the ultimate strategic credit card guide · • amex allows you to have 4 charge cards and 5 credit...

The Ultimate Strategic Credit Card Guide

Charlie Klene

January 2018 Edition

@charlieklene

charlieklene

linkedin.com/in/charlie-klene

@charlie-klene☺Download this guide at: www.afoolandhismiles.com

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Table of Contents

• American Express• Chase• Citi• Additional Banks• Putting it all Together (print slide 25)

2

American Express Membership Rewards: The Beast that No One Understands

3

American Express Membership Rewards Overview

One AmEx Membership Rewards Account

Everyday Preferred Everyday Morgan Stanley Card Business Gold Rewards Blue Business Plus

Corporate

Centurion

Business Centurion

Partner point transfers at 1:1 ratio unless noted

5:4 ratio

3:1 ratio 1:2 ratio

50:1 ratio

Platinum

Business PlatinumPremier Rewards Gold

Charles Schwab Platinum

Mercedes Benz Card

Ameriprise PlatinumGoldman Sachs Platinum

Mercedes Benz Platinum

Morgan Stanley Platinum

Other Options:• Airfare Pay

with Points• Gift Cards• Shopping• Statement

Credit

Business Platinum Card “Unlocks” Value

• Holding the Business Platinum Card “unlocks” value in points earned from other cards• Business Platinum Card rebates 35% of points when redeemed for airfare via ‘Pay with Points’

redemptions• 35% rebate transforms each point to be worth 1.54 cents, better than most frequent flier program

redemptions• 35% rebate applies to economy fares on one selected airline, or first class fares on any airline

Notes 1. 1x refers to points earned per dollar spent, valued at 1 cent/point; also equal to % cash back earned per dollar when redeemed for ‘Pay with Points’ redemption2. Business Centurion card not analyzed due to exclusivity of card; for reference, Business Centurion offers 50% of points back on all ‘Pay with Points’ redemptions, but with $2,500 annual fee3. Base earn for Everyday Card requires 20 purchases per statement cycle for 20% points bonus; Everyday Preferred Card requires 30 purchases per statement cycle for 50% points bonusSource: Charlie Klene Analysis, americanexpress.com

Denotes Optimal Cards to Hold

Spend Category: Base Earn Airfare Groceries Dining Gas

No Business Platinum

w/ Business Platinum









Platinum 1x 1.54x 5x 7.70x 1x 1.54x 1x 1.54x 1x 1.54x

Everyday 1.2x 1.85x 1.2x 1.85x 2.4x 3.70x 1.2x 1.85x 1.2x 1.85x

Everyday Preferred 1.5x 2.31x 1.5x 2.31x 4.5x 6.93x 1.5x 2.31x 3x 4.62x

Premier Rewards Gold 1x 1.54x 3x 4.62x 2x 3.08x 2x 3.08x 2x 3.08x

Mercedes Benz Card 1x 1.54x 1x 1.54x 1x 1.54x 2x 3.08x 2x 3.08x

Morgan Stanley Card 1x 1.54x 2x 3.08x 1x 1.54x 2x 3.08x 1x 1.54x

Corporate 1x 1.54x 1x 1.54x 1x 1.54x 1x 1.54x 1x 1.54x

Blue Business Plus 2x 3.08x 2x 3.08x 2x 3.08x 2x 3.08x 2x 3.08x

Business Gold Rewards 1x 1.54x 3x 4.62x 1x 1.54x 1x 1.54x 2x 3.08x

Business Platinum 1x 1.54x 1x 1.54x 1x 1.54x 1x 1.54x 1x 1.54x

5

American Express Optimal Strategy

One AmEx Membership Rewards Account

Everyday Preferred• 6.93x Groceries• 4.62x Gas• 2.31x Base Rate• Requires 30

purchases / month for full potential

• $95 Annual Fee

Morgan Stanley Card• 3.08x Dining• 3.08x Department Stores• 3.08x Rental Cars• $0 Annual Fee

Business Platinum• Unlocks 35% point

rebate• 10 Gogo WiFi Passes• $250 Net Annual Fee

Morgan Stanley Platinum• 7.7x Airfare• Centurion & Delta Lounge

Access• One FREE Authorized User

(Usually $175/year)• $150 Net Annual Fee

British Airways Avios• 1:1 transfers, One

World Alliance• Good for shorthaul

flights on American Airlines

• Flights start at 7,500 one way if distance <1,150 miles

Considerations:• Total Net Annual Fee: $495, includes Centurion & Delta Lounge Access, SPG & Hilton Gold Status, Fine Hotels & Resorts, Free Roadside Assistance, etc.• Morgan Stanley (MS) Cards Require MS AAA Account, No Fees if Balance > $50,000 or $2,500 direct deposit; $550 Annual Fee Rebated if Total Assets > $1,000,000

Singapore Airlines:• 1:1 Transfers, Star

Alliance• Suites Class NY to

Frankfurt 76k miles• 60k United

business to Hawaii (Same trip for 80k United miles)

• 80k Lufthansa First to Europe one way

ANA Program:• 1:1 transfers, Star

Alliance• Roundtrip business

class redemptions U.S. to Tokyo for 90 to 95k miles, 60 to 65k for economy

• Can book United Flights

Flying Blue Program:• 1:1 transfers, Sky

Team Alliance• 30k miles roundtrip

Hawaii economy class on Delta (same trip for 45k SkyMiles)

• 50k roundtrip coach to Europe, 125k business

Delta SkyMiles:• Instantaneous 1:1

point transfers• Only use if getting

>1.54 cents per Delta Sky Mile

• 80,000 miles one way Business class U.S. to Asia

Airfare Pay with Points:• Requires holding

Business Platinum Card for 1.54 cents / point valuation

• Good for economy on selected airline, first on any airline

• Better than most airline redemptions

6

Delta American Express Cards Overview

• Delta SkyMiles (commonly referred to as Delta SkyPesos due to relatively high award pricing) are generally worth at least 1.2 cents per point

• Delta AmEx cards are good for churning through all seven sign-up bonuses to receive at least $4,200 in value

• For extremely loyal Delta fliers who are big spenders, cards can be used to secure elite status (Delta is the only major airline with this possibility)

Notes1. High Bonus offers are typically available every May; four years of no-annual-fee priority boarding & checked bags possible with proper application timingSource: Charlie Klene Analysis, americanexpress.com

Denotes Optimal Cards to Hold for Occasional Delta Flier who Values Companion Certificate

High Bonus Annual Fee Bonus Category MQM Potential

Domestic Companion Certificate?

