Expert advice on program choice for big spending
 

hi everybody,

This is my first post of hopefully many here. I've never paid much attention to frequent flyer programs mainly because I never traveled enough for it to make sense, and certainly not enough to justify paying $200+ extra for one airline over another just to accrue more points.

However, this all changed a few weeks ago when I took a consulting job that requires nonstop travel. 5 days and two flights per week all over the country, along with at least three overseas trips per year to central europe.

My company has no regulations or guidelines or preferred hotels or flights, and I pay for everything myself (flights, hotels, meals, entertainment, etc.) but get reimbursed for it. So basically it's a total blank slate for me.

I live in Chicago, which is a United hub, though my favorite airline is Continental. My traveling isn't really restricted to a region, per se, but we have yet to acquire any West Coast clients. We do have a lot of clients in Georgia, Texas, DC and NYC.

So here's the dilemma. I'm looking into different frequent flyer/stayer programs and credit cards to join and it seems they each have their own positives and negatives and it's a bit overwhelming to measure them all and figure out the best approach to take. Just to demonstrate I'm not lazy and this isn't just another x vs. y program thread, I've done a bit of homework and narrowed things down to the following:

Chase Premier United Visa (and United program)
Chase Marriott Rewards Card (and Marriott program)
Starwood Preferred Guest AMEX Card (and Starwood program)
Capital One No Hassle Miles Credit Card
Diners Club Rewards Card (I don't own a car, so I don't know how the primary auto insurance feature affects or doesn't affect me)

Here is what I've anticipated spending on average (assuming 45 weeks of traveling per year, no car rental):

Flight miles: 1600 miles/2 segments per week = 72,000 qualifying miles per year
Flight cost: $350 per r/t flight per week = $15,750 per year in flights
Hotel stays: $250 per night/5 nights per week = $56,250 per year in hotels
meals: $50 per day = $11,250 per year in meals

All of these are 100% reimbursed by my company, and I don't anticipate having to carry a balance unless my company is slow to pay (remains to be seen). Also, given the number of qualifying miles I'll earn, I think most earnings caps on United will be waved before I hit the cap.

I love international travel, and over the next several years I would love to visit New Zealand, India, Egypt, Brazil, Argentina, China, Dubai, Greece and Morocco. Because my company is European, I came up with the clever notion of doing most of my Eastern Hemisphere travel by booking vacation time immediately after company meetings (2-3x per year) and therefore flying directly from Europe for big savings.

Now, as I understand, i need not own my own business to get a business credit card - I'm just listed as a sole proprietor and I must use the card for business expenses only. So I'm functioning under that assumption. If that is incorrect, please let me know.

I'm therefore using the business version of most of these cards. That said, here's what I've calculated for each of the candidates. Please correct any incorrect assumptions since i'm totally new to the rewards program world.

Chase United Mileage Plus Platinum Business Card
-----------------------------------------------
2 miles for every $1 spent on United Purchases (I'm not sure if that includes hotel/car bookings made through United as well, which makes a big difference)
25,000 bonus miles
1 mile per $1 on all other purchases

Chase Marriott Premier Visa Signature Card (and Marriott program)
---------------------------------------------------
15,000 bonus points
5 points for every $1 spent at Marriott locations
2 points for every $1 spent on plane tickets, food, rental cars
1 point per $1 on every other purchase
50k miles for 125k points transfer

It appears when joining the Rewards program that you can choose to earn miles instead of points at a rate of 2 miles per dollar spent, but I'm not sure how that works with the credit card, which is only described in points, not miles (though you can transfer points into miles).


Starwood Preferred Guest AMEX Card (and Starwood program)
-----------------------------------------------------------
10,000 bonus points
1 point per $1 spent (credit card)
2 points per $1 spent on hotels (credit card)
3 points extra per $1 spent on hotels (gold, platinum, which I would get quickly)
5000 bonus points upon transferring 20000 points to miles
1 point per mile transfer rate*
*appears to be half that for United, whose hub is my home airpoint

Capital One No Hassle Miles Credit Card
-------------------------------------
2 points per $1, which can be used for miles for any number of airlines, or points for hotels, or anything else.
Points can be redeemed for 100x the value of the ticket. I get reimbursed by redeeming the points (so a $600 ticket will cost 60,000 Capital One points)

Diners Club Rewards Card
-------------------------
1 point per $1, which can be used for hotels, air miles, etc. Points are redeemed directly for miles, not reimbursed like Capital One.


Looking it over, it seems that I would get the following points based on my projected spending in a year:

Chase Premier United Visa (and United program)
------------------------
171,000 miles (196,000 first year)


Chase Marriott Rewards Card (and Marriott program)
--------------------------
184,500 using the miles program (2 miles for $1 spent at hotels + United miles) (no credit card membership necessary, it seems)

and/OR (?)

