I give up: Missing the welcome bonus for the first time (On Nick’s mind)

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I give up; I am part of the way to a welcome bonus that I won’t even try to finish earning. It’s just not worth it.

Amex has absolutely ruined my wallet in a way that is totally changing the game for me at the moment. I have so many bench players just dying to get in the game that the cards I thought were perfect for specific purposes have been relegated to the minor leagues of my sock drawer for the next several months.

I thought that my wife and I had finally put together the perfect wallet: we had 8x at gas stations, 4x grocery and dining, 2.625% cash back on unbonused spend, and co-branded cards with each of the major hotel chains that would be best for spend at their respective brands. Then Amex came in like a wrecking ball with the +4 referral promotion that we have written about and we talked about on the podcast this past weekend. Then, over the weekend, I stayed at a Marriott property and realized that I shouldn’t pay with a Marriott credit card. After checkout, I was standing at the gas pump ready to use the Wyndham Business Earner card for 8x when I realized that even at 8x it wasn’t the best card in my wallet for that purchase. Then, I got to doing the math and I realized that it won’t even be worth finishing the spending requirement for the welcome bonus on the World of Hyatt credit card that we opened a few months ago.

For the next 3 months, my wallet will be almost entirely Amex cards.

The awesome +4 referral promotion

For those unfamiliar, the short of the current Amex referral promotion is this: Most cards that earn Membership Rewards points are currently offering a referral bonus of +4 points per dollar on up to $25K in purchases for 3 months from the date your referral is approved. You must take advantage of this promotion by 12/1/21. See more detail in this post about how it works and on the podcast about why this deal is so awesome.

My displaced cards

This was an old wallet – none of these cards are in there today.

The Bank of America Premium Rewards became the king of my wallet for unbonused spend about a year ago thanks to moving our IRAs to Bank of America to trigger Preferred Rewards Platinum Honors status. That status provides a 75% bonus on earnings on Bank of America’s in-house cards, so we earn 2.625% cash back on the Premium Rewards card, which makes the prospect of earning points instead of cash kind of an expensive value trade.

Still, at times I have used the Capital One Venture card to earn 2x miles per dollar to transfer to partners I love like Turkish Miles & Smiles or Wyndham Rewards despite the expensive trade-off.

However, using either of those cards now seems preposterous for the next 3 months.

That’s because my wife has triggered the +4 offer on her Blue Business Plus card. That means she’ll earn 6 points per dollar over the next few months because the Blue Business Plus card offers 2x on the first $50K in purchases per year (then 1x) and she’ll get 4 points per dollar on top of that on up to $25K in purchases from the referral promotion. At a base level, those 6 points per dollar could be cashed out for 6.6c with her Schwab Platinum card. In other words, her Blue Business Plus offers a return of 6.6% on all purchases while she has capacity for 2x and 4x. That’s nuts.

At that rate of return, it beats the best you’d ordinarily do with most credit cards in most situations.

For instance, I stayed at a Ritz-Carlton property over the weekend. I thought for a moment to myself about using one of our many Marriott credit cards for incidentals. However, the Marriott cards offer 6x Marriott points at Marriott properties. With the Blue Business Plus, we can earn 6x everywhere right now. Membership Rewards points can transfer 1:1 to Marriott or to an array of (more valuable) airline programs. Using the Blue Business Plus and earning 6 Membership Rewards points per dollar is far superior to using a Marriott credit card (and indeed that’s what we did since we needed to provide a credit card at check-in and the incidentals weren’t significant enough for me to want to dig through my bag for one of my Marriott gift cards).

The same situation is true with IHG, Radisson, and Choice Privileges: earning 6x Membership Rewards points easily beats what those cards offer even on-brand. That really isn’t as much a slam on those credit cards as much as it is a testament to the strength of the +4 offer. It would be tough to beat six Membership Rewards points per dollar spent in a normal world.

Yet 6x Membership Rewards points isn’t even the best option in my wallet right now for “everywhere else” spend and won’t be for a while.

My best “everywhere else” cards right now

I was standing at the gas pump the other day ready to pop in our Wyndham Earner Business card when it dawned on me that not even 8x Wyndham points was enough return to beat out my best current Amex card(s).

That’s because my wife added me as an additional Gold card user on her Platinum account recently. She had an offer to earn 20,000 points by adding an additional cardholder who spends $2,000 in the first 3 months.

