Choice of airline - rewards program, amenities, customer service, hubs

[krnyc2008]

@ohai

So, it seems like airlines must be subsidizing credit card companies who issue travel cards, since the rewards from encouraging consumers to travel outweighs the cost of the subsidy. Not only do the points tie consumers to some airlines, but consumers will say “I have travel points, so I should travel”. Since travel is generally a discretionary expense, it is worth the company’s effort to influence the consumer’s choice. Furthermore, consumers might outweigh the benefits of travel rewards, like check baggage fees “worth $25”, but actually worth less, since consumers might not choose those options every time they travel. Consumers give up the freedom of cash rewards for higher % rewards in travel points, and possibly due to some other psychological effects.

It’s a bit of chicken and egg situation. Do people really start traveling because they have some miles to burn or because they really like traveling, so they might as well earn those miles?

[krnyc2008]

@Tactics

@ohai

Let me clarify. I mean - why are travel credit cards so common in the first place? I doubt that travel is the main spending category of most consumers. So, whatever is the market share of travel credit cards - 20%, 30%? Why is it so much?

Travel cards generally have better redemption perks than cash cards (e.g. Chase Sapphire Reserve). A 2% all-purpose cash card might sound better for an average household than a travel card that gives 3% on travel and 1% on everything else, BUT every point earned on the travel card can be redeemed for 1.5 times the value when used for booking travel. Travel cards also have other perks such as travel insurance, travel credit (directly credited from monthly statements), access to VIP lounges that have free wifi/snacks/shower facilities, etc. Most travel internationally at least once every one or two years, so it makes it worthwhile.

I alternate the two cards depending what I am purchasing. Is 1 mile from Chase Reserve really worth more than 2% cash back?

[Matt_Likes_Analysis]

yes. i’m sure most airlines would be on the brink of bankruptcy if it weren’t for the sham that is unnecessary point related travel. and 90% of the population wonders why they don’t have any money…

[ohai]

“It’s a bit of chicken and egg situation. Do people really start traveling because they have some miles to burn or because they really like traveling, so they might as well earn those miles?”

They like traveling, but will travel more if incentivized. It’s not chicken and egg, because the rewards make people travel more, not make people like traveling more.

[Tactics]

[/quote]

I alternate the two cards depending what I am purchasing. Is 1 mile from Chase Reserve really worth more than 2% cash back?

[/quote]

No. But, you might need to use the Reserve card to reach the $4000 spending requirement over three months that gives you 100,000 bonus points (which is really the main reason why everyone’s so excited about the card).

[Analti_Calte_Equity]

The United PS service is nice from NYC to SFO. It’s not that crazy jet blue seat setup posted above, 2 per side. Food is always good. I get a deal on United.

[krnyc2008]

@Tactics

I alternate the two cards depending what I am purchasing. Is 1 mile from Chase Reserve really worth more than 2% cash back?

[/quote]

No. But, you might need to use the Reserve card to reach the $4000 spending requirement over three months that gives you 100,000 bonus points (which is really the main reason why everyone’s so excited about the card).

[/quote]

Short term, yes. Timing worked perfectly for me to open Chase reserve as I am in the process of booking my next trip in December. Also I needed to get Global travel.

I am wondering about the long term (after bonus is earned) though. Is the combination of two cards or using exclusively Reserve card more beneficial?

[krnyc2008]

@ohai

“It’s a bit of chicken and egg situation. Do people really start traveling because they have some miles to burn or because they really like traveling, so they might as well earn those miles?”

They like traveling, but will travel more if incentivized. It’s not chicken and egg, because the rewards make people travel more, not make people like traveling more.

People are incentivized differently I suppose. Personally I won’t travel more times per year than I can afford, no matter how much I would want to, or how many more mile I could potentially earn

[Sweep_the_Leg]

Last year I had three credit cards that offered various rewards depending on what my wife and I were purchasing. For example, Discover would do something like 5% cash back on groceries and gas, Amex for Costco, and Chase for travel.

We used our cards correctly approximately 0% of the time. At the beginning of this year I switched to the US Bank Cash Plus card for everything and it’s been much more rewarding (not a pun. Literally more rewarding.)

Sometimes simplicity is key.

[krnyc2008]

@Sweep_the_Leg

Last year I had three credit cards that offered various rewards depending on what my wife and I were purchasing. For example, Discover would do something like 5% cash back on groceries and gas, Amex for Costco, and Chase for travel.

We used our cards correctly approximately 0% of the time. At the beginning of this year I switched to the US Bank Cash Plus card for everything and it’s been much more rewarding (not a pun. Literally more rewarding.)

Sometimes simplicity is key.

