If You Can Only Have One Credit Card (Writing Assignment)

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One card stands above them all…

Okay, it might not be that epic, but picking a credit card can be overwhelming if you’re new to the points and miles game. If you can only have one card, Million Mile Secrets recommends the Chase Sapphire Preferred® as the best option. Here’s why:

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1. Bank Rewards Cards

The Chase Sapphire Preferred® is a Visa Signature card offered by Chase bank. Rather than a card co-branded with one specific airline or hotel, a bank card offers the flexibility of transferring your points to several airlines and hotels. If your goal is to use points and miles to travel the world for free, you can’t afford to be loyal to any one airline. You’ll want to make the most of every opportunity and offer. And as we’ll see, Chase is a company with many great offers.

The Chase Sapphire Preferred® currently offers a sign-up bonus of 40,000 points after spending $3,000 within the first three months.

2. Ultimate Rewards Points

Points accrued with Chase are called “Ultimate Rewards Points.”

The Chase Sapphire Preferred® (or “CSP,” for brevity’s sake) offers x2 points on travel and dining, and x1 for all other purchases. That means paying a $100 restaurant bill with your card will earn you 200 points (whereas a purchase of $100 at, say, a clothing store, will earn an equal 100 points) The “dining” category applies to fast food the same as fine restaurants. And since travel and dining often go together, it’s a perfect points pairing.

Sometimes the CSP will enter partnerships for limited-time offers with increased rewards. A current example is a partnership with OpenTable that offers x3 points per $1 on dining the first Friday of each month. The offer started in April and lasts through the end of 2013.

The x2 points for travel includes airfare, train tickets, cabs, and even parking. And because there’s no foreign transaction fee (more on that in a moment), you can use it overseas and rack up the points while traveling. Use it while sipping limoncello at the Venice waterfront cafe you traveled to using your points 🙂

3. Spending Requirement

Like most cards that offer good rewards, the CSP has a spending threshold that must be met within a certain time-frame. To earn the 40,000 bonus points, you must spend $3,000 on the card within 3 months.

This is a much more feasible number to meet than the $5,000 required for many business cards. And unfortunately, cards with no spending requirement offer little in the ways of sign-up bonuses. Worried about meeting the $3,000 threshold? Follow these suggestions on how to meet your spending requirement without breaking the bank.

This spending must be met 3 months from the approval date, not from the day you receive the physical card. And remember: like any rewards credit card, this one has a high APR (15.24%), so make sure to always pay your bill in full.

4. Airline And Hotel Redemption

So you’ve met the threshold and accrued all your bonus points… now what to do with them? How to convert your Ultimate Rewards Points to free flights and swanky hotel rooms?

That’s easy. The CSP offers a 1:1 points transfer. This means that if you’ve racked up 40,000 Ultimate Rewards Points, you can transfer it to 40,000 miles with a participating airline. Or 40,000 points will convert to 40,000 participating hotel points.

Chase is partnered with these airlines, which cover all three major airline alliances:

• British Airways
• Korean Air
• Southwest Airlines
• United
• Virgin Atlantic

And these hotels:

• Hyatt
• Marriott
• InterContinental Hotel Group
• The Ritz-Carlton

This combination of airlines and hotels will allow to you travel and stay all over the world. Oh, and for those who like to ride the great, wide US railways, Ultimate Reward Points can also be used on Amtrak.

And here’s where one of the greatest benefits of the CSP comes in: Not all cards allow the transfer of points to miles, but the CSP does! For example, a card like the Chase Freedom may earn you Ultimate Rewards Points too, but you’ll need a CSP (or a Chase business card) account to actually convert those points into airline miles or hotel nights. Basically, if you want to use a credit card to earn points for traveling, the CSP is 1 of only 3 Chase cards that allow you to do that directly.

5. Fees

The yearly fee to use the CSP is $95, with the fee waived the first year. Some people have reported success in calling up their Chase representatives after the first year and getting the fee waived, but there are no guarantees.

But as far as fee-cards go, $95 is a low cost for a card with such convenient and high rewards. Canceling after a year is an option, but you may just decide to keep this one for the long-term.

And again, speaking of fees, the CSP has no foreign transaction fees. You can use it while overseas on those fantastic trips you’re taking with your miles redemption.

