Amex Schwab Platinum

While amex points have great transfer options reddeeming them for cashback at a decent evaluation is not straightfoward. Therefore it is difficult to give them a minimum value. A solution is the schwab platinum. This is a platinum card issued specificaly to charles schwab account holders. All you need to do is open an eligible Schwab account to be eligible. The unique feature included in this card is that you can deposit your amex points across all cards to your Schwab account at a rate of 1.1 cents per point. While not a great evaluation it is much better than Amex’s other cash options. It is important to note that Amex may count the Schwab platinum and the other platinums as one product regarding the opening bonuses.

Credit card overview

 Please note all rates are subject to change without notice and may not even be correct at time of publishing we recommend double checking.

Chase United

 Chase sapphire link

Chase freedom link

Amex link

Credit cards

Your spending is an asset you own not maximizing it would be like charging $800 for a prime apartment in Lakewood, it is simply silly. Banks are willing to spend $1,000 to be the #1 card in your pocket especially if your a business.

There is a misconception that ALL credit card companies are trying to get you hopelessly in debt with no way of paying back. While they wouldn't mind extra money their Ideal customer is someone who has enough money to pay their bills. There are cards targeting people who haven't/ couldn't pay in the past this is known as subprime lending. Generally the better cards are for people with a better credit history. A simple look at American Express’ annual report will show you that most of their revenues are not from interest. This article is just to show you what can be done to maximize what you already spend.

Types of rewards

Banks and credit card companies make billions of dollars every year from their credit card customers (chase alone had over $4 billion in card revenue in 2019). They therefore fight over every customer with incentives.You can therefore  earn thousands of dollars worth of points and cash with minimum effort and a little awareness.There are 4 primary ways they go about that.

● Cash back

● Credit card points

● Airline/hotel points

● No interest periods

1. Cash back is the most straightforward method you get a percentage back. A typical example is the Td cash back card which comes with an easy opening bonus. Another advantage is that it has no foreign transaction fees (many cards charge a couple of percentage points for foreighn transactions) which is perfect if you're spending in shekels. From experience its easy to get approved even if you never had a card before if you have  a td bank account. This true for many banks.

2. Credit card points are the best ways to maximize your spending. Cards from chase american express are probably your best option with city bank and capital one coming in behind. These points can be used for travel directly or cash back( besides american express) or they can be transferred to airlines or hotels.

3. Airline/points can vary in value ease of use ect. For example 30,000 hyatt points could get you a night in a $1000 a night hotel but 50,000 hilton point points will maybe get you a decent hotel.

What are the best points to get?

There are two types of points

● Credit card points

● hotel /airline loyalty program points

We will first discuss the latter:

Loyalty systems are a huge revenue driver for airlines/hotels they are leveraged to ensure loyalty to themselves and by selling their points to banks who further use them to incentives people to use their credit cards. (el al has not yet managed to understand this, maybe the new owners will change that). These deals with banks can amount to Billions (with a B) of dollars.They also offer perks like free luggage lounge access ect. Directly through their programs through status (usually achieved by flying alot and spending alot of money) and by issuing these “privileges' ' through their credit cards. When a person uses the points they “lose” revenue (the person doesn't pay for the seat/room) or they actually pay the hotel (when its a franchise location) or the partner airline. They therefore walk a thin line between trying to make their points the least valuable and keeping the loyalty/ points selling. Prior to the corona virus the big airline and hotel chains constantly devalued their points due to lack of competition and huge demand. Corona virus seems to have tapered that off a bit.  That has since changed with the huge demand for travel. The airlines programs can be a bit complicated for real in depth analysis i recommend dansdeals.com and travelisfree.com (though these things constantly get changed and updated its a bit hard to stay on top of it.

There are two ways a hotel chain or airline will set up their loyalty systems

 

● Fixed points for category/miles flown

● Variable points charged

Fixed categories: For example marriott and hyatt have 8 categories of hotels that they charge a set amount for without the price being a factor. (This has now change with marriot switching to dynamic pricing which basically means they can charge what they want)A Lot of hotels can get very pricey in one season and very cheap another but the points cost will be the same (though marriot has peak/off peak pricing. For Airlines it's a little trickier even if an airline has set rates they will only allow a few seats to be booked at that rate this is usually  called  awards seats or something similar. Another difference is that airlines have alliances and you can use one points “currency” to book flights on another. For example you can use alaska points (transferable from amex and citi points) to book el al seats (these things can change) or use alaska miles to fly american. For these partner flights some airlines will also have set rates.

