Credit Card Strategy For Planning Honeymoon

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Reader David asked the following on the “Ask Lucky” page of the blog, and I thought I’d answer it here as I think there are some larger questions at play:

I need help! Though I’ve used various travel rewards for years, I’ve never played multiple card and sign-up bonus games. But now I have an interesting confluence of circumstances:

1. I have $130,000 of spend (student loan that allows credit card payment for a 0.65% fee) and the cash to pay it immediately. In addition, I have $3000-$5000 of monthly spend.

2. I currently have about 201,000 USAA rewards points, 35,000 US Airways Dividend Miles, and 151,000 British Air Avios (A 100,000 mile British Air bonus was my first foray into point maximization. Unfortunately, I did not read the fine print carefully, and I split my $30K spend for the companion pass over two years, thus not qualifying.)

3. I’m getting married! And I’d like to pull off a ridiculous honeymoon. Would not be opposed to a round-the-world trip lasting up to one month.

What do you recommend? For airline rewards? For hotel? Thanks for your help.

Overall, this is a great setup, and even without putting his loan payments on credit cards David has $50,000-$60,000 a year he can charge on various cards. That means he should easily be able to meet minimum spends on several cards per year. The only thing that pains me a bit about his setup is that he spent enough on a USAA affiliated credit card to earn 200,000+ points with them. 😉

The key here is going to be to maximize the miles accrued, while also maximizing the potential value of those miles. Chasing large bonuses is great, and David can easily accrue a million points in a year, but if those are spread across 15 programs they may not be as useful. Too many people tend to over-diversify their mileage portfolios, which makes trip planning difficult.

So ideally I would try to stick to just a few points currencies, ideally ones that are flexible, so that they can easily be combined.

Ideally, David would be able to rack up enough miles for two first class tickets to just about anywhere in the world. Without knowing when exactly the honeymoon is planned for (or whether or not David’s fiance can apply for credit cards as well, which would really accelerate earnings), I might recommend the following cards over the next several months, given that David is interested in earning both airline miles and hotel points:

Citi Executive AAdvantage World Elite Mastercard

This card currently offers an amazing 100,000 AAdvantage miles after spending $10,000 within three months, plus $200 statement credit. The $450 annual fee isn’t waived for the first year, but that statement credit helps.

The 110,000 miles earned from signing up for this card and meeting the minimum spend would be enough for two one-way business class tickets to Southeast Asia. First class would be 67,500 per person, and David should be able to spend the additional ~$25,000 to top off that account once he’s met minimum spend on other cards.

Ink Plus® Business Credit Card and/or Ink Bold® Business Charge Card

These cards currently offer 60,000 Ultimate Rewards points after spending $5,000 within three months, and the $95 annual fee is waived the first year. This is a limited time increased sign-up bonus on the card, which is 20% higher than the normal bonus.

The Ink cards have generous category bonuses which help sole proprietorships and small businesses maximize points on everyday credit card spend, including 5x points at office supply stores, and on cell phones, internet, and cable TV, and double points on gas and hotels.

David also mentioned that he is associated with 30 LLCs. Assuming he is in a position within those LLCs where he can apply for credit cards, in my experience Chase will often issue the same person multiple business cards for different businesses. There will be some restriction as to how many you can apply for in the short term, though you should be able to pick up a card a month, if your credit score and business situation qualifies you.

Chase Sapphire Preferred® Card

I’m a bit shocked that David doesn’t already have this card, which offers 40,000 Ultimate Rewards points after spending $3,000 within three months, plus an additional 5,000 Ultimate Rewards points when you add an authorized user to the card that makes a purchase within three months. The annual fee is $95, waived the first year.

Ultimate Rewards points can be transferred at a 1:1 ratio to Korean Air, United, Hyatt, and many other programs. The card is also great for everyday spend given that it offers double points on dining and travel. This is probably the most-used card in my wallet, and ideally David would be able to leverage this card for some of the wedding dining expenses as well.

Both the Ink and Sapphire Preferred cards accrue Ultimate Rewards points, which I find incredibly valuable due to their extensive transfer partners. David could easily earn 105,000 Ultimate Rewards points by signing up for one of the Ink cards in conjunction with the Sapphire Preferred (and even more if he maximizes the bonus categories). And based on David’s current business situation, it seems like he could get a lot more Ink cards than that, potentially.