Most Amex Platinum cards charge $175 for up to 3 additional Platinum cardholders who each get benefits like Centurion lounge access, Delta SkyClub when flying Delta, and access to stuff like Fine Hotels & Resorts. However, you don’t need to add an additional Platinum cardholder; you can add a Gold authorized user for free. Note that the Gold-colored additional cardholder card on a Platinum card is not to be confused with the Amex Gold card. An “additional Gold card” on a Platinum account does not have any of the Amex Gold card’s bonus categories or benefits. Instead, it has the same bonus categories as the Platinum card, it’s just Gold in color to make it clear that it doesn’t have any of those extra Platinum card benefits like lounge access.

My wife had added me as a Gold additional cardholder on her Platinum account, so if I spend exactly $2K on that card, the effective return will be 10x when she receives her bonus (and I haven’t yet completed that spend, so we’re in that “10x” period). Earning 10x flexible Membership Rewards points is better than 8x Wyndham points. But it gets better.

My wife also referred someone from her Platinum card to trigger the +4 referral bonus on her Platinum card. That means she is earning 4 extra points per dollar for the next 3 months on up to $25K in purchases. The bonus also applies to purchases made by an additional cardholder.

That means that all of my purchases on that additional gold card are currently earning an effective 14x until I reach the $2K bonus threshold (at which point I’ll stop using the card for now since I have so many players on the bench itching to get in the game).

When that runs out, I still won’t need to settle for just 6x Membership Rewards points for quite a while.

Welcome bonus spend is (almost) always well-bonused

Any time I point out a good “everywhere else” type of card, a few readers always chime in to make the (good) point that if you’re willing to open a new credit card, you never need to settle for just 2 or 3 percent back.

That’s because welcome bonuses almost always represent a return of something more like 8-10% back or more. Depending on individual spending needs, I bet that most people could open 3 or 4 new credit cards per year and if they space out the applications, they could probably always earn a return in at least that 8-10% range. With more than 150 cards on our Best Offers page, you could play long ball and maintain that rate of return for decades if the game stayed the same.

It just so happens that we’ve recently opened a number of new cards in my household that offer the opportunity to get great return. Since this is spend we’ll have to do in order to earn large welcome bonuses, we’ll obviously prioritize this spend. At least, we’ll prioritize most of it.

The most significant minimum spending requirement of those opportunities is the Capital One Venture X card. This card currently offers 100K Capital One miles after spending $10K in the first 6 months. Combined with the 20K miles earned from $10K in unbonused purchases, we’ll have at least 120K miles after meeting the minimum spend. That’s a total return of 12x. While not quite as good as the return I’m earning right now on my Gold authorized user card, that is still entirely respectable and will be a great deal when we get to it. At a base level, that 12x is like getting at least 12% back since the Capital One miles could be used to erase travel at a rate of $0.01 per point.

That said, we probably won’t get to spending serious money on the Venture X until late February. That’s because the +4 offer that we have triggered on a number of our cards is only available for 3 months from the date the person you refer is approved. Since we’ll have incredible opportunities on Amex cards for the next 3 months, I’ll probably leave the Capital One spend until the latter half of the 6-month spending window.

And I’ll probably bow out of finishing the spend for the World of Hyatt card welcome bonus altogether – even forgoing the Category 1-4 free night award that I could earn with enough spend. It just isn’t worth it right now. back to that in a minute.

Amex Business Green was my luckiest mistake lately

I wrote a section in a post last week about how I opened the Amex Business Green Rewards card recently solely for the purpose of triggering my wife’s +4 offer on her Gold card without picking up an annual fee this year (the Business Green has no fee the first year, then it’s $95).

Within a few days of approval, I was targeted for an offer to add up to 5 employee cards and get 20K bonus points after $4K spend on each within 3 months. That’s like a return of 5x bonus points on top of the 1x that the earn ordinarily earns for an effective 6x everywhere on exactly $4K spend on each employee card. Before the +4 referral promotion ends on 12/1, I intend to refer someone from my Business Green Rewards.

That will add an additional 4 points per dollar on all spend on my Business Green Rewards card for the next few months, including for the additional cardholders. In other words, those cards will be earning an effective 10x on all spend if they each get exactly $4K in spend. Actually, since I haven’t even started spending toward the welcome bonus yet (which is 25K points after $3K in purchases in the first 3 months), the first $3K in spend will juice things up a bit further yet. Once we complete $4K spend on the first of those additional cardholders, we’ll earn:

  • The 25K welcome bonus
  • 20K bonus points from the additional cardholder bonus
  • 4K points at the standard 1x
  • 16K points from the +4 promotion

That’s a total of 65K Membership Rewards points after $4K on one of those additional cards. That’s good for a return of 16.25x. On the Business Green Rewards card.

