American Express Membership Rewards points are some of the best rewards you can earn because they're flexible - you can use them for travel, gift cards, or statement credits, among other things.
Amex cards that earn Membership Rewards include:
Each card offers a unique set of bonuses and benefits depending on how you spend and travel.
While Amex's rewards program has a lot of flexibility, that doesn't mean all redemption options get the same cents per point value.
Let's start with the worst ways to use your Amex points.
Amex has a shopping portal with many products you can buy with Membership Rewards points. While this is a versatile way to use your points, it doesn't have a high redemption value.
For 10,000 points, you'll only get a value of 0.5 CPP— which is not the best value for Amex points.
If you're set on using points for merchandise, you might be better off buying a gift card or going through a shopping partner like Amazon.
Amex has a ton of airline transfer partners that you can transfer your points straight to.
Most partners offer a 1-to-1 transfer rate, so if you transfer 1,000 points to them, they will give you 1,000 points back. Sometimes, American Express runs promotions for transfer partners where you can get a better rate.
One thing to keep in mind here is the Excise Tax Offset Fee.
In most cases, American Express charges an excise fee of 0.06 cents per point (capped at $99 for any single transfer) when you transfer points to U.S. airlines with a card such as The Platinum Card®.
American Express's U.S. airline partners that charge an excise fee include:
On a 100,000-point transfer, that fee equates to $60. In addition to these charges, the airline may also charge taxes and fees.
However, not all partners charge this fee. Some of the airline programs where you can transfer Membership Rewards points without paying any fees include:
Since these are points from airlines outside the United States, American Express won't charge you the Excise Tax Offset fee to transfer points into these programs, although you need to evaluate their value (Note: some of them are hard to redeem points from). Transferring points to their hotel partners will also be free of charge.
Unfortunately, the only way to transfer points to your Delta SkyMiles account is through AMEX, so be prepared to pay the fee to utilize them.
To get the best redemption rates, you need to do a lot of research before you transfer your points.
If you don't want to pay your card bill, you can redeem your points for statement credits, effectively wiping out any purchases you made with the card. While this option is handy, it also isn't recommended.
However, if you're in a pinch, this can help.
It's best used as a last resort if you need some last-minute funds to cover your balance. But each point will only be worth 0.6 CPP. So the low value makes it not a great option.
We'll talk about other setups later in this post if you're after cash.
With JustGiving, you can donate your points to over 1.5 million charities. Unless you can redeem your points for travel, you'll likely get no more than 0.7 cents per point from this redemption option.
The points aren't the greatest value for your money, but if you don't need your points, this is a decent option.
Beware of the value change, though. Depending on the organization, the value of your points may vary, so pay attention.
Doing the math can help you make a bigger impact.
With American Express Travel, you can book all kinds of travel, including hotels, vacation packages, and cruises.
If you book travel through the American Express Travel portal (excluding airfare), you will only earn 0.7 CPP. In addition, considering other companies will give you 1 CPP, booking your travel using the Amex Travel portal may not be the best way to spend your Amex points.
Keep in mind that using the Amex Travel Portal is NOT the same as using a transfer partner.
Similar to option 1, you can use your points to spend with certain merchants.
The cents per point come out to 0.7 mostly, except for NYC Taxis and Ticketmaster.com. Those have different point-to-cent ratios, so check the redemption rate before redeeming, as redemption rates may vary from retailer to retailer.
You also need to be careful because some platforms like Amazon can automatically fill in that you're using M.R. points when you check out.
If you want to use your points for shopping, there are probably better options in this list.
This option is new for 2022.
If you have a business checking account with Amex, you can redeem your points for cash. You'll get 0.8 CPP, so 10,000 points would come out to $800. These points are considered rebates instead of income, so you're not taxed on them.
So if you have a lot of points, cashing out your business checking account through your Business Platinum might be a better option. (More about this below)
Gift cards come in different types, and your redemption value varies. Then again, there are many 1 CPP options with less variance, which is not too bad.
It may not be the best redemption method for your Amex points because it has additional hoops to jump through.
With Upgrade with Points, you can bid on seat upgrades at over 20 participating airlines using your Membership Rewards points. This is a convenient option if you are worried about cramped seats on long flights.
It might make more sense to upgrade your seat with the actual card and earn more points because there are higher-value options to redeem your points. However, membership rewards here are worth at least 1 CPP depending on how you use them.
If you value your seat on the plane, you might like this option.
This is a great option for the avid traveler.
