Credit Card Changing Fortunes (2016 Edition)

The past few months have been full of surprises and changes in the points & miles world.  Many of these changes centered around high-end $450 per year credit cards… Citibank announced a huge devaluation to their Prestige card.  Soon after, Chase released their new blockbuster Sapphire Reserve Card, with its 100K signup bonus, 3X earnings for travel & dining, 1.5 cents per point value towards travel, and $300 travel reimbursements.  At around the same time, Chase increased the annual fee for their Ritz Carlton credit card, increased its signup bonus, and changed it to a Visa Infinite card.  Amex responded to the Sapphire Reserve by adding 5X earnings on flights to their personal Platinum cards.  Amex then surprised us further with interesting changes to their Enhanced Business Platinum card: They introduced both a new public 100K signup offer; and enhanced benefits: a 50% rebate on flights purchased with points; and a 50% bonus on points earned for purchases of $5,000 or more.

Amidst all of these changes in the high-end credit card space, Marriott’s takeover of Starwood proceeded forward with the new ability to link Marriott and SPG accounts.  By linking accounts, members get automatically matched to their highest status level with either program: Marriott Gold = SPG Gold; Marriott Platinum = SPG Platinum; and they get the ability to freely move points back and forth where 1 SPG point = 3 Marriott Rewards points.  Full details of the sweet opportunities created by this merger are detailed here, and summarized here.

All of the above changes have made me rethink how I value various credit cards.  And, I’m not just talking about those credit cards that were directly changed.  Each of the changes described above has had a domino effect upon many credit cards.  What follows is not intended to be an exhaustive look at all changes in credit card fortunes, but just the ones that immediately come to mind…

Starwood Preferred Guest (SPG) credit cards (business and personal): Trending Up

The ability to transfer points 1 to 3 from SPG to Marriott has led to many extremely valuable new options.  Even though SPG cards only earn 1 point per dollar (other than at Starwood properties, where they earn 2X), the value of those points has risen dramatically.  As a result, the SPG card is a worthwhile option for everyday spend even though it earns only 1 point per dollar for such spend.

Amex Personal Platinum: Trending Up Slightly

The new 5X airfare earnings are nice, but I expect that few people spend enough on airfare to make this a game changer.

Amex Enhanced Business Platinum: Trending Up

The new 50% points rebate on flights purchased with points is huge.  Once you throw in the limited time 100K signup bonus and the card’s excellent perks, many will find this card to be well worth the hefty price of admission ($450 per year). Update: This offer has expired.

The fact that Membership Rewards points become much more valuable towards paid flights with the Enhanced Business Platinum card has led to a cascading effect on the value of other Membership Rewards earning cards.  Specifically, the cards that offer great category bonuses are now more valuable if paired with the Enhanced Business Platinum card.  For example, with some cards you can earn 3 points per dollar in various categories of spend and then, if you have the Enhanced Business Platinum card, use those points to book travel for a value of 2 cents per point.  This means that those 3X earnings are like a 6% rebate towards airfare.

Note that to get 2 cents per point value (through the 50% points rebate), you need to book economy flights with a single airline you select once annually.  Business class and first class flights can be booked on any airline.

Amex EveryDay Preferred: Trending Up

The EveryDay Preferred card is arguably the best Membership Rewards earning card thanks to it’s excellent category bonuses and its 50% bonus on all points earned each billing cycle in which the card has been used 30 times.  By combining the category bonus and 50% bonus, it’s possible to earn:

* 4.5X at U.S. grocery stores, up to $6K spend per year (then the rate drops to 1.5X)
* 3X at US standalone gas stations
* 1.5X everywhere else

Full details can be found here: Amex’s powerful new EveryDay cards.

Amex Business Gold Rewards: Trending Up

The Business Gold Rewards card offers 3X points on one category of your choice, and 2X points on the other categories (up to $100K in purchases per year).  Available categories:

* Airfare purchased directly from airlines
* U.S. purchases for advertising in select media
* U.S. purchases at gas stations
* U.S. purchases for shipping
* U.S. computer hardware, software, and cloud computing purchases made directly from select providers

Amex Premier Rewards Gold: Trending UP

The Premier Rewards Gold card offers 3X points for flights booked with airlines, 2X points at US gas stations, US supermarkets & US restaurants, 1X points on other purchases.

Chase Ritz Carlton: Trending Up

The new, $450 annual fee (vs. $350 previously) is hardly an improvement, but the signup bonus is better than before: 3 nights instead of 2.  Plus, the ability to earn Platinum status through high spend is more valuable than before thanks to the Marriott SPG merger.  Platinum status with Ritz = Marriott Platinum = SPG Platinum.

Also, unlike the Sapphire Reserve, the new Ritz card comes with a valuable Visa Infinite benefit: $100 discount on domestic round trip flights booked for 2 or more.

