Nervous about high Ultimate Rewards balance?
Apr 27, 2012, 12:17 pm
#93
Join Date: Dec 2007
Location: PDX
Programs: AA,DL,BA,UA,SPG, and any other free trip!
Posts: 1,803
Apr 28, 2012, 9:29 am
#94
Join Date: May 2011
Programs: Spg Gold, Hilton Diamond, Hyatt Diamond
Posts: 1,578
Eh. Not really pointing to myself. I don't even have a Freedom. But there are countless people who've acquired both a Sapphire Preferred (in some cases both a Visa and Mastercard), an Ink Bold (old and new) and a Freedom and they're still chugging merrily along. Paying for the appropriate expenses on the card that gives the most points for the category. Bloggers included. And they're all still fine.
So all of this makes me wonder what's really up.
So all of this makes me wonder what's really up.
Apr 28, 2012, 9:40 am
#95
Join Date: Jan 2008
Location: SF Bay Area
Programs: UA 1K MM, Marriott Life Plat, various others of little note
Posts: 2,763
You get 33% more value or 25% discount - they are the same thing but expressed in different terms when different basis are used in the calculation.
Your math is off, or better way to put it, misled by the banks' marketing wording.
Both UR pts and TY pts when used to redeem an airline revenue ticket, have the SAME value.
They work the same way:
A $100 worth ticket, you only need 7500 points. That is a 25% discount.
75/100 = 0.75, 1-0.75 = 0.25 so you get a 25% discount.
Or, $75 gets you a $100 worth ticket, that is a 33% bonus. 100/75 = 1.3333. So you get a 33% bonus.
It is the SAME thing, except being expressed differently, using a different basis to do the calculation.
The banks do not deceive you when they correctly use the term of 33% bonus but given many folks are a little bit math-challenged since the age of calculator (not to mention the computer), they can be fooled into thinking the above are different. They ain't!
The only advantage is, if one needs to earn status with the airlines, and does not want to shell out cold hard cash to do Mileage Run, then the points would become handy for such purpose because those tickets redeemed by either UR or TY pts are just like regular paid tickets and earn both EQP/EQM/RDM.
However, from the value of redemption point of view, Miles of a FF program almost always yield higher value than the Cash-Equivalent point redemption.
Your math is off, or better way to put it, misled by the banks' marketing wording.
Both UR pts and TY pts when used to redeem an airline revenue ticket, have the SAME value.
They work the same way:
A $100 worth ticket, you only need 7500 points. That is a 25% discount.
75/100 = 0.75, 1-0.75 = 0.25 so you get a 25% discount.
Or, $75 gets you a $100 worth ticket, that is a 33% bonus. 100/75 = 1.3333. So you get a 33% bonus.
It is the SAME thing, except being expressed differently, using a different basis to do the calculation.
The banks do not deceive you when they correctly use the term of 33% bonus but given many folks are a little bit math-challenged since the age of calculator (not to mention the computer), they can be fooled into thinking the above are different. They ain't!
The only advantage is, if one needs to earn status with the airlines, and does not want to shell out cold hard cash to do Mileage Run, then the points would become handy for such purpose because those tickets redeemed by either UR or TY pts are just like regular paid tickets and earn both EQP/EQM/RDM.
However, from the value of redemption point of view, Miles of a FF program almost always yield higher value than the Cash-Equivalent point redemption.
Apr 28, 2012, 10:48 am
#96
Original Poster
Join Date: Jul 2010
Posts: 37
seems like people are all of different opinions regarding the risk of high UR balances.
After reading through some of the posts I think it makes sense to transfer points out.
The only reason I am hesitating is because I know that the instant I transfer 100K points out then Chase will introduce some sort of transfer bonus.
Any thoughts on that? Please tell me there will be no transfer bonus so that I can transfer away without hesitating.
After reading through some of the posts I think it makes sense to transfer points out.