Compared to other companies, you can get a decent rate on your points. You can expect to redeem 1 CPP with flights and hotels if you book it through the Amex Portal.
But if you have the Chase Sapphire Reserve, you could get 1.5 CPP when you book through their own portal.
With this option, you can get an elevated value for your points, whether it is flights, and pay yourself back.
This is a better option than the 7th option mentioned above.
Instead of $800 per 100,000 points, you can get a better rate of 1 CPP. That comes out to $1,000 per 100,000 points. You must have the Amex Business Platinum card, though.
If you run a large business, that might be enough to offset the annual fee, but you still need to do the math.
If you own a Morgan Stanley brokerage account, this might be useful.
It's similar to a business checking account using your business platinum but on a more personal card side.
If you own the Platinum Card from American Express Morgan Stanley edition, you can cash out your points to your brokerage account at 1 CPP.
The points can be cashed out anywhere once they reach your brokerage account.
Though, you might want to consider these things first before you use this option:
I made a blog post about this before and how to waive the annual fee. You can learn more about it here: https://www.asksebby.com/guides/waive-amex-platinum-annual-fee
You can transfer M.R. points at 1.1 CPP to your brokerage account with the Platinum Card from American Express Charles Schwab. So if you're looking to redeem for cash, this might be the best option.
However, as with any other Amex Platinum cards, there are a few things you need to consider:
If you have a Business Gold, you can get a 25% rebate when you book an eligible flight.
So, if you use 100,000 points to cover a $1,000 flight, you'll get 25,000 points back. That means you used only 75,000 points for a $1,000 purchase, which works out to a rate of 1.33 CPP.
The maximum rebate is 250,000 points, so you wouldn't want to redeem more than 1 million.
Platinum Business cardholders can redeem M.R. points for travel and get a 35% rebate when they use their card for either first class or business class travel or flights with the airline of their choice (via the travel incidental credit).
That means if you spend 100,000 points for a $1,000 flight, you'll get 35,000 points back. Considering the 35% points rebate, the effective value is 1.54 CPP.
This is your best bet if you're looking for a simple travel redemption. The maximum rebate here is 1 million points per year, so you wouldn't want to redeem more than 2.85 million.
This is the same for the two previous options, but even better!
You can redeem your points with Business Centurion for a 50% rebate. As you know, spending 100,000 points for a $1,000 flight would get you 50,000 points back.
With the rebate, you can effectively get 2 CPP, the highest rate we've discussed.
On top of that, there is no maximum rebate. However, the personal Centurion card does not offer flight rebates.
Finally, you can transfer your points to American Express airline and hotel partners.
The rate here can be up to 10 CPP, but it can generally fluctuate or come out to about 2 or 3 CPP when you get through all the transferring. There are a lot of nuances to this one.
But for avid travelers, this might be a decent option for you.
American Express points can be redeemed in many ways, so it's important to know which one gives you the most value.
While you can use them for merchandise or shopping with Amazon, they don't provide good value.
Most people will get the best value from their points by transferring them to airline or hotel partners or using your Amex business card.
Watch this video to find out how to get the most out of your Amex points:
Starting May 31, 2020, Chase added a new temporary benefit for Chase Sapphire Preferred® Card and Chase Sapphire Reserve® members to “Pay Yourself Back.”
Note: The “Pay Yourself Back” feature is not available to the no annual fee Chase Sapphire card.
The Pay Yourself Back Program lets Chase Sapphire Preferred and Sapphire Reserve cardholders redeem Ultimate Rewards to offset select category purchases at a favorable rate.
Pay Yourself Back Categories:
The current promotion is valid through September 30, 2020, but it’s possible that it may be extended due to uncertain times.
[ March 30 Update ] Pay Yourself Back is extended until Sept 30, 2021.
Sign into your online Chase account and navigate to the Ultimate Rewards tab located on the bottom of the left column.
Select the card you’d like to access. If you have multiple Ultimate Reward earning cards, you can choose to pool points to the Sapphire card to redeem.
In our example, we choose the Chase Sapphire Reserve.
Navigate to the left hand column and select the “Pay Yourself Back” menu item. Clicking the main promotional banner also works, as seen in the screenshot below.
The current categories for pay yourself back are: restaurant and grocery stores (including take out and eligible delivery services), home improvement stores, and select charitable organizations.
After each purChase posts, you have 90 days to pay yourself back. Check the respective box to select the purChase.
