Downgrading Credit Cards for More Efficient Points and Miles Accumulation
Frank McBride • February 9, 2024
When credit card issuers ask you to step up, it may be advantageous to step back.
In the past few months, some clients and friends have received offers from their credit card issuers to upgrade their credit cards to cards offering more benefits along with, of course, higher annual fees. This is obviously a good move for the credit card issuers. They are asking people with $100 annual fee cards to step up to a card with an annual fee of $200 to $300. Cardholders with these mid-level cards are being offered an opportunity to move up to premium cards with annual fees surpassing $500.
In most of the cases brought to my attention, I could NOT see any significant benefit of taking the upgrade. And in some cases, the upgrades could actually harm the client’s strategy for accumulating points and miles leaving them with higher card fees and fewer points or miles to show for their routine credit card spending.
But this post is not really about upgrading your credit cards. It is about the possibility that you should sometimes
downgrade a credit card when it is to your advantage. After all, just as there are cases where there is little or nothing to gain from upgrading, there can also be cases where there is little or nothing to lose from downgrading. Understandably, you won’t be getting mail pieces or emails from your credit card issuer offering you an opportunity to downgrade. The topic of downgrading comes up from time to time in other points and miles blogs but, there is more emphasis on upgrades. This is no surprise since many points and miles blogs rely on advertising from card issuers as well as collecting fees when you sign up for a credit card through links they provide. (TRO does not accept advertising and has no relationship with credit card issuers.)
Why Downgrade a Credit Card
The bottom-line reason for downgrading a credit card to a less expensive card in its family is that the cardholder is simply not getting good value for the annual fee that they are paying. A downgrade can quickly save you hundreds of dollars in annual fees. Reasons that you are no longer getting good value might include:
- You no longer use the benefits and credits, or you use them less frequently.
- The issuer changes or reduces benefits so that they no longer resemble what you originally signed up for.
- Your spending patterns have changed so the card’s bonus structure is less beneficial.
- You learn that points accrual will be similar or even better with a downgraded card.
- The annual fee has increased but any promised new “enhancements” are of no benefit to you.
When to Downgrade
Usually, you cannot downgrade a credit card until you have held it for at least one year.
- There is no point in downgrading before the year is up anyway as you have already paid the annual fee and can still take advantage of any benefits.
- In cases where the annual fee was waived for the first year, the issuing bank will probably not be keen to offer a downgrade before you have paid your first annual fee. In fact, if you were to try to cancel the card or seek a downgrade to a no fee card, the bank might try to “claw back” any sign-up bonus you received. Furthermore, they might be hesitant to issue you cards in the future.
- Also, if you are planning to get a new card from an issuer in the near future, it is probably not a good idea to ask for a downgrade of one of their current cards and they might see you as a less desirable (i.e. less profitable) customer and be less inclined to approve your application.
You should downgrade around the time that your annual fee is about to be renewed. First, you might as well take advantage of any benefits or credits for the full year. Second, if you have decided to downgrade, you want to get that done before the renewal fee kicks in. Typically, after renewal fees appear on your statement, you have a brief grace period to drop or downgrade a card and avoid the new annual fee, but policies can vary from bank to bank.
How to Downgrade
Downgrades require a call to a card issuer’s customer service.
- If you have been a good customer, they might try to keep you with your current card by offering some incentive which might or might not be compelling enough for you to stay put.
- In some cases, perhaps if you have not used their card very much, they might not approve a downgrade even if they have a lower tier product. In that case, you need to decide if you want to keep the card for another year or cancel it.
- Don’t forget that the downgrade also affects any authorized users who hold the card so you need to alert them to changes.
Why Not Just Cancel the Card
A common myth of credit cards and credit ratings is that cancelling a card will improve your FICO score. However, a huge component of your credit score (perhaps one-third) is your credit utilization rate (i.e., the percentage of all your available credit that you are using at a given time). The credit rating agencies and banks like to see a low percentage. Let’s say you tend to put $4,000 per month on credit cards and have a total credit line (from all sources) of $40,000. Your utilization is 10%. Now, imagine that you cancel a card with a $16,000 credit limit. Your total credit now drops to $24,000 and your utilization would increase to about 17% ($4,000/$24,000) which will have an impact on your FICO score.
By downgrading, you maintain the credit limit and your relationship with the bank. Maintaining the relationship with the bank is important because you want your ongoing pursuit of travel rewards to be sustainable. You may be interested in other products offered by that bank in the future or even upgrading back to the card you moved away from.
