Frequent Miler's latest team challenge, Million Mile Madness, is almost done! The last two weeks Greg, Nick, and Stephen competed to earn 1 Million SAS miles by flying 15 airlines. But who completed the challenge with the most Speed, Affordability, and Style?
I don’t know how I missed this. Last weekend I was at the “West Coast DO,” which was a meet-up primarily for people interested in manufacturing spend. At the DO, there was naturally a lot of talk about the semi-demise of the old Amex Blue Cash card (see “Amex shuts down “old” Blue Cash accounts”). During one of many enlightening conversations, one person told me that his Wells Fargo Visa Signature card gets 1.75 cents per point value towards airfare rather than the advertised 1.5 cents per point.
Wait…
What?!
First some background: Wells Fargo offers two cards that get 5X rewards for gas, grocery, and drugstore purchases for 6 months. One is the cash back card, the other is the Visa Signature card which earns points instead of cash. Up until now, I’ve mostly ignored the points-based version of the card. I had thought that points were worth, at most, 1 cent each. If that was true, then there was no reason to prefer points over cash back.
I was wrong…
The Wells Fargo landing page for this card, clearly shows the enhanced benefit for airfare. They write:
- Receive 50% more value when you redeem for airfare through mywellsfargorewards.com.2
- 30,000 points is currently a $450 value toward airfare redemption or a $300 value toward cash redemption options.
And, the footnote says:
2. Flights must be redeemed through the Wells Fargo Rewards Program. For airline ticket redemptions, the number of Points required to be redeemed is equivalent to the ticket costs divided by .015, rounded up to the nearest whole Point. For airfare redemptions, a separate $24 per airline ticket processing fee will apply. Certain restrictions and limitations apply. See the Summary of the Wells Fargo Rewards Program Terms and Conditions and Addendum to the Wells Fargo Rewards Program Terms and Conditions for the Wells Fargo® Visa Signature® Card for further details.
Wow. This means that, for 6 months, the effective return for purchases at gas, grocery, and drug stores is approximately 7.5%. Keep in mind, though, there is a separate $24 processing fee per airline ticket. So, these points aren’t as great for extremely cheap tickets, but for moderate to expensive tickets, they’re apparently pretty awesome.
Let’s look at two examples:
$150 flight
In the case of a cheap flight, the $24 processing fee is a pretty big percentage:
- Points required: $150 / .015 = 10,000
- Value of points = ($150 – $22) / 10,000 = 1.28 cents per point (still better than cash back!)
$600 flight
At the $600 price point, the $24 processing fee becomes less significant and the points approach their top 1.5 cent per point value:
- Points required: $600 / .015 = 40,000
- Value of points = ($600 – $22) / 40,000 = 1.45 cents per point
1.75 cents per point?
The person I talked with at the DO last weekend didn’t seem to know why he was receiving a better than advertised 1.75 cents per point value from his points, but of course he was thrilled to get it. Regardless of how he lucked into this extra bonus, for the first 6 months of card ownership he is able to earn the equivalent of up to 8.75%, towards airfare, through gas, grocery, and drugstore purchases!
Regardless of whether points can be redeemed for 50% more value or 75% more value towards airfare, this is a sweet deal. This card has suddenly moved high on my list of “must get” cards even though my Blue Cash card is still alive and kicking.
Applying for the card
It turns out that this isn’t something you can just apply for on a whim. They’ll only approve your application if you already have an existing relationship with Wells Fargo. And, if you open an account now (such as a checking account), I’ve been told that you have to wait at least 30 days after opening the account to apply for a card. Also, they say that they’ll look for “continued deposits” to that new account, so make sure to make regular deposits to your new account.
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How do they count a year? Calendar year or last 12 month?
For the purposes of what? The 5X bonus is for 6 months, so I’m not sure what you’re asking about the year?
To get 1.75 cents per point after 50k spent
Ah, right. I see what you’re asking. I’m not sure.
[…] If you choose to spend $50,000+ on the Visa Signature you get bumped up to 1.75x uplift towards airfare and $24 per ticket booking fee is waived. For more information on this, hit the comments section on Frequent Miler’s post on the card here. […]
[…] Visa Signature because it is the only one that has that 1.5x bonus for airfare. (Frequent Miler reports it may be up to […]
I have both Visa Signature and Propel and spent over $30k, but only see 1x on redemptions on travel. Anyway to force it?
That’s too bad. I’m not aware of any such tricks to force it, but then I don’t have either card. Maybe call and say you’re thinking of cancelling the Propel and ask if they can move the points to your Visa Signature?
If you had the 5% cash back Signature card previously can you still get the 5X points on the points version of the Signature card?
I believe so, yes
Wonder if Wells Fargo travel will let you apply your AA gift cards to a reservation to cover any difference in the 1.5 points and the cash difference?
