A strategic Business Platinum card upgrade, without a bonus

As the old saying goes, I need another ultra-premium credit card like I need a hole in the head. Having recently taken stock of our household ultra-premium credit cards and the cumulative weightiness of their annual fees, I have been working on trimming the fat. However, I recently realized that in doing so I made a mistake of sorts, and the only way to fix it was with another ultra-premium credit card.

Thinning our wallets (of ultra-premium cards)

As annual fees have continued to climb, our wallets have begun to feel figuratively heavy. While we can individually justify holding several ultra-premium credit cards, and my job as a blogger sometimes justifies having a card in order to be able to write about it even if the math doesn’t quite pencil out, there is no doubt that our wallet has ballooned beyond reason. As such, I have been working on downgrading or cancelling numerous cards this year.

Our wallets are still far from thin. We still have a number of Platinum cards between us as well as Ritz cards, the Chase Sapphire Reserve card, Capital One Venture X card, US Bank Altitude Reserve Card, Amex Bonvoy Brilliant card, Amex Hilton Aspire card — the list can go on. However, as annual fees have hit, we have been pretty good about deciding to downgrade or cancel over the past many months.

I should add that there have been times where I have forgotten to cancel in time. With Amex, you have 30 days from the date the annual fee is charged to cancel and avoid the fee (either getting it refunded if it has been paid or waived if you cancel before it is due). However, if you miss that 30-day window (which I have done), then downgrading is a better path than cancelling: if you downgrade, you will receive a pro-rated refund of the annual fee for the months you have not yet used on the old card and be charged a pro-rated annual fee for the new card to which you downgrade.

For instance, if you have a Business Platinum card and you realize on day 31 that you forgot to cancel within the 30-day window, you probably do not want to cancel the card. If you cancel after then 30 days have passed, your $695 would be a total loss. Instead, if you downgraded to a Business Green card, you would receive a refund for 11 months of Business Platinum annual fee (11/12 of $695 is $637.08) and be charged 11/12 of the annual fee of the Business Green card (11/12 of $95 is $87.08). In other words, instead of losing $695, you would get back a net $550 (a refund of $637 minus a charge of $87.08), “losing” only $145. I have done this a couple of times in situations where I wanted to salvage some of the fee I’ve paid or where I’ve held the card a bit longer because I knew I had an upcoming use of a particular benefit but didn’t need the card long-term.

The short story is that I had downgraded or cancelled several cards over the past few months that I didn’t think we needed.

My JetBlue’s 25 for 25 plan hits a wall

I’ve written about my plans to go after JetBlue’s 25 for 25 promotion, aiming to get my whole family to 25 JetBlue destinations for 1.4 million collective JetBlue points and 25 years of Mosaic 1 status. Originally, I didn’t think we’d do it, but then we decided to go for it.

In the post where I laid out a rough plan, I determined that it would cost us a net ~582,000 Amex Membership Rewards points to generate 1.4 million JetBlue points (20 destinations). Then, pre-existing trips would help us hit the remaining 5 destinations for 25 years of status.

I was basing that net Membership Rewards cost on the points necessary if we used Amex Membership Rewards points to book our JetBlue flights through Amex Travel with JetBlue as our selected airline on a Business Platinum card in order to take advantage of that card’s 35% pay-with-points rebate. As a reminder, the Business Platinum card from American Express offers both an annual airline incidental credit and a 35% rebate when paying with points for flights on that specific airline (up to 1 million points back per year). That rebate essentially makes it possible to get a bit over 1.5c per Amex point toward flights with your chosen airline. That’s a better deal than transferring points to JetBlue both in the sense that we’ll get better value and in the sense that we will earn points and tiles with JetBlue since they are paid flights. Furthermore, Amex points are relatively easy to replace given excellent welcome bonuses, referral bonuses, spending category bonuses, and temporary spend bonuses. We are likely to replace the 582K points over the next year (and then some).

I noted that we probably wouldn’t book all of our flights with that feature, in part because we have a number of credit cards with card-linked offers for $50 back on $200 or more at JetBlue and in part because we would probably be willing to invest some amount of cash, we have a few pre-existing JetBlue points, and we will earn JetBlue points along the way. We may yet open a couple of JetBlue business cards and use those points, too.

However, I intended for the bulk of our flights to be booked using my wife’s Membership Rewards points. I moved most of my own Membership Rewards points to Hawaiian and on to Alaska before Amex cut its link with Hawaiian Airlines (I did leave myself more than 100K since I needed to have points for our 100K Vacay challenge). I could have transferred the bulk from my wife’s Amex account to her Hawaiian account and then combined Hawaiian miles, but I just didn’t do it that way. It didn’t feel like it mattered. Until it did…..

Whoops: We closed all of my wife’s Business Platinum cards

I had not chosen JetBlue as our airline of choice on any of our Platinum cards at the beginning of this year since we didn’t anticipate flying to 25 destinations on JetBlue before this promotion. I did not anticipate this being a problem; in the past, chat agents have always been able to change our selected airline upon request. While that isn’t guaranteed to work (officially, you are only allowed to change your airline of choice once per year in January), I’ve never had difficulty getting it changed, even when I have already used some of the airline fee credit with my originally-chosen airline.

I have learned from experience that it is important to choose your airline at least a day before you intend to use benefits like the airline incidental fee rebate or the pay with points rebate. I once changed to an airline and made a qualifying charge later that same day and it was never credited, but charges made the calendar day after switching have always worked for me.

