Originally Posted by
littlewinglet
You're incorrect....if you buy 10k worth of GC at the mall, you will spend $79 + about $7 in MO fees at WM to clear them out. For that effort and expense you get EITHER $201.60 OR about 10k SPG points. Your logical flaw is to count the cost in the cashback scenario but ignore it with the points. I bought $201 cashfor $86, you bought 10k SPG points for $86. So now we compare the values of what we got out of this activity....which is $201 vs 10K pts.
Furthermore, if you're a moderately well to do middle class person, like many in this community, you probably pay around 30-40% marginal tax rate. This effectively means that any CB profit is multiplied by around 1.5x when compared to just working more at your job/business. So my $110 CB profit is really more like ~$160.
I'm sure the are some examples here and there, where you can get good value out of SPG points for somewhere you really need to go, and where you have no choice but to pay through the nose, and a Marriot/Spg hotel saves the day. I don't travel to overpriced cities nor do I think $600+ a night is worth it or justifiable. I can always find an airbnb or much cheaper hotel that works just fine. Also, if low tier hotels were all over the place in National Parks around US, I'll be all about hotel card MS....but I just did a road trip around Arizona and UTah and not once encountered anything from a chain besides Best Western or similar....and they were all under $100 anyway. I would probably find more value in Miles transfer personally, but I have more miles than I can use now so it's not a priority.
You are incorrect at least in 2 assumptions - '
1) many of us dont have WMTs that still take no name Gebits, hence it would no be $7 for $10K, it is more like $18 instead. At least that is how much the grocery chain here charges.
2) 30-40% marginal tax rate should not be still in middle class, nor should not be even bothered to go thru this exercise as it is not without intangible costs - your time and energy, just to point out the obvious.
There are folks who have high net worth yet in the low teen tax brackets, if they know how to manage their finance. I just heard a complaint from a friend - they complained their tax payment went up a lot because they are now having SS income which 85% is taxable. You can google to find out the bracket as IRS finally made it much easier with only 2 income ranges to determine taxable SS income.
Before they started taking SS, they live very well, but not on any income in the sense that is subj to tax. They own second home in one of the international world-class cities fwiw. Their marginal tax is way way below the 30-40% you cited, even after adding the SS income.
3) London is a world-class city and like any world-class city it is expensive but not overpriced, just being expensive due many factors. You can think NYC or DC, or SFO as equivalent.
Airbnb does not always work. You also would not find much offerings that is below $300 if you want to stay closer to the city itself and not like 30 min metro ride away.
Sure you can find a $200 hotel in some fringe locations but that also means it is fairly low end, plus you most likely would need to pay cash rate. What is the logic that you are willing to pay $200 cash to stay in much lesser hotel versus paying (indirectly) $150 to stay at 5 star hotel with the commensurate services and facilities? Better yet, because of enough spend on your SPG card you earned SPG Gold thus translated to Marriott Gold which give you lounge access, that would take care of your breakfast, afternoon snack and often enough for dinner, plus the drinks that you may consume (that is what you would find in the full service Marriott properties. When you stay at low priced hotel or Airbnb, you still have to eat, right? That is the added cost that you dont incur when you have lounge access.
Those of us who are far more interested in miles and points over CB because we spend a ton of discretionary income in travel even after the help of miles and points. Not to mention the miles and points make travel so much more comfortable, especially on long haul international flights.
As ALWAYS, there should NOT be any blanket statement to argue whether CB would offer better value than miles and points - it all DEPENDS ON how you use your miles and points, for the travels you do, whether it is wanted or needed.
However, when you look at value proposition, you should take a broader view.