The Quartet of Amex Cards=Powerful Combo for an Average Family, and More!

In this hobby, there are two camps: Those who mostly obtain miles and points through flying and hotel stays (purists), and those who get them from credit card bonuses (gamers). The first camp despises the other. After all, they are a special (dying) breed, putting in all that work and time to collect their precious stash. They look down on those who obtain miles and points the “easy” way. It just isn’t fair. Guess what? They are right.

It isn’t fair that you can just sign up for a card, put $3,000 on it, and get 50,000 miles just like that. It would take a person 6 roundtrip flights to Europe (in an eligible fare) to collect the same amount.  Why do Americans get these amazing opportunities while the rest of the world doesn’t?  The thing is, life isn’t fair. I don’t make the rules, but I do try to play by them.

Don’t be an airhead

Let’s also take the argument that it’s wrong for miles and points bloggers to promote credit cards. I find it laughable. Of course, there is the obvious conflict of interest aka BIG elephant in the room. And yes, the sheer amount/frequency of advertising (some use another term for it) can be overwhelming at times.

Image courtesy of num_skyman at FreeDigitalPhotos.net

You guessed it, it’s  “Asian theme” week here at Miles for Family.

Anyway, to say that credit cards are irrelevant/evil when it comes to affordable travel is plain absurd. If someone can point out a  way where a husband and a wife can earn 100,000 miles combined, that happens to be easier than opening 2 credit cards, I am all ears. Seriously, let me know. Well, as long as it doesn’t involve any illegal activity.

One of the reasons I started this blog was to help my cousin-in-law. She was genuinely interested in miles and points hobby, and there was no site I could point her to. Don’t get me wrong, there were many good blogs, but none were conveying my “special brand of crazy” message. Well, two years later, she and her husband  went to Kauai by getting award flights on American and stayed in a nice Hyatt using hotel certificates. All that was required: 4 credit cards and some self-discipline. Imagine what it would take to save up for a trip like that.

An important disclaimer

Obviously, you have to be realistic. I’ve mentioned last week that all 4 of us will be flying roundtrip in first-class from Tampa to Seattle. The miles were accumulated from sign-up bonuses and I actually bought 50K miles at penny each. I had close to 500K in AAdvantage program and decided to splurge. What I didn’t say: this will be almost impossible to replicate for someone just starting out in the hobby. You see, most of this stash was accumulated due to US Airways Barclaycard (no longer available). You got 40,000 (or more) miles after spending $1, and the bank seemed happy to give out the bonus a few times per year.

Now, your best source of AAdvantage miles is Citi AA co-branded card, and you can only qualify for the bonus 18 months after closing your previous card. Realistically, a typical couple can only get 100,000 AA miles every two years under the best of circumstances. So, yes, you can still fly 4 in first-class domestically using that stash, but only one-way… maybe.  First rule of miles and points hobby: There are no guarantees.

No churn, no problem

Of course, switching credit cards isn’t for everyone. In fact, this was another reason I started this site. A common thread running through blogs was/is this: Everyone should renew CSP and Amex SPG. So I challenged it. I admit, my argument mostly fell upon deaf ears, but some have listened. Contrary to popular belief, I never said those cards are bad. I only encouraged everyone to do their own math when it comes to  annual fees.

Finding best long-term cards for regular family has been the main goal of this blog. Majority of population just wants to keep things simple and maximize their everyday spending. This is the reason for most email requests in my Consulting Service. There is absolutely nothing wrong with it! If switching credit cards is making you uncomfortable, don’t do it.

But what if you and your spouse are willing to do a little bit of work, and have easy access  to purchasing Visa gift cards at a grocery store via credit card? You should consider getting an Amex quartet. Let me explain. In my post last month, I’ve mentioned that if my spending didn’t go towards meeting minimum spend, I would probably get Amex Everyday Preferred and Amex Blue Cash Preferred. Those two cards are the ones I mostly recommend to friends and family. Why? The grocery store bonus. You can read more on both here

But say, both you and your spouse got each of these cards. Majority of my posts assume monthly family spending of $2,000 to $2,500. You would get the best bang for your buck when purchasing one $500 Visa gift card with each Amex. That’s because the extra bonus only applies on up to maximum of $6,000 per year/ per account. Of course, if you need to get groceries anyway, you can just use the credit card. But even if you shop at Walmart, this is probably the most lucrative/easy strategy  for most busy families. You can just stop once a week by your grocery store, get a  few things you need anyway, and pick up a gift card. Then use it for your regular bills.

