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Personal Finance Digest

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It’s okay if you don’t have 10 million points and 50 different credit cards

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I’d like for you to contrast and compare two things. The first is an excerpt from Freequent Flyer’s review of the Charlotte mile madness festivities:

You are not playing against any other member of the community when you manufacture spend, book tickets, or sign up for credit cards. You are only playing against yourself (and the referees).

When people hear about the levels of manufactured spend being reached by others, their first, natural reaction is envy: why aren’t I earning as much as they are?

And the answer is simple: they have a different credit history, different credit limits, different risk tolerance, different geographical restrictions, different ethical boundaries, and different knowledge.

And that’s totally fine. It would be deeply weird (and not a little suspicious) if we all had exactly the same spend patterns, at the same merchants, all year every year. Instead, we’re all different, and that’s one of the things that makes it hard to pin any one of us down (our relatively small numbers help, too).

[Read more…]

Et tu, Wyndham? Plus $200 from PNC, and the dollar home program

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WYNDHAM KNOWS HOW TO HANDLE PESKY CUSTOMERS: I’ve posted before on the virtues of the Wyndham credit card, which was the best way to earn miles without paying an annual fee, albeit at the low rate of 0.8 miles per dollar spent.

The key phrase in that last sentence is was the best way. Poster lotuspad broke the news on Flyertalk that Wyndham was halving the value of its points when redeemed for miles. So instead of earning 0.8 miles per dollar, you’re now earning 0.4. And if you were sitting on a pile of points that you were about to redeem, you’re out of luck because this change is effective immediately. Advance notice is for losers!

Courtesy of Mommy Points

$200 FROM PNC: PNC is willing to give $200 to anybody willing to open up a checking account. Requirements: $2,000 in direct deposits, plus one use of PNC’s online billpay. The offer’s good in AL, DC, DE, FL, GA, IL, IN, KY, MD, MI, MO, NC, NJ, NY, OH, PA, SC, VA and WI–sorry, west coast. (Thanks FWF!)

HOW TO USE THOSE AMERICAN AIRLINE MILES: There is criticism of The Points Guy for at times being a thinly veiled credit card marketing machine. Say what you will about the guy, but he does know his stuff: here are 10 good uses for American Airlines miles. If you’re not too experienced with AA redemptions, this is a good read.

Haven’t heard about that AA card 100,000-mile offer? Here you go. If you don’t want to deal with the $10K minimum spend and the considerable annual fee, keep in mind there are some 50K-mile offers as well.

INCREASE YOUR TAX REFUND BY 10%: This is not my cup of tea, as I’m still working through some Amazon credit from another deal, but Amazon and TurboTax are teaming up to give you an extra 10% on your refund when you get it in the form of an Amazon gift card. Why? Because Amazon likes to help, that’s why.

REAL ESTATE: Along the same lines as my free land post, Zero Hedge has a list of cities where you can buy a house for a dollar–or less! The usual suspects are there of course–what would we do without you, Detroit?–but what’s news to me is that the federal government now has a dollar home program:

Dollar Homes are single-family homes that are acquired by the Federal Housing Administration (which is part of HUD) as a result of foreclosure actions. Single-family properties are made available through the program whenever FHA is unable to sell the homes for six months.

You can look for a dollar HUD home of your own here. Happy hunting!

KeyBank Rewards: the most ridiculously confusing rewards program ever

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Every now and then I like to take a jab at PNC bank for having a needlessly complicated rewards program, but no more! KeyBank Rewards is the new champion of lousy rewards programs. This one requires extensive work with a spreadsheet.

If you take a look at the rewards language on Keybank’s website, you see this:

  • Earn 1 reward point for every $6 spent in signature debit net purchases and PIN/POS net purchases.
  • Earn 1 reward point for every $1 spent in KeyBank Platinum MasterCard Credit Card purchases**
  • Earn 5 reward points for every $1 spent in Key2More Rewards MasterCard Credit Card purchases**

I know that debit card rewards are weaker than credit card rewards, but something is out of whack when the standard credit card reward is 30 times that of the debit card. That’s just weird, KeyBank, and you ought to be ashamed of yourself.

So just looking at that, we know that either debit cards are worthless from a rewards standpoint or that the KeyBank credit card is the greatest deal in the history of credit cards. How do we find out?

Let’s have a look at the KeyBank Rewards Guide! Maybe we can find clarity and guidance there:

key bank rewards 1
Click to embiggen

..or maybe not. That’s only part of it the guide, by the way–there’s more. The guide actually makes things more confusing: 10 points per dollar for the Private Bank credit card? A 60X rewards gap between debit and credit? A birthday bonuses? ATM deposit bonuses? Intriguing! But confusing! How rewarding is all of this anyway?

