MilesBuzz! - Huge Mile/Point earning ability...where to focus!

I am in the lucky position that I have the ability to charge a ton on credit cards each month (~$400,000 per month and growing). Ignoring the obvious credit challenges that I continue to slog through, where should I focus my point earning ability?

Currently I am using Starwood Amex for most of it, though I just signed up for an Amex Plum card and might switch to that. Basically, if you were in my spot what would you do?

Horde Starwood points?
Horde Amex Points?
Take the cash back from Plum?
Get AA gold/platinum status?

I tend to use points for hotels and both domestic and international air travel.

.. where should I focus my point earning ability?...
I tend to use points for hotels and both domestic and international air travel.
In order to get really good advice from our FT "experts", you have to be a lot more specific. Your current profile doesn't help either. ;)

Folks need to know what your MAIN goals are for the miles/points (upgrades..etc), your home base, your travel patterns, your destinations, and your personal preferences. Also, do you have elite status on any of the airlines/hotel chains? All these are factors to consider before sound advices can be given.

Are your charges mostly on personal or business cards? One thing you should have been aware is the caps of earned miles/points on the say creditcards. I would think you probably should spread your monthly $400K charges to more than one card so you can make the best out of your spending patterns. For credit card related issues, you can visit our Credit Card Programs/Partners Forums (flyertalk.com/forum/forumdisplay.php?f=390).

The Stickies on top of each forum (Hotels, Airline Programs, Credit cards) are usually a good starting point. You can find some useful info from there also.

Welcome to FT!

Wirelessly posted (BlackBerry8310/4.2.2 Profile/MIDP-2.0 Configuration/CLDC-1.1 VendorID/102)

Considering how short it would take you, I'd go for AA 2 mm status through an SPG transfer. Should only take you four months and who knows when it might come of great use further down the line. You could then turn those into HHonors points if you have no use for AA miles, but AA miles are notoriously easier to use than many other carriers.

I would look into getting status on AA through a challenge or regular flying. The mileage caps on the credit cards are lifted for elites. Thus, you could earn all 400k on a Citi AAdvantage card. However, the Starwoods card gets better than $1/1 mile, so I'd look into that as well.

Are the AA credit card mileage caps lifted for Gold, or do you have to be Platinum?

Gold will do it.

That might sound somewhat weird, but I feel almost sorry for you. Can you still feel joy when finding a "1000 bonus point" promotion? Are you still excited about having a "free" first class flight to some cool destination using miles? Maybe I am just rationalizing being a lowly FTer :).

But to answer your question: if you really want to use CC's, I would go for SPG amex given that SPG points are probably the most flexible currency. If the money you spend is yours (or you have a stake in the company) I would negotiate with the supplier(s) to get a discount if you do not pay by credit card. That should probably be more than anything you can get via cards. And it seems unlikely that you'll use all the points anyway (unless you engage in forbidden trading etc.)

lin821: Thanks for the tip, I had looked at some before but I revisited them and found some more information. Per your comment, let me provide more information below, thanks!

It's my company so I have no issues taking the points, but at the same time the cost of getting a discount also comes out of my pocket so to speak. I am currently putting the vast majority of the spending on Starwood Amex based on what I read here a while ago and other advice and I think that still makes sense given the flexibility of the SPG, the ratio of the exchange per dollar and the bonuses (like 25% bonus in Nov!).

However, not everyone I spend with takes Amex so I planned to put the balance on a Citi AA card. I have about 200k flown miles on AA credit toward the 1M mark and at 50k/month or so I could let that tick in the background while I racked up SPG points and hit the 1M mark for gold. (mtparadis: I did not realize you could use SPG points to transfer to AA and have that qualify for status.) But, while AA is easier to redeem and they go a lot of place, I really find the airplanes crappy and their first class service out of Boston is basically only a bigger dirty seat (I know, it's the same with all of them).

If we assume as most people do on FT that Starwood Amex is the best program with Amex, the only other question is should I be using my new Plum card that I got. 2% cash back if you pay within 10 days (which I do since I never have enough credit on the cards I have to prepay a lot). Does 2% cash back exceed the value of the Starwood points? Sometimes yes sometimes no, but for me, psychologically it is different. I know that is stupid but I would never pay $5k for a first class ticket but would not hesitate to use the points...

