The Only Time I Will Write About Credit Cards

Wherein I talk about the incredibly boring, tedious, and distracting world of travel reward credit cards for, I hope, the only time.


Hey Stephen, why don't you...

I don't want to write about travel reward credit cards.

No no, hear me out. These guys...

Make all their money from affiliate links?

Well...

Write five or six blog posts a day? Of variable quality?

I mean...

And there's, like, a million of these people out there already writing about the same thing and then linking to each other in a compleat and æternal metal-premium-credit-card ouroboros?

I guess...

God damn it, fine.


When I started writing about travel, I sorta figured I would inevitably get to writing about travel rewards credit cards. There are, approximately, fifty thousand sites on the internet dedicated just to these things, and quite frankly I had some new and original things to say about them, because (1) these sites perpetuate themselves and make revenue by affiliate links, wherein you the reader click the link and apply for the card and the proprietor of the blog earns a commission usually in the $100-$200 range per person who applies which (2) creates a perverse set of incentives to put links to credit cards in articles that have nothing to do with credit cards to get more people to click those links while (3) dispensing advice on which credit cards to buy and use right next to the convenient link which (4) creates some perverse incentives to describe every travel credit card as the most important travel credit card of the day. Which is not to say that the proprietors are venal, self-serving twats 1 , or that there's no useful information to be had. The bit of literate legerdemaine these guys pull is that all the information is in a vacuum, and it takes a year or two of trial and error to figure out what works best for you, and every person will be different anyway so there's no one-size-fits-all solution to the pressing question I seem to get periodically of "what travel credit card is best for me?" One system is to apply for every travel card under the sun and get all the sign up bonuses and then spend them and then you have chunks of orphan points you can't use spread across so many loyalty programs that you can't ever earn anything worthwhile and you end up with enough currency to buy a soda from vending machines across three continents but no way to actually spend it effectively.

And after years of thrashing around, following this advice and that, and ending up going through probably a dozen or more travel credit cards 2 , and finally finishing off a few orphaned points in a few loyalty programs I don't give a damn about, I developed my own, relatively simple system, built around a handful of generally useful credit cards. And I thought I should share this with the world. Not just the system, but the process. And so I started writing. Then I'd get a page in and throw it away and start over. And then I started again, this time thinking I'd sell it as an e-book or something. And it's sitting dead on some cloud service hard drive. Because the truth is, this stuff is unbelievably dry and boring, and every time I would start writing I'd get bored and wander off before committing anything useful to paper.

For example, there's the issue of where to even start, which it turns out probably isn't based on a credit issuer but on your primary domestic airline that you travel on the most 3 . This is actually to figure out who you could potentially be earning miles with by crediting those flights to an airline alliance partner. What's an airline alliance partner, you ask? Well, back in the 90s, to improve reach, the big US legacy carriers (American, United, Delta, to list the current survivors) banded together with other airlines around the world to form alliances, who have code shares so you can, say, book a flight from the US to Thailand by way of Japan using United, ANA, and Thai airlines, for instance, and good Lord aren't you bored to death of this already? These airlines ALSO allow you to earn each other's miles when you book with each other 4 . So, for example, you could earn ANA miles by booking through United flights, if indeed you wanted to do your fun vacation travel on ANA. This narrows down the list of airlines you would want to earn miles with, but does not make for the final decision, because each airline has their own award chart 5 which fixes the value of each airline's miles -- more or less -- and you probably want to figure out which airline you want to partner up with based on various factors like earning rates (meaning distance versus revenue based earn), how much it costs to fly certain routes 6 , if they have usurious additional fees like fuel surcharges, and whether or not at this point your eyes have glazed over and you are considering walking off and grabbing a beer instead of finishing this.

This then tells you which credit issuer you want to partner with -- in the US you are probably choosing between Chase AMEX and Citi -- because each of these issuers have cards that earn fairly generic transferable points that you can turn into airline miles with a partner airline. These points are gold, and what you earn on your daily spend, and unless you're traveling 75% time and think this whole article is a sort of Points 101 that you actually TA'd last semester, your daily spend will be where you earn the majority of your travelin' points. So, what you probably want to do is pick the credit issuer that transfers to your preferred airline. The one caveat at this point is probably that AMEX is not popular throughout big chunks of Europe because they charge the most for transactions.