Chase Sapphire Reserve

Thanks to the Sapphire Reserve card’s 3X earnings for travel and dining, and 1.5 cents per point travel redemptions (give or take), the value of other cards that earn Ultimate Rewards points has been effected.  The value of cards that earn category bonuses has increased because points can be moved to the Sapphire Reserve and used to book travel at better value.

Sapphire Preferred: Trending Down

The Sapphire Preferred used to be the travel card.  And, it’s still good, but in many ways the Sapphire Reserve is better.  Still, free authorized users and great trip coverage protections (for primary and authorized users alike) keep the Sapphire Preferred from becoming completely useless.

Ink Plus, Ink Cash: Trending Up

5X office supplies, cellular service, landline, and cable!  5X rewards transferred to the Sapphire Reserve and used for 1.5 cents per point towards travel = 7.5% rebate within 5X categories.

Freedom: Trending Up

5X points in rotating categories up to $1500 spend per quarter.  5X rewards transferred to the Sapphire Reserve and used for 1.5 cents per point towards travel = 7.5% rebate within 5X categories.

Freedom Unlimited: Trending Up

1.5X points everywhere.  Combine this with the Sapphire Reserve to earn at least 2.25% towards travel on all spend.

Fixed Value 2% Mile Cards: Trending Down

The combination of the Sapphire Reserve and Freedom Unlimited cards makes it easy to get at least 2.25% value (towards travel) from all of your spend, and even more value from travel and dining.

This reduces the attractiveness of fixed value “2 miles per dollar” cards like the BarclayCard Arrival Plus, and Capital One Venture Rewards (sorry Jennifer Garner) since most people would do better with the combination of the Sapphire Reserve plus Freedom Unlimited even after considering the difference in annual fees.

No-fee 2% cash back cards are a different story.  The Citi Double Cash and Fidelity Investment Rewards Visa are great no-fee options for earning a straight 2% cash back without any fuss and without the requirement to use rewards for travel.

Citi Prestige: Trending Way Down

A number of big changes are coming in July 2017:

• No American Airlines Admirals Club access for existing cardholders (it is already the case that new cardholders don’t get this benefit)
• No free golf
• ThankYou points will no longer be worth up to 1.6 cents each towards airfare.  All airfare redemptions will be at 1.25 cents value.
• The 4th Night Free benefit (details here) will no longer be based on the 4th night’s rate.  Instead, it will be based on the average nightly rate, not including taxes.

Before these changes, the Prestige card made other ThankYou cards more valuable (since points can be moved or combined).  Plus, it made the AAdvantage Executive card less valuable since the Prestige card was a less expensive option for Admirals Club access (thanks to the Prestige card’s annual $250 airfare rebate).

The Prestige changes have caused a ripple effect in the value of various Citi cards…

Citi AAdvantage Executive World Elite MasterCard: Trending Up

The AAdvantage Executive card is now the best option for getting AA Admirals Club access.  Yes, it has a steep $450 annual fee, but it includes actual Admirals Club membership, not just club access.  This means that you and your guests can visit Admirals Club lounges even when flying other airlines.  Plus, authorized user cards are free and include their own Admirals Club access plus guest access (but authorized users do not get full membership so they do need to fly AA same-day in order to get that access).

Citi Premier: Trending Down

The Premier card offers excellent ThankYou point category bonuses: 3X travel and gas; 2X dining and entertainment.  When combined with the Prestige card, Thank You points used to be more valuable, especially for AA flights.  As of July 2017 that will no longer be the case.

Citi AT&T Access More: Trending Down

This is another ThankYou point earning card with excellent category bonuses: 3X Online Retail & Travel websites; and 3X AT&T. Plus, get 10K bonus points after $10K annual spend.  With the falling value of ThankYou points, these bonus categories become a bit less exciting.

FlexPerks Cards: Trending Down

I’ve written that US Bank’s FlexPerks Visa is the best backup travel rewards card.  FlexPoints are particularly valuable (up to 2 cents per point) only when you want to buy airfare in particular ranges.  Now that Ultimate Rewards are easily used for 1.5 cents per point (give or take) for all travel, and Membership Rewards points can be worth up to 2 cents per point towards airfare, there are better and easier ways to get good value from points.  That said, US Bank is the only issuer that offers great category bonuses for charitable contributions (3X with the FlexPerks Visa, or select Charity for 5% cash back with the Cash+ card).  Plus, the FlexPerks Visa is still an inexpensive option for in-flight wifi passes.

Important Note (Really!)

The trends listed above are not intended to be recommendations of which credit cards you should get or not get.  A card can be trending upwards but still be a bad choice for many people.  Similarly, a card can be trending down, but still be a great choice.  And, of course, the best cards for you depend upon how you would use the cards and the rewards, and how much you value the perks.

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