The only reason I am hesitating is because I know that the instant I transfer 100K points out then Chase will introduce some sort of transfer bonus.
Any thoughts on that? Please tell me there will be no transfer bonus so that I can transfer away without hesitating.
Apr 28, 2012, 12:07 pm
#97
Suspended
Join Date: Dec 2006
Location: USA
Programs: All major programs
Posts: 1,403
Need advise
I have almost 300 K UR points between 2 person in our household. Because of the ongoing speculation I am thinking of transferring around 50% of the points to UA and Hyatt. I don't really fly UA and stay in Hyatt, but I believe this is the best value. I do stay in Marriott a lot, but Chase UR transferred to Marriott is not attractive. The remaining points I plan to divide between two people in two different accounts. So if something went wrong it is still not bad. If it did, it seems Chase allows cash redemption so not all will be lost. Any critique of this strategy will be appreciated. Thanks.
Apr 28, 2012, 12:22 pm
#98
Join Date: Dec 2009
Location: ICT
Programs: AA ExP
Posts: 1,860
seems like people are all of different opinions regarding the risk of high UR balances.
After reading through some of the posts I think it makes sense to transfer points out.
The only reason I am hesitating is because I know that the instant I transfer 100K points out then Chase will introduce some sort of transfer bonus.
Any thoughts on that? Please tell me there will be no transfer bonus so that I can transfer away without hesitating.
After reading through some of the posts I think it makes sense to transfer points out.
The only reason I am hesitating is because I know that the instant I transfer 100K points out then Chase will introduce some sort of transfer bonus.
Any thoughts on that? Please tell me there will be no transfer bonus so that I can transfer away without hesitating.
In all seriousness, the possibility is very small that there will be. Chase hasn't ever offered a transfer bonus with UR. Furthermore, Chase seems to focus on bonusing the earning rather than the redeeming.
Apr 28, 2012, 12:22 pm
#99
Join Date: Jul 2011
Location: North America
Posts: 2,265
It's not really a strategy, it's a CYOA type of move. If that's what will help ease your mind, then that's what you should do.
But yes, I do agree that for the majority, UA and Hyatt are currently some of the most lucrative transfer partners of UR.
But yes, I do agree that for the majority, UA and Hyatt are currently some of the most lucrative transfer partners of UR.
Apr 28, 2012, 12:30 pm
#100
Join Date: Nov 2006
Location: LAX
Posts: 2,851
seems like people are all of different opinions regarding the risk of high UR balances.
After reading through some of the posts I think it makes sense to transfer points out.
The only reason I am hesitating is because I know that the instant I transfer 100K points out then Chase will introduce some sort of transfer bonus.
Any thoughts on that? Please tell me there will be no transfer bonus so that I can transfer away without hesitating.
After reading through some of the posts I think it makes sense to transfer points out.
The only reason I am hesitating is because I know that the instant I transfer 100K points out then Chase will introduce some sort of transfer bonus.
Any thoughts on that? Please tell me there will be no transfer bonus so that I can transfer away without hesitating.
Apr 28, 2012, 1:48 pm
#101
Join Date: Jan 2007
Programs: Many
Posts: 335
I transferred out all but 11,000 to United (maybe want to do a BA shorthaul redemption somewhere). If Chase is closing down accounts without warning and offering at best a cash payment worth much less than UA miles, I'm not going to sit on a significant balance. I assume the closures aren't random, but unless I get a better sense of what it is that triggers them, yes it will ease my mind.
Apr 28, 2012, 5:17 pm
#102
Join Date: Aug 2011
Location: ECP
Programs: DL Diamond
Posts: 1,658
I don't get what a high point balance makes Chase want to shut you down? Maybe I'm just an idiot and I'm about to lose all of my UR points, but...
To me it's simple:
--If you're profitable for the bank (i.e. run a lot of spending through your cards), they'd be idiots to shut you down.