So now that you've picked your issuer and not gotten bored with this whole thing, you need to pick your credit cards proper. Cards? Plural? Yep. Plural, most likely. You'll definitely need a premium card, which will be made of metal to make you feel important and which will have an annual fee that will range from $450-$550 which sounds like a lot but they have so many damned airline fee credits and travel credits and credits for paying for Global Entry with the card that it sorta brings the number down to around $150 or so in terms of real out-of-pocket expense in a year and if you don't want to dig through all that and make sure you'll get your money's worth you should probably start with the $95 annual fee travel card with training wheels that each of the issuers have. AMEX's costs like $150 or something, because AMEX likes to act exclusive. Now you get to the really fun stuff, because these cards are great for spending on travel but can be a bit more mixed on other spending, like groceries or restaurants or whatever, so you'll actually want to get a few more cards from your chosen issuer -- spacing out the sign-up enough to make sure you can meet the minimum spend for each of their sign-up bonuses, of course! -- and each issuer has their own peculiar ecosystem where you can earn such and such transferable points in a variety of ways from the straightforward to the painfully gimmicky. You could NOT do this, but remember that your daily spend is how you earn your points, and you probably don't spend all your money on airfare every day, and really you need the premium card to make the points transferable at all instead of just being worth 100 points/dollar on an Amazon gift card which while after all this may seem just fine is actually a big waste that leaves a lot of value on the table and we're all about maximizing value here aren't we?

Here is a photo of my brother's dog, hanging out with me, from when I was visiting. He is a handsome gentleman. I include this because it's the only way this article is going to be worth getting through.

Here is a photo of my brother's dog, hanging out with me, from when I was visiting. He is a handsome gentleman. I include this because it's the only way this article is going to be worth getting through.

I haven't even talked about hotel points, because if you're loyal to one chain you'll want to get that chain's brand affiliated card 7 because, barring one exception (Hyatt), transfering cc points to a hotel chain makes the beancounters at said cc issuer giggle with delight at how badly you done fucked up because hotel points are usually "worth" (we'll get to what that means later, but for now I'll leave it nebulous because it is) anywhere between a half to a third of airline miles, and the way this whole thing works is the cc issuer buys a boatload of points from their partners and the partners know what they think the points are worth and, in fact, outstanding airline miles can be a sort of liability on the company's books that have to be valued so there's a whole team at American that works their asses off to make sure your average airline mile is worth some specific target number of cents, probably somewhere around 1.5. So if you transfer your points to the hotels, the cc issuer bought those hotel points for a lot less than airline miles and are selling them to you then at the same price. Doesn't take a genius to figure that hotel points probably have a nice profit margin to the cc issuers. After that depressing digression into bean counting, you should just earn hotel points through hotel spend with a hotel credit card if you are loyal to one brand, or earn as many transferable points as possible and foresake hotel loyalty if you aren't. There are other options where you can earn more of those sweet, sweet transferable points.

You're probably bored out of your mind at this point - I know I am - but we're finally to the fun part: cashing in those points for travel! Now, the dewy-eyed naïfs out there might just use those points as cash, since most of these points can just be exchanged at a fixed amount somewhere between ¢1-1.5/point for travel. This will be met with much tongue-clucking by the points-mad community, particularly w.r.t. the potential use as airline miles. You see, paradoxically, airline miles become more valuable on a cents/point scale as you up your travel. Nobody with any worldliness would use miles for domestic economy since this is usually the least valuable use. The gold standard is international travel. Your mileage may vary (see, that's a pun I used to break up the monotony of this), but some typical numbers are going to be around ¢1/mile for international economy class, ¢1.5/mile for int'l. business class, and a whopping ¢3.5/mile for int'l. first. That said, the scaled cost increase in miles is incommensurate with the cost, so you can take, typically, two economy class trips for the mileage cost of a single business class trip, and maybe three business trips for the cost of two first class trips, and I didn't even have to look that up. Seriously, these numbers are just in my head. I know them, like I know my Social Security number, or my mother's birthday. And I'm nowhere near as meticulous or tongue-cluck-happy as the real professional "travel hackers". There are pretty serious debates about the best way to evaluate how much points are worth, with some people giving breathlessly overvalued numbers (the venal, self-serving twats mentioned supra) and others arguing that a cc point is only worth what you can cash it in for (who are also wrong). So the point is that when it's time to book a flight you need to ask if you want to travel, abroad is a given, in the pinnacle of luxury twice or in a very comfortable space three times or wedged in with the typhoidal masses in economy six times or seven times. Then, once you've decided whether or not you want to eat five hundred dollars worth of caviar paid for with miles or contract an eighteenth century disease while your seat neighbor elbows you for ten hours, you need to compare fares and figure out if you're getting a better deal with miles or using points as cash, and book accordingly. And seriously, if you screw this up you could be leaving, like, a thousand dollars on the table like I did one time. Hotel bookings w/ points are much more restrictive because, as I said before, you need to be earning direct hotel points or trying to optimize earn with your transferable points for these flights. In this sense it's simpler, and also because hotels are still a competitive market (unlike airlines) your points earn in terms of return per dollar spent will be much higher with hotels than airlines, esp. if you are using a hotel co-branded cc.