Each additional card thereafter on which we meet the $4K spending requirement will earn a total of 40K points (20K bonus points from the additional cardholder bonus, 16K points from the +4 promotion, and 4K base points at 1x on $4K in purchases), an effective return of 10x provided that we meet the $4K spending requirement exactly (falling short would mean missing the 20K bonus and spending beyond $4K would mean reducing the rate of return per dollar spent).

All this adds up to the Hyatt card not making sense

I also noted in my post last week that my wife opened the World of Hyatt credit card a few months ago. The current welcome bonus on the card is awful, but she was about to go over 5/24 and wanted to grab it while she could.

I say that the current welcome bonus is awful because it offers 30K points after $3K in purchases plus 2x everywhere for the first $15K in purchases. After meeting $15K spend, we’d have 60K World of Hyatt points. The card also offers a Category 1-4 free night certificate with $15K in purchases in a calendar year. While the welcome bonus isn’t great, surely it made sense to spend toward the free night certificate anyway, so we’d make out OK.

Except now we won’t meet the spend.

Unfortunately, we didn’t prioritize meeting the spending requirement early on this card and we are now facing about $10K spend left to do. There was some laziness here: I had figured that we’d make a tax payment or two through Plastiq (I have a lot of fee-free dollars) with this card to knock out the spend without much effort. But now, I am questioning whether it’s worthwhile at all. My instinct is that it isn’t thanks to all of this incredible bonused spend from Amex.

The $10K in purchases we have yet to do on the World of Hyatt card would yield us 20,000 World of Hyatt points (because we are in the welcome bonus period) and a Category 1-4 free night certificate. If we put that $10K in purchases on my wife’s Blue Business Plus card, we have a minimum return of 6.6% (the rate at which we could redeem the points for cash via Schwab). That means the opportunity cost of spending on the Hyatt card is at least $660.

Is 20K points and a Category 1-4 free night certificate worth more than $660?

Before you start thinking of your best Category 1-4 free night certificate redemptions, let me stop and remind that the maximum value of the certificate is 15K points (the cost of a Category 4 night). Even that would be an overly generous valuation since points don’t expire but the certificate does. But let’s be generous and say that it is worth 15K points: is it worth giving up $660 on the Blue Business Plus for 35K World of Hyatt points (the 20K from spend + 15K from the certificate)?

I obviously know that 35K Hyatt points can be redeemed for a room (or rooms) costing more than $660, but would I actually pay $660 for 35K points? That’s a cost of almost 2 cents per point.

And that’s comparing against the Blue Business Plus, which I’ve already noted is a bench player in the current environment.

Between the Amex Platinum I opened through the Resy offer (which I plan to use to buy a car at 19x on $25K spend) and the other offers mentioned in this post so far, I have the following capacity to earn better than 6x Membership Rewards points everywhere:

  • Almost $2K at 14x (Additional Gold card on my wife’s Platinum card)
  • $4K at 16.25x (Business Green with welcome bonus, employee card bonus, and referral bonus stacked)
  • $16K at 10x (Business Green other employee cards with the employee card bonus and referral bonus stacked)
  • $20K at 10x (My wife’s Business Platinum card also has the offer to add up to 5 employee cards and earn 20K after $4K in purchases on each which stacks with the +4 referral offer)
  • $10K at 12x with the Capital One Venture X (welcome bonus spend)
  • $25K at 8x at US Supermarkets on the Gold card (which ordinarily earns 4 points per dollar on up to $25K at US Supermarkets per year, then 1x, but added with the referral promotion is yielding 8x for us right now)

When you add 19x at restaurants and small businesses on my Platinum card on up to $25K in purchases over the next 3 months (see more detail in this post), I’m looking at more than $75K worth of spending capacity at 10x Membership Rewards points (or a minimum of 11% cash back via Schwab) over the next few months and another $25K at 8x at US Supermarkets.

I almost surely won’t do all of that spend. I’m not sure which I’ll complete, but I know which one I won’t: it feels impossible to justify $10K spend on the World of Hyatt card for a best-case value of 35K Hyatt points. At a minimum of 11% back on most the cards above, my opportunity cost for spending on the Hyatt card right now is really $1100 for $10K spend. There’s just no way I’d pay eleven hundred bucks for 35K World of Hyatt points.

And so it just isn’t worth it. For the first time ever, I am going to miss the spending requirement for a welcome bonus and it isn’t going to be an accident. It’s just not worth spending for it in my current world.