Let’s try the KeyBank Rewards site itself. If you browse their rewards catalog itself, you can see how much it takes to redeem for certain items. Looking at the Target gift cards, we see the following denominations and redemption amounts (I’ve added in the value per point):

key bank rewards 2

So at last we have some idea of how much a KeyBank rewards point is worth. Expressed mathematically, we can say that for any KeyBank rewards function f(x) where x is your total points earned:keybank3

I haven’t had calculus or pre-calc or whatever it is they teach limits in for twenty years or so, so pardon me if my math is sloppy.

Anyway: let’s re-do that KeyBank rewards guide page with a value of one fifth of a cent per point. How does it look now?

key bank rewards 3
Click to embiggen

So if you’re willing to put up with KeyBank’s program for some reason (for example, if you’re a KeyBank executive’s mother and you don’t want him to feel bad), you can get a whopping 1% back on your credit card purchases. (Or 2% if you’re wealthy enough for their Private Bank). And if you’re willing to jump through a lot of hoops, you can get $20/month back from the incentives on their deposit accounts. It’s probably not worth your time, unless you’re very clever and/or efficient.

Credit card pop quiz

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Pop quiz, hotshot! I’m going to give you two mystery credit cards, and you’re going to tell me what credit card I’m talking about, what airline I’m talking about, and which card is better. Ready?

CREDIT CARD A: Earns 1.25 miles with Airline X per dollar spent on all purchases. $95 annual fee.

CREDIT CARD B: Earns 1.30 miles with Airline X per dollar spent on all purchases. $0 annual fee.

You can probably guess what card A is, since not too many airline cards give you 1.25 miles per dollar. It’s the Chase British Airways card, of course! (Note: this is not an affiliate link, and I get no money if you click through.)

And credit card B? It’s the American Express Blue for Business (Note: this is not an affiliate link either):

amex blue business

The card earns 1 Membership Reward point per dollar spent. MR points can be exchanged for Avios at a 1:1 ratio, plus you get a 30% bonus on all purchase-related points earned each year. Voilà, 1.3 points per dollar spent. (Though before you rush out to get this card, please note that you do need to have a more premium Amex card, e.g. a Gold card, in order to be able to transfer points from this card to one of the MR partners.)

So which card is better? That’s a trick question. The answer, as always with these things, is it depends. The Chase card comes with 50,000-point sign-up bonus, vs 10,000 for the Amex Blue, so clearly if you’re looking for a big one-time gain, the BA card wins.

But the Amex Blue for Business belongs in the conversation. You can actually earn more Avios with it than you can with the branded card, and there’s no annual fee. There are many cases where you can get two cents of value or more per Avios, so you’re talking about a 2.5%+ card with no annual fee. I could get a CLT-LGA roundtrip ticket with seven months of Amazon payments.

Another pop quiz: why don’t other bloggers in the points and miles community talk about this card? It’s not an amazing card, but like I said, it belongs in the conversation since there are some people and some situations for which it would be useful.

Frequent Miler, to his credit, is the only major points-n-miles blogger I know of who has mentioned this card (he even has it on his best credit card deals page). I wasn’t able to find any mentions of this card by the rest of the boardingarea.com crew, or by Points Guy or Frugal Travel Guy. If I’m missing one, by all means let me know and I’ll gladly correct the record.

This goes back to what Matt wrote about the other day regarding the economics of blogging. The incentives of big league bloggers are not aligned with the incentives of their readers. This doesn’t mean that they’re bad people, or that there’s anything wrong with getting paid to sell, just that most of them are sacrificing the quality of their product in exchange for card-whoring. They get paid to push certain cards, and they don’t write about other potentially useful cards since they’re not getting paid to do so.

I don’t mind if a blog has advertisements, or if they promote a really good deal, or if they subtly work a relevant link into an article, or if they ask me to use their links to help support the blog. Bloggers have to eat, right? Just be honest about it and don’t punish your readers with irrelevant and/or subpar affiliate links.

There are some who still produce a good blog despite the temptation to do otherwise, and hats off to them, because it’s got to be awfully tough to resist the temptation to cash in for a substantial short-term gain. Those of you who merely read and don’t blog should be aware of the incentives underlying some of the content you’re reading.

Another sale for Points Miles and Martinis!

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Saverocity is Journalistic in Nature, please obtain Professional Representation prior to attempting anything discussed herein. Opinions expressed here are author's alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.