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Saturday, April 6, 2013

The Importance of Planning a Credit Card Churn - Part 2

This is the second in a series about the importance of planning your credit card applications to maximize the benefits that come with a specific card. 

One of the basic premises of earning millions of points and miles is to do so in a manner that benefits the type of travel that you are looking to do. Without a plan for how to use your points and miles, you can waste money fulfilling minimum spending requirements on credit cards that serve no purpose to your specific travel goals. 

The first thing that you need to do is to figure out where you want to go.  I like to use real world examples to demonstrate my point, so today I will talk about how I plan for my wife and I to go to Paris and Italy in the Spring of 2014.

The first thing I wanted to arrange for our trip was the 1st Class airfare to Europe in lay-flat seats.  There are many airlines that have this product, but in 2012 I signed my wife up for the 100,000 mile Chase British Airways offer.  British Air has what's called a travel together ticket.  It's their version of a companion ticket.  The great thing about the BA companion ticket is that the companion flies free whether you "pay" for the card member's ticket with cash or points.  That essentially means that your points are spread twice as far.  In order to obtain a travel together ticket you need to spend $30,000 on the BA card in a Calendar year.  The reason I emphasized calendar year is that I made the mistake of assuming it was the first year of card membership.  In order to have received the full 100,000 miles that came with the Chase BA card, you need to spend $20,000 in your first year of card membership.  As the Travel Together certificate is good for two years, I was trying to time the last $10,000 in spending on the card so that my certificate would be good through the Spring of 2015.  Even though we planned our trip for 2014, you never know what might happen that far in the future.  I wanted the security of knowing it would be good for one more Spring trip, "just in case". Anyway, I had put $20,000 on the card in late 2012 and was planning on putting the rest of the $30,000 spend in early 2013 in order to receive the travel together certificate in the Spring of 2013. When I called Chase to find out the details, I was told that while the $20,000 in spending to receive the full signup bonus was during your first year of membership, the $30,000 to receive the companion ticket was based on the Calendar year.  Now I had to start the spending all over! Lesson learned.  Make sure to read the Terms and Conditions in the agreement. 

The big negative of booking with points on BA are the hefty fuel surcharges.  The "free" tickets will probably cost about $1000 each.  While that may seem crazy to some people to pay $1000 for a free ticket, most people who do so consider it as paying for the coach ticket and getting a confirmed 3 class upgrade.  My understanding is that BA provides an excellent 1st class product.  To me, it will be worth paying the fuel surcharges to get a good night's sleep on the flight over "The Pond". The retail price on those same tickets would likely be more than $10,000 each.

Next I will need to obtain a Hyatt Diamond trial for my wife prior to arriving in Paris for our stay at the Park Hyatt Venedome.  We will want to use our two free nights in a suite that come from signing up for the Chase Hyatt card when you sign up as a Diamond. Depending on how many nights we plan to stay at the Hyatt Venedome, we may also use one of the 4 confirmed suite upgrade certificates that come with Diamond status.

In order to obtain a Hyatt Diamond trial, you will need to have top tier status with another chain.  For us the easiest path to top tier status is through credit card spending on the one of the Hilton branded cards.  My wife has the both the Citi Hilton and the Amex Hilton cards.  I suspect one of those cards will be terminated prior to the time when its annual fee is due.  As the Hilton Amex comes with the ability to book AXON awards, I think this is the card we will concentrate her spending on.  In order to earn Hilton Diamond status through spending alone, you need to place $40,000 on the card during a calendar year.  Once Hilton Diamond status is obtained later this year, it will be good for 2014.  We will need to time the Diamond trial with Hyatt to coincide with our trip, then immediately apply for the Chase Hyatt card having Diamond Status.  We will then be awarded two free nights in a suite along with 4 confirmed suite upgrades to be used on paid nights.  If we choose to have her try to keep the Diamond status we will simply need to spend 12 nights in 60 days once the Diamond trial begins.  Her status would then be good through February 2015. 

As you can see, it is very important to have a strategy for using your miles and points to get the most out of them and to travel in the manner in which you want to travel.

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


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