Bottom line

The incredible Amex +4 promotion has made it hard for me to justify spend on other cards in my wallet, including the spend required to earn the full welcome bonus on the World of Hyatt credit card. Even with the chance to earn a free night certificate, it just doesn’t make sense to use the Hyatt card in situations where I can use an Amex right now — and even in situations where I can’t use an Amex I’ve got far better return available on the Venture X card. I just can’t see displacing any spend at the moment for a return worth less than 8x Membership Rewards points for the next several months. Maybe we’ll spend our way to a Hyatt free night certificate next year, but if Amex keeps showering us with points, it might continue to be hard to justify.

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Zeezo

All right, got my bro-in-law to sign up for an AMEX using player two’s AMEX Platinum referral (I can’t get AMEX Plat because I’m being pop-up boxed during app). 
When do purchases become eligible for +4 points? Immediately after his approval (aka right now) or do I need to wait to get an email from AMEX or something? Have some large transactions (e.g. property tax) that I don’t want to pull the trigger on until I know the bonus is working.
(Also, loved this article Nick. It seems sacrilegious not to complete any sign up bonus but your logic tracks completely)

Parts Unknown

Amex sends an email a day or two after the approval to the referrer that you’re now earning +4

Duc Nguyen

I actually called amex and ask this exact question. The rep told me the +4 applies after the person that got the referral gets their first statement on the card they applied for. Meaning it takes about a month and a half.

Duc Nguyen

I’m so glad I commented on this random comment and you replied. You are ompletely right. I just looked through my email and found the email from amex about the +4 being added to my business platinum after my friend got approved from my link. It was dated the day after I sent out and after he got approved for his card.

Im in the middle of an expansion at work and was planning to use a 3x card for a big purchase instead of my plat since the rep told me the +4 wasn’t active on my platinum yet. Thank you for saving me from loosing 20k MR points.

I actually got a request to rate the service I got from “Debora” so maybe I should let them know they are giving wrong formation.

Parts Unknown

When spend capability approaches infinite none of these things are mutually exclusive. I sort of hope this article is written for an audience you’re not a member of. I spent $6k today before lunch without buying supplements or really even knowing what I’m doing. Anyway.

ucipass

How on earth can you spend THAT much? I am sure there are som deals out there that I am not aware of. It kind of sucks that back in the days all these deals were blogged about in the open. For you average reader like me. Having 4x with a few thousand dollars of spend will mean almost nothing. An extra 2-3% over the standard cashback card? I mean you have to scale out and without manufactured spend that avenue is very limited. (unless you have a wedding coming up smh)

LarryInNYC

Nick wrote about his he’s going to knock out $25k of spend by buying a car. I know people who could easily make all the spend that Nick has lined up on food and beverage alone. And others who could make it on reimbursable business travel. For me, some heading system repair and home heating fuel will cover about $10k; auto maintenance maybe $2k; dentistry and medical for a family of four a few k. And, as a schedule C earner I always have the option of pissing tax with a 2% fee — 100% worth it if I’m earning 19 MR points per dollar (although I’ve never yet had to resort to paying fees).

dizzy

LOL not even a wedding or car. We just spent $5k total on ours. The car I bought in 2020 cost under $4k (*did* use my biz plat tho!)

I live in an area where MS isn’t the best and I got burned by KF, there are still some opportunities in buying groups and bank bonuses, tho not like the good ol days. So it is prudent to be intentional about signup bonuses. Wish there were more blogs still like TIF…it’s hard for me to relate to posts that are v casual about spending the big buxx

Sometimes an offer comes up that you didn’t anticipate. I’m in a similar boat with the Hyatt personal card, was gonna try for globalist especially once the biz version was introduced, but now just focused on the initial bonus since the Venture X and new Chase biz came up (got the FNBO biz in there too for quick $$). You know what tho? In the end you are still profiting. I’ve had incredible travel experiences and now saving money, that 100% wouldn’t have been possible without churning. It’s still a win, don’t beat yourself up too badly.

rich

Depending on your spending a lot of cards make no sense beyond sign up/retention bonuses. I thought Blue Cash Preferred wasn’t bad but with my limited spending on groceries and gas, it isn’t worth $95 so that will go next.

I already got rid of the Hyatt, Marriott cards, Green card, a business card and some others over the last 2 years.

Due to a lack of travel, and never a big traveller, I have probably 1.5-2M points between Chase, Amex, BA and AA. That is plenty for me with an occasional big bonus.