I am with you on simplicity. Two cards is the max I would go for. It’s still simple enough and the only question you need to ask yourself before a purchase is whether it’s “travel and dining” or “all other” category.

[krazykanuck]

@krnyc2008

Short term, yes. Timing worked perfectly for me to open Chase reserve as I am in the process of booking my next trip in December. Also I needed to get Global travel.

I am wondering about the long term (after bonus is earned) though. Is the combination of two cards or using exclusively Reserve card more beneficial?

I plan to keep my Chase Reserve card past year 1 because the 3x on travel and dining is huge for me and the fee is essentially $150 a year. Travel is my largest discretionary expense and I book a decent amount of reimbursed travel for work. A Chase point is worth a minimum of 1.5 cents (if you redeem for travel), so the return on a $1 of travel spend is 4.5%. If you have the no fee Chase Freedom card with it’s 5% cash back categories you can combine the points and a $1 of spend there is now worth 7.5% return.

I have a couple of cash back cards but I never use them anymore. I put a bit more thinking into it than most, but it works for me. For those that want to keep it simple, that’s cool too.

[krnyc2008]

@krazykanuck

@krnyc2008

Short term, yes. Timing worked perfectly for me to open Chase reserve as I am in the process of booking my next trip in December. Also I needed to get Global travel.

I am wondering about the long term (after bonus is earned) though. Is the combination of two cards or using exclusively Reserve card more beneficial?

I plan to keep my Chase Reserve card past year 1 because the 3x on travel and dining is huge for me and the fee is essentially $150 a year. Travel is my largest discretionary expense and I book a decent amount of reimbursed travel for work. A Chase point is worth a minimum of 1.5 cents (if you redeem for travel), so the return on a $1 of travel spend is 4.5%. If you have the no fee Chase Freedom card with it’s 5% cash back categories you can combine the points and a $1 of spend there is now worth 7.5% return.

I have a couple of cash back cards but I never use them anymore. I put a bit more thinking into it than most, but it works for me. For those that want to keep it simple, that’s cool too.

I need to see if what I typically spend on travel per year will justify the fee.

[rawraw]

+1 on Jet Blue

[Tactics]

@krnyc2008

I need to see if what I typically spend on travel per year will justify the fee.

Travel bonus = $1,500

Annual fee = $450 - $300 = $150 (you get $300 travel credit, including taxi/uber. Even a warcraft level 90 shadowlord who hasn’t seen the sun in 4 years would spend $300 going to Blizzcon). So assuming you never use the credit card to make any purchases, you’ll be in the greens even after 10 years.

[krnyc2008]

@Tactics

@krnyc2008

I need to see if what I typically spend on travel per year will justify the fee.

Travel bonus = $1,500

Annual fee = $450 - $300 = $150 (you get $300 travel credit, including taxi/uber. Even a warcraft level 90 shadowlord who hasn’t seen the sun in 4 years would spend $300 going to Blizzcon). So assuming you never use the credit card to make any purchases, you’ll be in the greens even after 10 years.

Or that means that you spent your sign up bonus on fees

I am planning to compare my points earned this year with Chase (net of fee) with what I would have gotten (by spending same amount) had I used my other travel card, Barclays Arrival (no fee, 2x for travel and dining). If the rewards are similar, it makes sense to drop Chase card after the first year.

[krazykanuck]

@krnyc2008

Or that means that you spent your sign up bonus on fees :).

That’s assuming you get zero value out of the perks of the Chase card (airport lounge access, primary car insurance on rental cars, elite status with National car rental, etc). I travel so much for work and personal that rental car status has value, lounge access has value, included insurance has value, etc…

I have 3 Chase cards that earn points that are transferrable between the cards (Freedom, Ink+, and the CSR). Makes a really powerful earning combination.

If you do decide to get rid of it at the end of year one, I would downgrade it to a Freedom or a Freedom Unlimited as opposed to cancelling the card.

[Tactics]

@krazykanuck

@krnyc2008

Or that means that you spent your sign up bonus on fees :).

That’s assuming you get zero value out of the perks of the Chase card (airport lounge access, primary car insurance on rental cars, elite status with National car rental, etc). I travel so much for work and personal that rental car status has value, lounge access has value, included insurance has value, etc…

I have 3 Chase cards that earn points that are transferrable between the cards (Freedom, Ink+, and the CSR). Makes a really powerful earning combination.

If you do decide to get rid of it at the end of year one, I would downgrade it to a Freedom or a Freedom Unlimited as opposed to cancelling the card.

Did you get the custom-made card or plastic? I’m still using the plastic one

[krazykanuck]

@Tactics

Did you get the custom-made card or plastic? I’m still using the plastic one

I got the metal one.