Potential Pitfalls of Downgrading
Obviously, you will lose certain benefits with a downgrade. If your current card benefits include credits for certain expenditures, it makes sense to take advantage of them before a downgrade. As an example, some cards will cover the application fee for Global Entry or TSA PreCheck so you could apply for these or cover the application fee of a family member or friend if you already have this.
Another concern is the fate of flexible points that you have accumulated. For most card families, you need a card with an annual fee to transfer points to airline and hotel partners. If you are downgrading to a free card, you might lose that capability. For example, if you have a Chase Sapphire Preferred card ($95/year) you can transfer Chase Ultimate Rewards points to partner loyalty programs. But, if you downgrade to one of the Chase Freedom no fee cards, you are limited in how you use the points and they tend to be worth less. In this case, if you were downgrading to a free card, you might want to proactively transfer points where they would be most useful before you lose the opportunity.
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When we create a Travel Rewards Optimizer plan for you, we often recommend that you apply for cards with annual fees.
- Generally, the best benefits and accumulation of points and miles tend to go hand in hand with cards that have fees.
- When we recommend these cards, our plans are designed to ensure that the travel value you receive will pay for the higher fees many times over.
- But, at the same time, we also look for opportunities for you to strategically downgrade cards when we learn that pricier cards are less efficient for point and mile accumulation, offer redundant benefits, or offer benefits that don’t justify the additional costs. That’s optimization.
In the next few weeks, our posts will take a closer look at some of the credit card “families” and what this might mean for upgrading and downgrading. We hope you will check them out.
We are ready to help you turn your routine credit card spending into the travel of your dreams.
I have been traveling long enough to remember taking a small stack of American Express Travelers Cheques with me when leaving the United States. In an age with fewer ATM machines and less widespread acceptance of credit cards, travelers cheques were an insurance policy against the loss or theft of your money. Many heeded actor Karl Malden’s advice: “Don’t leave home without them.” Use of these instruments has declined as international travelers can now rely on ATMs and credit cards much more than in the past. As American Express is very much in the credit card business, we are now advised “Don’t leave home without it. ” But, American Express cards have a reputation for being less likely to be accepted than Visa and MasterCard cards, especially outside of the United States. Historically, American Express cards have charged higher fees to merchants that eat at their profit margins so understandably, merchants were less enthused about them. So, should you “ leave home without it ” and just take Visa and MasterCard products? If an American Express card is part of your program for accumulating points and miles, you should definitely take it along for several reasons. First, importantly, many Amex cards do not have foreign transaction fees. That should be a primary consideration for taking any credit card as these fees (often around 3%) can nullify any travel rewards benefits you would otherwise accrue. American Express has undertaken an aggressive campaign to get more merchants to accept their cards. In just the last decade, this effort has tripled the number of merchants outside of the US who will accept American Express cards. Worldwide, 119 million locations accept American Express compared to 130 million that accept Visa/MasterCard. While this 92% acceptance rate is driven by a 99% acceptance rate in the US, it is still the case that American Express cards can be used widely during international travel. When traveling, Ms. Optimizer and I take two American Express cards: Amex Gold: This card delivers a 4X Amex point bonus for restaurant dining so we definitely use it at restaurants that will accept it. While the Amex Gold also gives you a 4X bonus at supermarkets, this is limited to the US, so we buy groceries with other cards when traveling abroad. Amex Platinum: For us, this card is almost exclusively an air travel card that we use for airline purchases, flying benefits and airline credits. We travel with this card if we are likely to want access to a Delta Sky Club or a Centurion Lounge. We are only likely to make a purchase with the card if we need to purchase airline tickets or airline fees while traveling as these purchases yield a 5X point bonus. If you have the classic Amex Green card and its bonus structure works for you, it would be worthwhile to take it on international trips. This card also does not have foreign transaction fees and offers a 3X Amex point bonus on travel, transit, and restaurant purchases. Because acceptance of Amex cards can vary greatly , it is important to also have a Visa/MasterCard on hand (don’t forget to make sure they do not have foreign transaction fees). And, for that matter, it is a good idea to have some cash for establishments that do not accept any credit card. American Express cards might or might not fit into a productive travel rewards plan for you. When we design a custom Travel Rewards Optimizer plan for you, we take your travel goals, travel habits, spending patterns, and preferences into account. We want to ensure that the cards we recommend for you can quickly generate free travel and provide relevant benefits while keeping your annual card fees under control. We are ready to help you turn your routine credit card spending into the travel of your dreams.