We therefore got online the other day to see about making the JetBlue selection on a Business Platinum card in my wife’s account….only to realize that my wife no longer had a Business Platinum card!

At one point last year, both my wife and I had several Business Platinum cards open, so it didn’t even dawn on me that I had closed or downgraded all of her Business Platinum cards over the past year. I still have a few Business Platinum cards in my name, but having transferred most of my points to Hawaiian, that won’t help us here. My wife has the points that we need to use for this challenge — and since we are planning to travel in August, we need to start booking soon. This was a problem in need of a quick solution.

Considering upgrade options

As fate would have it, the $95 annual fee on my wife’s Business Green card recently posted. That card was likely the result of a Business Platinum downgrade in the past. I was planning to cancel that card, but then it dawned on me that we could instead upgrade it to a Business Platinum card since we needed that card right now.

However, I quickly realized that didn’t make much sense. Since we were right at renewal, it would essentially cost us $695 to upgrade her Business Green card (we wouldn’t have kept that card for $95, so the choice was to cancel at a $0 cost or upgrade at a $695 cost). Sure, we’d get all of the Business Platinum card’s coupon benefits, but we already have enough coupons (and annual fees). If we wanted to pay a full $695, it would make far more sense for my wife to first apply for a new Business Platinum card so that we could potentially get a new card welcome bonus offer in exchange for the $695 annual fee. My wife may not qualify for a bonus since she has had the Business Platinum card before, but both of us have indeed been able to qualify for the bonus on that card more than once, so it is possible she could have qualified.

However, as noted above, I really am making an effort to focus on cutting back annual fees. As much as it would make sense to open a new Business Platinum card, I didn’t want to add another $695 fee to the pile (or the mental energy to work on the $20K introductory spending requirement while also planning and executing this JetBlue 25 for 25 trip and also planning my 100K Vacay trip — there’s enough on my plate right now). Then, a better plan dawned on me.

A strategic Business Gold upgrade

My wife also had two Business Gold cards open, one which had been open for a few years and one that she additionally opened last year. I quickly realized that her older Business Gold card has a renewal date (or at least annual fee charge date) in October.

Amex card upgrades work similarly to downgrades. She is 9 months into her annual cycle on her Business Gold card. If she upgraded to a Business Platinum card now, she would receive a refund of 3/12 of the Business Gold card’s annual fee (3/12 of $375 = $93.75) and be charged 3/12 of the Platinum card’s annual fee (3/12 of $695 = $173.75). That’s a net cost of $455 for the year, but since we had already kind of viewed the Business Gold card’s annual fee as a sunk cost, the immediate additional cost feels pretty minimal. She’d get a statement credit of $93.75 and be charged $173.75, so it would cost us a net $80 out of pocket today to get access to the Business Platinum card’s 35% rebate so we could use it for JetBlue.

The nice thing is that she also gets immediate access to the Business Platinum card’s coupons as well, many of which are annual or quarterly. I’m sure that we’ll find the ability to use the $200 Amex airline fee credit with JetBlue and I expect that the $50 quarterly Hilton credit will come in handy during the August trip. Hopefully, we’ll also find a use for that credit in early October before the full $695 annual fee posts for the new year so that we get $100 out of that benefit. She’ll also get a $150 Dell credit. While we don’t necessarily need anything from Dell, they have a couple of Nintendo games that we don’t yet have and/or could resell locally (and I also have my eye on a touch screen monitor that I could buy if I split tender with my own Business Platinum cards). We’ll certainly also use the $10 monthly wireless credit pre-paying our T-Mobile bill, so that should be $40 total before a renewal decision. We should therefore receive $490 in credits before the fee posts in October ($200 airline, $100 Hilton (two quarters), $150 Dell, and $40 Wireless (July, August, September, October) provided that my wife remembers to enroll in all of these credits. Enrollment is required for these various coupon credit benefits.

At this point, I don’t think that we’ll still need the card in October, but I’ll leave that decision for October.

Before making the upgrade, my wife did click around in her Amex account to check for any offers to upgrade to the Business Platinum card. Sometimes people report points offers to upgrade (for example, I currently have an offer in my account to upgrade either a Green or Gold consumer card to a consumer Platinum card and earn 50,000 points after $2,000 in purchases in the first couple of months). She didn’t have any such offer. She also asked via chat whether there were any upgrade offers and was directed to click around in her account to check for offers. Nonetheless, she still upgraded via chat without a bonus offer. That process was quick and she almost immediately received an email confirming the upgrade.

Notably, she upgraded yesterday and the card did not change from Business Gold to Business Platinum in her online account until the overnight hours despite having made the change relatively early in the day. That meant that today is the first day she could select JetBlue as her chosen airline, so we’ll probably have to hold off on booking anything (to take advantage of the points rebate) until tomorrow.

Bottom line

My wife had closed or cancelled all of her Business Platinum cards in order to cut back on our cumulative total of annual fees. However, we realized that we needed a Business Platinum card for its pay-with-points rebate to complete the JetBlue 25 for 25 challenge. Ultimately, we upgraded one of her Business Gold card’s to a Business Platinum card because it will only cost us 1/4 of the Business Platinum card’s annual fee (minus a 1/4 prorated refund of the Business Gold card’s annual fee) but will get us at least $490 in credits before the full fee is due plus access to the pay with points rebate that we need right now. We still need to work on eliminating more of our ultra-premium credit cards, but in this case we had to add one to make our points more valuable for a specific near-term use.

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