Delta Sky Club?

Free Checked Bag? Rationale

Blue Delta SkyMiles 10,000 $0 2x Dining, Delta •Good downgrade option to avoid annual fee

Gold Delta SkyMiles 60,000 $95 2x Delta y•Good for priority boarding to avoid rollerboard death match fight, free checked bag, sign bonus

Platinum Delta SkyMiles 70,000 $195 2x Delta 20,000 y y•Same as Gold card, adds annual coach domestic companion certificate for extra $100, MQM potential

Delta Reserve 40,000 $450 2x Delta 30,000 y y y•Same as platinum, companion certificate good for first class, Delta Lounge access, more MQM potential

Gold Delta SkyMiles Business 60,000 $95 2x Delta y •Same as personal version, good for bonus churning

Platinum Delta SkyMiles Business 70,000 $195 2x Delta 20,000 y y •Same as personal version, good for bonus churning

Delta Reserve Business 40,000 $450 2x Delta 30,000 y y y •Same as personal version, good for bonus churning

Complete Cycle: 350,000 100,000 •For $1,290 in Annual Fees, and $250,000 in spend, can qualify for Diamond Status with just 25k in-air-MQMs

7

Hilton American Express Cards Overview

• As of January 18th, 2018, American Express is the exclusive issuer of Hilton credit cards• Hilton Honors points are generally worth at least 0.5 cents per point• The new ‘Aspire’ card is likely un-economic and ripe for Issuer benefit stripping• Proper churning can yield enough for five nights at a top-tier Conrad or Waldorf Astoria property• Hilton Gold status is actually decently valuable: offers free breakfast and room upgrades

Notes1. Bonus offer likely to increase in the next 12 monthsSource: Charlie Klene Analysis, americanexpress.com

Denotes Optimal Card; Pays Cardholders ~$250 / Year & Offers Top Tier Hilton Status

Base Hilton Dining Groceries Gas Airfare Car Rentals

BonusAnnual

Fee Points Value/$ Points Value/$ Points Value/$ Points Value/$ Points Value/$ Points Value/$ Points Value/$ Status?Travel Credits Rationale

Hilton Honors Card 50,000 $0 3x 1.5¢ 7x 3.5¢ 5x 2.5¢ 5x 2.5¢ 5x 2.5¢ 3x 1.5¢ 3x 1.5¢ Silver - •Good downgrade option to avoid annual fee

Hilton Honors Ascend Card 100,000 $95 3x 1.5¢ 12x 6.0¢ 6x 3.0¢ 6x 3.0¢ 6x 3.0¢ 3x 1.5¢ 3x 1.5¢ Gold -•Good to hold on for Gold status, annual free weekend night (~$200) with 15k in spend

Hilton Honors Aspire Card 100,000 $450 3x 1.5¢ 14x 7.0¢ 7x 3.5¢ 3x 1.5¢ 3x 1.5¢ 7x 3.5¢ 7x 3.5¢ Diamond ($700)•Likely to be discontinued in current form•Annual free weekend night (~$200), 2nd at 60k in spend•$250 Hilton Resort Credit, $250 Airline Credit

Hilton Honors Business Card 100,000 $95 3x 1.5¢ 12x 6.0¢ 6x 3.0¢ 6x 3.0¢ 6x 3.0¢ 3x 1.5¢ 3x 1.5¢ Gold -•Good option for churning bonus, same as personal Ascend card

Complete Cycle 350,000

8

American Express Rules & Application Considerations

General• American Express has tried hard recently to crack down on people churning credit card bonuses• AmEx cards allow you to receive a bonus “once per lifetime” which in practice means you have to wait

7 years after closing a card until you can get the bonus again (when it falls off your credit reports)• AmEx allows you to have 4 charge cards and 5 credit cards at any one time, for a total of 9 cards; this

means you have to choose your cards carefully and be mindful of churning strategy• AmEx threatens to take away your points if you close a card sooner than 12 months after opening it• Despite all these restriction, American Express is the easiest card issuer to be approved for

Note on Business Cards:• Business cards are not regulated under the Credit Card Act of 2009 and as a result are often more

generous with sign up bonuses and earning rates• American Express business cards are extremely easy to get• If you are a Sole Proprietor (i.e. you’ve once sold something on Ebay) you are eligible; Business name

can be your name, business tax ID is your SSN• Other valid reason to get a business card is to keep your corporate travel expenses separate• Card agreements say all charges must be valid business purchases, not personal; decide for yourself

what this means to you; I personally use Everyday Preferred instead of Blue Business Plus for this reason

Note on Travel Credits:• Utilizing Airfare Credit on Platinum and Hilton Aspire cards can be challenging; best option is to load

into United Travelbank in $25 increments (think of it as a savings account that can only be used for United airfare) 9

American Express Cheat Sheet

Notes1. American Express cards not listed on this page are not worth applying for (exception being Delta Reserve cards if you are an EXTREMELY loyal Delta flier)Source: Charlie Klene Analysis, americanexpress.com

Optimal American Express Cards to Hold Forever:

Bonus Bonus Value Annual Fee Travel Credits Net Cost Rationale

Business Platinum Card 75,000 $1,125 $450 ($200) $250 •Hold to unlock 35% 'Pay with Points' Rebate