I have been following Southwest Airlines’ credit card offers with great interest as this airline is in transition. Like the other main domestic carriers, it will soon have assigned seating and will charge for checking bags. However, from what I can tell, the new products do not necessarily correspond with where Southwest will be a few months from now. Southwest’s previous offer for personal credit cards, which ended March 31, was intriguing because it offered an easy way to get a coveted Companion Pass which allows two to fly for the price of one (whether paying with cash or miles). The catch was that this Companion Pass would only be good through February of next year. Typically, Companion Passes are good for the remainder of the year in which they are earned and then the entire following year. With the new month, Southwest has unveiled a new offer for personal cards which is almost identical to the offer I reviewed a little more than a year ago . This personal credit card offer includes three options: Southwest RapidRewards Plus Southwest RapidRewards Premier Southwest RapidRewards Priority Common Offer Elements for All Three Cards Apparently, Southwest and Chase want to make this easy. The current welcome bonus is 50,000 Southwest Rapid Rewards points for all three cards. These points are worth approximately $650. You only need to spend $1,000 within three months to earn the sign-up bonus. The spending bonus structures for the three cards are almost identical. 2X or 3X for Southwest purchases (2X for the Plus card and 3X for the Premier and Priority cards 2X bonus on purchases with Rapid Rewards car rental partners (most major brands) 2X bonus on purchases with Rapid Rewards hotel partners (Hyatt, Marriott, MGM, Choice, Best Western) 2X on local transit, commuting 2X on internet, cable, phone, streaming 1X all other All cards also offer a 25% discount for in-flight purchases and 10,000 Companion Pass qualifying points each year. The differences in the three cards revolve around annual fees, annual Rapid Rewards point bonuses, and benefits. RapidRewards Plus This card has a $69 annual fee, and cardholders get 3,000 Southwest points (worth about $40) each year upon renewal. You also get two “Early Bird” check-ins per year so that you can board earlier (Southwest currently uses open seating). RapidRewards Premier The Premier card’s annual fee is $99 and the annual anniversary bonus is 6,000 points (worth about $80). These cardholders also get two “Early Bird” check-ins each year. Those spending heavily on this card can get 1,500 tier qualifying points toward “A-list” status for every $5000 spent annually. RapidRewards Priority This highest end card in the family has a $149 annual fee and the annual bonus is 7,500 points (worth about $100). The benefits of this card include four upgraded boardings per year when available. These upgraded boardings guarantee that you will be one of the first 15 people to get on the plane, so you have the best choice of seats and overhead space. You also receive a $75 Southwest travel credit. As with the Premier card, those spending heavily on this card can get 1,500 tier qualifying points toward “A-list” status for every $5000 spent annually. My Conclusions When I reviewed these cards last year, I concluded that, on an ongoing basis, a cardholder could at least break even by flying at least one round trip per year on Southwest. At the same time, I did not see the potential for getting outsized value that you can get with some other co-branded airline cards. While the offers have not changed, I see them as less attractive than a year ago for several reasons. The value of a Southwest point has declined and is now around 1.3 cents per point. A few years ago, Ms. Optimizer and I could regularly get about 1.7 cents per point when redeeming these points. When Southwest moves to assigned seating in a few months, the Early Bird Check In and upgraded boarding benefit will become irrelevant so cardholders will not be able to use these benefits for the full year of card membership. Although there is a 2X bonus for purchases with Rapid Rewards hotel and car rental partners, this might not be the best option for points and miles accumulation. Many cards already offer 2X or 3X bonuses for car rental or hotels and co-branded hotel cards tend to offer much better bonuses when staying at their properties. Once Southwest drops its two free checked bags policy, I understand they may offer free checked bags for Southwest cardholders, and they might position this as a new benefit. Of course, it won’t be and, if the benefit is for only one free bag, it is actually a benefit reduction. The upcoming changes will make Southwest less distinct from competitors. Already, other domestic carriers are trying to poach Southwest flyers with status matches. It is difficult for me to see where Southwest will fit in the market six months from now. For now, I can see several types of travelers who might benefit from this (not so) new credit card offer: Passengers who are currently well served by the flights offered by Southwest, find them to be a good value, and use them with some regularity. Passengers who want to add Southwest to a mix of options by easily picking up some points. The $69 annual fee (Plus card) and $1000 in spending to reach the bonus threshold is a quick and uncomplicated way to cover a couple of round-trip flights. Of course, the ongoing value of this card drops after the first year. Passengers who can combine one of these personal cards with a Southwest business card and use the two sign-up bonuses (50,000 + 80,000) to get most of the way to the 135,000 points needed for a Companion Pass. _________________________ The Southwest Airlines credit cards might or might not fit into a productive travel rewards plan for you. But if flying with Southwest is a potential part of your travel mix, one of the cards discussed in this post might be appropriate. When we design a custom Travel Rewards Optimizer plan for you, we take your travel goals, travel habits, spending patterns, and preferences into account. We want to ensure that the cards we recommend for you can quickly generate free travel and provide relevant benefits while keeping your annual card fees under control. We are ready to help you turn your routine credit card spending into the travel of your dreams.
