Reader OfficiallyBill asked the following question in the Ask Lucky forum:
So after reading this post about what card Lucky puts spend on… and having just gotten the SPG Amex (Personal) as well as the Freedom Unlimited and already having the Freedom card… when you have the CSR, where does the the SPG Amex card come in? Even with additional few SPG points per dollar spent at SPG properties, 3X on the CSR still seems like a better deal, and non-bonus spend areas seem to be better on Chase Freedom Unlimited? Am I missing something??
I imagine many people have similar questions, so in this post I wanted to address this, “big picture.”
The Chase personal three card trifecta
Bill has the excellent trifecta of three personal Chase cards that helps maximize Ultimate Rewards points:
- The Chase Sapphire Reserve® Card, which offers 3x points on dining and travel
- The Chase Freedom FlexSM, which offers 5x points in rotating quarterly categories, on up to $1,500 of spend per quarter
- The Chase Freedom Unlimited®, which offers 1.5x points on everyday purchases
Technically the only card of the above that directly earns Ultimate Rewards points is the Chase Sapphire Reserve® Card, though that’s the beauty of the above setup. If you have any card earning Ultimate Rewards points (the Chase Sapphire Preferred® Card, Chase Sapphire Reserve® Card, or Ink Business Preferred® Credit Card), then points earned on the Freedom cards can be converted into Ultimate Rewards points at a 1:1 ratio (otherwise each point gets you just one cent). Since I value Ultimate Rewards points at 1.7 cents each, that’s like a way of increasing the value of your points by 70%.
This means that if you have the above three cards, you’d be earning a return of 5.1% on dining and travel, a return of 2.55% on everyday spend, and a return of 8.5% in rotating quarterly categories, which is awesome.
How do other cards fit into the equation?
Bill recently got the Marriott Bonvoy American Express Card, which I also like — the card has a great welcome bonus, $95 annual fee (Rates & Fees), gives you elite stay and night credits towards status annually, and offers 6x Marriott points per dollar spent at Starwood and Marriott hotels and 2x Marriott points per dollar spent on all other purchases, which I’d consider to be a solid return.
But now Bill is saying “wait a second, I’m earning a return that’s better than 2.2% on the Chase Freedom Unlimited®, so why would I use the Marriott Bonvoy American Express Card?”
The information and associated card details on this page for the Marriott Bonvoy American Express Card has been collected independently by OMAAT and has not been reviewed or provided by the card issuer.
It’s all about diversifying your points
Bill isn’t necessarily better off putting that spend on another card. In a way I’d say he’s almost getting the best return possible. If we’re going to look at the bonus categories he’s taking advantage of right now, then I think there are only two cards that might be worth acquiring to maximize spend:
- The Blue Business® Plus Credit Card from American Express, which offers 2x Membership Rewards points on the first $50,000 spent annually (1x after that), and has no annual fee (Rates & Fees)
- The Amex EveryDay® Preferred Credit Card from American Express, which offers 3x Membership Rewards points at US supermarkets (on up to $6,000 of spend per year) and 2x points at US gas stations, plus a 50% points bonus when you make at least 30 transactions per billing cycle, for a total of up to 4.5x points on groceries and 3x points on gas stations (none of his current cards offer bonuses in those categories)
Anyway, I think Bill’s strategy right now is great, and the main reason he should consider using other cards is because he wants to diversify his points. When it comes to credit card rewards it’s not just about earning the most points per dollar spent, but also earning points that are most valuable to you, and get you the travel experiences you want.
I have a lot of Ultimate Rewards points, and it’s a currency I love, though I haven’t been redeeming them all that much lately. So that’s one reason I’d consider putting spend on other cards right now. For example, lately I’ve been redeeming Amex Membership Rewards points more than Chase Ultimate Rewards points, and at this point I’m pretty Membership Rewards “poor” and Ultimate Rewards “rich,” which means I’m trying to put as much spend on cards that earn Membership Rewards points at the moment.