He could likely pick up additional Ultimate Rewards earning cards later in the year, and by utilizing shopping portals and leveraging bonus categories it should be relatively easy to accrue Ultimate Rewards.

These could be added to his British Airways Avios, redeemed for first class on Korean Air or Singapore Airlines, or if he ends up with enough miles for the roundtrip tickets through other methods, could transfer points to Hyatt, so it really makes sense to earn as many Ultimate Rewards points as possible here.

Grand_Hyatt_Hotel_Martinez12
Room with a view at the Grand Hyatt Cannes Hotel Martinez

Barclaycard Arrival Plus™ World Elite Mastercard®

This card offers 40,000 miles after spending $3,000 within 90 days, and the annual fee is $89, waived the first year.

Each point can be redeemed for one cent towards the cost of travel, and you get a 10% refund of redeemed miles, making each point worth 1.1 cents. On the redemption side, there is a bonus when you redeem for travel, so you can earn a pretty great 2.2% cash back towards travel for every dollar spent on the card.

This is also a great card to use in conjunction with award tickets on airlines that levy fuel surcharges, so can be a huge cost-saver, particularly with the large British Airways Avios balance David already has.

Club Carlson Premier Rewards Visa Signature Card

This card offers 50,000 points after the first purchase, and an additional 35,000 points after spending $2,500 on the card within 90 days, with a $75 annual fee.

As I’ve written about previously, the Club Carlson card has a ton of value, including 85,000 points after completing the minimum spend, a 40,000 point anniversary bonus, Gold status for as long as you have the card, and most importantly, the second night of award redemptions are free, potentially doubling the value of your points.

You earn 5x points per dollar spent on the card, so once you’ve spent $3,000 on the card you’ll have 100,000 points. Many of Club Carlson’s best hotels cost just 50,000 points per night, so that’s enough points for two sets of two nights at some of Club Carlson’s top properties. You can also redeem points for premium rooms and suites, which really increases the value of these points, so this would be a great option if David plans on visiting multiple destinations on his honeymoon.

Citi® Hilton HHonors™ Reserve Card

Ultimately, I  love this card for the two free weekend nights at most Hilton family properties after spending $2,500 within four months of account opening. The annual fee is $95, and these free night certificates are redeemable all the way up to Category 10 properties, potentially making this sign-up bonus worth the equivalent of 190,000 HHonors points.

So in terms of buying power, the value of these certificates has hugely increased compared to the buying power of HHonors points. Furthermore you get HHonors Gold status for as long as you have the card, which gets you free breakfast and internet. Depending on where they ultimately decide to travel, this could mean a huge cost savings on David’s honeymoon.


Sunset view from villa at Conrad Koh Samui

Bottom Line

Having the resources to easily meet minimum spend on multiple cards in a year is awesome, and makes racking up miles much easier. That being said, it’s important to keep redemption rates in mind when deciding which cards to apply for, and how to allocate that spending.

But I would suggest he start applying for some of the cards with the bigger bonuses, and use the money he can spend on credit cards in order to meet the minimum spend on those cards in order to activate the bonuses. And in general if he can focus on Chase Ultimate Rewards points I’d say that would give him the most flexibility.

But he shouldn’t leave huge bonuses on the table, like the one offered by the Citi Executive AAdvantage Card, or skip hotel cards, since those would be valuable for his honeymoon as well.

What do you think? What cards or strategy would you recommend?

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Comments

  1. I’d go for an initial application for the AA 100k bonus, Ink, Hyatt, and SPG cards. Then, a couple days later apply for a second AA 100k card. When all is said and done, he’ll have more than enough miles for 2 rt tkts in F class, Almost 5 nights at a category 6 Hyatt property, and enough points for a few nights of C+P redemption at some high end SPG properties.

  2. I spent a couple of years slowly planning my honeymoon on points, and even without the ability to put as much spend on my cards as David has I now have a ~3 week+ honeymoon planned, with a week in London and 2 in South Africa. The airfare is all covered in a combination of Business and first, and all of the hotel nights are covered, with the exception of the two nights we are spending on a safari / game reserve. This is a trip I could have never done otherwise, and I was not nearly as “aggressive” in my strategies as some others are.

    Good luck, David!