When I travel, I like to report how the points and miles game fits into our plans. After all, if I am going to dispense advice about turning credit card spending into free travel, I need to lead by example and "show my work." In January, Ms. Optimizer and I took a trip to Costa Rica to learn more about this fascinating country, its regions and climates, and its famously diverse flora and fauna. Although we usually plan our own trips, we took this one as part of a group with the Road Scholar organization (which creates and runs a broad range of excellent tours in Costa Rica and throughout the world). Because the tour was mostly inclusive while in Costa Rica, we did not leverage points and miles as much as we would have if we planned the trip ourselves. Nonetheless, miles and points still played a role in making our trip less expensive and more comfortable. We used 78,000 Delta SkyMiles for two round trip tickets to San Jose. These tickets had a fair market value of $1054 so our redemption came to 1.4 cents per SkyMile which is fairly good for Delta. We have one Amex Delta Gold card which got us a 15% discount when redeeming SkyMiles as well as free checked bags. Our Amex Platinum cards gave us access to airport lounges at our home airport and the San Jose airport. We also visited the spacious Centurion lounge in Atlanta during layovers both on our way to Costa Rica and when returning home. We used the airline fee credit that comes with the Amex Platinum card to purchase better seats for our Delta flights. We used Uber several times in San Jose and the cost of some of those trips was offset by the monthly Uber credit that comes with our Amex Platinum card. Overall, using miles and points saved us about $1200 leaving us with more money for the excellent Costa Rican coffee, chocolate, museum admissions, souvenirs, and a refreshing beverage called Agua de Sopa (which literally translates to “toad water”). Costa Rica is justifiably well known for ecotourism, but we also enjoyed the few days we spent in its capital, San Jose. A couple of recommendations if spending time in San Jose . . . It is easy to see several key museums and sights as they are located along a 600 meter/yard section of Avenida Central. These include the National Museum of Costa Rica, the Jade Museum, the Pre-Columbian Gold Museum, and the National Theater. While the museums do not require timed entry tickets, the National Theater does for its guided tours (Spanish and English). The San Jose Central Market (also on Avenida Central and about 500 meters from the National Theater) is a fascinating maze of stores selling produce, meats and fish, crafts, and souvenirs. There are also several eateries for quick and inexpensive meals. The key mistake I made on this trip was NOT buying typical Costa Rican crafts and souvenirs here. We learned there was less selection and things cost more elsewhere. For this trip to Costa Rica, like other trips we have taken in recent years, the well-planned use of miles and points played a significant role in our travel by not only saving us money, but also by enhancing our travel with more comfort and convenience. Whether you are interested in seeing sloths and toucans, admiring the craftsmanship of pre-Columbian goldsmiths, sipping great coffee right where it was grown or any other type of travel adventure , we are prepared to design a custom Travel Rewards Optimizer plan for you that will quickly generate free and reduced cost travel while keeping your annual credit card fees under control. We are ready to help you turn your routine credit card spending into the travel of your dreams.