Enter the dollar amount you’d like to receive as a statement credit by using some or all of your available Ultimate Rewards points. The Chase Sapphire Preferred redemption rate is 1.25 cents per point, and the Sapphire Reserve is 1.50 cents per point.
After setting the cash value, click “Confirm & Submit” to redeem!
One of the main benefits of Chase Ultimate Rewards points is that you can transfer them out to partners if you have the Chase Sapphire Preferred, Chase Sapphire Reserve, or the Chase Ink Preferred.
You can view credit card offers by going to the "Credit Card Offers" tab. Find offers for the respective cards in "Travel Rewards Credit Cards" and "Business Credit Cards." You don't have to use our links, but we're grateful when you do. Thank you for supporting AskSebby!
Chase Ultimate Rewards transfer at a rate of 1:1. On average, you can get up to two cents per point when you use transfer partners.
If you're looking for the most value possible, then airline partners are the way to go for first class redemption. This also works well for last minute flights.
The way I redeem points for "best value" is hotels because everyone in your travel group can benefit.
For example, if I transfer my Ultimate Rewards points to United:
On the other hand, if I transferred my Ultimate Rewards points to Hyatt:
For the cost of a round trip United Polaris flight to Asia, I can get four nights at a top tier Hyatt property.
Examples:
IHG is not an ideal transfer partner because of the cost of the points, and you typically need more points for a redemption.
In my experience, Hyatt has the best redemption value for transfer partners. The Category 1 Hyatt properties start at 5,000 Hyatt points.
Category 1 = 5,000 Hyatt points / 5,000 Chase UR points
Check out the video below for more redemption ideas.
American Express offers a wide range of charge cards and credit cards. Charge cards technically don't have a set spending limit, and you must pay them in full each month. Credit cards can be core Amex cards or co-branded cards, and you can carry a balance (although we do frown upon that; pay your cards off each month).
I recommend getting an American Express card AFTER you've finished obtaining all the Chase credit cards on your wish list due to the 5/24 rule. By the time you finish with Chase cards, you should have a solid credit foundation that will let you apply for premium cards.
People who are not currently American Express members have a higher likelihood to get targeted for increased signup bonuses like the 100,000 point Amex Platinum offer via CardMatch.
My first Amex card was the Amex EveryDay card, and I regret not going for the Amex Platinum first since I lost out on the additional 40,000 points.
Amex Platinum (as of 2018)
You can be targeted for the 100k offer via CardMatch even if you're already a customer, just less likely.
The following is my credit journey recommendation. American Express falls into step 4: choose your own adventure.
1. Student or secured (Card #1)
[let age for 12 months]
2. Chase Freedom/CFU (#2)
[let age for 1-3 months]
3. Finish off 5/24 (#3-5)
4. "Chose your own adventure"
Membership Rewards points can be worth 0.6-2.0+ cents per point (CPP) depending on how you redeem them.
Redeeming MR points:
The main questions you need to ask yourself are:
1. Do you travel?
2. Do you want the Amex Plat Schwab?
The Charles Schwab Amex Platinum lets you redeem MR points for cash back at a rate of 1.25 CPP.
If you miss out on the 100k Amex Platinum offer, how much is the opportunity cost worth?
40k MR opportunity cost
a) Cash back
b) Travel (low)
c) Travel (high)
At a minimum, you're missing out on $400 in opportunity cost. If you utilize transfer partners for travel, you could miss out on $800.
The short answer is no. I've seen plenty of people get approved for the Amex Platinum as their first Amex card.
The main question you need to ask is if one hard inquiry is worth $400 to $800?
Maybe if you're mortgage hunting, in which case you should already have a minimum card base of 3-5 cards set up.
In some cases, it might make sense for to get the Amex EveryDay card. Amex EveryDay is great for:
The exception for not getting the Amex Platinum first is if you fly on Delta often or you stay at Hilton properties often.
Exceptions list:
1. Amex Delta Gold
2. Amex Hilton Ascend
To start off with, I'm not taking any sides. My goal is to make you aware of the rules and actions that can lead to a shutdown. I'm going to list a bunch of items, and for you, some of these actions may seem reasonable, but Chase is within its right to cancel their relationship with you. This is called a non-satisfactory relationship.
When a non-satisfactory relationship occurs, all of your cards and accounts are closed. Chase will typically mail you a check for the balance in your account.
After this happens, some people may be able to reopen accounts after a few years. In certain circumstances, they will send a message saying you're rejected because of a previous non-satisfactory relationship.
