Anyone want to guess which credit card I’m putting my rent on?

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Link: Citi® Hilton HHonors™ Reserve Card

I’m paying a bit more in rent in Bellevue than I did in Tampa, but I kind of expected that. The good news is that they accept credit card payments for a fixed fee, and it comes out to roughly 1.5% for what I owe. They don’t accept American Express cards, or else I’d put it on an American Express Prepaid card that I bought at Office Depot (funded with a Chase Ink Bold card so I earn five Ultimate Rewards points per dollar).

So is it worth basically “buying” points at 1.5 cents each in a spend category that doesn’t accrue bonus points? I’d say yes, though not all that enthusiastically.

On the surface I figured the Chase Sapphire Preferred® Card would be my best bet. After all, I value Ultimate Rewards points at 1.9 cents each. But still, there’s a certain holding cost to points, and while I’d probably do it, I wouldn’t he thrilled about it.

The card that somehow completely slipped my mind is the Citi® Hilton HHonors™ Reserve Card. I applied for it during my most recent credit card churn, though after completing the minimum spend I put it in my sock drawer for the time being. The card comes with Hilton Gold status for free as long as you have the card (which more than justifies the annual fee in my opinion), and gets you Hilton HHonors Diamond status after $40,000 of spend in a calendar year, so that was my goal for next year. I didn’t quite know how I’d do that, given that I’m quite infatuated with American Express Prepaid cards right now, and I’d have a hard time giving those up in favor of achieving Diamond status.

But paying rent — or any large expense that doesn’t otherwise qualify for a “category” bonus — on the Hilton HHonors Reserve card has to be the greatest thing since reality TV. While my rent (fortunately) isn’t $40,000 per year, it gets me a good way there. $40,000 of spend in a non-bonus category gets you:

  • 120,000 Hilton HHonors points
  • Hilton HHonors Diamond status
  • A free weekend night certificate — it can be redeemed for properties that cost 80,000 points per night, though due to the weekend restriction let’s conservatively value it at 40,000 Hilton HHonors points.

Now, Gary and I disagree on the value of Hilton points. I value them at 0.8 cents each, and he values them closer to 0.5 cents each. My reasoning is simply that as long as you have a Hilton American Express card as well you can redeem for AXON awards, whereby four nights at their top category hotels will run you just 145,000 points. That includes properties like the Conrads in Tokyo, Hong Kong, Koh Samui, and the Maldives.

Either way, between the equivalent of 160,000 Hilton HHonors points of value and Diamond status, I’d say that’s a return that’s impossible to beat — and makes putting rent on the card a complete no brainer. If I could maintain the 1.5% rate for all $40,000 of spend I’d be looking at just $600 for Hilton Diamond status and ~160,000 Hilton HHonors points, which would be amazing. Guess I need to rent a more expensive place so I can knock it all out at once? 😀

The bottom line is that I think this card is the best out there for spend that doesn’t belong in a bonus category on another card. Otherwise I’d say the Starwood American Express card is the other best option, though I do value three Hilton points at slightly more than one Starwood point. Oh, and I’m happy that my apartment community is miles and points friendly. 😀

Link: Citi® Hilton HHonors™ Reserve Card

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Comments

  1. @ JettyBoy — Clearly I need to do some reading up on Bluebird then (I’ve been moving while it has been developing). So does that mean you can pay your credit card statements with Bluebird too?!

  2. With bluebird you can use billpay and (apparently) load with vanilla. That said, if you view vanilla supply or billpay capacity as limited (something you will max out regardless) then it might be better to save the bluebird capacity for something you can’t pay with a cc.

  3. I would be in agreement ONLY IF you plan to be able to reach the $40k threshold. That’s a big IF for many of us.

  4. Lucky – you can’t use AMEX reloadable as you say they don’t take AMEX, so use Vanilla Visa reloadable instead.

  5. I was wondering why there were still VRs at the Bellevue OD yesterday. Apologies Lucky, I snapped them all up. 😉

  6. @ HikerT — Grrr, I picked some up just a few days ago. Did they have them on the display case? Last time they had to get them out of the back room…

  7. Lucky/HikerT, would you guys mind sharing how many VRs you feel it is safe (from a Chase shutdown point of view) to pick up at one time, or over a month or so?

  8. @ JettyBoy — That’s a great question, and I’m sure we all wish we had the answer. I tend to think “however many still keeps you a profitable customer for Chase.”

    I do about $2,500 per month, sometimes a bit more, sometimes a bit less. I know there are people that do a LOT more than that, though for me it’s an amount I feel safe with, and peace of mind is worth something.