What will I do with all the points? Travel with the family both domestically and internationally relatively often. As well I plan to use them for high end Starwood hotels that I would never want to pay for. I suppose I could transfer some to Amex and redeem for gift certs, but I figure I will stop earning the points some day and so I might as well stockpile them and then travel for "free" for several years.

I still have the status that comes with centurion but I canceled it so it will all go away save Starwood Gold (and I am going to try and talk them in to making me platinum based on spend). So I won't really have any status.

Thanks for all the help!

dukieee: Well the volume is relatively new, so I still get a thrill! :)

However, not everyone I spend with takes Amex so I planned to put the balance on a Citi AA card. I have about 200k flown miles on AA credit toward the 1M mark and at 50k/month or so I could let that tick in the background while I racked up SPG points and hit the 1M mark for gold. (mtparadis: I did not realize you could use SPG points to transfer to AA and have that qualify for status.) But, while AA is easier to redeem and they go a lot of place, I really find the airplanes crappy and their first class service out of Boston is basically only a bigger dirty seat (I know, it's the same with all of them).

Do you already have status on AA? Otherwise, you need to be very careful of the annual mileage cap until you reach 1 million lifetime miles on AA (when you'll be comped as Gold). The earningcap is 100-150K per year, I think, depending on if it is a personal or business card, so "letting that tick in the background" would only last a couple of months and then you'd stop getting closer to your goal.

I don't think Diner's Club has a point earning limit (you should check!), and that would give you a Mastercard number. You can redeem for miles on a number of airlines, including AA.

As for AA miles, don't forget you have redemption possibilities on OneWorld airlines and a few other airline partners, plus the ability to transfer (1:2) to Hilton HHonors.


P.S. If you ever run out of things to use your miles for, just let me know and I'll gladly help out. ;)

the only other question is should I be using my new Plum card that I got. 2% cash back if you pay within 10 days (which I do since I never have enough credit on the cards I have to prepay a lot). Does 2% cash back exceed the value of the Starwood points? Sometimes yes sometimes no, but for me, psychologically it is different. I know that is stupid but I would never pay $5k for a first class ticket but would not hesitate to use the points...

What will I do with all the points? Travel with the family both domestically and internationally relatively often. As well I plan to use them for high end Starwood hotels that I would never want to pay for.

At 400K/month, that's potentially an $8,000 rebate per month. Cash is always good. You could get a higher or lower redemption value than that, as you've said. If you want to redeem for international business/first class, then the points will get you farther than if you tried to use cash to do the same. Of course, as you said, you probably wouldn't pay cash for an expensive ticket like that.

One route would be to mix it up a bit--some cashback, some points, etc.

However--and this is something for your tax accountant to answer--there may be a disadvantage to getting a cash rebate as opposed to miles/points. If you get a rebate on business purchases, you may need to deduct it from your cost. If you get miles/points, you wouldn't.

...I still have the status that comes with centurion but I canceled it so it will all go away save Starwood Gold...So I won't really have any status.
I assume:
1) you maintain just general member of all FFPs;
2) you don't fly much to get to airline elite status (yet);
3) you've been concentrating on AA miles & SPG points;
4) you earn the miles/points mostly from credit cards.

Correct?

I think you've gotta be well-versed in the fine print and especially any caps, but that almost goes without saying.

If you can burn at roughly the same rate you earn, then a points-based program that converts to tickets that count as paid might be worth considering for at least part of it. In my own case I'll generally get one "full option" ticket on ScoreCard through my credit union (20K points at $1/1 point) per year, which is $325 off (really $300 net after their $25 service fee to book) of any ticket anywhere. This really rewards people who stay current with sales and can pounce unusually cheap fares. The ticket bought counts as a paid ticket, earns miles and is upgrade-eligible. I don't think there's a cap, or maybe I just haven't hit it. But if I had $150K or so in credit card charges (which I don't) I could finance the whole year of elite qualification on that alone, probably favoring domestic trips that were upgrade-eligible. Depending on luck with fares, the trips booked could earn back 66-100% of the number of points spent as miles.

