Well, 2016 has been quite the year for credit cards. We’ve arguably seen more innovation this year than ever before. Not only with new products, but also with lots of new perks — new Centurion Lounges and bonus categories, to name a few. So it’s been a good year for those in the points and miles space.
Even though we’ve seen the airlines and hotels increase the number of points needed for awards and there’s definitely been inflation, you can now earn miles and points more ways than ever before. As I always say, this game is far from over — you just need to be savvier about every single dollar you spend and juicing out as much value as possible from credit cards.
Given the fact that 2016 was such an excellent year for credit card rewards, in terms of an outlook for 2017, I actually think that the credit card companies will keep investing in making their products better. Earlier this month, Chase announced that its profit was cut by $300 million because of the Sapphire Reserve. Even though it’s paying a lot up front, Chase is confident that it’ll see returns down the line.
This is also good news for us because it means that other credit card companies have to step up to the plate to compete. In the latter part of 2016, we especially saw American Express step up in a big way, and I think there’s still a lot more to come there.
Outlook for Credit Card Rewards in 2017
In my opinion, the number one threat to credit card rewards would be more regulation, making credit card transactions less profitable for the credit card companies like we see in the UK and around the world. In most other countries, there’s much more regulation with how much the credit card processors can charge merchants. Hence why the credit card rewards industry is more lucrative in the US as compared to other countries around the world.
There are a lot of differing opinions on what a Trump presidency might bring to the US, but when it comes to regulations, especially related to business, they have publicly stated that their goals will be to reduce regulations. I’m not here to debate whether that’s good or bad for consumers, but when we focus on credit card rewards, I think that means that reform will not happen over the next four years.
Thus, I foresee strong competition in the marketplace, which means more rewards, especially since the Chase Sapphire Reserve has upped the game by offering a whopping 100,000-point sign-up bonus.
Credit Card Themes of My Year
Here’s a look at where I put most of my spend for 2016 — and some thoughts of what I’m thinking about doing in 2017.
1. Chase Sapphire Personal Spend — I used to be a Chase Sapphire Preferred fanatic — jokingly, until the day I die — because it offered double points on travel and dining. This year, the biggest impact on my personal spend was the fact that the Chase Sapphire Reserve came out, and I’ve been juicing even more rewards out of it.
I booked a first-class flight home from Bali with that single 100,000-point sign-up bonus — and still had points to spare. So, personally, the new Sapphire Reserve is where I’m putting a lot of my spend to get 3x points on travel and dining. I actually ended up downgrading my Sapphire Preferred to the Chase Freedom Unlimited, which gets me 1.5x on everyday spend, because there’s no reason to have both Sapphire cards.
2. Bonus EQMs From Spend — Also on the personal side of my spend, I’ve been hitting the minimum requirements on the AAdvantage Aviator Silver World Elite MasterCard and the Citi / AAdvantage Executive World Elite MasterCard. By hitting the minimum spend required on both cards, I’ve been able to get 20,000 bonus EQMs — 10,000 from each.
I have to really think about my airline elite status in 2017, and I’m not quite sure I’ll need those 20,000 EQMs from spend going forward. This year, I ended up at 154,000 EQMs on American and got Executive Platinum status and two additional EVIPs. But instead of the eight EVIPs (systemwide upgrades) I used to get for hitting 150,000 EQMs, American now only gives you six, which kind of stinks. I’ll do a separate post on my airline status and where I’m looking to go in the future, but I’m not 100% sure I’m going to meet those EQM requirements for next year.
No more paid flights this year, so for my top status I’ll maintain Executive Platinum and since I passed 150k EQMs (thanks to 20k from credit card spend on Exec Aadvantage and Aviator Silver) I get 6 EVIPs – I miss the old days of 8! I’ve noticed AA service declining this year- especially with baggage and waiting ridiculously long times for gates. I suspect I’ll continue shifting business to JetBlue Mint as they grow that product- I firmly believe a Mint suite (row 2 or 4) is better than AA transcon first. What will you end 2016 with and what are you 2017 predictions?
A photo posted by Brian Kelly (@thepointsguy) on
Dec 16, 2016 at 7:34am PST
3. Free Night Certificate From Citi and Hilton — In my opinion, one of the greatest hotel credit card perks is the free weekend night certificate from the Citi Hilton HHonors Reserve Card. So I’ve been putting a lot of my personal spend on this card to meet the minimum of $10,000 in order to get that free weekend night certificate.
4. Fourth Night Free With Citi Prestige — Unfortunately this year, we saw the Citi Prestige devalue some of its benefits. And even though it was devalued, I’m still going to keep it going into 2017. I’ve gotten thousands of dollars in value from the 4th Night Free benefit. In fact, I’m staying in the Maldives right now and am getting $1,500 in value from that single usage.
Mornings in Vommuli / my best use of 32,500 @spg points per night! (Though sadly they’re raised the amount per for this room over 4x since).