  3. My monthly spend is similar to David’s and I am trying to determine how to optimize it. A lot of what you write in this article is directly applicable to me, but I have one question. I would like to get the amazing 100k bonus miles from AA, but unfortunately already have the Citi AA card. Can I cancel it and reapply and, if so, how long do I have to wait? The AA card I have now I got five or six years ago. I already have the sapphire and SPG cards and intend to get IHG and Club Carlson cards. I don’t think I can get the Ink card since I do not have my own business.

  4. @ Matt — You should qualify for the Citi Executive AAdvantage Card even if you already have one of the other versions of the card, so no need to cancel.

  5. @CFFrost
    Congratulations! Sounds like an amazing trip. Would you mind sharing your itinerary/miles used?

    Thanks

  6. Any advice for someone who already has the strategy, and just needs help implementing?

    For instance, I have enough IHG points for 6 free nights at the IC Bora Bora.

    Because Bora Bora is so far, I’d like to tack on a 2-3 night stay in a city either before or after BB (i.e., Hong Kong, KUL, Singapore, Sydney, etc).

    How the hell do I get to PPT (Assuming that’s the most convenient airport for BB) on miles?

  7. Lucky, with respect to David’s point #3, are there any around-the-world awards that make sense these days after the demise of the Explorer? United’s seem like an astronomical number of miles. Any you use through the booking service?

  8. He said ridiculous not pedestrian so am really unclear why you mentioned AA and Hilton when Lufthansa and Singapore are clearly superior in your mind and Hyatt Diamond challenge right before the honeymoon would give a real Aspirational push down the aisle. Take her to Hilton and she’ll be certain you are a putz……….

  9. @Brian – Originating from East Coast US (JAX). Willing to depart from MCO or ATL.

    @JustSaying – I wouldn’t call the Conrad pedestrian 😉

  10. @ Ben
    Air France from LAX, Air Tahiti Nui (using AA or Delta miles) from LAX, or Hawaiian from HNL. Just did the trip on Air Tahiti Nui last month, need to call AA to search for availability, no way to find online. You need to buy the leg from PPT to BOB separately in cash, no way to redeem traditional miles.

  11. Thanks for the tip, Diamond.

    I’ve been trying to use aa.com to search Air Tahiti Nui.

    Last question(s):

    Their biz/first doesn’t look worth the miles….what are people’s thoughts on that? I’m a sucker for first and have the miles to spend, but I’d much rather save for something like F in Cathay to HKG than LAX to PPT.

    Which leads me to question #2:

    What are my options as far as adding on 2-3 days at an HKG or Sydney or….somewhere else close. That would negate the Air Tahiti Nui need, no?

  12. @Diamond Vargas, both Aeroplan and Singapore offer around the world star alliance awards for considerably less than United. Aeroplan is 50000 less in business and first, Singapore is 110,000 less in business and 90000 less in first, and they offer more stops along the way. Singapore also is transfer partner for all of the flexible point currencies

  13. @Ben, if you have enough MR points to transfer to FB, why not go for Air France First Class from LAX to PPT?

  14. @farnorthtrader, Whats this about a Singapore airline rtw ticket?? Whats the redemption at different levels? Did a quick search but couldn’t find any info

  15. Not sure why that happened, but the limit is also 16 segments and 35000 miles for their round the world award

  16. Can you apply for both a Chase personal card (Sapphire Preferred) and business card (Ink) on the same day? Or should there be a gap?

  17. @Jack, I have applied for and received both on the same day, then applied for and received the other business card about 60 days later, all with only one pull on my credit bureau.

  18. @ Ben — @Diamond Vargas is correct. Your best options are Air France (booked through Delta, Alaska, or FlyingBlue) or Air Tahiti Nui (booked through Delta or American). Delta would allow a stopover, and Alaska technically would as well, though the stopover would need to be in the US.

  19. @ Diamond Vargas — Not really, unfortunately. In most cases it’s going to make more sense to combine multiple “traditional” awards, as they’re less restrictive.

  20. @ JustSaying — Agree in general (and I mentioned KrisFlyer as an option), but timing matters as well. If you’re talking about being gone for a month it’s silly to leave free hotel nights on the table, and when planning a honeymoon it’s probably best to book prior to the 15 day window for partner awards with Lufthansa, in my opinion.

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