335,250 Marriott Rewards points (5 points per $1 hotels, 2 points per $1 for air, food).

This doesn't include the elite upgrade bonuses from silver to gold to platinum over the course of the first year, which would amount at about 420,000 points, and a full year max of 435,825

Using lowest exchange rate from Marriott points to miles (2000 miles:10,000 points), that's only 67,050 miles. But using max exchange rate (50,000:125,000 points), that's 134,100 miles. Taking into account the elite bonus, that's 84,000 miles and 168,000 miles respectively.

I still don't yet understand how to combine or stack the frequent stay program with the credit card program. it looks as though the 5 points per $1 already stacks membership in the program, but I'm not sure.

Starwood Preferred Guest AMEX Card (and Starwood program)
----------------------------
Assuming they stack (and it looks like they do), I'd be getting 5 points per $1 spent on rooms as a Gold/Platinum Preferred guest and one point on everything else. So that should be:

380,250 Starwood points or 475,312 miles

or 264,657 United miles (didn't halve the qualifying miles, since I earned them on the flights directly. I also included the 5000 mile for 20,000 points bonus, though I'm not sure if United qualifies?)

Capital One No Hassle Miles Credit Card
-----------------------------
166,500 no hassle miles
and
72,000 qualifying miles (didn't combine them since they're non-compatible)

I will, however, earn additional qualifying miles for cashing in no hassle miles since it counts as a regular purchase as far as the airline is concerned (I just get reimbursed by Capital One). So the qualifying miles would increase to maybe 77,000 miles.


Diners Club Rewards Card (I don't own a car, so I don't know how the primary auto insurance feature affects or doesn't affect me)
------------------------------
155,250 miles


So looking it over, it appears that if I were to just get one card, that even with the United penalty, the Starwood card combined with Starwood membership is the best option. But that's largely because I don't understand how the Marriott Rewards membership works with the Marriott Rewards Credit Card. They were unclear in how the stacking might work since they describe the rewards membership as either a miles program or a points program but they describe the credit card program ONLY in terms of points (where you could transfer them to miles, but at a substantial "tax", it seems). It may be a better idea for me to post this specific question on the Marriott board. I apologize if that breaks a specific double-posting rule.

Assuming they stack with a penalty (meaning I can choose to accumulate miles through the membership AND I can accumulate points with their credit card), that would mean getting 5 points and 2 miles. Recalculating, that would amount to a potential maximum of 318,600 miles, because I would be combining 184,500 miles with the max exchange rate of 134,100 miles. If there's also a stackable elite bonus (6.5 points and 2.6 miles, respectively), that comes out to a max potential of: 218,250 membership miles + 168,000 credit card miles post-exchange = 386,250 miles.

Which would make the Marriott by far the better deal for United.

These mileage numbers seem so high that I know I'm doing something wrong (or am I?). So please feel free to point out any incorrect assumptions or calculations, since I'm eager to master the programs and bonuses here. There are hundreds of thousands of miles at stake!

Follow up
 

Hi again,

I did all of this just calculating air miles, but I haven't taken into account hotel value. Out of curiosity, has anybody done a comparison/calculation yet of whether it's most cost effective to redeem points for miles, or to keep the points and use them for hotel stays? If not, I can run some numbers, but it seems like the kind of question that people have asked before and someone probably answered years ago.

Also, it seems that it may be a good idea to combine credit cards. So if I were to sign up for Marriott Rewards Premier Visa at 2 miles per $1 spent on Marriott AND signed up for the Chase United card at 2 miles per $1 spent on United flights, that comes out to 227,250 miles per year base, 261,000 miles with Platinum status + 25,000 first year United bonus. Does that sound about right?

Overall, it seems far and away the best value is signing up for Starwoods and NOT using United, since it seems unless my stacking theory is incorrect that I would be getting nearly half a million miles per year (that can't be right, lol).

Welcome to FT! It seems you have been in a speedy mode to catch up with the FTers' world in the first 2 days of April! :D

Well, you probably are going to get different answers from savvy FTers. ;)

Some value miles more, and some pursue hotel points. It depends on your travel patterns and needs/living style. The questions you have to ask youself first are what do you want to achieve with your miles/points (such as free tickets, upgrades, status perks, free nights...etc). When you set your priorities straight, you simply concentrating on the points/miles earning activities.

You asked about points/miles transfers at different threads. If you like, you can try to play with the Webflyer Mileage Converter Tool and see what will come out. Generally speaking, conversions (or transfers) between different programs will cut you deep. Our FT gurus will tell you to concentrate on one FFP from each global alliance, so your miles won't be spread too wide and will be more manageable and redeemable. Same to the hotel programs. Choose the one (or two) that will serve your flying/stay patterns best.