For most people reading this blog, you'll be fine unless you're doing something shady/illegal. Most shutdowns happen because they're seeing unusual transactions and seen as "risky."
With that said, let's run through the list.
Easy examples of this are gambling, adult films, as well as Bitcoin. Back in 2014, there were a few producers that worked in the adult industry and had their accounts shut down because of it.
On the Bitcoin and cryptocurrency side, especially if you're using Coinbase, my recommendation is to link it to another account that's not Chase.
If you're someone who has large international wires, then I would avoid using Chase because it usually triggers a financial review that can lead to a shutdown. For Chase Private Clients, maybe that changes, but for normal people, it's seen as risky behavior.
The problem with money orders is the money isn't traceable. Banks get concerned when they don't know where the money is coming from. Their biggest concern is that the money is being obtained illegally.
On the other end of the spectrum, buying a lot of Visa gift cards with your credit cards can flag your account. The main problem is that Visa gift cards are a cash equivalent, meaning you can turn it into cash if you wanted to. When you buy store branded gift cards, it's harder to liquidate.
Some credit cards know when you're buying gift cards because they receive level 3 data, meaning they can see what you're buying. A Scenario where you might want to buy store-branded gift cards is if you're close to hitting minimum spend, and you don't have any other way. Here, you can buy a gift card on Amazon if you know you're going to use it in the future.
If you're someone who's new to credit and you apply for a lot of Chase cards in a short amount of time, this may trigger a shutdown. For example, if you received your first credit card three months ago, and you apply for 6 Chase cards in the next six months, it raises a red flag.
The way to lower the risk profile is to lower your credit limits. Again, you're seen as risky because you have a thin credit profile with a ton of credit.
I'm not sure why, but after your third or fourth Chase card, they start to give you high credit limits.
Another thing that may cause a shutdown is if you do credit piggybacking. This is when you add people to your credit cards as an authorized user when they don't have a purpose of being there. The person typically isn't a family member or in the same household.
The main thing Chase is concerned about is you're selling your credit cards as a service to help them improve their credit.
If you do want to help your significant other out, I think that's reasonable. Just be sure the mailing address is the same household.
This is obvious, but suing Chase is a bad idea. On the other hand, suing someone else is seen as a reputational risk because it can affect their other relationships with other companies.
Large cash deposits are also a red flag because it leaves them wondering about the source of the money. The benefit of a check or a wire is that they can track the origin or the money. With cash, they don't know.
Selling your UR points can trigger a shutdown. If you do want to transfer your points to family members, ideally they live in the same household and have the same last name.
If you review the list, most of the actions can be avoided. The only ones that can't are the reputational risk — so if you work in an industry they don't approve of, or if you end up suing someone they don't approve.
My recommendation is to be cautious of your transactions and try to see it from the bank's point of view.
What leads to an American Express financial review? I've talked about my experience with a financial review in the past.
A financial review is a risk minimization tactic by Amex to make sure you don't max out your cards and run away. Their goal is that you don't default on payments by having too much debt and not pay it off.
When you're under financial review, they'll freeze all of your accounts, and you'll need to send in documents about your income. They will request tax returns and bank statements. What they're looking for is to make sure the income you reported on the application is true.
The process typically takes 2-3 weeks, and you're assigned a specialist to talk to. Even if you contact customer service, you will not be able to talk to anyone except for the specialist.
If you don't send in the requested information, they will shut down all of your accounts. Even if you're worried about failing the review, you should still send in the documentation because they're going to either shut down the accounts or set a lower credit limit.
If you click the "spending power" button more than three times a day, it will trigger a financial review. The idea is if you have a big purChase coming up, you can check if the transaction will be approved.
For me, this is what triggered a review. I entered $20,000 and then $30,000 and $50,000. Surprisingly, they all said it would be approved. On Amex's side, this raised a red flag because I just received my charge card.
The lesson here is: Don't play with the "Spending Power" button.
I think this is reasonable to prevent fraudulent transactions. One thing to be careful of is if you're hitting minimum spend. For example, if you're approved for a card, and you have a $10,000 credit limit, if you spend $5,000 in the first three days, it will raise a red flag. This equates to $2,500 a day, so they're going to assume this is normal behavior since they don't have spending history on your new card.
If you take the $2,500 and multiply it by 365 days, you get a figure close to $1 million dollars. This is concerning to Amex, especially if the income you reported isn't close to $1 million.