If you're not able to burn-as-you-go, then any place you park miles or points has devaluation risk. The airline FF programs or any of the point-based programs can and probably will change for the worse. If it were money rather than points/miles, people would be saying to buy gold as a hedge, but I'm not sure there's anything analogous. Maybe a cash rewards card, but it's hard to get the same immediate return.

...However, the Starwoods card gets better than $1/1 mile, so I'd look into that as well.
It is, of course, 1 SPG point per $1 charge (and more when spent with Starwood), and those points are worth more than $.01 each.

With that much going onto CCs, I would try to get elite status in as many programs as you can that allow status through non-flying points. AA would be my first goal - lifetime Platinum status for $2M. If you fly Southwest, you can get a Companion Pass through CCs. And I believe one of the DL AMEX cards gives you enough points for Silver Medallion.

The Hilton AMEX gives you HHonors Gold by charging $20,000 per year and a Marriott VISA gives you Silver with one purchase.

There are probably a few others, but I would definitely focus not only on the accumulation of miles and points but program status as well.

Mileage cards are not your best option. What will you be doing with the 5 million miles you earn every year? The best option is the Citi Cash Rewards, with 5% cashback ("for the first three months"). 1.2 million miles vs. $60,000 cashback every three months should not be a difficult decision.

I had never heard of the Plum card until your post. But as a heavy SPG user (for domestic charges) and a heavy CapitalOne user (for international charges), may I suggest:

1) Earn AA 2M Platinum status first; it'll never hurt.
2) Earn as many SPG points as you can reasonably use in the next 2-3 years, but no more. Top off every year or two.
3) Funnel all the rest of your traffic to Plum or any card that returns more cash than Plum. I'd rock between the 2% from Plum and the 5% from the post above.

In my opinion, 2% cash back is nearly always better than ANY point scheme, and is certainly always more liquid.

Do you happen to have the Starwood Preferred Guest Business AMEX?

If so, this month (Nov), all purchases earn 25% bonus Starpoints.

With your spending, that could be half a million Starpoints!!

Starpoints transfer into most airline programs at a 1:1.25 rate. The best way to transfer is in batches of 80,000 Starpoints = 100,000 airline miles at a time. You're limited to a 99,000 transfer per day I think, which would not be a smart transfer, because you would lose out on the last 5,000 mile bonus. So, only transfer 80k at a time.

I would earn as many Starpoints as possible, transferring them into AA and other programs.

What about 2mm lifetime status for each member of your family? It's your business and you could get/use cards in their names and give every family member the gift that will keep on giving for a lifetime. And, if your children are young enough you can still control the access to their miles and use them first, thereby not letting an adult child run wild with 2mm AA miles in their account. (Bye mom and dad, see you in a few years!):D

You could also get them all started with other Airline mileage and hotel point cards, heck with your amount of purchases it would be no trouble having a broad number of programs with massive usable currency for any travel situation.

I would also expand beyond SPG, though that would be one of my first priorities. If you plan on traveling extensively with these points you should by all means get and use to some extent the credit cards of the hotel programs. Mariott Rewards Visa, PC visa, Choice visa and HH Amex to start. HH Amex for instance could be a nice compliment for your business spending if you buy/ship through the Post Office at 5 points per dollar. The same post office spending on an AA visa, then transfered to Hilton would only yield 2 points per dollar, or 2.5 if funneled SPG>AA>Hilton. Even with the dollars you are playing with it's still fun to use the right card for the right job.

Also spend the minimums on those cards, 30k for SPG gold (which you've already got), IIRC 20K on HH Amex for Hilton Gold, the Delta SM card as mentioned before. Get status and spread out points among many programs so you'll always have a place to stay, and hopefully it will be one of the best rooms in the joint!