SPG Amex is a big exception, giving the flexibilities and 5K bonus with each 20K transfer (but not to UA, as you've already learned). Our FTers recommend SPG Amex highly to those who will be a big spender and heavy traveller. With certain credit cards, a yearly spending over $20K will also earn you status and extra bonuses. Be sure to look it up.

With your flying pattern, I believe you will obtain elite status by segments alone in the first 3-4 months. I would suggest you to look into the elite privileges of FFPs and see which one "touches" your heart. Even though you live in a United hub city, it doesn't mean you have to stick with UA. Find the alliance that will serve you best. I am not a heavy traveller (yet :)), so I will leave all the specific recommendations to our resident experts.

If you haven't signed up with those FFPs and credit cards, keep an eye on referral bonuses. UA and Delta periodically run get-a-new-member promo (I am not aware of any recent one though). SPG Amex had a targetted promo for 5K referral bonus points last year. You may want to check out each designated forum to look up those info. If you do need a referral, you should voice your needs in our SPAM forum.

Welcome again. You just come to the right place.

You must be an accountant to do all that research! :)

My $.02: If you live in Chicago, I would definitely go with United. You will get so tired of connecting thru CLE, EWR, and HOU on Continental to get anywhere. UA has so many direct flights from ORD. I know this goes against the flyertalk credo of mileage maximization, but having spent the night in many airports, I can assure you, it is not fun.

With your flight schedule, if you get the United Platinum Visa with its bonus EQMs, you should be 1K by the end of the year. You might have to do a mileage run or add on a few segments to your business trips (take US thru CLT for example), but it should be easily done. I love flying UA as a 1K.

If you're just expensing this to your company, you do not need a business Visa. I don't think it would matter other than the biz card balance wouldn't show up on your personal credit report, but it would be paid off every month, it might improve your personal credit scores, so you may be better off using personal cards.

For hotels, I am a Hilton guy only because I think the Homewood Suites is the best hotel on the planet for staying on a weekly basis. And there are far more Hilton than Starwood hotels. That being said, I do have both the Hilton Amex and the Starwood Amex, just in case. While I'm sure I'll get crucified for this, I've never stayed at a Marriott that I liked. Just my personal experience...

I have not done a cost comparison, but an educated guess tells me that using hotel points for hotel stays is better use than transferring to miles. The only exception might be the 25% bonus when transferring Starwood points. With your flying, you'll have plenty of miles. Keep the hotel points and go on a free vacation.

Welcome to the world of frequent flying. Once you get hooked, you'll never want to fly without status again. :)

Hi demigawd. I think you missed some important points in your analysis because you can't take the programs in isolation. When doing your calculations, you are including the hotel points for the Marriott and Starwood cards. For example, take the United card. You say all you get is 171,000 miles. But you're forgetting that you can also get 168,750 Starwood points from your hotel stays. If you count the 3 SPG points for one card, you have to account for them with the other cards to make a fair comparison, too.

No need - he's better off making it on segments with his schedule, and the Platinum Visa doesn't help for segment qualifiers.

Plat. Amex. (not otherwise branded) makes sense for lounge access.

sounds like united, starwood, marriott (and their credit cards) might work well.

you might want to credit united redeemable miles to other programs sometimes as well, like BD, LH, NH for example.

although AA would let you credit all earned miles including credit card towards lifetime status.

amex plat gets you AA/DL/CO/NW lounge access when flying them. its also the only E0 award partner, and lets you advance 60K points for a year.

You mentioned the 2:1 $1 to 2 points. DO NOT DO THIS WITH MARRIOTT. When you transfer 125k points for 50k miles, you also get 7 nights of hotel stays. Also, as a PLT you earn 10 points for every $1 spent, so earning 125k points only requires a $12.5k spend assuming you have no promotions. This nets you miles, which if you earned straight you would need a $25k spend plus you would loose the 7 night cert.

Also, as a Chicago based flyer why not consider AA? With your destinations and your lack of west coast flying, AA might be a better choice for you. Also, for your INTL travel, the AA eVIP is a powerful upgrade instrument. Of course, I'm biased so YMMV. :)

You're correct - I realized that in my next post when I mentioned combining credit cards and memberships to further maximize benefits.

So after reading everybody's advice and doing more research, I think i have a pretty good system worked out that I'll run by all of you:

I'm going to sign up for Marriott Rewards for the points program. I picked the points over the miles because I did a few calculations. I'll run them by you to make sure I'm not missing something.