--If you're not profitable to the bank (i.e. they spend more on your sign up bonuses than they end up making off of you before you apply for a new card), you have to take what you can get and enjoy riding the wave and playing with house money.
Just my 2 cents...
To me it's simple:
--If you're profitable for the bank (i.e. run a lot of spending through your cards), they'd be idiots to shut you down.
--If you're not profitable to the bank (i.e. they spend more on your sign up bonuses than they end up making off of you before you apply for a new card), you have to take what you can get and enjoy riding the wave and playing with house money.
Just my 2 cents...
Apr 28, 2012, 5:26 pm
#103
Join Date: Dec 2009
Location: ICT
Programs: AA ExP
Posts: 1,860
I don't get what a high point balance makes Chase want to shut you down? Maybe I'm just an idiot and I'm about to lose all of my UR points, but...
To me it's simple:
--If you're profitable for the bank (i.e. run a lot of spending through your cards), they'd be idiots to shut you down.
--If you're not profitable to the bank (i.e. they spend more on your sign up bonuses than they end up making off of you before you apply for a new card), you have to take what you can get and enjoy riding the wave and playing with house money.
Just my 2 cents...
To me it's simple:
--If you're profitable for the bank (i.e. run a lot of spending through your cards), they'd be idiots to shut you down.
--If you're not profitable to the bank (i.e. they spend more on your sign up bonuses than they end up making off of you before you apply for a new card), you have to take what you can get and enjoy riding the wave and playing with house money.
Just my 2 cents...
I agree with you that those of us that don't abuse Chase shouldn't need to worry. However, if you stop and do some back of the envelope number crunching, I start to get a little nervous. I had $100k+ of legit Chase spend last year, which should have gotten Chase at least $2k (if you figure 2% in merchant fees after some overhead costs and divvying with merchant bank) in fees. If I earned 300k UR and UA and BA from them last year (that's a rough estimate including signup bonuses (Sapphire, OIB, CO 40k; doesn't include two Hyatt nights) and regular/bonus spend earnings) that means that they'd better be paying less than $0.0066/point if they're to make a profit. That makes me even someone with my level of spend a bit nervous. Hopefully this year my spend will be closer to $250k and I'll be putting Chase a bit more firmly into the black.
Apr 28, 2012, 5:37 pm
#104
Join Date: Oct 2009
Location: Land of the parrots and parrotheads
Programs: Several dozen
Posts: 4,820
Lemme make it simple:
Money laundering is quite profitable for banks and many banks have been caught doing it. Yet, if the bank cardinals (audit, fraud, loss, risk) discover it you are gonna get wacked. So I guess the cardinals are the idiots who will burn you at the stake if they harbor any suspicion that you may be a heretic (i.e. risky customer). Profit always has to be measured against risk.
Money laundering is quite profitable for banks and many banks have been caught doing it. Yet, if the bank cardinals (audit, fraud, loss, risk) discover it you are gonna get wacked. So I guess the cardinals are the idiots who will burn you at the stake if they harbor any suspicion that you may be a heretic (i.e. risky customer). Profit always has to be measured against risk.
I don't get what a high point balance makes Chase want to shut you down? Maybe I'm just an idiot and I'm about to lose all of my UR points, but...
To me it's simple:
--If you're profitable for the bank (i.e. run a lot of spending through your cards), they'd be idiots to shut you down.
--If you're not profitable to the bank (i.e. they spend more on your sign up bonuses than they end up making off of you before you apply for a new card), you have to take what you can get and enjoy riding the wave and playing with house money.
Just my 2 cents...
To me it's simple:
--If you're profitable for the bank (i.e. run a lot of spending through your cards), they'd be idiots to shut you down.
--If you're not profitable to the bank (i.e. they spend more on your sign up bonuses than they end up making off of you before you apply for a new card), you have to take what you can get and enjoy riding the wave and playing with house money.
Just my 2 cents...