Originally Posted by
ralphs
Here's some analysis driving me to prefer the WOH business card over WOH personal:
Assume spend 50k in January 2022. WOH Business nets 25 EQN (50k spend @ 5 EQN/$10k). This is equivalent to what you'd get out of the WOH Personal (50k spend @ 2EQN/$5k + 5 flat EQN).
- I value Hyatt points at 1.5cpp. Thus the point value of 50k spend is $750 to me.
- My best alternative is cashback at 2.625% back. The value of my best alternative is $1,312.50.
- My opportunity cost on $50k spend is $563. That's a marginal opportunity cost of just over 1.1% per point.
- I can also expect 20k points back in redemption rebates throughout the year. The value of this bonus is $300 worth of points.
- The AF is $199. But I will organically use the $50 x2 Hyatt credits in the course of my business travels, which credits $100 of value. Thus the AF is neutral between WOH Personal and Business for me. (ok technically $4)
- I now have an adjusted opportunity cost of $267.
Other assumptions:
- I actually use and redeem Hyatt points locally in my natural course of doing things and preferences, so this requires no behavior change to achieve about 1.5cpp in value. For example, I would actually pay $300 cash out of pocket for a 20k Hyatt redemption at Mission Pacific in Oceanside, or $450 cash out of pocket per night at Ventana Big Sur several times a year. I am fortunate enough to have the free time and access to local Hyatts to confidently redeem more than 200k Hyatt points a year.
- I value the ability to separate business accounts from personal accounts in terms of mental overhead and actual costs paid to accounting professionals both directly employed or contracted to my company.
- My best alternative comes from the BofA Business Travel Rewards card. My business has plat honors status with BofA Business Preferred Rewards.
- Most of this spend is unbonused spend to B2B vendors and suppliers. A fraction of this is rideshare, maybe 10k. Dining/Advertising goes on AMEX Business Gold, Airline AA goes on Barclays Aviator, Internet goes on Chase Ink Plus.
I can see how someone (most people!) would look at all this and go Nah, this isn't for me, but I think it's overall good for my situation.
Thanks for the detailed analysis. Here are two things to consider as you make your decision:
Although the personal WoH Card has an AF only around $100 less than the business WoH card, it also provides a cat 1-4 certificate to offset that annual fee (along with 5 innate EQNs). In this sense, the personal WoH card has a net fee of $0 whereas the business WoH card has a net fee of $100-$115 (depending on how you value pre-payment). Furthermore, the personal WoH card rewards another cat 1-4 cert after $15K spend on the card whereas the business card does not.
So essentially this is the comparison between WoH business and WoH personal + BoA 2.625% (there are a couple) after 50K spend:
WoH Business- Cost $200, 50K WoH, up to 20K WoH rebate, 2 $50 Hyatt rebate, and 25 EQNs
WoH Personal (first $15K spend) and BoA 2.625%- Cost $95, 15K WoH, $918.75, 2 category 1-4 certificates (up to 15,000 point redemption each), and 11 EQNs
For simplicity’s sake, let’s value the rebate and certs at face value (though a more detailed analysis would discount both.
70K WoH per your valuations = $1050
45K WoH per your valuations = $675
So $1050-$200+$100 (I would discount this to $85 but whatever)= $950 for the WoH Business setup.
Conversely, $918.75+$675-95=$1498.75
So opportunity cost of $548.75.
If you want both the personal and business WoH card, the calculation gets more interesting. Personally, I would not take the business over the personal in your situation unless you really needed the EQNs but, even then, I’d still pick up the personal WoH for essentially 5 free EQNs.
P.S. As a small business owner, you can put business expenses on a Chase personal card. If you’re opening the card purely for business spend, you could just make a new account for the personal card. Large businesses should use corporate cards for reasons unrelated to points and miles but JPM’s corporate card products are not competitive.