A similar thing is true of the Starpoints earned on the Marriott Bonvoy American Express Card. Those are just about the most flexible points out there, so even if you’re not earning as many points on the card, it could still be worth using the card in order to diversify your points.
There’s one caution I should add on that front — there’s value in diversifying points, but you don’t want to over-diversify. So I think it all comes down to how many points you have in different programs. You want enough points in a particular program so that you can redeem for your “dream” redemption, but if you get beyond that, it may make sense to consider other cards for the time being.
The information and associated card details on this page for the Amex EveryDay Preferred Credit Card and Marriott Bonvoy American Express Card has been collected independently by OMAAT and has not been reviewed or provided by the card issuer.
Bottom line
Achieving the best return on your credit card spend isn’t just about earning as many points per dollar spent as possible, but about getting the right number of points in various programs. In Bill’s case, I think he has a great approach, and if he’s earning Ultimate Rewards points at a decent rate, I’d say he should keep doing what he’s doing now. The only thing I might consider in his shoes is a card earning bonus points on gas and groceries (assuming he spends a decent amount in those categories), since he’s missing out on quite a few points there.
Otherwise I think he should only direct spend onto the SPG Amex (or another similar card) if he’s at the point where he has so many Ultimate Rewards points that he can’t redeem them in the short term, or if he has a dream trip that wouldn’t be practical to book with Ultimate Rewards points.
The following links will direct you to the rates and fees for mentioned American Express Cards. These include: Starwood Preferred Guest® Credit Card from American Express (Rates & Fees), and The Blue Business® Plus Credit Card from American Express (Rates & Fees).
Shouldn’t these be called the Chase Triplets rather than Trifecta? They’re all related, have the same DNA, with slight differences which aren’t obvious to the naked eye.
I feel like there’s multiple scenarios for the “trifecta”. Reserve, freedom and SPG. Reserve, freedom, Hyatt card. Although the ultimate trifecta is reserve, freedom/or unlimited and whatever card you’re hitting the sign up bonus on.
‘We would never buy a $4500 plane ticket
But we’ve had Chase Sapphire for 1 year.
one year of chase spending gave us 270,000 miles which was more than enough for European Biz Class Flight (MSP-BUD-VIE-JFK)’.
The question here is on unbonused spend. If you had $270,000 to spend where there were no bonuses would you rather have 270k miles or $5,400? Scale to whatever number you spend. That is the question. It...
‘We would never buy a $4500 plane ticket
But we’ve had Chase Sapphire for 1 year.
one year of chase spending gave us 270,000 miles which was more than enough for European Biz Class Flight (MSP-BUD-VIE-JFK)’.
The question here is on unbonused spend. If you had $270,000 to spend where there were no bonuses would you rather have 270k miles or $5,400? Scale to whatever number you spend. That is the question. It mixing it up if you have 3x bonuses on other spend. For many that are not rich they would rather have the cash.
“FWIW, no hate to the blogosphere business model, but it’s a hell of a lot easier travelling luxuriously with cash than miles.“
If you’re rich.
I’m late to this game. We are high earning but somewhat cost conscious couple
We would never buy a $4500 plane ticket
But we’ve had Chase Sapphire for 1 year.
one year of chase spending gave us 270,000 miles which was more than enough for European Biz Class...
“FWIW, no hate to the blogosphere business model, but it’s a hell of a lot easier travelling luxuriously with cash than miles.“
If you’re rich.
I’m late to this game. We are high earning but somewhat cost conscious couple
We would never buy a $4500 plane ticket
But we’ve had Chase Sapphire for 1 year.
one year of chase spending gave us 270,000 miles which was more than enough for European Biz Class Flight (MSP-BUD-VIE-JFK)
$9k worth of tickets for spending we already do?