If you have more than $25,000 credit limit on a credit card or a combined credit limit of $35,000, it will trigger a financial review.
Amex allows you to link a bank account to pay your statement balance. If you don't have a balance in your bank account to pay the balance, it will result in a return payment.
The final factor that leads to a financial review is if you change your income numbers too drastically. For example, if you apply with a $100,000 salary, and one year later, you have a $150,000 annual salary.
Amex may want to see proof of the salary increase in the form of a pay stub or tax return.
There are three possible outcomes to the financial review process:
1. Pass, everything checks out, and no further action is needed.
2. Pass, but they will decrease your credit limits.
3. Fail, they will close all your accounts.
Note: Some of the offers/products mentioned below are no longer available.
Active duty service members can benefit from luxury cards without the hefty annual fees due to MLA and SCRA. In this post, we'll focus specifically on Chase and American Express.
Chase and American Express are some of the main credit issuers that will waive the annual fees when you call in. Learn more about how to contact each credit issuer in this post. Here's the step-by-step playbook for active duty members.
Month 0 = Grab any secured or student card
Month 12 = Chase options open
Learn more about secured credit cards in this post or the video below.
The alternative to secured cards is a starter card if you qualify depending on your relationship with the bank and/or income level. Learn more about starter cards in this post or the video below.
Important: You only need ONE secured or starter card. Adding more than one will take up a 5/24 slot.
Chase 5/24 is an unwritten rule that states you can only get approved for a Chase credit card if you have opened less than five credit cards from any issuer in the past 24 months. If you have 5 or more, you will be automatically rejected.
Time for a bad analogy...
It's kind of like a bar that will not serve you any liquor if you have 5 (or more) of any alcoholic drinks in the last 2 hours (24 months in our case).
* ALL: Southwest, United, Sapphire, Freedom, and Ink cards
* Also: Marriott (personal), Slate
Again, after 12 months of having any secured or starter card, apply for a Chase card.
Month 0 = Grab any secured or student card
Month 12 = Freedom or Freedom Unlimited
The ideal credit utilization range is 1-10%. If you need to use more than 10%, I recommend pre-paying your statement before it closes and leaving a small balance to pay off later.
For example, if the card statement opens on the first of the month and closes on the last day of the month, pre-pay 95% of the balance around the 20th. When the statement closes, it will report the 5% utilization. Pay off the balance in full after the statement closes.
If you pre-pay the card (push from your bank) on, let's say, Jan 24 for $399.
When the statement closes (Jan 31), utilization = ~1% (excellent).
However, if you don't pre-pay and you used $400 of the $500 credit limit, $400 / $500 = 80% (very poor).
The reason to get a stater card like the Chase Freedom or Chase Freedom Unlimited at the 12-month mark is to build a relationship with Chase. It's hard to get approved for a premium credit card without any rapport because they don't have a profile on you.
After having the Chase Freedom card for at least 2-3 months, I recommend going for the Chase Sapphire Reserve. The Chase Sapphire Reserve is ideal, but if you can't get approved for a $10,000 minimum credit limit, you might have to get the Chase Sapphire Preferred instead.
Worst case, get the Chase Sapphire Preferred, and when your income increases, product change to the Chase Sapphire Reserve after the first year.
[2 slots left after this]
Chase Sapphire Reserve Upgrade Requirements
1. The card being upgraded must be a: Slate, Freedom, Freedom Unlimited, Sapphire or Chase Sapphire Preferred
2. The card must be at least 12 months old
3. You must have the ability to get a credit limit of $10,000
Side note: You can have multiple Chase Sapphire Reserve cards via upgrades but NOT applications.
For example, if you have a Chase Sapphire Reserve already and applied for another one, it will get auto-rejected.
If you have a Chase Sapphire Reserve + Chase Freedom Unlimited, you can upgrade the Chase Freedom Unlimited to a second Chase Sapphire Reserve.
After acquiring the Chase Sapphire card, you have 2 more slots open for Chase cards. There are a few options. Pick 2 from the list or skip them if the cards don't interest you.
a) Chase United MileagePlus Explorer = Welcome offer + free checked bag + priority boarding
b) Chase United Club = United Club access
c) Chase Southwest Priority = Welcome offer + travel credits + discounts on in-flight purchases
d) Chase Freedom and Chase Freedom Unlimited = Complete the Chase Trifecta
e) Chase Marriott Rewards Premier = avoid; One Lane Rule w/ SPG
After finishing off the Chase 5/24 slots, I recommend moving on to American Express and some hotel keeper cards. The Chase Hyatt and Chase IHG cards are not affected by 5/24.
