Over at TBB, a commenter called The Grim Blogger wrote:
Only one major blogger has consistently said that after the first year you would need to spend $45,000 a year on the card to exceed the return of the Fidelity Amex.
Since I’m a happy Fido Amex customer and I don’t have an Arrival, I had never thought about a head-to-head breakeven with those two before. Obviously, it was time to head for Excel (which, lest you’ve forgotten, can be purchased really cheap if you have the right employer).
The Fidelity Amex has 2% cash back and no annual fee, whereas the Arrival gives you 2.22% back on travel expenditures but has an $89 annual fee. Given those numbers, let’s plot the breakeven point:
Sure enough, the breakeven point is right there at $45K in annual spending. If you spend a lot of money on this card, then it’s possible you’d be better off with the annual fee. Otherwise, I don’t know why you’d want to keep this card after the first year. I would guess the vast majority of the populace would be better off switching back to the Amex after the annual fee comes due.
And in case you’ve forgotten, you can actually get more than 2% with the Amex.
That’s all for today, have a great weekend!
I think the reason more people haven’t written about it is because of the many reports of the AF being waived (I haven’t seen anybody who has actually put spend on the card not have this waived if they call retention).
Also you need to compare sign up bonuses. Amex Fidelity is $75, Arrival is $440+, which is a difference of $365. You’re not better off with the FIDO card until the 5th year (actually the sixth year due to the annual fee waiver in year one) and that’s with NO spend on the Arrival.
I loved the FIDO card, but it’s been pretty much sock drawered for me since the Arrival came out. If you want to bother with worldpoints and get 3.2% back then FIDO is worth it, but I’d rather stick with the Arrival and get 2.222% and book my flights with points/miles instead.
Why the heck would you sock drawer a 2% card with 4% CB available on AMEX GCs? I’ve pulled everything out of the sock drawer, and then some.
Because you can get more than that by using different cards? 6% return for AmEx GCs isn’t worth the headache for me. I don’t find it particularly scaleable, it’s time intensive and if you’re doing volume you’re leaving yourself vulnerable to having a lot of GCs that are hard to get rid of.
I forgot to add, can’t you actually get 6 Barclay Miles per AmEx GC with the rewards boost? That works out to be 6.6666% cash back, which is better than the 6% you’re currently getting on the FIDO if you’re not using them as worldpoints.
Well, that’s 6.66% travel credit, not cash back. I prefer a mix of 5-6% cash back and 9-10% travel credit. Unless you are buying $2K airfare it beats 6.66% travel credit.
There are a lot of ways to get things to redeem as travel.
I would guess that the commenter was referring to me, and this is the math that I’ve explained several times on the blog most recently here — http://boardingarea.com/viewfromthewing/2014/04/18/possible-many-miles-switch-cash-back/
“After year 1 (if you don’t value the other features of this card, like TripIt Pro) you’d have to spend at least $44,500 on the card to cover the annual fee with extra earnings versus the Fidelity card.” 🙂
Thanks Gary! I was wondering who he was talking about.
I’m with HikerT on this one, real money is way better for me. I personally sock drawer the arrival (snagged the bonus) and use the Fidelity for everyday spend that isn’t at an X.
Really depends on what the annual travel expenses are for the person in question, thus far I haven’t been able to find much to put on the Arrival to then wipe out.
I think you need to put your thinking hat on, unless you’re purposefully avoiding the obvious work around.
You mean refund? It’s not something I believe in if so.
Disclaimer: I’m new to all of this, so feel free to correct me.
I’m considering the Barclay’s card over another Amex card because many people in this hobby mention spreading your MSing over different cards. I have the old Amex Blue Cash card and already put a lot of spend on that. My thought is if I MS another Amex card I may exceed my annual household income between the two, which could lead to a FR or shut down from Amex. With the Barclay card offering 6x on Amex gift cards, it’s another good avenue to have. This is assuming Amex doesn’t look at combined spending on their credit cards and the high dollar gift cards you buy from them. Again… I’m new to this so if I’m wrong, set me straight.
The Arrival is a great card to get due to the signup bonus, but perhaps not a great one to keep. The Fid Amex is issued by Bank of America (FIA technically but switching fully this year) so it is no different from having any other BOA card VS your other Amex cards IMO. But I am new to this too!
I didn’t compare Arrival to Fidelity, but if you run Arrival side by side with Sallie Mae Barclaycard, you would have to charge $31,000 just to break even. That annual fee is a deal breaker for most low spenders. I’ve noticed lately that Arrival is being touted as “the long-term card” in the points community. For some, maybe. The problem is, most readers will just take blogger’s word for it and not do the math.
The Fidelity Amex is issued by B of A, so I wouldn’t think the Amex credit card company would see your spending on there. I’ve never been through an Amex Financial Review though, so I could be wrong on this. Anybody with a more definite answer?
Let me commit heresy here.
In our little city, we frequent multiple places that don’t take American Express. (Places that do take Amex also show up in the Discover/Freedom/Citi Dividend bonus categories frequently.) Therefore, my comparison isn’t between the Fidelity Amex and the Arrival; it’s between the Arrival and the Capital One Quicksilver, which earns 1.5% cash back with no fee. (We’ve had a Capital One card since before starting to play this game. We could of course try to upgrade to Venture Rewards, if we were feeling wild and crazy.) I have to spend around $12,700 on the Arrival to make it worthwhile. I’m not convinced that, absent an annual fee waiver, we’ll keep the Arrival.