Using Luckys tricks I also bought Avianca miles which I converted to 2 RT tix LAX to SYD in First Class! I think I spent $4500 or so for tix worth 3-4x that
And got 13500 Chase Miles
Sure. Could have just paid $29k and bought the tix in cash
So much more fun getting the flights the way I did, despite the time involved (which I found to be fun)
This is something I've always wondered about. While I don't have the CSR yet but do have CFU & CF and am willing to stick with the trifecta especially now after reading this. For now just waiting to see if the CSR comes up with another good sign up bonus like the 100k it had before.
@Kyle, you have to factor in the additional cost of the annual fee of owning a credit card, which varies based on personal viewpoint - for the average Joe, this precludes even Rick B’s generous $20k spend a year example.
FWIW, no hate to the blogosphere business model, but it’s a hell of a lot easier travelling luxuriously with cash than miles.
@Shawn No, you cannot PC a Hyatt Card to a freedom Unlimited. Only CSR/CSP/CP can PC to a Freedom Card.
As for the original topic, diversify is key. since having 300k UR points, i couldnt find anything for a flight from Taiwan to Japan. UA wanted a ton of mileage for such a short trip, cash value was $500 RT. If i had another currency, id probably be fine.
SPG is a great card...
@Shawn No, you cannot PC a Hyatt Card to a freedom Unlimited. Only CSR/CSP/CP can PC to a Freedom Card.
As for the original topic, diversify is key. since having 300k UR points, i couldnt find anything for a flight from Taiwan to Japan. UA wanted a ton of mileage for such a short trip, cash value was $500 RT. If i had another currency, id probably be fine.
SPG is a great card for the 1x. I prefer SPG card over Freedom Unlimited is because its super easy to earn UR, but hard to earn SPG. They also go to Marriott, 100k SPG to 300k Marriott. redeem for Flights a hotel is a pretty slick idea for a cheap vacation.
For me my 2% cashback card (Fidelity) is important for diversity. I have enough points that I don't need more at the moment. The ones I have are just depreciating as I can't use them quickly enough due to lack of vacation time or paid travel (must maintain status!), which then replaces the ones in the kitty. Once you blow past your point target just take the cash.
@rickb - that puny 25k you would get from SPG would put you up at the Sheraton on the park in Sydney for 2 nights. Which routinely goes for 400 a night. I know because I’m going and looking at hotel rooms. Booked J on chase points...I know I know use cash back. And just FYI I travel for personal not business. Cash back cards have a place, I have yet to find a place for them though.
Question for the group - way over 5/24. Have reserve and freedom. If I have the Hyatt card could I call to have it changed to the freedom unlimited and since it’s not subjected to 5/24 apply again for it later.
"5x points in rotating quarterly categories" - wtf is this supposed to mean?
Trifecta? Sounds like a villain that the mutant ninja hero turtles would fight.
rick b, the minimum value of a UR point is 1.5c with the CSR. So, using the freedom unlimited will get you 1.5x = 2.25c which is more than your 2% cash back card. So....yeah, having Chase trifecta works out better than a simple 2% card if you actually travel. In reality, I do transfer points to airlines and get much more value. Everybody has and should have their own strategy. Have fun.
The Chase Trifecta strategy is very good for many but not perfect for all.
Some cannot use up a large amount of points due to inability to get enough vacation time. Others, like Rick B, is like the economy class flyer. He would rather stay at a cheaper hotel than get points at more expensive hotels.
Some of the 5% cash back on quarterly categories cards (Chase Freedom Visa, Discover it, and the no-new-cardholders Citi...
The Chase Trifecta strategy is very good for many but not perfect for all.
Some cannot use up a large amount of points due to inability to get enough vacation time. Others, like Rick B, is like the economy class flyer. He would rather stay at a cheaper hotel than get points at more expensive hotels.
Some of the 5% cash back on quarterly categories cards (Chase Freedom Visa, Discover it, and the no-new-cardholders Citi Dividend Select MasterCard) are useful to some.
