buylowsellhigh

Hi... New to this forum. Small biz owner, I put almost $400k/yr thru company cards. I've done quite a bit of research on customer loyalty programs offered and I'm looking for some input from the forum veterans.

I'm wondering what the average "cash value equivalent" is for the Amex program, asides from airline tickets. For the last few years i've been using a 1.5% instant cash back credit card and seems that this pays off better than any points systems.

Their goal is to offer points to gain customers at the lowest cost possible, our goal is to get the most out of the points, by not redeeming stuff that isn't worth redeeming.

I cancelled a $400/yr Amex card a few years back, but not before redeeming 150k points for $1500 GC... but I realized later that the $1500 GC probably cost them 60 or 70 cents on the dollar.

My business is in California, focuses on business with asia-pacific region.. maybe I can find rewards that can help lower my expenses. Any opinion? Thanks!

mia

Transoceanic first and business class airfare is the category where Membership Rewards points reliably return 2-3%, more if you redeem through a program that allows deeply discounted economy class fares to be upgraded to business class or fly routes that do not attact much competition. The reason this category provides value is that airlines use perishable inventory that would otherwise be unsold. These seats are worth far more to the consumer than they cost the airline to provide. The same logic applies to hotel redemptions, but not to gift cards, merchandise or cash because these are not perishable.

If you do not value premium class air tickets or lodging I think you are better off with 1.5% cashback.

Centurion

Membership reward point value imho = .01 and decreases ever year

You will find this is open for debate and some people have are absolute genius at getting best value. Some past examples I remember are a member transfering to an obscure airline and bidding on a Mercedes (thought that was membership rewards). Most famous not amex case was when the founder of this board, Randy Peterson, gave millage for buying his airline subscriptions. People were ordering multiple subscriptions and flying Concord for and unbelievable cheap price. That said you have people like me who just wait for a transfer bonus to Delta 20 to 30% and then end up using crazy amounts of miles just to get to Europe... example states to London for 280,000 miles.

buylowsellhigh

Wow... You guys are awesome... 2 replies in 5 minutes in the middle of the night.

I checked out the airline reward side and on the surface I didn't see anything too appetizing. Most are 1 point for 1 mile in participating programs, so if you can book a ticket that is more than 1 cent per dollar (correct acronym?) it might be worth it.

The one I may use is Cathay Pacific's "deal." 25000 points for $325 economy ticket to Hong Kong. Considering a normal economy ticket at $900, subtract $150 (becuase you are ineligible earn 15k miles) net $750, then subtract $325 economy cost makes it $325 benefit for 25k miles = 1.7 cents per dollar. For extra .2 cents (above my 1.5% rebate) I'll lose my frequent flyer elite status and it also has a lot of blackout dates.

Maybe I'm looking at the wrong place? I checked out the "airline" section of membership rewards.

Lets figure this one out together

mia

I calculate only $0.014 per point...

$900 normal cost
$325 co-payment
$575 savings

25000 points redeemed
15000 miles forgone
40000 total (asumes points and miles interchangeable 1:1)

$575 / 40,000 = $0.014 per point

mia

Correct. I am not familiar with airfares to Asia, but from the USA to Europe advance purchase business class fares are typically $2,500 to $4,000, and redemptions are generally 90 - 100,000 miles.

If you normally fly economy class it will be difficult to consistently redeem for more than $0.015 per point, because the fares vary by season and award availability is less in the high season.

awake

As other FTers have mentioned. The best redemption is a transfer to airline miles and using those miles for upgrades/business class/first class.

For heavy spending, 1.5% redemption is about the best that you can get (aside from premium travel). Consider the following cards to increase your return per $ (vs. AMEX Green/Gold/Platinum):

buylowsellhigh

Mia/Awake,

Thanks for the great information. I think re. the calculation, there is more than one way to calculate value but the best way really is to share info.

It seems like SPG is the best for miles, but signing up for airline CC's puts you on the fast track to elite status (assuming they dont exclude cc points). But for me... 90% of my travels are abroad... and when I do that, int'l airlines (cathay pacific, china airlines, singapore, etc) all have the edge over domestic airlines in price and service.

All of the mileage I've redeemed thus far is for J travel, because the benefit is around .02-.03 per mile (if i used a cc).. I always did y upgrade to j for around 35k miles. Bbut unfortunately for transpacific sector redemption is next to impossible to redeem. I have nightmares of having loads of miles and no chance of redeeming them...

So what do you guys use it for? It also seems that using points for hotel redemption via SPG is a good idea.. what do you think?

cigaraddict

I personally prefer the AMEX SPG (Personal & Business cards both) for earning points. I use the vast majority of the points for hotel nights in Sheraton properties. I typically average $0.03 - $0.04 per point that way.

I typically book rooms that would have been $90-120 per night for 3,000 SPG points. On vacation, I have booked rooms that were over $400 per night (international resort properties on the beach) for as little as 10,000 points.

Simply put, I have experienced a much higher value for the points on the SPG cards. And... if I ever need the miles for airline upgrades, I can get a 20% bonus for transferring 20,000 to an airline program (total 25,000 credit). [Except for Continental, of course, since they now 2 SPG = 1 OnePass miles.]

IMHO, if you stay in hotels alot, you should see if Sheraton properties have good point values compared to what you paid in cash.

mia

Starwood appears to be a good match for your travel pattern because Starpoints convert 20000:25000 to all three of those carriers. This means you would have the flexibility to redeem for lodging or air travel, and there is a "near cash" option to redeem for (examples) Amazon or Nordstrom gift cards 14,000 = $150 = 1.07%

buylowsellhigh

DZ, I think that hit the jackpot. .03-.04 for hotel nights is well worth it. But seems to be hard to find.

I'm searching though, the numbers are not consistent. Based on my travel patterns: Vegas... Oct 30 to Nov 2... Planet hollywood is .022. Shanghai - .02 to .03. But I did see a .07 hotel. Just one. And, bummer... Can't book "6 star" hotels in HKG with SPG... like intercontinental, mandarin orient, shangrila to name a few

And the last tidbit - because these are based on list rates, I think it would be safe to say that all dollar equivalent should be reduced by 25%. However, even with that being said, doing "points and dollars" option when available, does shoot it up to .04-.05.

Anyone care to offer opinion/insight to my calculations?

mia

1. Why would you expect to be able to be able to redeem Starpoints for stays at other hotel chains? However, you can use Starpoints to stay at Intercontinental: SPG 20,000 = AA 25,000 = PC 20,000

2. Why would you calculate return based on rack rates rather than the rates actually offered on the dates you will travel?

buylowsellhigh

Mia,

I think either you/I are confused, most likely me. I know "rack rates" are regular price but thats up for debate, price offered by hotel on the specific day to me are rack rates, i dont know if its accurate or not. So, if hotel discounters such as priceline, hotwire, or hotels.com are able to get the same hotel at say... 25% cheaper, than the rate of return is 25% less. For example if it is .02, but because you can probably get the hotel 25% cheaper, the number gets updated to .015. I might be over analyzing, but its my profession

Regards to converting into miles and then into PC, that is a genius idea, i never thought of that. Now its time to over analyze the returns rate after conversion @:-). If I start putting charges thru the Amex prudent business decision says the return has to be better than what im getting (1.5% instant cash back) haha.