Southwest Airlines is undergoing some significant changes, and these changes will certainly have an impact on the value that the points and miles community can get from participation in its Rapid Rewards program in the future. In the past, I have held Southwest credit cards (both personal and business) and, for one year, obtained a coveted Companion Pass. I liked the Southwest vibe when on their flights but always dreaded the prospect of being stuck in the “B” (or even “C”) boarding groups. The ability to check two bags for free came in handy for the Optimi-son when he was in college. Going forward, it seems that Southwest will be less distinct. They are moving to assigned seating like other airlines and passengers will pay to check bags (unless they are elite flyers or hold Southwest credit cards). The current Southwest credit card offer reflects an airline in transition. Although Southwest will shift to assigned seating, the current cards offer “EarlyBird Check-In” or “Upgraded Boarding” which gives passengers a better chance of getting a desirable seat. Of course, as Southwest shifts to assigned seating, these benefits will become irrelevant. There are three versions of the personal card in this offer and, from what I can see, the key differences are how many bonus points you are awarded on your cardmember anniversary (from 3,000 to 7,500) and the annual fee (from $69 to $149). The sign-up bonus is 30,000 Southwest points if you spend $4,000 within the first three months for all three cards. Among some popular points and miles websites, the consensus value of a Southwest point is about 1.3 cents so this offer might have a value of about $400. The other key component of this offer is that it comes with Southwest’s popular Companion Pass if you spend $4,000 which allows you to add a companion to your itinerary for just the cost of taxes and fees. Usually, you must accumulate 135,000 Southwest Rapid Rewards points to get a Companion Pass so this is a great shortcut. Although you must designate one travel partner for the Companion Pass, you are allowed to change this partner (but you can have only one designated travel companion at a time). The last day of this offer is March 31st. The catch is that the Companion Pass that comes with this offer is only good through the end of February, 2026 so you have 11 months to put enough spending on the card to get the Pass ($4,000), make your flight reservations, and complete the travel. A key consideration is how much value you can get by using the Companion Pass to travel with one designated person. At the very least, using the Companion Pass with the 30,000-point bonus will effectively double the value of the point bonus to $800. From my perspective, this offer could be of value for someone who has access to a decent stash of Southwest points (or a realistic opportunity to get them very soon) and can quickly take advantage of the short timeline for using the Companion Pass. Possible scenarios where this soon-to-expire offer might be of value include: You already have some Southwest miles, and you want to use them for travel with a partner in the next 11 months. You want to travel with Southwest in the next 11 months and you have a significant number of Chase Ultimate Rewards (UR) points that can be transferred to your Southwest account. You can combine the bonus you might get with this offer with a bonus you get from a Southwest Rapid Rewards business credit card. The current bonus offer for the business card is 80,000 miles if you spend $5,000 in the first three months. Like many credit card offers, this offer is not for everyone but has a place for some travelers. If you have a travel partner in mind and would like to fly to destinations served by Southwest in the next 11 months, this could be a useful deal. At the same time, you might not be able to fully utilize the Companion Pass or feel constrained to fly Southwest in the near term to get value from the Pass. Furthermore, as Southwest transitions and starts to look more like other major domestic airlines, some benefits of these cards will disappear and the benefits that might replace them (if any) are unknown. Going forward, I do not know how Southwest credit cards will fit into the Travel Rewards Optimizer plans we create for our clients. As this offer is (very) short-lived, I believe we will soon learn what credit card offers Southwest is rolling out to replace these cards. I will keep you posted. We are ready to help you turn your routine credit card spending into the travel of your dreams.
After almost a decade of pursuing travel rewards, it has become clear to me that the best return on routine spending is through credit cards that offer flexible points. Because these flexible points can be transferred to many domestic and international airlines, cardholders can choose the most valuable redemption for a particular itinerary and date. Points can also be transferred to hotel chains although it can be harder to get solid redemptions. Last April, I was excited about the launch of the Wells Fargo Autograph Journey credit card as it added to the list of existing flexible points programs offered by Chase, American Express, Capital One, Citi, and Bilt. The Autograph Journey card stood out for offering excellent spending bonuses, especially for hotel and airline purchases. At the same time, a chief concern was that the Wells Fargo Autograph Journey card had a limited number of transfer partners (five airlines and one hotel