6. Build A Relationship With Chase

Starting a credit history with Chase will put you in a good position for approval if you choose to apply for other cards down the line. And it’s no secret that Chase cards are very popular among travel bloggers. The Chase Ink Bold and Plus business cards offer even higher sign-up bonuses, and the Chase Freedom has rotating x5 points categories to earn you even more.

Bottom Line

The Chase Sapphire Preferred® offers you the best of all worlds. A good sign-up bonus, the ability to transfer your points to travel partners,  x2 points on popular spending categories, and no foreign transaction fee. It’s good for use both at home and abroad. If you can only have one credit card, it’s the one you’ll make the most of.

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10/15/2013 at 5:23 am Leave a comment

Getting To Europe Using Chase Points vs. Amex Points (Writing Assignment)

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So you’ve racked up points from your American Express ® and Chase® credit cards, and now you want to use them to get to Europe. Maybe Paris. Or London. Or Prague. Or… you get the “point.”

(Forgive my travel puns, I just get so much mileage out of them)

Let’s use your earnings to get you going someplace!

But wait, which rewards points do you choose to use? Your Amex Membership Rewards points or your Chase Ultimate Rewards points? We’ll look at both and find the simplest, non-hassle way. Let’s start with Chase:

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Chase

All Chase points transfer 1:1, and allow for travel on:

• United Airlines
• British Airways
• Virgin Atlantic
• Korean Airlines
• Southwest Airlines

Southwest and Korean Airlines

Since Southwest doesn’t fly to Europe and isn’t part of an alliance, cross it off.

Korean Airlines doesn’t fly to Europe, but it is part of the SkyTeam Alliance. It has partners in Delta and Air France. But while this looks good on paper, benefiting from the partnership is more difficult. Air France, for example, doesn’t open up first class seats to reward members from partners. And Delta, as we’ll see later, has its own host of caveats. Korean Airlines also makes it difficult to make partner bookings from their website, and travelers have reported long wait times trying to speak to representatives over the phone. Sometimes it’s even impossible to view award booking space online at all. Let’s save ourselves the headache and move on.

• British Airways
• Virgin Atlantic
• United Airlines
• Korean Airlines
• Southwest Airlines

British Airways and Virgin Atlantic

British Airways has many flights to popular hubs in Europe…. but they also have some of the highest fuel surcharges in the industry, often in the hundreds of dollars. For example, a trip from New York to London is currently an extra $658 economy/$1,317 business in surcharges alone!

Since the British Airways miles system (called “Avios”) is distance-based, it’s often a better value to save them for short hauls within the US, or to Canada, Hawaii, and South America. Or to use when flying within Europe itself, as they don’t require a fuel surcharge for that (although booking is often restricted in that scenario). Basically, redeeming your points through British Airways is better saved for a different trip.

Virgin Atlantic offers a wonderful “Upper Class” experience with 6’6” lie-flat seats and other luxurious amenities…  but it could cost you 80,000 miles and $1,300 in fuel surcharges too. Just like British Airways.

Virgin Atlantic is also restricted by a terrible cancellation policy for awards tickets: cancel your flight 7 days before departure and you’ll lose 25% of your miles. Cancel within 7 days and you won’t get back ANY of your miles. Yikes.

• British Airways
• Virgin Atlantic
• United Airlines
• Korean Airlines
• Southwest Airlines

United Airlines

The best is saved for last. First off, United doesn’t tack on ANY fuel surcharges. Hooray. And they make it incredibly easy to get to, and fly within, Europe.

1. Air Partners:  United has several partners based in Europe (Air Berlin, Swiss Air, Lufthansa, etc), that offer direct flights to many hubs. There isn’t a fuel surcharge when making these bookings using United miles, but there can be the other way around. For example, booking a United flight to Europe using Lufthansa miles will incur a fuel surcharge. The fine details of partner airline redemption is a post series all its own (like Lufthansa here), so just know that United has a good partner line-up.

2. United allows 1 “Stopover” and 2 “Open-Jaw” flights. A Stopover is adding one stop on your route. For example, you could stop in Paris on the way from New York to Prague.  You can stay as long as you want, and you’re getting to see an extra city for no extra cost.