Could you point me in the direction of avenues that are scalable that can potentially return higher than the Amex GCs with portals?
Let me add to the heresy. I just applied for the Fidelity Visa card! No bonus, and only 1.5% for first 15k spend per annum. I chose it due to a couple of extra avenues that I use that won’t take AmEx, and the level of spend I plan with the card should more than offset the .5% loss on first 15k. It suits my purposes.
I’ve posted in another blog’s comments that the biggest benefit of the Arrival is the commission it pays to the blogger. It’s a fine product to get for the sign up bonus, but canceling it before the first annual fee hits is the smart play.
Personally, I prefer miles over cash back because they allow me to take a trip every couple of years with my family that I otherwise wouldn’t be able to afford with straight cash back – it’s generally been business class to europe, but now that we have kids, it’s going to be more like 3-4 coach tickets to europe. That said, I do my best to maximize Chase 5X by using merchant gift cards for my regular every day and monthly expenses – meaning, Whole Foods gift cards (no other grocery cards in there yet), Netflix, Hulu Plus, and the big one for us – Amazon (subscribe and save is well-priced and a real timesaver for all the baby stuff, paper products, etc). We don’t have cable, but internet and phone also get 5X on the Ink.
When I can’t get 5X, I’ve shifted from Amex to Chase for 2X on travel and restaurants.
(I’ll pause here to admit that since CVS VR stopped happening, I have been paying my mortgage and student loans with a bank draft. I know that makes me an amateur. My servicing company isn’t supported by Evolve Money, though, and the gift card + walmart BB dance is too much of a time sink right now.)
After that, Fidelity 2% is the winner unless I have some min spend to hit on a new card. But other than the ones above, the only keepers in my wallet are 2 Alaska Airlines cards (for the companion passes), Amex Platinum (FHR, what remains of the lounges and large purchases) and the SPG business card (OPEN savings + Milepoint P2 10% Hyatt discount means I’m staying in Hyatts this year).
The arrival card would be compelling without an annual fee. I travel enough to redeem that 2.22% easily, but it’d be my “bottom tier” card behind Ink and CSP, and I don’t currently put 40k+ on that last card in the stack.
What combination is getting you 9-10% travel credit?
It seems to me that a card is just a tool in your overall system, and cards can rise or fall in value depending on your particular travel goal at the time. Take Vegas, for example. In a little over 2 months, I manufactured enough points, with offset fees, on my barclay to cover hotel and food expenses at Caesars for a week. Between promo codes I can find, a tip at the front desk, and being flexible on travel dates, I got one of their top rooms in April for $100/ night all-in.
As in most things, YMMV on this one. If you value the travel credit like cash, breakeven drops to $15,000 in Amex GC if they consistently offer the 4% Boost.
… And to further compound the heresy, I actually paid for my flights through the ultimate rewards portal. Cash price for tickets, less their discount, was cheaper than using miles, and with much greater flexibility for scheduling.
Yeah I think the critical thing here is the rewards boost on AMEX GCs which is generally higher than other options. Plus being able to spread onto more cards/issuers. That’s why even though I already have a Fidelity AMEX and the magic 2% priceline visa, I’m still planning to get an arrival soon.
The options for cashing out travel credit are not scalable and some involve significant risk. Certainly doable for the first couple thousand, but once you start accumulating thousands in travel credit every month you will have the epiphany that travel credit is not the same a cash back, not anywhere close. But if you were inclined to dip your hand in the cookie jar with refundable travel, why use arrival boost when there are options that are almost twice as good. I’ll let you put your thinking cap on for that one.
The old Priceline is still the winner….
I would advise against getting Arrival for boost. It’s a good card for the signup bonus, but there are better choices for boost. Also keep in mind if you are doing any sort of MS volume with AMEX GCs you will accumulate a lot of boost, more than you will know what to do with. If Barclays doesn’t like your MS spending patterns (or redemption patterns) and closes your account guess what happens?
If you’re looking for a 2% card to MS with I would get the Arrival simply because it’s a MC. I’ve found several online MS opportunities that won’t allow you do to use an Amex card. I would probably get the FIA Visa (1.5% on first $15k then 2%) before I got the Amex version.
Not everybody is the same. The majority of people aren’t doing thousands a month in miles with the Arrival (which is 50k spend). Some of also have a lot of legit travel expenses for work.
Yes, where can you get a combination of 9-10% travel credit? On the arrival or a different card?
It was mentioned in the AMEX GC thread on FT back in Feb. Overexposure would likely lead to devaluation so best not to circle and arrow it
What’s stopping me from getting the Fidelity is the fact that it’s an AMEX. I am already at the 4 AMEX cards limit, but I am not exactly sure if getting the Fidelity counts against this limit.
I wouldn’t think that one would count against the limit since it’s not issued by Amex.
Nope, not refunds. I don’t think that’s a good idea either from both a moral and shut down perspective.
It’s issued by BoA so you shouldn’t have any problems.
Interesting. I have actually read much more about people not being able to get the Arrival AF waived than about those that get it waived. I have called several times over the past 6+ months, but get shut down each time.
I wonder when they will stop these practices if ever.