group) compared to the other flexible points cards. My hope was that the Autograph Journey would add more transfer partners after launch to increase its potential usefulness. Wells Fargo suggested that they were seeking more partners and planned to add them soon. After almost one year, Wells Fargo has added Virgin Atlantic Flying Club/Virgin Red as a transfer partner, but unfortunately, that is all. While it is disappointing that the Wells Fargo transfer partner list is not as versatile as those offered by rival card issuers, there is still a place for this card in the wallet of some travelers. While we do not recommend it to many clients, there is a solid rationale for some to sign up for this card. What We Like About This Card Overall The Autograph Journey card offers a 60,000-point bonus for making $4,000 in purchases in the first three months. The cash value of this bonus is $600. However, with point transfers to the right airline partners or for certain itineraries, the value can be much higher. The annual fee for the card is $95. Spending Bonus Structure The Autograph Journey is clearly oriented toward travel spending as travel categories will net you the best spending bonuses. The card is especially strong for its hotel and airline spending bonuses. 5X spending bonus for hotels – Aside from bonuses on co-branded hotel cards, this is the highest generic spending bonus for hotels of which we are aware. 4X spending bonus for flights – This is also an excellent bonus rate even compared to what is offered on many co-branded airline cards. While the best generic flight bonus is the 5X bonus with an American Express Platinum card, that card has an annual fee of $695. 3X spending bonus for dining – This is solid and competitive with other travel cards. 3X spending bonus for “other travel” – Again, this is solid and competitive. 1X for all other purchases Importantly, none of these bonuses requires that you spend through a Wells Fargo (or any other) portal. Other Benefits This card offers some travel-related benefits. A $50 per year credit for a $50 minimum airline purchase $1 million in travel accident insurance Trip cancellation/interruption protection Lost baggage reimbursement Cellular telephone protection Potential Transfer of Points to Airlines and Hotels While it is easy to get $600 in cash value out of this $95 card from its welcome bonus, there is greater potential value in transferring the points to airline partners. Airline partners include: Air France (Flying Blue) Avianca LifeMiles British Airways Executive Club Aer Lingus AerClub Iberia Plus Virgin Atlantic Flying Club/Virgin Red These points can also be transferred to Choice Privileges, a hotel program that includes brands like Radisson, Clarion, and Rodeway Inn. Who Might Benefit? There are several types of travelers who might find this card useful. Flyers who already participate in the loyalty programs of the six airline transfer partners. Those interested in travel to the United Kingdom or Europe as well as those who want to use Avianca (which is based in Bogota, Colombia and serves Latin America). Travelers who are not brand loyal to airlines and hotel groups and can benefit from the 3-4X category bonuses. Travelers who frequently stay in hotels that are not part of any major chain or hotel group. Travelers who want cash rewards and can benefit from the travel category bonuses. Points and miles enthusiasts who are blocked from getting signup bonuses from other cards (Ex: beyond he Chase 5/24 limit). At some point in the future, Ms. Optimizer or I might apply for the Wells Fargo Autograph Journey. It would make sense for us because, in recent years, we have been travelling to places that are not well served by the hotel groups we tend to use. The Autograph Journey would generate a 5X bonus for any non-chain hotels we book which is better than the 3X bonus we get for hotels from a Citi Premier or a Chase Sapphire Reserve card. For us, the Wells Fargo points would be put to good use by being transferred to Air France. The $50 airline credit would effectively reduce our annual cost for this card to $45 annually. Conclusions Overall, it is great to see another option for those interested in flexible point travel cards. Competition is good for those of us in the points and miles community because it gives us options and it will keep the banks who issue proprietary points from becoming complacent. While it is disappointing that Wells Fargo has not expanded the list of transfer partners for the Autograph Journey card very much, the card can still be useful for some points and miles enthusiasts. Going forward, I will continue to watch for developments in this card, especially regarding transfer partners, and will keep you apprised. The Wells Fargo Autograph Journey card might or might not fit into an optimized travel rewards plan for you. Our job at Travel Rewards Optimizer is to keep track of changes and opportunities in the world of points and miles so we can provide our clients with guidance to get the most value out of their travel rewards programs. When we design a custom Travel Rewards Optimizer plan for you, we take your travel goals, travel habits, spending patterns, and preferences into account. We want to ensure that the cards we recommend for you can quickly generate free travel and provide relevant benefits while keeping your annual card fees under control. We are ready to help you turn your routine credit card spending into the travel of your dreams.