Chase (non-5/24 cards)
a) Chase Hyatt = Intro bonus + keeper (free annual night)
b) Chase IHG = Intro bonus + keeper (free annual night)
American Express Cards
The obvious choice here is the American Express Platinum card because of the great benefits the card offers.
a) American Express Platinum
b) Upgrade Amex Green or Amex PRG to a Platinum in Year 2
c) Other flavors (Schwab, Ameriprise, etc.)
d) Business Platinum
Some people choose to get multiple variations of the Amex Platinum card. Why? You get $200 airline credits and Uber(Eats) credit per card.
Be aware that you can have as many charge cards as you want, but you can only have 5 American Express credit cards at one time.
Amex 5 Credit Card Cap
Below are a few options for the additional American Express credit cards to acquire.
a) SPG = free night (can be upgraded in Y2)
b) SPG Luxury = BETTER free night + $300 Marriott credits
c) Hilton Aspire = free night (any) + $250 airline + $250 Hilton
d) Hilton / Hilton Ascend = bonuses (can be upgraded in Year 2)
e) Delta Platinum = companion certificate
f) Delta Reserve = BETTER companion certificate + Delta Lounge*
*irrelevant w/ Amex Platinum because you can access the Delta lounge when you fly Delta
We've talked about business credit cards in the past, but a few more frequently asked questions have popped up. Here's everything you ever wanted to know about business credit cards.
Who is liable for business credit cards? For most business cards (assuming it's a business card and not a corporate card), even if you use an EIN, they'll pull your credit report using your social security number. Therefore, you are going to be liable for the card. Whenever you apply for a credit card, there is a terms of service you need to agree to.
Individual and Company Liability: You understand that by responding to this offer you agree to be personally responsible, both individually and jointly with the Company, for payment of all balances incurred on all cards and accounts issued pursuant to this application now or whenever such additional accounts may be established in the future.
By submitting this application, you, as an individual and the Authorizing Officer of the Company, (a) are requesting us to open an Account in the name of the Company, (b) are requesting that we issue Card(s) as you direct, (c) are agreeing to be jointly and severally liable with the Company for all charges to the account.
Just like any credit card, you are liable for the expenses and payments. The credit issuers have the right to come after you if you default because you signed the cardmember agreement.
If you issue employees cards, you'll be liable as well. The best practice is to have internal controls set up to monitor transactions.
The main things we're focused on in this post is to optimize the spend you're already doing and getting a signup bonus.
The benefit of having a business credit card is that you can optimize for different categories. Most cards offer 3x and 5x back on categories you typically don't get with personal cards. For example, the Chase Ink Cash card offers 5x back on cable and phone bills.
Another reason why people pursue business credit cards is that they have good intro bonuses that provide out sized value on spend.
The one thing people don't realize is that businesses come in all shape and sizes. Yes, there are corporations and LLCs, but there are also sole proprietorships.
In the state of California, you do not need additional documentation if you operate as a sole proprietor. I've had friends who are thinking of starting side hustles who applied for the Chase Ink Preferred and were successful. They didn't have any income, but they expect to make at least $5,000 this year.
The business card is intended to be used for business purposes, and that the card is being issued to a public or private company including a sole proprietor or employees or contractors of an organization.
In circumstances like a sole proprietorship, it gets a bit foggy. For example, if I was a videographer creating content for other people, but I also use the camera, is that ok?
As long as the expense is justifiable, that's fine to me, but technically it doesn't matter.
I do a lot of reading online for data points, and I have yet to hear of someone getting shut down for making purchases that weren't business expenses. Can it happen? Yes, but I don't think it's likely.
The biggest risk of using your card for nonbusiness expenses isn't getting shut down; it's losing consumer protections.
Whenever you get approved for a new card or do a product change, the credit issuer will send an updated benefits and protections guide.
My biggest concern is black swan event; something that's difficult to predict and can be very costly. A good example is if you rent a car and get into an accident.
Even though your business card might have CDW, you might be in a position where you need to "prove" that the car rental was related to business.
The retail price for an intermediate car like a Honda Civic is $20,000. If you were to get into an accident and the car was declared a total loss, you would be responsible for recovering the car if for some reason the credit card didn't honor CDW.
Again, it's not likely to happen, but I like to be proactive and think of worst case scenarios.