Morgan Stanley Platinum Card 60,000 $900 $550 ($400) $150 •Hold for 5x on airfare, free authorized user, Centurion & Delta Lounge access

Everyday Preferred Card 15,000 $225 $95 $0 $95 •Hold for 1.5x base point earn, 4.5x groceries, 3x gas

Morgan Stanley Card 10,000 $150 $0 $0 $0 •Hold for 2x on dining, department stores

Delta Platinum Card 70,000 $840 $195 ($300) ($105)•Hold for annual companion certificate (assuming you receive at least $200 in value from it)

Hilton Aspire Card 100,000 $500 $450 ($700) ($250)•Hold for Hilton Diamond Status, $500 travel credits, annual free weekend night certificate (~$200)

$3,740 $1,740 ($1,600) $140

Additional Cards to Churn:

Premier Rewards Gold Card 50,000 $750 $195 ($100) $95 •Churn for bonus

Delta Gold 60,000 $720 $95 $0 $95 •Churn for bonus

Delta Gold Business 60,000 $720 $95 $0 $95 •Churn for bonus

Delta Platinum Business 70,000 $840 $195 ($300) ($105) •Churn for bonus

SPG Card 25,000 $550 $95 $0 $95 •Churn for bonus; 5 night / 2 stay annual credit for SPG cult members

SPG Business Card 25,000 $550 $95 $0 $95 •Churn for bonus; 5 night / 2 stay annual credit for SPG cult members

$4,130 $770 ($400) $370

10

Chase Ultimate Rewards: The Gold Standard

11

Chase Ultimate Rewards Overview

Freedom Unlimited Freedom Ink Business Cash

Partner point transfers at 1:1 ratio

Other Options:• Travel Pay


Credit

Sapphire Preferred Sapphire Reserve Ink Business Preferred

Cashback cards are transformed into lucrative money makers

12

Sapphire Reserve Card “Unlocks” Value

• Holding the Sapphire Reserve “unlocks” value in points earned from other cards• When transferred to Sapphire Reserve Ultimate Rewards account, points are worth 1.5 cents each

when redeemed for travel booked through Chase Travel Portal (Expedia driven)• However, this is not the optimal use of points given the superior transfer partners Chase offers (mainly

United and Hyatt)• Holding the Sapphire Reserve, Sapphire Preferred, or Ink Business Preferred “unlocks” the ability to

transfer points to travel partners where a >1.5 cent per point value can be easily found

Notes 1. Freedom Card offers rotating 5x bonus categories each calendar year quarter quarter up to $1,500; full optimization of bonus categories yields 30,000 Ultimate Rewards for $6,000 in spend, annuallySource: Charlie Klene Analysis, chase.com


Spend Category: Base Earn Travel Dining Cable, Phone, Internet Gas Office Supply StoresNo Sapphire

Reservew/ Sapphire

ReserveNo Sapphire

Reservew/ Sapphire

ReserveNo Sapphire

Reservew/ Sapphire

ReserveNo Sapphire

Reservew/ Sapphire

ReserveNo Sapphire

Reservew/ Sapphire

ReserveNo Sapphire

Reservew/ Sapphire

Reserve

Sapphire Reserve 1x 1.5¢ 3x 4.5¢ 3x 4.5¢ 1x 1.5¢ 1x 1.5¢ 1x 1.5¢

Sapphire Preferred 1x 1.5¢ 2x 3¢ 2x 3¢ 1x 1.5¢ 1x 1.5¢ 1x 1.5¢

Freedom (1) 1x 1.5¢ 5x 7.5¢ 5x 7.5¢ 5x 7.5¢ 5x 7.5¢ 1x 1.5¢

Freedom Unlimited 1.5x 2.25¢ 1.5x 2.25¢ 1.5x 2.25¢ 1.5x 2.25¢ 1.5x 2.25¢ 1.5x 2.25¢

Ink Business Preferred 1x 1.5¢ 3x 4.5¢ 1x 1.5¢ 3x 4.5¢ 1x 1.5¢ 1x 1.5¢

Ink Business Cash 1x 1.5¢ 1x 1.5¢ 2x 3¢ 5x 7.5¢ 2x 3¢ 5x 7.5¢

13

Chase Ultimate Rewards Optimal Strategy

Freedom Unlimited Freedom Ink Business Cash

Sapphire Preferred Sapphire Reserve Ink Business Preferred

British Airways Avios• 1:1 transfers, One

World Alliance• Good for shorthaul

flights on American Airlines

• Flights start at 7,500 one way if distance <1,150 miles

Singapore Airlines:• 1:1 Transfers, Star

Alliance• Suites Class NY to

Frankfurt 76k miles• 60k United

business to Hawaii (Same trip for 80k United miles)

• 80k Lufthansa First to Europe one way

United MileagePlus:• 1:1 transfers, Star

Alliance• Best U.S. Airline

program, easy to use website

• Best value in business class to Asia redemptions

Flying Blue Program:• 1:1 transfers, Sky

Team Alliance• 30k miles roundtrip

Hawaii economy class on Delta (same trip for 45k SkyMiles)

• 50k roundtrip coach to Europe, 125k business

World of Hyatt:• Instantaneous 1:1

point transfers• The only hotel

points program worth anything

• 30,000 point redemptions for top tier Park Hyatt properties going for >$1,500 / night

Travel Pay with Points:• Requires holding

Sapphire Reserve Card for 1.5 cents / point valuation (1.25 with Preferred)

• Turns the Freedom Unlimited into a 2.25% cashback card

• Can do better with transfer partners

Pick one of the three depending on personal circumstance

14

Chase Cheat Sheet

Notes 1. Chase cards not listed on this page are not worth applying forSource: Charlie Klene Analysis, chase.com

Optimal Chase Cards to Hold Forever:


Sapphire Preferred 50,000 $750 $95 $0 $95 •Hold for ability to transfer points to partners, 2x on travel, dining