Lucky's highly recommended IHG Rewards Select Club MasterCard by Chase is an interesting card that I may get someday. The bonus is like getting one night a year for $49 (the annual fee of the card).
MasterCards are getting less common than Visa, due to Visa's aggressive marketing to banks. Rarely there's a merchangt that only takes Visa or only takes MasterCard.
Thanks, Lucky, for introducing me to the wonderful world of credit cards and credit card sign on bonuses!
Rick B is right....if you are cheap and you enjoy staying in a $20 airbnb or hostel... a cash back card is a must!
It depends on how much he spends overall. If it is $20-50k per year, you should really be constantly signing up for cards and then putting your spend toward those bonuses. If he spends more than that, this type of analysis makes sense.
I’ve barely used my SPG credit card in the last year (I don’t do many hotel stays at all). It just racks up so slowly for non bonus spend that somehow it just felt easier to put my non bonus spend on my Reserve cc & not even bother taking out my SPG cc. Now that I just downgraded my Preferred to the Unlimited, I really don’t know when I’ll be using my SPG, even...
I’ve barely used my SPG credit card in the last year (I don’t do many hotel stays at all). It just racks up so slowly for non bonus spend that somehow it just felt easier to put my non bonus spend on my Reserve cc & not even bother taking out my SPG cc. Now that I just downgraded my Preferred to the Unlimited, I really don’t know when I’ll be using my SPG, even tho I have 1:9 SPG to UR. I should may be really force myself to diversify like Ben suggested even if I lose some bonus points. It’s just so hard to give up on ‘easy’ bonus categories!
...to add, of course there are some people with monstrous amounts of business expenses, or reimbursed travel expenses, or they get comped stays at SPG hotels. Their math changes, but that's rare. I'm talking about average singles/families who just spend on normal daily expenses. Without heavy Manufactured spending, it's tough to earn any significant amount of miles on a non-bonus category.
The value of miles is debatable, I personally would not put 1x spend on either a Chase card for UR or an SPG card for 1.25 Mileage currencies have been devalued left and right, and availability during busy travel seasons when most people can go are often barely there, so I personally would still take 2%+ cashback, and earn miles strictly with signup bonuses or if there's some spending promo going on.
Bill, or...
The value of miles is debatable, I personally would not put 1x spend on either a Chase card for UR or an SPG card for 1.25 Mileage currencies have been devalued left and right, and availability during busy travel seasons when most people can go are often barely there, so I personally would still take 2%+ cashback, and earn miles strictly with signup bonuses or if there's some spending promo going on.
Bill, or anyone else, needs to calculate how much spend they even put on a card that's not bonused. So a typical person let's say has $20k of spend per year that's not in a bonus category, and that's pretty generous already. That's a puny 25K miles they earn via SPG. WHere is that going to get you?
@Bill Klein, Diversifying points is always a plus especially when maximizing point returns.
If you can get the Ink Cash, it'll give you 5UR points for office supplies store, cellphone, internet service and cable bills as well.
Strangely Netflix(internet service?) counts as well.
That only matters if Bill actually cares deeply about only staying at SPG/Marriott hotels, to the point of overpaying for them vs. another cheaper option. I think a straight 2% CASH card is best outside of any bonus spend, as cash is king and I can book airbnb or a cheaper non-chain hotel in most parts of the world vs. trying to shoehorn into a big chain property.....only to see my points value slashed with minimal notice. :)
@ rick b -- I was suggesting earning Starpoints as a way of earning airline miles (via SPG's mileage transfer partners), rather than for hotel stays. Since you can earn up to 1.25 miles per dollar spent, I was suggesting that there might be cases where Bill might prefer 1.25 miles in an SPG partner currency compared to 1.5 miles with an Ultimate Rewards partner.
Thanks Lucky for taking the time and putting in the effort for responding to my question in the forms! Very helpful and clarifying. I definitely need the Amex EveryDay card then. HUGE gap - I don't have any Membership rewards earning cards right now.