Other than that I would still recommend:

Fidelity Visa (1.5% back, put into an investment account)
Juniper Bank's USAir MC (get 1.5 miles/$1 for the first year, fee free for 2 yrs.), use those miles for *A
Check the CC section of flyertalk for all the great initial spending offers like the one mentioned before about 5% for the first 3 months.

In my opinion, 2% cash back is nearly always better than ANY point scheme, and is certainly always more liquid.

True, but as an owner, isn't the cash back a taxable event, thereby reducing the cash advantage?

First off, THANK YOU to all the FT responses from everyone. So far this has been extremely helpful for me in thinking about the best way to diversify my spending. Based on comments above I have started to come up with a plan for how to allocate the spending. The main drivers are 1) diversification of points, 2) status and 3) ease of implementation. It is not worth every last point if I have to have accounting manage and reconcile 20 credit cards all with separate close dates each month...so please, feedback on the plan below:

I think my plan should basically be to work toward the 1M or 2M AA lifetime status awards, lock up Delta and Hilton status while warehousing SPG points and getting some cash back.

First: Get a Hilton & Delta card and hit the minimum limits to get status (I actually have Delta and Hilton gold still from being a Centurion card holder, but I canceled it and those will go away in Feb give or take, so I'll need to re-qualify).

Second: Understand the AA program and start the process of hitting at least 1M miles

Third: Investigate the CitiGroup card that offers 5% cash back and use that (that's HUGE) for the 3 month period.

So, on an ongoing basis, I will allocate some points to hotel and airline cards to get status but push the bulk of spending to SPG and cash back (plum and citigroup) while at the same time working toward the AA gold/platinum status through spending/transfers.

Questions:
1. I understand that most programs have mileage/points caps in a given year based on status and other items. I will research this, but off the top of folks' heads, do you know if SPG has a point cap and if points expire?

2. What is AA's point cap if I do not have status? I have done the platinum challenge before on AA but no longer have status-- what would be the best way to allocate $/SPG points to AA to get at least to 1MM with a point cap on earning?

3. Should I also sock away some more run of the mill Amex points? I have a 200k or so already?

4. Should I look at redeeming SPG or other points in another way through Amex gift cards etc?

5. Does Continental have a similar program to AA for gold status?

AA is simple. Just stick the miles in the account. Any mile that hits your account counts toward million miler status.

If you want diversification, use Starwood points. That gives you access to 20 airlines (plus other things) with an easy transfer. Also gives you Starwood Gold with a 30K/year spend.

Delta is tougher. You have to go to the Delta Platinum card, but it will only get you 20,000 MQM for a $50K spend per calendar year (possibly an additional 5000 first year). After that, more Delta miles don't count to either status (MQM) or million miler status. So tough it out or re-up for Centurion.

Citigroup 5% is huge, but I'll bet a low initial credit limit and ramp up time will limit that considerably.

SPG has no point cap, and SPG points don't expire unless you earned them thru purchasing a SVO timeshare.

No, Amex Mileage Rewards points pale in value to SPG points.

Can't remember about Continental, but I don't think so.

Once you have enough points for 2-3 years of projected usage, have used the Citi 5%, then push all the rest to Plum.

AA is simple. Just stick the miles in the account. Any mile that hits your account counts toward million miler status.

Citigroup 5% is huge, but I'll bet a low initial credit limit and ramp up time will limit that considerably.

Once you have enough points for 2-3 years of projected usage, have used the Citi 5%, then push all the rest to Plum.

Thanks for the input, follow up:

1. Can I transfer SPG points to AA, and if so are those transfers capped like earning on the AA card at a certain level each year?

2. I think the way around the CitiGroup is easy, same as the current credit issues I have with most CC's, which is prepay, then charge. Sucks but most credit cards don't want to give you $300-400k unsecured credit.

3. Why do you say 2-3 years projected use for SPG?

Ah, you have a problem that most of us dream of! Of course, when you attend your first FT Do (a get-together among community members), we know who will be picking up the check. :D

I'll also say that SPG is the best credit card out there, given the premium that Starwood points carry. That serves as a good conduit to airlines.