Freedom 15,000 $225 $0 $0 $0 •Hold for rotating 5x category, 30,000 points per year for $6,000 in spend when fully utilized (hello Hawaii)

Freedom Unlimited 15,000 $225 $0 $0 $0 •Hold for 1.5x base earn on all purchases

Ink Business Cash 30,000 $450 $0 $0 $0 •Hold for 5x on Phone, Internet, and Cable bill (at least $200/month, 12,000 points/year for most)

IHG Card 60,000 $360 $49 ($150) ($101) •Hold for annual free nigth at any IHG propety wordwide, worth at minimum $200

Hyatt Card 40,000 $800 $75 ($130) ($55) •Hold for annual free category 1-4 free night worth at least $130, Discoverist status

Marriott Card 75,000 $600 $85 ($120) ($35)•Hold for annual free category 1-5 free night worth at least $120, 15 night credits / year (Silver status)

Marriott Business Card 75,000 $600 $99 ($120) ($21)•Hold for annual free category 1-5 free night worth at least $120, 15 night credits / year (Silver status)

United Explorer 50,000 $750 $95 $0 $95 •Hold for two lounge passes annualy, additional saver award space, priority boarding, checked bag

Amazon Prime Card $70 $70 $0 $0 $0 •Hold for 5% cash back on Amazon purchases

$4,830 $498 ($520) ($22)


Sapphire Reserve 50,000 $750 $450 ($300) $150 •Churn for bonus; worth keeping instead of Sapphire Preferred if > $3,667 in travel & dining spend

Southwest Plus 50,000 $750 $69 ($45) $24 •Churn for bonus

Southwest Premier 50,000 $750 $99 ($90) $9 •Churn for bonus

Southwest Premier Business 60,000 $900 $99 ($90) $9 •Churn for bonus

United Club Card 50,000 $750 $450 $0 $450 •Churn for bonus; If loyal United Flier United Club membership, waived close-in booking fee, 1.5x on all purchases worth holding

British Airways Card 75,000 $1,125 $95 $0 $95 •Churn for bonus

Ritz Carlton Card 2 Nights $600 $450 $0 $450 •Churn for bonus; Marriott Platinum status & United Silver status with $75k in spend

United Explorer Business 50,000 $750 $95 $0 $95 •Churn for bonus; 2x on dining

Ink Business Preferred 80,000 $1,200 $95 $0 $95 •Churn for bonus; potentionally worth holding instead of Sapphire Preferred

$7,575 $1,902 ($525) $1,377

15

Chase Rules & Application Considerations

General• Chase has by far the most restrictive approval rules. “5/24” rule automatically denies for a new card if

one has 5 or more accounts opened within the past 24 months with ANY card issuer• Certain cards exempt, notably: Amazon, Hyatt, Marriott Business, Ritz Carlton, IHG, and most Business

Cards• 5/24 rule means you should start your credit card acquisition journey with only Chase cards and aim

to acquire the “Chase Quartet”: Freedom, Freedom Unlimited, Ink Business Cash, Reserve/Preferred/Ink Business Preferred

• After acquiring Chase Quartet, get the United Card, Marriott Card, and then IHG, Hyatt, Amazon, Marriott Business

• Chase does not limit the amount of cards you can hold, only your overall outstanding credit limit


generous with sign up bonuses and earning rates• If you are a Sole Proprietor (i.e. you’ve once sold something on Ebay) you are eligible; Business name

can be your name, business tax ID is your SSN• Other valid reason to get a business card is to keep your corporate travel expenses separate

16

Citi ThankYou Rewards: The Afterthought

17

Citi ThankYou Rewards Overview

Citi ThankYou Premier Citi Prestige


Other Options:• Travel Pay


Credit5:4 ratio

18

Citi Cheat Sheet

Notes 1. Citi cards not listed on this page are not worth applying for; Costco card beaten in every bonus category by Chase or AmExSource: Charlie Klene Analysis, citi.com

Optimal Citi Cards to Hold Forever:

Bonus Bonus ValueAnnual

FeeTravel Credits Net Cost Rationale

Citi AAdvantage Executive 75,000 $1,050 $450 ($405) $45 •Bestows full AA Admirals Club access to each authorized user, up to 10; find 9 people you trust and venmo annually $45 for a card

Citi Double Cash Card 0 $0 $0 $0 $0 •Boring 2% cashback card; good to keep as a downgrade to build credit history

Citi Prestige 75,000 $1,050 $450 ($250) $200 •Only reason to get is for 4th night free benefit, extremely lucrative if can utilize otherwise skip, good for any hotel rate plan

$2,100 $900 ($655) $245


Citi AAdvantage Platinum 60,000 $840 $95 $0 $95 •Churn for bonus; potentially keep if don't want to pay for Executive card; priority boarding, checked bag, 10% points back, enables MileSAAver awards

Citi AAdvantage Business Platinum

60,000 $840 $95 $0 $95 •Churn for bonus

Citi ThankYou Premier 50,000 $700 $95 $0 $95 •Churn for bonus; bonus categories and transfer program beaten by Chase and AmEx

$2,380 $285 $0 $285

Yes: There is never ANY reason (besides meeting a sign-up bonus) to put a dollar of spend on any Citi card; Every single category bonus is beaten by Chase or AmEx; Citi Executives: step up your game

19

Citi Rules & Application Considerations

General• Citi limits bonus eligibility to people who have not opened or closed a card from the same branded

family in the past 24 months• Restriction is difficult to track and slows down how fast you can churn though cards, as there are only

three “families” of cards worth applying for: AA Personal, AA Business, ThankYou Cards


generous with sign up bonuses and earning rates• If you are a Sole Proprietor (i.e. you’ve once sold something on Ebay) you are eligible; Business name

can be your name, business tax ID is your SSN• Other valid reason to get a business card is to keep your corporate travel expenses separate