When Ms. Optimizer and I take trips, I like to report on how the travel rewards game fit into our plans and how we benefited from it. After all, if I am going to dispense advice about turning credit card spending into free travel, I need to lead by example and show actual results. At the end of last year, we took a trip to New York City to visit family, see some museums, and take in the tree at Rockefeller Center and other holiday decorations in Manhattan. Our hotel was close to Grand Central Terminal, where we could catch a commuter train to Connecticut to visit family and friends. The hotel was also located a short walk from the Museum of Modern Art and close to the bus lines that ran to the Metropolitan Museum of Art and the Guggenheim Museum. Naturally, points and miles played a key role in this trip, both for reducing costs and for increasing comfort. We were able to utilize World of Hyatt points and Delta miles to lower our costs as follows: For our flights to and from JFK, we used 30,400 Delta miles for two round trips. With a value of $436 for the tickets, this worked out to a redemption of 1.4 cents per mile which is solid for a Delta redemption. For our hotel, we used 145,000 World of Hyatt points for a five-night stay at the Grayson Hotel in Midtown Manhattan. With a total cash rate of $3608 for those nights, we got a return of 2.5 cents per point, another solid redemption. Overall, the miles and points we utilized for this one trip saved us over $4,000. Additionally, the use of travel rewards credit cards yielded additional benefits that enhanced our trip. Because we have one Amex Delta Gold card, we got a 15 percent discount when redeeming miles for the round-trip tickets to JFK. This card also allowed us to check bags for free. Through the Amex Platinum Card, we were able to use the Delta lounge at our departure airport as well as for our return trip from JFK. Our Chase Hyatt card includes “Discoverist” status which allowed us to check in early upon arrival. We used Uber so we were able to take advantage of a monthly Uber credit that comes with the Amex Platinum card. For this trip to the Big Apple, like other trips we have taken in recent years, the well-planned use of miles and points played a significant role in our travel by not only saving us thousands of dollars, but also by enhancing our experiences with more comfort and convenience. Whether you are interested in checking out some of the greatest museums in the world, hunting down the perfect bagel or pastrami sandwich, shopping til you drop, or any other type of travel adventure , we are prepared to design a custom Travel Rewards Optimizer plan for you that will quickly generate free and reduced cost travel while keeping your annual card fees under control. We are ready to help you turn your routine credit card spending into the travel of your dreams.
An interesting opportunity for those who fly American Airlines is that they can apply for credit cards from two banks that earn American miles and offer significant welcome bonuses. First, there are several cards offered by Citibank that range from a no annual fee card to a deluxe card that includes access to American Airlines’ Admirals Clubs. These are the most familiar and account for the largest share of American Airlines’ co-branded card business. However, there are also cards offered by Barclays Bank with some having similar features to the Citibank products. In a September post , I warned that after a decade of this co-existence between Citi and Barclays, Citi and American Airlines were having talks about forging an exclusive co-branding relationship. Based on a recent announcement, it is indeed the case that, starting in 2026, Citi will be the only issuer of co-branded American Airlines credit cards. The two-card arrangement has been great for people who want American miles, and I sometimes recommended the two cards for Travel Rewards Optimizer clients who need a “crash program” for getting some quick miles. The Barclays card is unique in that a new cardholder only needs to make one purchase (in any amount) and pay the $99 annual fee to get a 60,000-mile sign-up bonus (SUB). Most credit card sign-up bonuses usually require spending several thousand dollars at a minimum. While this unique loophole in the points and miles game will be missed, it is still available (at least for now). Anyone who is potentially interested in the Barclays card should apply for it soon. Going forward, I do not know if these Barclay American Airlines cards will be closed or converted to Citi products. Although the American Airlines credit card “double play” is going away, the exclusive relationship between Citi and American Airlines might offer a new opportunity for those wishing to accumulate American miles and fly this airline. A joint press release from the organizations stated that “the agreement creates an innovative alignment between the Citi ThankYou and AAdvantage card programs.” The Citi ThankYou card program has cards that generate proprietary ThankYou points that can be used as cash, turned into gift cards, or transferred to airline partners. A key weakness of this program is that, while is has many airline partners, it does not currently partner with a major domestic airline (American Express partners with Delta; Chase with United and Southwest). This “innovative alignment” mentioned in the joint press release suggests that Citi’s ThankYou program might add American Airlines as a transfer partner. Simply adding a major airline as a transfer partner alone goes a long way in making the ThankYou program cards more attractive. But, even better, some of the ThankYou cards, such as the Citi Strata Premier, allow you to accumulate ThankYou points at an accelerated rate. More details will emerge and we will keep you posted. This development with Citi and American Airlines is another example of how the points and miles landscape changes constantly. Opportunities appear and disappear every week. Let us create a comprehensive Travel Rewards Optimizer plan for you so that you can get the most impact from your credit card usage. We are ready to help you turn your routine credit card spending into the travel of your dreams.
Citibank and American Airlines discuss an exclusive co-branding arrangement
Card issuers might want you to do this but, it is completely unnecessary for travel rewards
A new credit will offset the annual fee hike for some cardholders