For the most part, business cards don't have an affect on your credit report unless you default on payments. Most business cards can only harm your credit, and not help it.
A lot of people signup for business cards if they're under Chase 5/24 because it doesn't show up on their credit report.
For example, my friend was trying to time getting Southwest Companion Pass. He ended up getting business cards to stay under Chase 5/24 to get the Companion Pass.
Capital One business cards are the exception among major issuers; they'll post on your credit card.
Corporate cards are a whole different ballgame. It requires you to have a corporation with at least three years of financial statements and sometimes tax returns.
Different programs have different requirements for transaction size and what they want to see regarding revenue. My guess is that they're committing an account manager to you and want to make sure that they get positive expected value.
If we play with Amex's online tools, you can get an idea of what they're looking for.
For Amex:
For a company with 1-10 employees, you need $10-$25 million annual revenue for them to recommend corporate cards.
For under <$5 million in annual revenue, even if you have 1000+ employees, they recommend OPEN cards and not corporate cards.
If you're between $5-10 million in revenue, they'll only recommend corporate cards only if you have between 51-100 employees (not 1-10 or 11-50).
1. Visit Google Flights: https://www.google.com/flights
2. Enter your departing city and destination, along with dates.
3. The dates with the cheaper airfare will be in green text. It's typically cheaper to depart on a weekday, but if you have work commitments, then select the days that work for you.
4. Flight prices usually increase one month before the target date, be sure to track the price to see if you're getting a good price. Sign up for email alerts for the flight you want so you can receive an email when there's a good price.
You can see the historical price history for a specific flight.
5. Once you find a good deal on flights, you can save even more if you have the Chase Sapphire Reserve card and book using the Chase Travel Portal.
Alternatively, if you're a Chase Ritz-Carlton cardholder and you're traveling with a friend, you can save $100 on roundtrip domestic airfare. The sale prices are often reflected in the Visa Infinite Discount Air Portal.
In the screenshot below, I was able to book two roundtrip tickets from SFO to LAX for $54 using the Visa Infinite Discount Air Portal (via the Chase Ritz-Carlton card).
If you're more spontaneous and you have a flexible schedule, Scott's Cheap Flights is an awesome resource to get deal alerts.
1. Sign up for Scott's Cheap Flights
2. Keep an eye out for deals that interest you via email. Below is an example of a flight deal.
3. If you have the Chase Sapphire Reserve, flight deals are often reflected in the Chase Travel Portal, so you can save even more when booking with points.
You can use Google Flights to search for cheap airfare on specific dates.
1. Visit Google Flights: https://www.google.com/flights
2. Enter your specific dates and hit the search button.
3. You'll find a map view of airfare.
4. If you have the Chase Sapphire Reserve, flight deals are often reflected in the Chase Travel Portal, so you can save even more when booking with points.
IFTT stands for "if this, then that." Below are a few of my favorite recipes to use for setting up deal alerts. h/t Flyertalk for the IFTTT recipes.
Mileage runs deals alert
https://ifttt.com/applets/169928p-flyertalk-mileage-run-deals-alert
https://ifttt.com/applets/232873p-flyertalk-mileage-run-deals
Premium fare
https://ifttt.com/applets/254587p-flyertalk-premium-fare-new-thread-notification
Glitch fare
https://ifttt.com/applets/269100p-glitch-fare-alerts-from-flyertalk
One of the most frequently asked questions we get is, “how exactly do you use transfer partners?” In this post, we’ll walk through each step from pooling Chase Ultimate Rewards points to making a transfer partner booking.
The first step is to log into your online Chase account and navigate to the bottom left menu to find your Ultimate Rewards balance. Click on the Balance to enter the portal.
The Chase Sapphire Preferred® Card, Chase Sapphire Reserve®, and the Ink Business Preferred® Credit Card are cards that have access to transfer partners.
After you click on the respective credit card, navigate to the top left hamburger button to see a bunch of point redemption options.
Below is a screenshot of the menu with all the point redemption options.
From the menu, click on “Combine Points” and select the card and amount you would like to move. Transfer Ultimate Reward points to the card that has access to transfer partners.
Now that you’ve pooled the points together, it’s time to use transfer partners!
Navigate back to the left-hand menu and select “Transfer to Travel Partners.” Chase has hotel and airline transfer partners.
Before you select a travel partner, be sure that you have a membership ID with them. If you don’t, now is the time to create one before moving on to the next step. Enter the number of points you would like to transfer and submit.