Oh, and you should always, always book Saver Awards, because the regular award tickets are twice the price and you might as well just put all your life savings into your mattress and then set your mattress on fire.

I have not even begun to talk about the myriad other tricks out there: booking through partners and various weird sweet spots in award booking where you'd want to book a US to China trip using a European carrier's miles that you transferred into and haven't actually earned a single mile w/ said Euro. carrier; positioning flights wherein you take a short jump to a sort of gateway where there are a lot more award options i.e. if you live in Lawrence, KA you're much better off looking for award flights out of Chicago which is a short flight away and a key int'l. gateway into the US; hotel-airline partnerships and specials wherein you can earn points with one for spend with another &c.; strategies involving buying transferable points or hotel points or airline miles to then cash in on some fancy flight so you can fly first class for the dollar cost of business because that's how hopelessly marked up First Class is as a revenue fare; the various implementations of paying for hotel rooms with cash and points and how to evaluate whether you're getting a good deal or not8; the various routing rules that can allow you to take effectively two trips for the cost of a single booking if you're clever and flexible; and the list goes on essentially forever.


So that's it. I wrote up what I hope is a pretty good summary of this dull-as-dirt topic that occupies space in my brain that could be used for something far more useful. And I did it without a single affiliate link.


  1. Although some are.

  2. Serious shit. That's not even pro level stuff, either. There are a group out there called "churners" who will burn through 24 credit cards in a single year, picking up sign-up bonuses and canceling when the annual fee comes due.

  3. Assuming you are based in the US and fly mostly domestic flights on a regular basis. If you fly mostly internationally or fly irregularly, you are in two entirely different ecosystems and much of this stuff won't apply to you, or will but in weird ways, sorta like when you look at some sliced avocado and figure out that programming problem you've been stuck on for days.

  4. Although they don't really advertise this so it's just a little open secret you gotta know. Shhhhh or they'll break my kneecaps. Which these days is probably a more literal threat than any of us should be comfortable with.

  5. You'll find there are a lot of industry buzzwords in this space, but fortunately they are much more self-explanatory than a lot of other buzzwords in other industries. In this case, an "award chart" is a chart that tells you how much various airline awards cost.

  6. Sometimes there is as much as a factor of two difference between two airlines for an award seat on the same exact seat on the same exact flight. Airlines ostensibly seem to aim for the same rough mileage value of ¢1.5/mile with some variation, so your guess is as good as mine.

  7. You don't want to do that with your airline, though, because the earning is worse and the perks are weaker and you're totally tied to one airline whereas with the transferable points you can pick different airlines if something useful comes up. You also may not want to do this because it will, usually, limit you to US legacy carriers, and nobody, including their own executives, can with a straight face claim they are better than any of their Asian or European counterparts.

  8. There are two main schools of thought on this. One of them looks at the usual point cost of the room, subtracts off the point cost for the cash and points, then evaluates how much cash you're paying for those points. This p.o.v. assumes you would never pay the straight cash posted rate for the room. The other is to look at the cash rate for the room, subtract the cash part of the cash and points, then evaluate the remainder. These can lead to wildly different evaluations as to whether you're getting a great deal or meh or terrible.