll get approved. It hasn’t been easy, though.

What’s funny about this is that US Bank issued the second credit card I ever had – an REI Visa that I had for around 10 years before they canceled it for inactivity. Back when I got this card, I was making minimum wage in Los Angeles, and my rent payment was 70% of my income. I had terrible credit – just one card open, and I had requested credit line increases on it multiple times and always had it loaded to the hilt with debt. Still, US Bank gave me an REI card with a $10,000 limit, and they were right to do it, since they made a ton off of me in interest payments. I’m still amazed by these 23-year olds who write personal finance blogs about never having debt and retiring at 35, since back when I was 23, I could barely remember to pay my utility bill (and often paid my gas bill in person when they sent me a 24-hour shutoff notice). Carrying debt on my credit card was how I survived dropping out of school, switching careers, and literally starting at the bottom (in one of the most expensive cities in the US). Does that build character? I don’t know, probably not. I’ll probably be working for one of those 23-year olds someday.

Anyway, now that I have great credit, no debt, and a respectable job, US Bank isn’t sure about me. And while it seems ironic, they’re probably right – this time, I’m not going to pay them any interest, I’m going to take my 45,000 miles, and I’m going to cancel the card after a year. They’ll get $80 out of me plus interchange fees on $3001 in purchases – not exactly a profitable customer for them. The default risk is way lower, since I actually did once consider declaring bankruptcy, but other than that, 23-year old irresponsible me was probably a more attractive customer.

Okay, so this is a long post with not much in the way of advice, although I feel like you should expect that by now. However, there’s one nugget I want to leave you with: CREATE ACCOUNTS WITH EVERY FREQUENT FLYER PROGRAM! You hear this advice a lot, and I’m often lazy about doing this. However, when I went to the Korean Air card’s website and entered my unique invitation code, my name, address, and Korean Air frequent flyer number were pre-filled and grayed out. I’m assuming that part of the reason I was targeted for the offer is that I have a Korean Air account that has never had any activity. If I had never signed up, I doubt I would have received this offer. Another offer that floats around that I’ve always been interested in is the 50,000 bonus on the Miles & More (Lufthansa) card – and I realized that I don’t have a Miles & More account, so that offer probably isn’t going to land in the mail anytime soon. There’s your insightful takeaway: if you’ve been putting off creating accounts with all the random non-US frequent flyer programs, go register now.