In one year I'll spend $56250 on average in hotels. That's 112,500 miles or 562,500 points (not counting any status bonuses, to keep it clean). 112,500 miles, at 1% is a value of about $1125. Looking on the website, I can probably get 1.5% of the value or $1688. I know there are people here who book first class tickets two weeks before to get really crazy returns, and I did see an $11,000 ticket to Japan that could be purchased for 120,000 points for a nearly 10% return, but on average I pick trips based on when I want to go and not on maximizes value, and I tend to plan months ahead, so 1.5% seems about in line with the average. About $1700.

Now, 562,000 points can buy 25 nights at the Marriott East in NYC at $400 a night, which is worth $10,000. Or it could buy TWO packages each worth 7 nights at a Cat 7 hotel + 25% of a car rental + 120,000 miles (8 thousand MORE miles than just collecting the miles). And there would be 20,000 points left!!!

I mean...wow. That's such a tremendous difference that it's ridiculous.

On top of that, I'll sign up for the United Visa and FF program (though I will have to look into AA per Dillman's recommendation). I will use the United Visa to buy United tickets for a value of 31500 miles per year. On top of that, since I'll be getting enough EQMs to make Premier Executive within six months, at which point i'll get 100% bonus. Just to make life easier for me, I'll credit the whole thing as Premier Executive for an average year. So that's 31,500 miles + 72,000 EQMs + 72,000 redeemable miles = 175,500 miles per year.

Now, factoring in the Platinum bonus, I will actually be getting 18 points per dollar spent on the hotel (10 points + 30% bonus + 5 credit card points). That comes out to 1,0125,000 points per year! And that's not counting any of the variety of specials and promotions and all that other stuff.

OK, so to summarize:

1. United Mileage Program
2. United Premier Visa - 2x miles on flights
3. Marriott Rewards programs - 10 - 13x dollars spent on hotels
4. Marriott Reward Credit Card - 5x dollars spent on hotels

Does that sound reasonable?

Now, a few outstanding questions:

1. I have hotels and flights covered, but should I put car rentals and meals on the FF card or the Hotel card? Or a third card with its own specials?

2. I noticed that I can book hotels on United.com. Do I get the same 2x mileage credit for hotels booked through United.com...in addition to the 13x Marriott credit? Or do I just get the mileage credit for flights?

3. I assume I've come to the conclusion that all of you have come to years ago. What are some of the advanced techniques you use? I noticed that a few people mentioned getting cards just for lounge access and other little perks. How do you incorporate these types of cards into your spending habits?

2MM with AA (all earned miles count, via credit card etc) and you get lifetime plat

Given the travel, I'd seriously consider an Amex (or possibly Diner's club) for the various travel benefits. You don't have to charge anything to them, but it's really nice to a) have a card w/o a preset spending cap and b) a # to call for help, replacement card, cash, etc.

Marriott and United affinity cards are both VISA cards issued by Chase. There's no reason not to carry both, but be realistic in your expectation of how much credit Chase will extend to a new customer, especially if your expenses will be disproportionate to your verifiable income. I assume you have already checked your FICO score?

Even if Chase issues both cards with adequate credit limits, it's important to always carrry at least one card from another issuer and a different transaction network (i.e. American Express or Mastercard). If there is an authorization system failure (at Chase or at VISA), or if Chase suspects fraud and freezes your accounts, or you simply have a dispute with Chase, you still need to be able to pay.

Also, if your expense reimbursement is late, and you must temporarily carry a balance, you will typically not want to put additional charges on that card for two billing cycles because those new transactions will also be subject to finance charges. (This is an important benefit of Diners Club. It's a charge card, and must be paid in full every month, but if you cannot pay you can transfer the charges to a separate account which accrues finance charges, but new transactions are not affected. American Express charge cards have similar features, but not quite as straightforward.)

Choose a third card that you actually want to use, and make periodic purchases in various cities so that the issuer sees that the account is active and that you travel. Not much benefit to carrying a spare if the transaction is declined because there has been no activity for two years.

I would ask more questions about the employer's expense reimbursement procedure. Do they issue payment for each set of expenses that you submit, or only once a month? If payments are made sporadically try to arrange your cards to have closing dates spread throughout the month to reduce the amount due at any one time. On the other hand, if it's monthly ask when the payments are issued, and try to synchonize your card closing dates so that payment will be due a week or more after you expect to receive the clear funds. If reimbursements are chronically late, update your resume.

That's good information. I do already have a Chase credit card for Continental that I've had for 8 years (but rarely used it because I didn't buy into the whole FF program thing). So my plan would require opening two more Chase cards, which sounds like it might be a problem.

Do you prefer Diners or AMEX for the travel benefits? I'd lean toward diners simply because it's accepted at more places now, but I'm not sure if there are little insider things that you all know from experience that isn't obvious to an outsider looking in.