20

Additional Banks to “Frequent”

21

Barclaycard Cheat Sheet

Notes 1. Barclaycards cards not listed on this page are not worth applying for; Uber visa beaten in every bonus category by Chase and AmExSource: Charlie Klene Analysis, Barclaycard.com

Optimal Barcalycard Cards to Hold Forever:



JetBlue Plus Card 30,000 $420 $99 ($70) $29 •Great for occasional JetBlue flier; checked bag, 5,000 anniversary miles, Mosaic status at 50k spend, 6x on JetBlue purchases

Wyndham Rewards Plus 30,000 $300 $75 ($60) $15 •Underated hotel program, simple redemptions fo 15,000 points for a free night at any hotel; platinum status, 6,000 anniversary

Choice Priveleges Card 32,000 $256 $0 $0 $0 •Ubiquitous chain, bestows Gold status which is useful if you get stranded at an airport; no fee so good to keep

$976 $174 ($130) $44


Lufthansa Miles & More 50,000 $700 $89 ($300) ($211)•Great card if Lufthansa flier; annual companion ticket can be used to fly to Europe and can be worth much more than $300

AAdvantage Aviator Red 60,000 $840 $95 $0 $95 •Identical to the Citi version, due to Barclaycard total number of account restrictions, would keep open Citi one instead

Arrival+ 40,000 $421 $89 $0 $89 •2.11% cash back card with an annual fee; used to be interesting but now beaten by freedom unlimited, everyday preferred; churn

Hawaiian Airlines Card 35,000 $420 $89 $0 $89 •Good for churning if you live on the west coast

AAdvantage Aviator Red Business

40,000 $560 $95 $0 $95 •Good for churning

$2,941 $457 ($300) $157

22

Miscellaneous Bank Cheat Sheet

Source: Charlie Klene Analysis

23

Optimal Additional Cards to Hold Forever:



Bank of America Premium Rewards 50,000 $500 $95 ($100) ($5)•Great for base spend if you have Platinum Rewards status with Bank of America ($100k in assets); $100 travel credit means card pays you

Alaska Airlines Visa Signature 30,000 $840 $75 ($200) ($125)•Sign bonus includes $100 credit and companion ticket worth at least $200; additional annual companion ticket for $99; checked bag

CapitalOne Quicksilver Card $150 $150 $0 $0 $0 •Good card to hold for credit building; offers a special benefit every year (e.g. 20% Uber rebates, 50% Spotify rebates, etc.); good downgrade option from Venture Card

$1,490 $170 ($300) ($130)


Cathay Pacific Card Synchrony Bank

50,000 $700 $95 $0 $95 •Good for churning

CapitalOne Venture Card 50,000 $500 $95 $0 $0 •Good for churning; boring 2% cash back card with an annual fee

Hawaiian Airlines Bank of Hawaii 35,000 $420 $89 $0 $89 •Identical to the Barclaycard version, good for churning

Hawaiian Airlines Business Bank of Hawaii

35,000 $420 $89 $0 $89 •Identical to the Barclaycard version, good for churning

U.S. Bank Altitude Rewards 50,000 $750 $400 ($325) $75 •4.5% cash back on mobile purchases likely not sustainable; good for churning; requires previous U.S. Bank relationship for approval

U.S. Bank Club Carlson Card 85,000 $340 $75 ($160) ($85) •Good for churning; keep if you frequent Club Carlson Hotels; 40,000 anniverary points every year

U.S. Bank Club Carlson Business Card

85,000 $340 $60 ($160) ($100) •Good for churning; keep if you frequent Club Carlson Hotels; 40,000 anniverary points every year

$3,470 $903 ($645) $163

Putting it all Together

24

Ultimate Spend Cheat Sheet

Notes 1. Requires Platinum Preferred Rewards Status at Bank of America to be a strong base earner; Platinum status requires $100,000 in assets at Bank of America or Merrill Lynch / Merrill Edge; Without Preferred

Rewards Status, card earns 1.5% as a base rateSource: Charlie Klene Analysis

Spend Category:

Base Earn Airfare Hotels / Other Travel Groceries Dining Gas Car Rental Internet, Phone, Cable

Everyday Preferred(2.31%)

Freedom Unlimited(2.25%)

Blue Business Plus

Bank of America Premium Rewards (1)

(up to 2.625%)

Platinum Sapphire Reserve

Ink Business Preferred (4.5% same as Reserve)

Hilton Aspire (7% at Hilton properties)

Everyday Preferred Everyday PreferredSapphire Reserve

Sapphire Preferred (3% if no Reserve)

Morgan Stanley Card (3.08% if no Sapphire

cards)

Ink Business CashSapphire Reserve (offers primary

collision coverage)

Sapphire Preferred (3% if no Reserve,

offers primary collision coverage)

Sapphire Preferred (3% if no Reserve)

Best card to use for each major spending category:

• Chase Freedom Card (not shown) rotates between the categories quarterly; will always be the best card to use when earning 5x points, 7.5%• Bank of America Premium Rewards card earns a base of 2.625% cash back, but requires $100k in assets with the bank for that level;

compares to 3.08% cash back for Blue Business Plus, 2.31% cash back for Everyday Preferred, and 2.25% cash back for Freedom Unlimited• U.S. Bank Altitude Rewards Card (not shown) offers 4.5% cash back on mobile wallet purchases, an increasingly ubiquitous category; this

generosity by U.S. Bank is likely not sustainable; additionally most mobile spend opportunities fall in groceries or dining categories which are beaten by other cards

• Holding the Business Platinum Card required for getting full ‘Pay with Points’ value out of American Express cards, but also easy to get at least 1.54 cents in value from transferring points to travel partners, but with more work (Business Platinum not required for points transfers)

25

3.08% 7.7% 4.5% 6.93% 4.5% 4.62% 4.5% 7.5%

No close runner-up No close runner-up No close runner-up No close runner-up

Putting it all Together: 25 Cards to Acquire Over Time

Source: Charlie Klene Analysis

Optimal Cards to Hold Forever:


1. Sapphire Preferred 50,000 $750 $95 $0 $95 •Hold for ability to transfer points to partners, 2x on travel, dining

2. Freedom 15,000 $225 $0 $0 $0 •Hold for rotating 5x category, 30,000 points per year for $6,000 in spend when fully utilized (hello Hawaii)

3. Freedom Unlimited 15,000 $225 $0 $0 $0 •Hold for 1.5x base earn on all purchases

4. Ink Business Cash 30,000 $450 $0 $0 $0 •Hold for 5x on Phone, Internet, and Cable bill (at least $200/month, 12,000 points/year for most)

5. IHG Card 60,000 $360 $49 ($150) ($101) •Hold for annual free nigth at any IHG propety wordwide, worth at minimum $200

6. Hyatt Card 40,000 $800 $75 ($130) ($55) •Hold for annual free category 1-4 free night worth at least $130, Discoverist status

7. Marriott Card 75,000 $600 $85 ($120) ($35) •Hold for annual free category 1-5 free night worth at least $120, 15 night credits / year (Silver status)

8. Marriott Business Card 75,000 $600 $99 ($120) ($21) •Hold for annual free category 1-5 free night worth at least $120, 15 night credits / year (Silver status)

9. United Explorer 50,000 $750 $95 $0 $95 •Hold for two lounge passes annually, additional saver award space, priority boarding, checked bag

10. Amazon Prime Card $70 $70 $0 $0 $0 •Hold for 5% cash back on Amazon purchases

11. Business Platinum Card 75,000 $1,125 $450 ($200) $250 •Hold to unlock 35% 'Pay with Points' Rebate

12. Morgan Stanley Platinum Card 60,000 $900 $550 ($400) $150 •Hold for 5x on airfare, free authorized user, Centurion & Delta Lounge access

13. Everyday Preferred Card 15,000 $225 $95 $0 $95 •Hold for 1.5x base point earn, 4.5x groceries, 3x gas

14. Morgan Stanley Card 10,000 $150 $0 $0 $0 •Hold for 2x on dining, department stores

15. Delta Platinum Card 70,000 $840 $195 ($300) ($105) •Hold for annual companion certificate (assuming you receive at least $200 in value from it)

16. Hilton Aspire Card 100,000 $500 $450 ($700) ($250) •Hold for Hilton Diamond Status, $500 travel credits, annual free weekend night certificate (~$200)

17. Citi AAdvantage Executive 75,000 $1,050 $450 ($405) $45 •Bestows full AA Admirals Club access to each authorized user, up to 10; find 9 people you trust and venmoannually $45 for a card

18. Citi Double Cash Card 0 $0 $0 $0 $0 •Boring 2% cashback card; good to keep as a downgrade to build credit history

19. Citi Prestige 75,000 $1,050 $450 ($250) $200 •Only reason to get is for 4th night free benefit, extremely lucrative if can utilize otherwise skip, good for any hotel rate plan

20. JetBlue Plus Card 30,000 $420 $99 ($70) $29 •Great for occasional JetBlue flier; checked bag, 5,000 anniversary miles, Mosaic status at 50k spend, 6x on JetBlue purchases

21. Wyndham Rewards Plus 30,000 $300 $75 ($60) $15 •Underated hotel program, simple redemptions fo 15,000 points for a free night at any hotel; platinum status, 6,000 anniversary

22. Choice Priveleges Card 32,000 $256 $0 $0 $0 •Ubiquitous chain, bestows gold status which is useful if you get stranded at an airport; no fee so good to keep

23. Bank of America Premium Rewards 50,000 $500 $95 ($100) ($5)•Great for base spend if you have Platinum Rewards status with Bank of America ($100k in assets); $100 travel credit means card pays you

24. Alaska Airlines Visa Signature 30,000 $840 $75 ($200) ($125)•Sign bonus includes $100 credit and companion ticket worth at least $200; additional annual companion ticket for $99; checked bag

25. CapitalOne Quicksilver Card $150 $150 $0 $0 $0 •Good card to hold for credit building; offers a special benefit every year (e.g. 20% Uber rebates, 50% Spotify rebates, etc.); good downgrade option from Venture Card

$13,136 $3,482 ($3,205) $277

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Denotes First Priority ‘Staple’ Cards

Putting it all Together: 30 Cards to Churn Over Time

Source: Charlie Klene Analysis27

Denotes Highest Priority Bonus “Churn” Cards

Optimal Cards to Hold Forever:


1. Premier Rewards Gold Card 50,000 $750 $195 ($100) $95 •Churn for bonus

2. Delta Gold 60,000 $720 $95 $0 $95 •Churn for bonus

3. Delta Gold Business 60,000 $720 $95 $0 $95 •Churn for bonus

4. Delta Platinum Business 70,000 $840 $195 ($300) ($105) •Churn for bonus

5. SPG Card 25,000 $550 $95 $0 $95 •Churn for bonus; 5 night / 2 stay annual credit for SPG cult members

6. SPG Business Card 25,000 $550 $95 $0 $95 •Churn for bonus; 5 night / 2 stay annual credit for SPG cult members

7. Sapphire Reserve 50,000 $750 $450 ($300) $150 •Churn for bonus; worth keeping instead of Sapphire Preferred if > $3,667 in travel & dining spend

8. Southwest Plus 50,000 $750 $69 ($45) $24 •Churn for bonus

9. Southwest Premier 50,000 $750 $99 ($90) $9 •Churn for bonus

10. Southwest Premier Business 60,000 $900 $99 ($90) $9 •Churn for bonus

11. United Club Card 50,000 $750 $450 $0 $450 •Churn for bonus; If loyal United Flier United Club membership, waived close-in booking fee, 1.5x on all purchases worth holding

