Airline Miles Rewards vs. Credit Card Cash Back Rewards
Guest: XeroK00L
Credit Expert (100+ Posts)
Post subject: Airline Miles Rewards vs. Credit Card Cash Back Rewards
Posted: Mon Jul 24, 2006 1:39 pm
Quote:
Quote:
"XeroK00L"
Quote:
I guess it is good I have UNITED & DELTA MILES
I guess it is good that you enjoy paying annual fees and being stuck with the choices of the two airlines.
FEEL SORRY FOR ME WHEN THAT ANNUAL FEE GETS ME TO HNL
I'm not sure what your point is. It's not like TY Network doesn't allow you to redeem points for flights to HNL. Spend just 35,000 TY points for a flight to HNL. From SFO, that would've cost at least $400; from JFK, that would be at least $700.
Can you tell us how many United or Delta Miles you have to redeem for a flight to HNL, so that we can make a better redemption efficiency comparison?
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Guest: rain
Credit Expert (100+ Posts)
Posted: Mon Jul 24, 2006 3:54 pm
I've repeated myself a few times, but here it goes again.
Airline miles are normally more valuable than normal cashback or existing credit card reward points only when you redeem for premium class tickets.
First class from USA-Asia: ~$10000 per ticket. Nobody really sane buys at those prices. Sometimes you have consolidators, business discounts, whatever, so lets say $8000.
It usually takes 120000 miles to redeem for this ticket. That's a 6.6% return. If you're feeling keen, you can figure in the taxes (I believe citi pays your flight taxes for you, but these airline miles don't), the inevitable annual fee, etc. But the approximate 6.6% return will probably not change much.
Major airlines also have alliances, and you usually can redeem on their partner airlines at the same rates.
You can also factor in a card like starwood amex card, which normally gives a bonus of 5000 miles when you redeem 20000 into many airlines (Not UA though). This is an additional 20% bonus, so 6.6% redemption rate becomes 7.9% redemption (if you fly first). If you fly biz, it may be a 3.5-6% return, depending on what card you use)
You can also factor in sign up offers, although those will typicall matter only in year 1.
-----------------
For bank reward cards like citi's, the stated value is only for economy ticket. If you want to choose alternate airlines or fly premium, the redemptation rate is going to be reduced drasticlly to ~1%.
Can you imagine spending 0.8M points on a first class ticket to asia?
----------------
For me, I just want to maximise the return, and give preference to cash.
So I try to put groceries on citi dividend and everything else on starwood, and switch between a few other cards as and when special double points offer start.
Ultimately, I still don't spend much. Mostly because I always seem to have too little money, too many bills, be underpaid, blah blah blah. Life sux when parents aren't handing out cash. =( So given my own personal constraints (How much I spend, what I spend on, what I want to redeem for), I chose what I believe was the perfect set of cards for me.
2% is an alright rate. Twice as good as most cards. I'd go for it if they increase the sign up offer to $150 worth. I currently don't do any offers $100 or less
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Guest: XeroK00L
Credit Expert (100+ Posts)
Posted: Mon Jul 24, 2006 4:57 pm
Thanks for the input, rain. So in conclusion, if you're cheap like me and always fly economy, use TY points-earning cards for free economy class tickets. If you're looking to upgrade tickets you buy on your own, use an airline card.
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Guest: maddybeagle
Credit Expert (100+ Posts)
Posted: Tue Jul 25, 2006 10:42 am
Quote:
Not sure why you're repeating your previous post, mouse. We all know their point-to-cash back conversion rate sucks, but nobody is forcing you to redeem TY points for cash back. As you, Polonius and I pointed out, there are mainly three ways to use the points with nearly, precisely, or above 100% efficiency:
a. nearly 100%: like you said, just redeem the points for gift cards. Even though by using gift cards you will lose the opportunity to earn more 5% rewards, the end result at 5% x (100% - 5%) = 4.75% still isn't a bad reward rate at all.
b. precisely 100%: be daring like I am, and redeem for student loan rebate checks, with always a 100% conversion rate. Spend just 2,500 points for a $25 check, and deposit it at your local bank's ATM. None of my past 6 student loan rebate checks got rejected so far, and I doubt they ever will be, since chances are Citibank won't ever want to waste their labor on manually verifying that the checks are really cashed by actual student loan programs. deal.
I dont know why you are repeating this info. either....My previous post was better.....you are losing more on the gift cards than 5% considering there are numerous gift card buying programs out there with 20% rebates.....Citibank is doing the same...they arent buying the cards at face value....
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Guest: quiznut1
Credit Expert (100+ Posts)
Posted: Tue Jul 25, 2006 2:51 pm
I don't have too much else to say, but given the discussion right now, I feel we need to stay on the original topic. The original topic was the Citi Diamond Rewards.
Any other thoughts about this card? Is it as good of a deal as they are making it? Will you apply, and if you do, will you ditch the card after 1 year? More input on these questions and other information related to the original topic would be helpful. Thanks.