For AA, I would definitely try to get to the 2 mm mark ASAP for two reasons: First, Gold doesn't get you much. Platinum will get you more benefits, although you'll still be fighting the Ex-Plats. Be sure to check out FewMiles' guide here (http://members.shaw.ca/fewmiles/AA/index2.html). In Boston, you have a pretty wide choice of airlines, but AA has the most capacity. Second, AA is the only carrier that lets credit card miles (or, for that matter, miles earned in any manner) count toward elite status. The rest limit them to BIS (butt in seat) miles.

One thing to remember: miles don't earn interest and it is getting progressively more difficult, not easier, to use them. Burn, rather than hoard.

Question: How do you feel about Las Vegas? Several of the casinos offer interesting credit cards, although Harrahs' is the best.

Mike

If you're legitimately spending 400K/mo, I would do maybe 100K a month on a mileage earning card & 300K a month on a cash back card - even 1% is 3K potentially in your pocket...

Point always seem to depreciate over time, and your needs change. Cash at 2% or above gives you so much more flexibility than millions and millions of points which you may never use (just ask me!). Top off once a year, but don't stockpile points that you have no idea how you will consume in the foreseable future. Things happen. Airlines go bankrupt. Points sometimes expire. Programs change. If you want to see something accumulate, stick the cash into some account, earn interest, and watch the power of compounding work for you over the years! (Also remember that points are easy to lose when you die!).

No SPG annual cap that I am aware of, but you want to transfer in 20000 point chunks to get the 5000 bonus, and there is a 99,999 point limit to transfers per day. So practically, you end up with a limit of 80K points per day times 365 days as your "capped" limit of 29,200,000 points transfer per year. It takes a concerted effort to transfer your limit every day for a couple of weeks to get to a million miles. By the way, go for the 2 million miles, not the one million... Platinum is so much better than Gold.

And on the prepay, I don't know about Citi, but prepaying usually still has to live within your credit limit. And making the payments daily isn't always possible or fast enough. Been there, done that.

And one more suggestion - I suggest negotiating directly with one or more of your vendors for a straight 3% or so discount on some of your key purchases if possible. If you can get a great deal and never hit the points game in the first place, GO FOR IT!

1. I understand that most programs have mileage/points caps in a given year based on status and other items. I will research this, but off the top of folks' heads, do you know if SPG has a point cap and if points expire?

SPG does not have any point cap, and Starpoints do not expire as long as you use your SPG credit card OR have a qualifying stay once every 12 months.


2. What is AA's point cap if I do not have status?

It depends on the card, but, for your spending, it's really low.
With the CitiBusiness® / AAdvantage® card, you can earn one AAdvantage® mile for every dollar you spend on purchases with your card, up to 150,000 miles per calendar year. A calendar year includes purchases posted to your Jan.–Dec. billing statements.
The maximum number of AAdvantage® miles you can earn with the Citi® Platinum Select® / AAdvantage® World MasterCard® is 100,000 AAdvantage® miles per calendar year (purchases recorded on your Jan.-Dec. billing statements).


I have done the platinum challenge before on AA but no longer have status-- what would be the best way to allocate $/SPG points to AA to get at least to 1MM with a point cap on earning?

One approach would be to basically transfer all of your earned SPG points to AA until you reach 1MM with status. (Then you would have Gold and would no longer have a points cap on the AA credit card, which, as a MasterCard or Visa, is a little more versatile.)
60,000 Starpoints will yield you 75,000 AA miles. That's the most you should transfer on a daily basis, but you can submit a transfer online each day. 800K in spending would, over 14 transfer days, gain you 1 million AA miles, but you presumably have earned some already, so you'd need fewer.


3. Should I also sock away some more run of the mill Amex points? I have a 200k or so already?
I wouldn't, unless you want CO miles for some reason (as SPG-->CO is a 2:1 ratio, though transfers to DL and NW are 1:1. (before 20K block bonus)

4. Should I look at redeeming SPG or other points in another way through Amex gift cards etc?
SPG does have some gift card options, though few FTers would use them (ex: 14,000 points for $150 Amazon gift certificate).
They also do auctions for "one-of-a-kind" events. http://spg.com/moments
Like others are saying, cashback is also always good

5. Does Continental have a similar program to AA for gold status?
I don't think they have an million miler program at all right now. I think I read on the CO board that they are going to implement one, but I don't know if credit card spending would count for anything--AA is pretty unique in counting ALL points earned.