12. British Airways Card 75,000 $1,125 $95 $0 $95 •Churn for bonus

13. Ritz Carlton Card 2 Nights $600 $450 $0 $450 •Churn for bonus; Marriott Platinum status & United Silver status with $75k in spend

14. United Explorer Business 50,000 $750 $95 $0 $95 •Churn for bonus; 2x on dining

15. Ink Business Preferred 80,000 $1,200 $95 $0 $95 •Churn for bonus; potentionally worth holding instead of Sapphire Preferred

16. Citi AAdvantage Platinum 60,000 $840 $95 $0 $95 •Churn for bonus; potentially keep if don't want to pay for Executive card; priority boarding, checked bag, 10% points back

17. Citi AAdvantage Business Platinum 60,000 $840 $95 $0 $95 •Churn for bonus

18. Citi ThankYou Premier 50,000 $700 $95 $0 $95 •Churn for bonus; bonus categories and transfer program beaten by Chase and AmEx

19. Lufthansa Miles & More 50,000 $700 $89 ($300) ($211)•Great card if Lufthansa flier; annual companion ticket can be used to fly to Europe and can be worth much more than $300

20. AAdvantage Aviator Red 60,000 $840 $95 $0 $95 •Identical to the Citi version, due to Barclaycard total number of account restrictions, would keep open Citi one instead

21. Arrival+ 40,000 $421 $89 $0 $89 •2.11% cash back card with an annual fee; used to be interesting but now beaten by freedom unlimited, everyday preferred; churn

22. Hawaiian Airlines Card 35,000 $420 $89 $0 $89 •Good for churning if you live on the west coast

23. AAdvantage Aviator Red Business 40,000 $560 $95 $0 $95 •Good for churning

24. Cathay Pacific Card Synchrony Bank 50,000 $700 $95 $0 $95 •Good for churning

25. CapitalOne Venture Card 50,000 $500 $95 $0 $0 •Good for churning; boring 2% cash back card with an annual fee

26. Hawaiian Airlines Bank of Hawaii 35,000 $420 $89 $0 $89 •Identical to the Barclaycard version, good for churning

27. Hawaiian Airlines Bank of Hawaii 35,000 $420 $89 $0 $89 •Identical to the Barclaycard version, good for churning

28. U.S. Bank Altitude Rewards 50,000 $750 $400 ($325) $75 •4.5% cash back on mobile purchases likely not sustainable; good for churning; requires previous U.S. Bank relationship for approval

29. U.S. Bank Club Carlson Card 85,000 $340 $75 ($160) ($85) •Good for churning; keep if you frequent Club Carlson Hotels; 40,000 anniverary points every year

30. U.S. Bank Club Carlson Business Card 85,000 $340 $60 ($160) ($100) •Good for churning; keep if you frequent Club Carlson Hotels; 40,000 anniverary points every year

$20,496 $4,317 ($1,870) $2,352

Now: Go Make $33,632 Tax Free!

• The 55 cards on the previous two pages offer signing bonuses worth a combined $33,632

• That value is tax free, so if you live in NY or CA it is close to $60,000 pre-tax income to be spent entirely on travel

• Best of all, you can spend all that “money” on yourself, guilt free

• Requires strong organizational skills, but this hobby pays out!

• Holding the 25 cards on slide 26 only costs $277 / year IF you are organized enough to utilize all the annual card benefits

• Following the spending cheat sheet plan on slide 25 will yield you on average ~4% yield; for $25,000 in annual spend you will earn an extra $625 per year in perpetuity (worth ~$10k with 6% discount rate) vs. the 1.5% or $375 per year most people receive

• $33,632 number is conservative (the absolute least you can earn); can do upwards of 10 cents per point “cash” value if points are used to redeem international first and business class tickets; redemptions in this way propel the bonuses to be worth $100,000+

-- ($100k is the sticker price, hopefully you wouldn’t actually pay cash for first class tickets)

28

Application Strategy

• Depends on personal circumstances

• Use Credit Karma to monitor credit score for free (Transunion, Equifax), and Experian App (also free)

• Use Plastiq to meet minimum spend requirements; paying $25 per $1,000 (2.5%) is worth it because it prevents you from overspending; Plastiq can pay any bill on a credit card and delivers a check in mail to any recipient; pay rent, mortgages, car payments, gambling debts, drug dealers, prostitutes, etc. and earn points doing it; can also pay your significant other a one time “retention bonus” and then deposit it in your joint checking account • Please use my referral code (you get $200 fee free dollars, I get $400 fee free dollars): 414141

• Time your applications every 90 days to not hurt credit score • Apply for 2 to 3 cards at a time • Start with Chase card so not to run into 5/24 rule• Next get AmEx cards• Business cards generally don’t count under 5/24, so use as a way to fall back under the threshold

without stopping acquiring new card bonuses• This hobby will not ruin your credit score; I have >20 cards and a score >800 at every credit bureau

29

I Just Made You $44,000

• Feel free to Venmo me my cut @charlie-klene; 1 to 100+ bps is fine ($4.40 to $440+)• Paypal also works: [email protected]

• $44k includes ~$34k in sign up bonuses plus a perpetuity value of ~$10k in extra rewards from daily spend (this number increases the more you spend on cards)

• It only takes five cards to maximize daily spend (see slide 25: 1. Everyday Preferred/Freedom Unlimited/Blue Business Plus, 2. Morgan Stanley Platinum, 3. Sapphire Reserve/Preferred/Ink Business Preferred, 4. Ink Business Cash, and 5. Business Platinum Card/Business Centurion Card)

• There are worse hobbies to participate in than this one

• Keep an eye out for similar future guides on personal finance decisions, investing decisions, & loyalty program decisions (spoiler alert: United, and Hyatt are the best programs)

• Visit www.afoolandhismiles.com to download this guide, and future guides

• Feedback or pointing out errors is welcome: [email protected]

30

mailto:[email protected]

http://www.afoolandhismiles.com/

mailto:[email protected]

About the Author

Charlie Klene, whose older sister once described as “autistic when it comes to screwing consumer facing companies out of money,” is an avid points, credit card, and personal finance enthusiast.