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Credit Expert (100+ Posts)
Post subject: Airline Miles Rewards vs. Credit Card Cash Back Rewards
Posted: Mon Jul 24, 2006 1:39 pm
Quote:
Quote:
"XeroK00L"
Quote:
I guess it is good I have UNITED & DELTA MILES
I guess it is good that you enjoy paying annual fees and being stuck with the choices of the two airlines.
FEEL SORRY FOR ME WHEN THAT ANNUAL FEE GETS ME TO HNL
I'm not sure what your point is. It's not like TY Network doesn't allow you to redeem points for flights to HNL. Spend just 35,000 TY points for a flight to HNL. From SFO, that would've cost at least $400; from JFK, that would be at least $700.
Can you tell us how many United or Delta Miles you have to redeem for a flight to HNL, so that we can make a better redemption efficiency comparison?
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Guest: rain
Credit Expert (100+ Posts)
Posted: Mon Jul 24, 2006 3:54 pm
I've repeated myself a few times, but here it goes again.
Airline miles are normally more valuable than normal cashback or existing credit card reward points only when you redeem for premium class tickets.
First class from USA-Asia: ~$10000 per ticket. Nobody really sane buys at those prices. Sometimes you have consolidators, business discounts, whatever, so lets say $8000.
It usually takes 120000 miles to redeem for this ticket. That's a 6.6% return. If you're feeling keen, you can figure in the taxes (I believe citi pays your flight taxes for you, but these airline miles don't), the inevitable annual fee, etc. But the approximate 6.6% return will probably not change much.
Major airlines also have alliances, and you usually can redeem on their partner airlines at the same rates.
You can also factor in a card like starwood amex card, which normally gives a bonus of 5000 miles when you redeem 20000 into many airlines (Not UA though). This is an additional 20% bonus, so 6.6% redemption rate becomes 7.9% redemption (if you fly first). If you fly biz, it may be a 3.5-6% return, depending on what card you use)
You can also factor in sign up offers, although those will typicall matter only in year 1.
-----------------
For bank reward cards like citi's, the stated value is only for economy ticket. If you want to choose alternate airlines or fly premium, the redemptation rate is going to be reduced drasticlly to ~1%.
Can you imagine spending 0.8M points on a first class ticket to asia?
----------------
For me, I just want to maximise the return, and give preference to cash.
So I try to put groceries on citi dividend and everything else on starwood, and switch between a few other cards as and when special double points offer start.
Ultimately, I still don't spend much. Mostly because I always seem to have too little money, too many bills, be underpaid, blah blah blah. Life sux when parents aren't handing out cash. =( So given my own personal constraints (How much I spend, what I spend on, what I want to redeem for), I chose what I believe was the perfect set of cards for me.
2% is an alright rate. Twice as good as most cards. I'd go for it if they increase the sign up offer to $150 worth. I currently don't do any offers $100 or less
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Guest: XeroK00L
Credit Expert (100+ Posts)
Posted: Mon Jul 24, 2006 4:57 pm
Thanks for the input, rain. So in conclusion, if you're cheap like me and always fly economy, use TY points-earning cards for free economy class tickets. If you're looking to upgrade tickets you buy on your own, use an airline card.
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Guest: maddybeagle
Credit Expert (100+ Posts)
Posted: Tue Jul 25, 2006 10:42 am
Quote:
Not sure why you're repeating your previous post, mouse. We all know their point-to-cash back conversion rate sucks, but nobody is forcing you to redeem TY points for cash back. As you, Polonius and I pointed out, there are mainly three ways to use the points with nearly, precisely, or above 100% efficiency:
a. nearly 100%: like you said, just redeem the points for gift cards. Even though by using gift cards you will lose the opportunity to earn more 5% rewards, the end result at 5% x (100% - 5%) = 4.75% still isn't a bad reward rate at all.
b. precisely 100%: be daring like I am, and redeem for student loan rebate checks, with always a 100% conversion rate. Spend just 2,500 points for a $25 check, and deposit it at your local bank's ATM. None of my past 6 student loan rebate checks got rejected so far, and I doubt they ever will be, since chances are Citibank won't ever want to waste their labor on manually verifying that the checks are really cashed by actual student loan programs. deal.
I dont know why you are repeating this info. either....My previous post was better.....you are losing more on the gift cards than 5% considering there are numerous gift card buying programs out there with 20% rebates.....Citibank is doing the same...they arent buying the cards at face value....
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
Guest: quiznut1
Credit Expert (100+ Posts)
Posted: Tue Jul 25, 2006 2:51 pm
I don't have too much else to say, but given the discussion right now, I feel we need to stay on the original topic. The original topic was the Citi Diamond Rewards.
Any other thoughts about this card? Is it as good of a deal as they are making it? Will you apply, and if you do, will you ditch the card after 1 year? More input on these questions and other information related to the original topic would be helpful. Thanks.
CardRatings.com is the most comprehensive source for comparing credit card offers. Please visit CardRatings.com to view the best rated credit cards!
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