A photo posted by Brian Kelly (@thepointsguy) on
Dec 26, 2016 at 5:57pm PST
Even though there are some negative changes coming to the Prestige in 2017, I don’t really care about Admirals Club access, so I’m going to keep it for the 4th Night Free benefit alone.
5. Diversifying My Rewards — When you’ve acquired a ton of points, you need to diversify your portfolio. For that reason, I’ve been putting a lot of my personal spend on the Capital One Venture Rewards Credit Card, which allows me to book helicopters (including BLADE Bounce) even easier with the purchase eraser. Getting 2x miles on every purchase when there’s not another category bonus makes me want to spend on the Capital One Venture.
I have lots and lots of Chase and Amex points, but I do like to diversify, and that’s what I always recommend doing. Getting those flexible miles from the Venture to pay for Uber and other travel expenses is a great option.
6. Amex Platinum Improvements — The relatively new improvements to the personal American Express Platinum Card have caused us at TPG to switch our spending habits for one category. With the 5x points on airfare, all of our company’s airfare spend now goes on the Platinum and going forward, all of our airfare will be exclusively on this card.
It was also great to see the Amex Business Platinum Card step up. As a whole, I spend drastically more on business than I do on personal, and the Business Platinum has really doubled my Membership Rewards points. With it, I’m getting 2 cents per point when I use Pay with Points, which offers tremendous value. Plus, I’m earning elite-qualifying miles on those tickets — it’s a win-win situation.
Amex was the first issuer that really enhanced its offerings following the release of the Sapphire Reserve, and I now put much more spend on my Amex cards than I did last year. And I’m hoping others do the same because the more we reward these credit card companies for making improvements and driving business, the more enhancements we can see down the line.
7. Maximizing My Business Spend — Chase launched the Ink Business Preferred Card toward the latter part of the year, and I was just recently approved. It comes with an 80,000-point sign-up bonus, and I’m going to maximize this through the end of the year and into next year. You can earn 3x points on the first $150,000 spent in select categories, but I’ll be maximizing that with the money we spend in online advertising.
This year, I also worked to maximize the bonus categories on the Amex Business Gold Rewards Card. With the card, you can earn 3x points on one category from a list of five, 2x points on the remaining four categories and 1x on everything else. For the 3x and 2x categories, you can only earn that bonus for the first $100,000 in each of the five categories, so I’ve been working on maximizing those as much as possible. Luckily, we’ve got an ever-growing team and business expenses, so I’ve been able to hit the maximum amount on those categories quite often.
8. Keeping the Business Centurion Card — The Business Centurion Card offers all of the perks of the Business Platinum Card — but with a few additions. I’ll be doing a post on whether or not the Business Centurion Card is really worth it, but the answer for those who want to know now is yes, I’ll continue to keep it open for a number of reasons.
And because of the 50% bonus on large purchases, I put all large purchases on the Business Platinum and Business Centurion, so it’s nice to have another option.
9. Canceling My Ink Plus — Back when the Ink Preferred was launched earlier this year, Chase stopped accepting new applications for the Ink Plus Business Card. But in my opinion, the new option is the better of the two. I never really spend at office supply stores to get the 5x points, which is what the card is really good for, so I’ll probably end up canceling that card in the new year.
You know it’s a slow day at #TPGhq when you decide to do an impromptu credit card shoot with @bluefrenchiemiles. For the record, he is not impressed with my new JP Morgan Palladium card. Stay tuned for my upcoming review to see if I am!
A photo posted by Brian Kelly (@thepointsguy) on
May 26, 2016 at 12:48pm PDT
Bottom Line
Overall, those are the main cards I’ve used this year and what I’m thinking about doing with my spend when the new year comes in just a few days. With the plethora of 5x and 3x bonus categories, my points earning this year has been dramatically higher than in years prior.
So, even though we’ve seen inflation, it’s raining points like never before for me — and that’s how you stay ahead. Knowing how to maximize lucrative sign-up bonuses and earn with bonus categories is crucial to winning in the points and miles game. I expect the large sign-up bonuses and expanded spending bonuses to continue into 2017 and beyond.
What do you think of the year for credit card rewards? What do you hope to see in the industry in 2017?
Chase Sapphire Preferred® Card
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Earn 50,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $625 toward travel when you redeem through Chase Ultimate Rewards®
Named Best Credit Card for Flexible Travel Redemption - Kiplinger's Personal Finance, July 2016
2X points on travel and dining at restaurants worldwide & 1 point per dollar spent on all other purchases.
Earn 5,000 bonus points after you add the first authorized user and make a purchase in the first 3 months from account opening
No foreign transaction fees
1:1 point transfer to leading airline and hotel loyalty programs
Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards. For example, 50,000 points are worth $625 toward travel
No blackout dates or travel restrictions - as long as there's a seat on the flight, you can book it through Chase Ultimate Rewards
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