Originally from California, Charlie currently lives in New York City and works as a Technology Investment Banker at Morgan Stanley. Although there is a conflict of interest, recommendations for co-branded Morgan Stanley American Express cards are based on their own merits. This deck contains Charlie’s personal views and opinions and does not represent the views of Morgan Stanley.

As a former Boston Consulting Group management consultant, Charlie is a battle-worn road warrior who got to experience corporate travel without expense limits. He is irrationally loyal to United Airlines and most likely has Stockholm Syndrome from monopolistic hub captivity. His United loyalty does not bias his product recommendations.

Charlie has successfully redeemed over a dozen 10+ hour international first class flights and estimates his point redemption total value to be in excess of $70,000. Above photo is of Charlie in Thai First Class. Yes, he finished the bottle of Dom Perignon and than passed out after the flight attendants prepared his bed.

Charlie holds an MBA from Harvard Business School and a BS in Mechanical Engineering from MIT.

31

Appendix

32

American Express Membership Rewards Overview

AmEx Membership Rewards Account

Platinum-5x Airfare (directly with airlines)-$200 Uber credit ($15/month, $35 in December)-$200 travel credit (best use: United travelbank additions)-Centurion (2 guests) & Delta Sky Club ($29/guest) access-$550 Annual Fee (net $150)

Everyday-2x Groceries ($6k)-20% bonus if 20 purchases / month[2.4x Groceries, 1.2x everything]-$0 Annual FeeEveryday Preferred-3x Groceries, 2x Gas-50% bonus if 30 purchases / month[4.5x Groceries, 3x Gas, 1.5x everything]-$95 Annual Fee

Premier Rewards Gold-3x Airfare, 2x Gas, 2x Dining-$100 travel credit-$195 Annual Fee ($95 net)

Morgan Stanley Card-2x Airfare, 2x Dining, 2x Department Stores, 2x Rental Cars-$0 Annual Fee

Business Gold Rewards-3x on one of: Airfare, Advertising, Shipping, Gas, Computers(up to $100k)-2x on other categories-$175 Annual Fee

Blue Business Plus-2x on everything up to $50k / year-$0 Annual Fee

Business Platinum-1.5x if purchase > $5k-10 Gogo wifi passes /year-35% points rebate on airfare pay w/ points: economy selected airline, first any airline-$200 travel credit-Same lounge access as personal version-$450 Annual Fee(net $250)

60 to 100k Bonus 10 to 15k Bonus 25 to 50k Bonus 10k Bonus 50 to 75k Bonus 75 to 100k Bonus0 to 10k Bonus

Corporate-1x points -$90/year to enroll

Centurion-$2,500 Annual Fee-Delta Platinum Status

Business Centurion-$2,500 Annual Fee-50% points rebate on all airfare pay w/ points

Pay with Points-Pay for airfare booked through AmEx with points at rate of 1 point = 1 cent-If holding Business Platinum, rate of 1 point = 1.54 cents for economy on selected airline, first on any airline-If holding Business Centurion, rate of 1 point = 2 cents for any airline

Holding BuinessPlatinum or Business Centurion “unlocks”

value in points earned from other cards for

pay with points


5:4 ratio

3:1 ratio 1:2 ratio

100:2 ratio

33

Business Centurion Card “Unlocks” Most Value

• Holding the Business Centurion Card “unlocks” value in points earned from other cards• Business Centurion Card rebates 50% of points when redeemed for airfare via ‘Pay with Points’

redemptions• 50% rebate transforms each point to be worth 2 cents, much better than most frequent flier program

redemptions• 50% rebate applies to any fare on any airline• $7,500 initiation fee, $2,500 annual fee, and ~$500,000+ annual spend invitation requirement make

this card difficult to attain; Yes, the rich get richer

Notes 1. 1x refers to points earned per dollar spent, valued at 1 cent/point; also equal to % cash back earned per dollar when redeemed for ‘Pay with Points’ redemption2. Business Centurion offers 50% of points back on all ‘Pay with Points’ redemptions, but with $2,500 annual fee3. Base earn for Everyday Card requires 20 purchases per statement cycle for 20% points bonus; Everyday Preferred Card requires 30 purchases per statement cycle for 50% points bonusSource: Charlie Klene Analysis, americanexpress.com


34

Spend Category: Base Earn Airfare Groceries Dining GasNo Business

Platinumw/ Business

PlatinumNo Business

Platinumw/ Business

PlatinumNo Business

Platinumw/ Business

PlatinumNo Business

Platinumw/ Business

PlatinumNo Business

Platinumw/ Business

Platinum

Platinum 1x 2x 5x 10x 1x 2x 1x 2x 1x 2x

Everyday 1.2x 2.4x 1.2x 2.4x 2.4x 4.8x 1.2x 2.4x 1.2x 2.4x

Everyday Preferred 1.5x 3x 1.5x 3x 4.5x 9x 1.5x 3x 3x 6x

Premier Rewards Gold 1x 2x 3x 6x 2x 4x 2x 4x 2x 4x

Mercedes Benz Card 1x 2x 1x 2x 1x 2x 2x 4x 2x 4x

Morgan Stanley Card 1x 2x 2x 4x 1x 2x 2x 4x 1x 2x

Corporate 1x 2x 1x 2x 1x 2x 1x 2x 1x 2x

Blue Business Plus 2x 4x 2x 4x 2x 4x 2x 4x 2x 4x

Business Gold Rewards 1x 2x 3x 6x 1x 2x 1x 2x 2x 4x

Business Platinum 1x 2x 1x 2x 1x 2x 1x 2x 1x 2x

the ultimate strategic credit card guide · • amex allows you to have 4 charge cards and 5 credit...

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