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Sunday, December 2, 2012

Is Bluebird Worth it Now?



We were sitting at dinner last night with some friends and the conversation turned to miles and points.  I was trying to explain the value of Bluebird.  It got me thinking that I needed to quantify its value and that I needed to take a closer look at my own plan.

Like all great points and miles strategies, you need to evaluate whether or not the plan is practical and worth the effort in real life.  I am all about ROI (return on investment).  What EXACTLY am I getting for the time and money I am about to spend?

When The Bluebird card was first announced in October, there was tremendous excitement in the points and miles community about the potential to rack up an extra 100K or more miles and points every year.  The idea behind this strategy was to purchase Vanilla Reload cards at Office Depot with your Chase Ink bold card. The Chase Ink card earns 5X points at office supply stores.  You would then load your Bluebird account with the funds from the 5X purchase.  This was a great idea.  You would be able to effectively earn almost 5X points on bills that you could not otherwise earn points. 

Back in October, Office Depot was still selling Vanilla Reload cards.  Vanilla cards at Office Depot are pretty much gone forever.  Next there was the ability to purchase the Vanilla Reload cards at Pharmacies.  The AMEX Hilton card offers 6X Hilton points at all Drug stores and Supermarkets.  OK, it wasn't 5X UR points any more, but 6X Hilton points are better than no points.  CVS and Walgreens are both selling Vanilla Reload cards. Unfortunately, Walgreens has now adopted a policy that those cards have to be purchased with cash.  That leaves CVS as the only way to purchase Vanilla Reload cards and earn bonus points with your purchase.  As long as you have the Hilton AMEX card it can still be worth it to use the Bluebird strategy to pay bills. 

I decided I had about $4000 in office bills and $4000 in personal bills that I would be paying each month through my two Bluebird accounts.  That means I need to load $8000/ month on Vanilla reload cards and transfer that money into the bluebird accounts.  It's probably not a good idea to use one credit card like the Hilton AMEX to purchase $8000/ month in Vanilla reload cards.  After all how can you justify to the credit card company almost $100,000/year in Pharmacy bills?  If they suspect you are abusing the points system, they WILL shut you down.

I decided the best strategy to not draw attention to credit card activity was for both my wife and I to use 3 different credit cards each month for the purchase of those reload cards. We would buy $2000 each on our AMEX Hilton card, and $1000 each on both our Starwood Preferred and Chase Sapphire cards.  This would at least spread the charges across different banks and different cards.  Right now we both probably stop twice a month at the pharmacy for some purchase  NOW, we will each have to make two extra trips each month to stock up on cards.  Each Vanilla reload card costs $3.95 cents, making our monthly expense to purchase 16 of them around $63. Annually, we will be spending around $750 just to purchase cards!

The question now becomes, Is it Worth it?  What EXACTLY will I be getting for my $750 and two extra trips to CVS each month.  Let's look and the math to help us make that decision. 

Purchasing $4000/ month on a Hilton AMEX will result in 24,000 Hilton points each month.  (Pharmacy spending earns 6X Hilton points).  That comes to over 290,000 Hilton points/year.   Purchasing $2000/month on both the Chase Sapphire and Starwood cards would result in nearly 25,000 Starpoints and more than 25,000 Ultimate Reward points.  (Don't forget you earn points on the $3.95 fee and UR give you a 7% yearly bonus on points earned)  Let's look at how those points can be used to see if it is worth the effort.

First of all, let's look at what $750 buys in travel.  For $750. you can probably buy two RT domestic coach airline tickets.  You might have money left over, or you may need to spend more than that.  Let's assume that a Hilton night at a top hotel costs between $250-$350 per night plus taxes.  That will buy you more than two nights, but less than 3 nights.  What do our points buy?

Using your 290,000 points, you could purchase two 4-night AXON7 awards.  An AXON7 award means that you can stay at ANY top category 7 Hilton with few exceptions.  Now that you don't care what the room night costs, you would probably try to get the most bang for your buck and stay at a property that costs $350/night.  Those 8 nights could be worth almost $4000 when you add in taxes and fees. 

Using 20,000 of your Starpoints you could book a domestic Coach ticket on any one of the 31 airlines that Starwood partners with.  Transferring 20,000 Starpoints gets you 25,000 Airline miles.  Using 25,000 UR points you could purchase over $300 worth of airfare or transfer those to Southwest or United for 25,000 miles. 

$750 buys EITHER two airline tickets OR 2-3 hotel nights.  Your points on the other hand buy two airline tickets AND 8 nights at the top category Hilton hotels. 

Only you can decide if that is worth the effort.  To me, getting an 8-day vacation for two people for $750 and some extra stops at CVS is worth it. 

What do you think?

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About The Points Doctor

The Points Doctor is Bruce J. Wilderman DDS of Artistic Expressions Dentistry.Dr. Wilderman has a practice limited to Cosmetic Dentistry, serving patients of the Philadelphia Area since 1986.He and wife of 30 years enjoy traveling the world for little or no money with the points and miles they have earned from the credit card companies. Dr. Wilderman would love to teach you how to do the same. You may reach him at ThePointsDoctor@comcast.net


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