An Open-Jaw is when you continue your flight from a different airport than the one you arrived at. For example, you could fly from New York to Paris, then continue your flight from Prague to Istanbul but YOU are responsible for transporting yourself from Paris to Prague. You can take as long as you want. You can find a more detailed explanation here. These types of tickets are beneficial for European travel since it’s so easy to go between countries once there. Let your inner Carmen Sandiego go wild!

In summary, While Chase only offers a couple of airlines that directly serve Europe, one – United – is the clear winner when it comes to redemption value.

Now, let’s look at the options with American Express Membership Rewards:

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American Express

American Express offers partnerships with the greatest number of airlines, but not all partnerships are created equal. Not every airline has a 1:1 transfer value, and some require roundabout ways to even book your miles. Amex offers travel on:

• AirFrance
• KLM
• Alitalia
• British Airways
• Cathay Pacific
• Delta
• Iberia
• Malaysia Airlines
• SAS
• Singapore Airlines
• Virgin Atlantic

British Airways and Virgin Atlantic

The negatives of British Airways (high fuel surcharges, distance-based Avios) in getting to Europe still stand, but using your Amex points does offer one benefit that Chase cards never do: transfer bonuses.

Amex recently ran a 35% bonus for converting your Membership Rewards Points to Avios. So, for example, 1,000 Amex points = 1,350 Avios. These incentives usually last for several few months.

Virgin Atlantic just last month ended a 40% bonus. The airline’s usual transfer ratio is 200:100 (200 Membership Rewards = 100 Elevate points), so the promotion made it 200:140.

It’s not as easy to cross off these two airlines when using Amex as it was with Chase because of the potential transfer bonuses, but keep in mind the many restrictions that still stand.

Delta

Look at any message board, and the experience redeeming miles (called Skymiles) through Delta is not exactly a positive one. People report difficulty finding available low-tier seats, and economy seats end up being incredibly expensive. Customers also report difficulty booking with SkyTeam partners. But, like the Brit airlines above, there are sometimes transfer bonuses when you convert your Membership Rewards to Skymiles.

Delta DOESN’T have any fuel surcharges for Delta flights originating in the US, but they DO when booking with all partner carriers. This makes getting to Europe a bit of a toss-up. While Delta flies direct to several popular hubs, they have just as many served by codeshare partners like KLM or Air France.

Delta also does NOT offer one-way award booking. You pay the round-trip price whether you’re flying round-trip or not.

The European Airlines

KLM is a Netherlands-based carrier that’s part of the SkyTeam alliance and a “Flying Blue” member. Unfortunately they have hefty fuel surcharges on transatlantic flights. But, fortunately, they do offer one-way booking on Delta. KLM could be a way to get to Europe on a Delta flight that’s a better value than booking through Delta itself.

AirFrance is the other member of “Flying Blue,” and also allows one-way booking on Delta. Travelers have reported it’s award search engine to be lacking. Iberia is Spanish airline that’s a direct partner with British Airways. They also use the Avios distance-based system. Smaller airlines include the Italy’s Alitalia and the Scandinavian-based SAS.

These European airlines could offer a value if you strike at the right time, but it often requires a lot of research and a circuitous way to make it happen.

Malaysia, Singapore, Cathay Pacific

Travelers have reported good deals with these Asia-based carriers… if you know how and where to look. Unfortunately, their website bookings and phone call centers can be an infuriating experience. Many of these airlines have fuel surcharges, low award availability, and quite frankly, are a better value when flying to Asia. They’re similar to the smaller Euro airlines in this respect, and figuring them out can be overwhelming for all but the most intrepid of points-and-miles gurus.

In summary, unlike Chase/United, there’s no one clear airline winner for transferring Amex Membership Rewards. Several of the numerous travel partners offer good theoretical value, and the opportunity for transfer bonuses… but they require more research, commitment, and roundabout ways to make it work.

Bottom Line

The airlines’ points and miles system can easily fluctuate. Some carriers offer limited-time bonuses for booking with their alliance partners. Some devalue their miles. Some airlines are better used for traveling to parts of the world other than Europe. You could watch the details like a hawk and uncover buried deals (and as the comment sections attest, many of you are great at this!), but that’s another post for another time.

If you’re looking for the simplest and most convenient way to get to Europe while using your miles in the most effective way, flying United Airlines through Chase Ultimate Rewards® is often the best option.

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10/15/2013 at 5:22 am Leave a comment