I kinda doubt it
[…] of the Wells Fargo Rewards program, such as the well-known Wells Fargo 5% card. (Bear in mind, that you can get a better value by redeeming for travel.) Reportedly, all Wells Fargo cards are eligible for the new ATM option, and this should include […]
[…] 6 months to earn 5X, but I do think it is underrated since 5X is worth more than 5%. See more here: https://frequentmiler.com/2014/11/13/a-card-i-wrongly-ignored/ – Frequent […]
Can you redeem points for refundable airline tickets? Do you have to book the ticket through a WF portal or do you just credit your points for airfare purchases?
No idea. I don’t have this card yet.
Hey Greg, I’m the one who told you about this. Wanted to add a couple things for clarification. 1) The increased redemption value comes after you spend a certain amount on the card, if I recall it was $50k. 2) I’ve made several travel redemption with these points and I’ve never been charged the $24 processing fee. Not sure why but I’m happy not to have to pay it.
Awesome. Thanks again for the original tip and now for the added info!
I appreciate your discretion and not using poor taste (lol). Just kidding. Really, no hard feelings. Your points are well taken. Reasonable people should be able to accept when other reasonable people disagree.
You make some very good points and I appreciate your perspective. I would offer though that the preference in one card versus another will depend largely on the individual. For you and those others who may be doing more than $ 50K per year in MS, and you value the UR points as low as 1.5 cents, then, yes, I can see why the WF card would be exciting. However, for those like me who think $ 50K per year is probably more MS than we will actually do on a single card and who do think the UR points are worth closer to 2.1 cents, the Ink Plus still looks better. If you value the UR points at only 1.5 cents, then, yes the difference in card fees could shift the overall \profit\ in favor of WF, but only after making up for the 50K sign up bonus the Ink Plus gives. And, even then, it only looks better if you value UR points that low. The value of the points really isn’t what you would pay for them. To wit, if you take the above example wherein it is established that using the WF points to buy $ 600 in airfare makes 40,000 points worth 1.45 per point, that doesn’t mean you would want to buy the points for 1.45 cents per point, that is just the value you can get. In short, why would you pay 1.45 cents per point for 40,000 points to get a $ 600 airfare (and you would have to cough up the $ 24 processing fee) when you could just use the $ 600 to buy the fare direct? Likewise with the UR points. Just because I would not buy them at 2.1 cents per point really is no indication that I don’t think I can get that much value from them. So, no I wouldn’t buy UR points at 2.1 cents each, but I doubt many folks would buy WF points at 1.45 cents each. Especially when the value drops even more on lower cost travel.
Again, I appreciate your views but I still don’t think the WF is \BY FAR\ better. Maybe for some folks depending on their amounts of spend and how they value the points, but not for me. Especially with no sign up bonus.
But I do wholeheartedly agree that its best to use as many of them as you can while the MS gravy train lasts. I suspect that may not be all that much longer.
@James It would be in poor taste to classify your comments as MS nube but I think the point that FM makes here is specifically to the 5X and further drill down to drug store 5X which is MS mania………your Staples comparison just doesn’t hold water but the idea of comparison is honorable…………
More realistic UR valuation is closer to 1.5 cents. If allowed I would sell UR all day long to those who believe they are worth 2.1, lol. But the real reason Ink isn’t the better card to MS with is you can only find $200 Visa/MC GCs at office supply. At G/G/D you can find $500 Visa/MC for roughly the same fee, so you get 5/2 as many points for the same effort and cost. Also, Ink 5x is capped at 50K spend / year. From an opportunity cost it’s not really about what card is better – sooner or later MS will die. The optimal solution is to MS both until the gravy train ends.
Gabriel,
I appreciate your reply. You said \ …this card is BY FAR the best for anybody doing MS.\ Why? For example, the Chase Ink Plus yields 5 UR pts/$ for spend at office supply stores. It seems that most folks are pegging the value of a UR pt at about 2.1 cent/pt. So, for MS thru office supply stores, the return is approximately 10.5%. That alone is better than the top end of 7.5% for this WF card and that is applicable only if the points are redeemed for air travel. Plus, the high rate of return really nosedives after 6 months. The Ink Plus keeps yielding the higher rate of return beyond six months. And, you get a 50K bonus to start, which is worth $ 1,050 if you accept that the UR points are worth 2.1 cents each. So, since the WF card does not have a sign up bonus, you would have to make an extra $ 14,000 of spend on the WF card, just to compensate for the Chase Plus bonus. Now I am not taking into account
the activation fees for GCs, which I presume most of the MS would involve with either card, simply because they would basically be equal with either card (although you could say there is another, slight advantage for the Ink Plus from Visa rewards and Staples by shopping at Staples. I just can’t see that it is \By FAR\ better than the Ink Plus. Frankly, I don’t think it measures up. I’m not saying that the WF card is not a good deal, I just don’t think it is as good a deal, even for MS.
That’s strange…..I went to the “Southwest DO” as there is no coast in Phoenix……..perhaps one day there will be a “WEST COAST” Do…….but the lack of coast was somewhat overcome by visiting the spring training grounds where World Series Champions are bred….Champions that do indeed live on the “coast” and would welcome a DO in their backyard…….but the fellowship was divine………..