After that, you’re all set! Transfers can be instant or take a few days. In my experience, United and Hyatt have been instant.
The main question is, “why do transfer partners matter?” I talk about 2 cents per point (CPP) in value a lot, and the big reason is transfer partners.
2 CPP really means that you can redeem, say, 5,000 points for $100 in value. In this example, we’ll use Hyatt to illustrate my point.
Hyatt points tend to have the most value for low (1-2) and high end (6+) categories.
The reason for this is that we’re looking at the retail price compared to the number of points needed for a redemption.
For example, let’s look for a hotel in Colorado Springs. From a quick Google search, the lowest price I see is $102/night.
If we click into Orbitz, the total price including taxes and fees is $112.17.
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Chase Travel Portal
Jumping into the Chase Travel Portal, if you have the Chase Sapphire Preferred or the Chase Sapphire Reserve, you can transfer 5,000 Ultimate Rewards to Hyatt.
With the Chase Sapphire Reserve, you can redeem UR points for 1.5 CPP, so 5,000 points is $75 in value.
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For the Hyatt House in Colorado Springs, you'll need to spend 6,800 points -- 7,400 points -- same $111 range we're seeing from other sites so good value for points -- 1.5 CPP.
Transfer Partners
To get an even better value, if you transfer 5,000 Ultimate Rewards to Hyatt, the redemption will only be 5,000 points. For this property, there are not any extra taxes and fees to pay when you redeem Hyatt points.
Your choices for booking the property are:
If you're redeeming 5,000 points for something that would cost you $112 out of pocket, you’re getting 2.2 cents per point in value.
I've talked about how I recently cancelled my Amex Business Platinum card in past videos, but I wanted to explain my thought process.
To start off with, I got the Amex Business Platinum card last year, and one of the reasons why I applied was that it had less of an impact on my credit score.
When you apply for a credit card, it affects your average age of accounts, and it usually comes with a hard credit inquiry. For example, if you currently only have one credit card and it's exactly two years old, and you apply for another card right now, then your average age of accounts is one year. You'll also get a hard inquiry and increase your total number of accounts.
The card increases your number of accounts, but it decreases your average age of accounts. If you decide to cancel the card, it stays on your credit report for 7-10 years from the date of closure.
The benefit of a business card is that it doesn't affect your average age of accounts or total accounts. You'll still receive a hard inquiry, and if you default on payments, you're still responsible. If you cancel the card, it won't affect your credit score.
For me, this was the best ways to try out the Platinum card without having a negative mark on my credit report. In Year 1, I received positive expected value:
I considered keeping it long-term because at first, they offered a 50% rebate on flights booked through American Express. For example, if you wanted to book a flight at 50,000 MR points, they would give you a rebate of 25,000 MR points.
Earlier this year, they modified the flight rebate perk by lowering to 35%. The lower rebate makes MR points worth 1.25 cents per point.
In Year 2, I would pay the $450 annual fee and only receive one $200 travel credit, making the effective annual fee $250.
When the annual fee hit my account, I tried calling Amex to get a retention offer of at least $250 (13,000 MR points) in value to keep the card, but that didn't happen. I made three calls within a month to try and get a retention offer.
You usually have one month to either downgrade or cancel the card to avoid the annual fee. During my first call, they offered $150 in statement credit. The second call, they didn't give me a retention offer, and in my final call, they offered 5,000 MR points. Again, I'm a firm believer that if you aren't getting positive expected value from a card, you should not keep it.
Since I had the Everyday card that earns Membership Reward cards, I moved the MR points from the Amex Business Platinum card to the Everyday card.
So why did I choose the regular Amex Platinum card instead of the other variations? My reason is that I don't have a use case for the Mercedes- Benz, Goldman Sachs, or Morgan Stanley variations. This left the regular Platinum, Ameriprise, and Charles Schwab.
I didn't go for the Ameriprise variation because I get a lot more value from getting a signup bonus and paying the annual fee.
The reason why I chose to get a personal card instead of keeping the business one is that the effective annual fee of the personal one is cheaper. With the Business card, it's $450 annual fee with $200 travel credit, making the effective annual fee $250. The Personal card's effective annual fee is $150 after $200 in Uber credits and $200 travel credit.
One important note is that the value you get from a card is subjective. For example, if you don't have Uber in your city or if you don't travel often, then you should not get the Amex Platinum. Only get a card if it makes sense for your spending habits and lifestyle.