I got an email the other day asking me if one would have a problem paying power bill, insurance etc. with gift cards. I have not had any issues. If Visa/Mastercard logo is present, the merchant should accept gift cards as well. Obviously, you would be better off using credit card for things that might have issues down the road, like expensive electronics and appliances.

Here is how your awards would stack up:

1. Grocery spending alone will yield 27,000 Membership Rewards on each Amex Everyday Preferred. The total would be 54,000 Membership Rewards. You can add your spouse as an authorized user, and they will be allowed to transfer points to their own mileage account.

I wrote about some possible uses of MR program when it comes to family travel. This amount will take care of 4 one-way (at times, roundtrip) tickets in most loyalty schemes. If there is a transfer bonus, you will do even better. So, after 2 years, you should have enough miles to fly your family of 4 roundtrip in economy domestically, excluding Hawaii.

2. Grocery spending bonus will yield $360 on each Blue Cash Preferred. The total on both would be $720.

So, if you maximize grocery store bonus, you will have $720 AND 54,000 Membership Rewards points (which I speculatively value at $675). Of course, there are fees:

1. You will pay $95 annual fee on each Amex Everyday Preferred and $75 on Blue Cash Preferred. Grand total of $340. But if you are familiar with Amex, you know you can make up for those fees via various promos. Yes, it will take some work, but it’s not unreasonable to assume that.

2. You will pay around $240 in fees if you buy gift cards and spend very little at a  grocery store.

Even if you assume that you will get zero value out of Amex offers, there is a compelling argument to stick with this combo. Say you pay $580 in fees. You would still have 54,000 MR points, and $140, all via spending of $24,000 per year. That’s a terrific return, all things considered. By comparison, if you used Citi Double Cash, you would have $480. Plus, remember, we are assuming that you will get zero out of Amex offers. Of course, some of your bills will be paid with credit card, but this breakdown should give you a general idea on possible return following this scenario.

Don’t ignore hotel cards

But what about “free” hotels? While I wouldn’t use them for everyday spending, there are a few hotel cards that can be worth renewing. Among them are Chase IHG MasterCard and US Bank Club Carlson card. The second one is no longer a no-brainer due to loss of BOGO benefit, but I still consider it a keeper.

You may also look into Chase Hyatt credit card. If you have a nice Hyatt property in mind, now might be a good time to consider this offer since the sign-up bonus is improved. A nice perk is that every year, it comes with a category 1-4 certificate after paying an annual fee of $75. That’s extremely reasonable, and can get you 1 night at hotels like Hyatt Place Daytona Beach and Hyatt Regency Coconut Point resort  in Bonita Springs, Fl. Those  properties are very expensive in the spring and during holidays. If both spouses get this card, it could provide a reasonably priced 2-night resort getaway for an entire family. Yes, you can combine it with a trip to Disney, sigh…

I don’t know how Wyndham program will evolve (and it will), but their co-branded card is also a keeper for now. For $69 annual fee, you get 15,000 points, good for 1 night at any Wyndham property. That is if you can find availability.

Just say No to “free” travel

That’s the thing with this hobby. The word “free” is overused to the point that it doesn’t make any sense. When you pay $49 renewal fee on Chase IHG card, you pay $49 for your night at that beachfront Holiday Inn. Sure, it’s a heck of a deal, but free? Nope. Transferred 20,000 Ultimate Rewards for Hyatt redemption? You just paid at least $200. Yes, you did.

And folks, let’s not forget the time this hobby sucks out of your day! I could have probably earned a college degree online with the hours I’ve spent on this obsession. Of course, I really do dig it.

I admit, I have used “almost free” term on  quite a few occasions, too many, really. No more. Looking at our bills from Europe trip, I’m reminded just how not free travel actually is. Yes, miles and points hobby is extremely lucrative and when done right, can open terrific opportunities. But please, don’t fall for the “free” baloney.