 

Variable points: Another way is variable points meaning the company will charge whatever it wants based on demand/price this is the way hilton marriot and ihg hotels set up their system. Examples of airlines that set it up like this are jet blue and delta.

 

The way you use points  can lead to some really good deals and really bad deals for example you could book a $100 flight on an airline that charges 20,000 points for that flight based on miles flown  for a value of .5 cents a point at the same time you can get a $3,500 business class seat to israel for 170,000 points a value of over 2 cents per point.

 

The way variable points system are set up could be confusing for example delta doesnt seem to have any rules and will charge crazy rates for high demand flights while hilton syas thei’ll never go over 95000 points for a basic room (with some exemption https://waldorfastoria3.hilton.com/en/hotels/maldives/waldorf-astoria-maldives-ithaafushi-MLEONWA/index.html)

Also even fixed systems can change thor rates or even to variable systems (like United did recently to their own flights though partner remains fixed) Therefore its best to target points you can convert at will which I will discuss in the next section.

 

Here are some examples. A shabbos at the waldorf in Jerusalem can be easily attained with Hilton points (please remember everything here is pre corona this has since changed as they seem never to have availability ). They can be attained by opening one or some or all of these cards  or by transferring amex points to hilton(Usually you need 95,000 hilton points a night you usually must book in advance but points bookings are cancellable until 24 hours before) A night at the stunning ritz carlton herzliya will cost you 60,000 marriott points. Attainable through the american express marriott bonvoy cards or the chase bonvoy cards. I looked at August flights 2021 for United, a direct flight to Tel Aviv for 48,000 United points (one way) received either through the Chase United credit cards  or transferred from Chase points . The best value from hotel points is through the hyatt loyalty program for example a night in the nyc park hyatt where raits can reach over 1,000 (pre crona) can be bought using 30,000 hyatt points which can be earned using the chase hyatt card or by transferring chase points. It is best to first target “hybrid” credit card points that can be transferred before you familiarize yourself with all the different options and due to the fact that airlines/hotels routinely devalue their points.

Credit card points

As we discussed in the prior section banks buy billions of dollars worth of points from airlines to use in their credit cards award systems. The banks distribute them in two ways.

1. By issuing credit cards unique to that program (ie:united credit card)

2. By issuing their own points with one of the options for using them is to transfer them to a loyalty program

There are currently for “currency” of points that have this feature

1. Chase ultimate rewards cards

2. Amex membership rewards cards

3. City thankyou points cards

4. Capital one points cards

Each of these points have some unique features and some that are shared between all of them.

For example chase has an exclusive contract with united and hyatt while amex has an exclusive contract with hilton.

These points can also be used to get cash back and some have enhanced features.

For example if you have a chase sapphire card or ink preferred business card you could redeem the points at a rate of 1.25/1.5 (depending on the card) cents a point for travel through chase ultimate rewards (or currently you could use points at this evaluation to redeem grocery gas station and grocery stores using sapphire i'm not sure if this is for us only stores or not.) or you can redeem them for cash at a rate of 1 cent a point. (I don't recommend selling to brokers because if you get caught which can happen if the broker is careless you will get shut down from that bank)

The advantage to these points that they have a a floor value. If you give your spending to an airline or hotel they will evaluate your points the second they deem it advantageous to do that. That is why I recommend going with chase points or even amex points. In later posts I will discuss advantages and disadvantages of each type of card

The theory of ros (return on spend)

When you invest your hard earned money you expect a good return. The standard benchmark is the return of the s&p 500 which for the last 50 years is about 10.9% annually. The fact is if you invest 10% of your earnings in a year, assuming this return, it would be a little more than 1/2 of what you can get by earning 2% back on the  other 90% (of course this doesn't have the compound effect that investing has). 2% is without any effort if you simply do some research it can be 10% if you play your cards right (pardon the pun). The fact is your spending is an asset that banks will pay to service, you should sell it the highest bidder.