Delta is tougher. You have to go to the Delta Platinum card, but it will only get you 20,000 MQM for a $50K spend per calendar year (possibly an additional 5000 first year). After that, more Delta miles don't count to either status (MQM) or million miler status. So tough it out or re-up for Centurion.
Easily solved...

$50k on Delta personal Amex = 20k MQMs and 70k SkyMiles.
$50k on Delta business Amex = 20k MQMs and 70k SkyMiles.

Pretty tough to pass up free Silver Medallion, 140k miles, and only 10k flown miles away from Gold for $100k in spending when you have the kind of credit card volume as the OP.

Don't forget to double dip on float - get some good exMBNA BofA cards & use them to pay your amex. If you're putting through 400k/mo by using bill pay to delay your payment 30 days gives you an extra $20k/year.

Interesting first post, jpslim.

Just out of curiosity, how did you happen upon FlyerTalk?

Easily solved...

$50k on Delta personal Amex = 20k MQMs and 70k SkyMiles.
$50k on Delta business Amex = 20k MQMs and 70k SkyMiles.

Pretty tough to pass up free Silver Medallion, 140k miles, and only 10k flown miles away from Gold for $100k in spending when you have the kind of credit card volume as the OP.Not as I read the Terms and Conditions! They use a peculiar code in the posting that includes year and whether it is the first or second traunche. The system is set up to disallow anything close to this type of behavior. Not that I would try.

if you run all of that through an AMEX plat, every other year you can drive a Lamborghini Gallardo Sypder for free.

If you do a gold challenge on AA, you could remove the CC limit after 2 trips to west coast within 90 days.

Interesting first post, jpslim.

Just out of curiosity, how did you happen upon FlyerTalk?

Hey Punki-- I have known about FT for quite a while and searched it on occasion. My brother told me about it 2 years ago and usually I pump him for all the info on how best to use/earn points, but since I started recently spending so much I figured I should do the research myself and since he speaks so highly of folks on this forum I came straight here (and I see it was the right call!).

It probably goes without saying, but at that level of spending you should be looking into negotiating cash discounts with your vendors rather than using credit cards. May not work depending on the composition of the spending. If its 400k at a small number of vendors it would work. If its 400k spread around all over the place you should go for the miles.

It's a nice problem to have!

jpslim, you have enriched all of our fantasy lives enormously. Thank you.

5. Does Continental have a similar program to AA for gold status?My earlier post was in error: Continental has a credit card with very interesting elite status earning possibilities. These are not miles, but you appear to be able to earn points toward status (only) an use them years later just when you need them. Depending on your CO goals, this could be phenomenal!

www.copresplus.com/20K

FT,

Thanks for all the great input. As I sort things out I'll post more information I learn that might be of interest to folks. Glad that I can contribute to folks "miles fantasies" :)

Is the AA cap for non-elites per credit card or per AA account? For example, if I have one AA account but a personal Ccard and an additional business card, can I earn up to the respective cap of each card?

Thanks.

Is the AA cap for non-elites per credit card or per AA account? For example, if I have one AA account but a personal Ccard and an additional business card, can I earn up to the respective cap of each card?

Thanks.

It's per card.

Don't forget to double dip on float - get some good exMBNA BofA cards & use them to pay your amex. If you're putting through 400k/mo by using bill pay to delay your payment 30 days gives you an extra $20k/year.



Can someone please clarify the above comment? There is a B of A "card" that can use to pay large AMEX bills and get an extra 30 days of free float? That would be huge.

If you do a gold challenge on AA, you could remove the CC limit after 2 trips to west coast within 90 days.

But if he uses an SPG AMEX to get SPGs and convert to AA, then, there is no limit, even without elite status, right? He can reach 2M++ with AA in 4 months given the standard 25% bonus and his 400K/month spend. [if he could put all his charges on the AMEX].