    This new Bluebird thing is going to kill me, though… 😀

  9. Thanks lucky – appreciate your response. I am at a similar level too, although it is hard to control oneself at times. I went in yesterday thinking I will get $500 worth but found myself with $1500 worth of VRs an hour later. 😀

  10. I tried to go to my usual OD in Kent this weekend, and some guy just snatched all 15 of the VR in stock. Was that you HikerT?

  11. Lucky, have you officially moved all your spending to Amex pre-paid or do you still use CSP for dining + travel and SPG for ‘everything else’? Just curious as I’m in the same boat as you and trying to decide whether to move ALL spending to Amex pre-paid…. Thanks!

  12. For me to get $40k in spend on the Hilton card, I’d have to put my entire life on it, as I have no reimbursable business expenses. That spend is best met meeting sign-up bonus thresholds on other cards.

    When I’ve needed to juice up my AmEx spend, I’ve been paying about 3% to use William Paid to pay my rent.

  13. The United Club card offers 1.5 UA miles per dollar of general spend. Assuming you value United miles at 1.8 cpm, you’d be getting 2.7 cents per dollar spent. 1.7 cpm would equate to 2.55 cents per dollar spent. That beats your valuation of 0.8 x 3 Hilton points = 2.4 cents per dollar spent.

  14. Your rent would easily be > $40k a year for a studio or small one bed in SF or NYC. Consider yourself lucky.

  15. what’s the best CC to use with the vanilla card, read the post about the Chase UR cards; however are there any miles cards that would be equivalent if not better than the UR cards?

  16. What’s the reconsideration number for Hilton reserve card? I applied 2-3 weeks ago but haven’t heard anything since.

  17. That’s a pretty decent return, but IF you like to travel BA First Class you can do far better. The companion ticket you get at $30,000 sopend makes that far more valuable IMO. Sure, there are those pesky taxes, so it will require additional spend on your part. You get 1.25x miles/$ (for 37,500 miles from spend), the companion ticket effectively doubles the value of points earned or transferred. If you can combine it with an Amex transfer bonus (sometimes as much as +100%), the value of MR points becomes insane!

    For an alternative but similar approach, there is also the Virgin America credit card for Virgin Atlantic Upper Class redemption. The redemption cost is roughly half compared with elsewhere (50,000 miles for west coast to London), but you still earn 1 pt/$. With spend bonuses you can get the equivalent of 2.12 miles/$ with Virgin Atlantic. Not bad. Still those pesky fees though.

    Finally, I concur with Lee’s United spend suggestion. That seems to offer at least similar if not better value.

  18. I’ve been putting my rent on my US Airways Premier World Mastercard, to meet the $25k threshold that allows me to have 10,000 miles converted into preferred qualifying miles. My apartment building charges a $40 monthly fee to do that, but I think it’s still worth it. Maybe next year I’ll look for a better card option, and just earn my US status the “legitimate” way.

  19. @ stacey — Right now most of my spend is either on the AmEx prepaid or for reaching minimum sign-up bonuses. There’s no point in earning two Ultimate Rewards points per dollar when you could be earning five. 😀

    @ Lee — On the surface, but it doesn’t account for the Diamond status and free night certificate, which easily makes it more valuable, in my opinion.

    @ KParikh — Either the Chase Ink Bold or Chase Ink Plus are best, since they offer 5x points at office supply stores, where you can buy the reload cards. I don’t know of any others that offer a similar return.

    @ Eugene — It’s 800.763.9795, though in my experience they’re not nearly as empowered as the folks at Chase.

    @ Karl Mitchell — While it works for some, I’d rather not spend $1,000+ in taxes/fees per person on an award ticket. While the companion certificate is nice and I find it valuable in many cases, it’s still not somewhere I’d focus spend. And beyond the $30K for the companion certificate I’d put the spend on a card that accrues Membership Rewards points, given the frequent transfer bonuses that give you better than 1.25 points per dollar.

  20. Hi Lucky,
    I have a question on the Hilton Diamond Status. Say if I met the $40k spending limit in Nov, 2012 does the Diamond starts on Nov, 2012 and last until Nov, 2013? If not please help explain.

  21. @ Travis — It’s my understanding that it would be good for the entire following year, assuming you reach the spend in the second half of the year. Though someone correct me if I’m wrong…

  22. Travis- I believe it is good for the entire following year AND first quarter of the next year

    That is how it has worked for me

  23. @Lucky thanks for the Hilton Reserve #. Unfortunately I got the card confused, I actually applied for the Surplus card 🙂 Do you happen to have a reconsideration number for that one?

  24. Lucky, if your building charges a flat $ amount to pay with a credit card, why don’t you pay multiple months at the same time? My building charges $25 to pay with a credit card and I pay in 4 month intervals. I’d owe them that much anyway if I broke my lease.

  25. @ SSSS — I hadn’t considered that, but good point. Might be a moot point with Bluebird, but otherwise I might as well prepay.

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