American express blue business card

 Click here for the application

In my opinion this is a must have. It gives 2 points per dollar on all purchases up to $50,000. It is a business card so it doesn't go on your 5/24 for chase. It is a perfect card to keep open if you want to accumulate Amex  points. That involves opening expensive cards that for many are only worth it the first year. This is a perfect no annual fee card that you can keep opens. It also has a great referral rate of 10,000-15,000 points for the referrer. This card usually doesn't have a public opening bonus but does have one through a referral link.

Amex Limited time offers (marriot)

 Amex has released some great limited time offers. I advise you to click here to see if any appeal to you. This post is about the Marriott cards. The Marriott portfolio is split between amex and chase. Amex issues a "luxury" consumer card with an annual fee of $450 and a business card with a $125 annual fee. 

Marriott Bonvoy Brilliant^™ American Express^® Card

The opening bonus on this card is currently 125,000 Marriott points if you spend $5,000 in eligible purchase in the 1st 3 months and $200 back at us restaurants. This offer can end at any time. This card comes with a $300 credit at participating Marriott hotels. If my referral link doesn't  show this offer then I advise you to apply through amex straight. (usually referral links show better offers with amex. Occasional this is not the case) The card earns 2 points per dollar and earns 3 points for the categories of dining and flights booked directly with airlines. It earns 6 points for spending with Marriot. We don't suggest using this card for everyday spend (or any Marriott card). Valuing points is completely suggestive but as far as I know buying Marriott points at the time of this posts from a broker cost at the most $.007 per point sock for everyday spending you will be getting 1.4% back that you can only use at Marriott obviously not very good. Unless you have a specific goal in mind that will give you a better valuation. I think you could probably get a cent in high season. For this you could spend with a freedom unlimited and instantly get 1.5% back. If transferred to a sapphire it can be worth up to 2.25 and even more if transferred to an airline or hotel.For the opening bonus it depends if you have a good redemption in mind. Keep in mind that for Marriott cards you can only get one bonus per 24 months across all cards and for Amex you (unofficially) cant have more than 4 credit cards. This card also counts for 5/24 for chase.

Amex Marriot Business card

This card has a limited time offer of 100,000 points for spending $5000 in the 1st  3 months also it includes a $150 credit which offsets the first year annual fee.
This card earns 2 points per dollar ,4 points for us gas stations shipping and wireless service providers and 6 points for spending at Marriott. Like I said before it is generally not worth doing your everyday spending on.

Other considerations

These cards also have certain bonuses for threshold for spend and  status for just having the card. From what I understand status at Marriott doesn't  guarantee you anything. The free night for spending on the business card is caped at 35,000 points. The free nights you get for just having the consumer or business card for more than a year are capped at 50,000 points and 35,000 points respectively. If you can find good hotels at that rate then you may find it worthwhile to open these cards. Just keep in mind that Marriott is notorious  for making their desirable hotels cost more points every year. Also keep in mind that chase and amex points can be transferred to Marriott so if you earn 2 amex points for spending with the blue business cash you could always transfer  it if its worth it. There are other benefits like tsa credits and insurance that you should do your won research to see if it adds value to you. 

 

 

Look out for future posts

 I hope to start reviewing individual cards in blog post in the near future.

Welcome

 Welcome to the Kollel finance blog. I am a Kollel guy who has a hobby of opening, using and studying credit cards. In addition, I love taking advantage of offers designed to attract customers to banks and brokerage accounts. Many people are perplexed on how Kollel families function with low incomes. Taking advantage of banks and credit card opening bonuses can help with finances.  Since customers of these institutions are generally sticky it pays for the banks to pay nice amounts of money to get them to use their services. It has become a situation in the United States where the question for the consumer is, "how much should I get paid for you to forward cash on my behalf, hold my money, and ensure that is it insured". Taking advantage of these facts can leave you thousands of dollars richer. Though there is an assumption that "points" are for "yeshivish" people who don't have incomes. The truth is the more spending you do the more you can take advantage of these offers. For example, a business or household spending $1,000,000 a year should be able to easily get at least 2 percent "payment" from the banks they use to pay. This would be at least  $20,000 at the end of the year without any effort.