Which Flexible Points Cards To Get?

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Reader MikeSmith asked the following question in the “Ask Lucky” forum:

I have a Capital One Venture Card that earns 2x miles per dollar. My girlfriend has a Gold Delta Skymiles credit card. We live in Atlanta, GA. These two credit cards are airline miles cards, not fixed or flexible points cards, right? Should my girlfriend get rid of her Gold Delta SkyMiles® Credit Card from American Express and try to get a Chase Sapphire Preferred® Card (which is a flexible points card)? We do some domestic travel, but we really like to save up for international flights to East Asia or Southeast Asia (we also might like to travel to Europe occasionally).

In general I think this is the “standard” realization people come to when they start to look into credit cards in more detail. And there’s oh-so-much potential for people in the above situation to maximize their points.

With that in mind, here are my general thoughts given MikeSmith‘s situation:

If you go the cash back route…

I recently wrote a post entitled “Why You SHOULDN’T Get The Capital One Venture Card.” Perhaps more accurately I should have used the word “spend on” rather than “get,” since the card does have a decent sign-up bonus.

Ultimately the Capital One Venture Card offers the equivalent of 2% cash back towards travel. Each “mile” can be redeemed for one cent towards the cost of a travel purchase. And the card has an annual fee.

It’s not a terrible card by any means, but there are better options out there long term. For example, if I wanted cash back I’d be using the Citi® Double Cash Card, which offers 1% cash back on every purchase, and then an additional 1% cash back when you pay for those purchases. That’s a return of 2%, all things considered. And that card has no annual fee, and accrues “true” cash, which you can spend on anything… not just travel!

Citi-Double

If you want more Delta SkyMiles…

MikeSmith‘s girlfriend uses the Gold Delta SkyMiles® Credit Card from American Express for her spend, it seems. She could be doing much better than that, even if she wanted to earn Delta SkyMiles long term.

For example, she could instead get the $95 annual fee Amex EveryDay® Preferred Credit Card, which offers the following return on everyday spend:

  • 3x points at US supermarkets (on up to $6,000 of spend per year)
  • 2x points at US gas stations
  • 1x point per dollar spent on everything else
  • You receive a 50% points bonus when you make at least 30 purchases per billing cycle

That means assuming you make 30 purchases per billing cycle, you’re earning:

  • 4.5x points at US supermarkets (on up to $6,000 of spend per year)
  • 3x points at US gas stations
  • 1.5x points on everything else

Those are points which could be transferred at a 1:1 ratio to Delta SkyMiles. Meanwhile the Delta Gold AmEx offers 1x mile per dollar spent, aside from airfare purchases on Delta, which they bonus.

So that’s a much better way to earn Delta SkyMiles. And you can even do better with a no annual fee card, like the Amex EveryDay® Credit Card, which offers:

  • 2x points at US supermarkets (on up to $6,000 of spend per year)
  • 1x point per dollar spent on everything else
  • You receive a 20% points bonus when you make at least 20 purchases per billing cycle

That means assuming you make 20 purchases per billing cycle, you’re earning:

  • 2.4x points at US supermarkets (on up to $6,000 of spend per year)
  • 1.2x points on everything else

That’s more than you’d earn on Delta’s own card, except this one doesn’t even have an annual fee.

Virgin-Atlantic-Upper-Class
Redeem Delta SkyMiles for Virgin Atlantic Upper Class

Best transferrable points in general

MikeSmith is correctly considering a flexible points currency card, which is what I would recommend to a vast majority of consumers anyway. They have reasonable annual fees, valuable perks (in many cases waived foreign transaction fees, car rental insurance, purchase protection, etc.), and most importantly, can greatly increase the rate at which you can earn points.

The Chase Sapphire Preferred® Card is a great card with which to start. It offers:

  • A great sign-up bonus of 50,000 Ultimate Rewards points after spending $4,000 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
  • Earn 2x points on travel and dining
  • Waived foreign transaction fees
  • Primarily CDW coverage on rental cars
  • Points which can be transferred to many useful partners, including airlines and hotels

The Citi ThankYou® Premier Card is a great option as well, and in many cases can nicely supplement the points earned on the Chase Sapphire Preferred® Card. It offers:

MikeSmith mentions wanting to redeem points for travel to Asia. Both Chase Ultimate Rewards and Citi ThankYou are transfer partners with Singapore Airlines KrisFlyer, meaning you could redeem points earned through both cards towards the same award ticket on Singapore Airlines, which offers among the best first & business class products for travel to Asia.

Singapore-Suites-1

The same is true for American Express Membership Rewards points, which are earned through the Amex EveryDay® Preferred Credit Card. As explained above, that card offers a great rate of return as well, so is worth considering.

Most importantly, accumulating points in a transferable currency allows you to diversify your points without over-diversifying. Having a pool of points you can move to a variety of programs at-will gives you more flexibility than being locked into a particular airline.

Bottom line

Regardless of which direction MikeSmith wants to go, there are better ways he could be maximizing his points from everyday spend, in my opinion. The credit card “landscape” can be difficult to navigate, though there are some cards with which it’s really tough to go wrong.

Hopefully this helps point MikeSmith (and others in a similar situation) in the right direction…


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Comments

  1. I think the calculation would be 2.4x at US supermarkets with the Amex EveryDay® Credit Card if we make 20 purchases per billing cycle as per the 20% bonus.

  2. Does Amex charge you for transfers of MR points to partners? In the T&C it states that they charge $0.0006/point with a max of $99 per transfer. Is this actually done in practice? I was always under the impression that they did transfers for free.

  3. Wow, you even put referral links into the question that your supposed reader has posted… That’s just cheap

  4. @charlene
    From my understanding, they only do it for airlines based in America. So if you transferred to BA or Asia miles or Krisflyer miles or w/e, you won’t be charged. Transfer to Delta or JetBlue or Virgin America, then you are charged. Again, from my understanding of it all.

  5. Hi Lucky,

    Still learning. I have had the Chase sapphire card for some time . I have a total of 270K points. How can I turn this into a VA upper class ticket for two to Paris from SF next year? Also interested in maintaining elite or what ever it’s called status.

    Thanks T

  6. Agree the Premier card is great to spend on. We’ve been using my wife’s Premier for travel and like it so much that yesterday I applied for my own, using your link.

    Unlike some people, I don’t resent your affiliate links, instead I go out of my way to use them. Gives me a way to pay back for all the value I’ve gotten from your fabulous blog. 🙂

  7. Lucky – any reason you partnered the Citi Premier with CSP rather than the Citi Prestige? I like the AMEX Everyday Preferred card but would like a bigger signup bonus – do you have any suggestions? Tx.

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