Introduction to Category Bonuses

Introduction to Category Bonuses

- Extra Points or Cash Back for

Spending in Certain Categories

What are Category Bonuses?

- 3X Points Airfare

- 2X Points Gas/ Groceries

AMEX Premier Rewards Gold

- 2X on Travel/Dining on Chase Sapphire Preferred

Sapphire Preferred

- Displaces spending on sign-up bonuses for other credit cards

Worth It or Not?

$50,000

*2010 US Census

- Spend everything you earn, you’ll get only 50,000 miles/points

- Pay-off is with the SIGN-UP BONUS,

NOT everyday spending!

Earning Miles & Points – Credit Cards

- Incremental Earning

- 3x on airfare. Actually 2 EXTRA points (or 1 EXTRA point if you have Sapphire)

- 2x on groceries. Actually 1 EXTRA point

- 2x on gas. Actually 1 EXTRA point

Worth It or Not?

- $750 a month on gas and groceries = 750 extra points per month or 9,000 points per year $ 175 Annual Fee - Worth it or not?

Worth It or Not?

- Annual Fees - $175 for Premier Rewards Gold - $95 for Chase Sapphire Preferred - $95 for Chase Ink Bold

Worth It or Not?

- Complex

- Time Consuming

Worth It or Not?

- Keep your partner happy!

Worth It or Not?

Worth it!

No fee for many of the best 5X and 6X bonuses!

• Chase Ink Classic, Ink Cash: 5X

• US Bank Cash+ 5X (choose 2)

• Chase Freedom, rotating 5X (limited to $6K / year)

• Citi Forward 5X

• American Express Hilton HHonors: 6X

Worth it!

Best alternative is sign-up bonus spend. Let’s look at some sign-up offers…

Ink Bold / Ink Plus

• Current offer: 50K points after $5K spend.

• If spend within 1X categories, total 55K points

• Earnings: 11X

• Prior 50K offer: 25K points free + 25K points after $10K spend

• If spend within 1X categories, total 35K additional points

• Earnings after free bonus: 3.5X

Sapphire Preferred

• 40K points after $3K spend

• If spend within 1X categories, total 43K points

• 14.33X

BA 100K offer

• 50K Free, 50K more after $20K spend

• BA card earns 1.25 points per dollar

• Total 75K additional points

• Earnings: 3.75X

More… • Citi AA: 50K after $2500 spend

• Total 5250 points

• Earnings: 21X

• Amex SPG: 10K free + 15K after $5K spend

• Total 20K additional points

• Earnings: 4X

• CitiBusiness ThankYou: 50K after $6K spend

• Total: 56K points

• Earnings: 9.33K

Worth it!

• Sign-up bonus spend ranges from 3.5X to 21X

• Better than category bonuses, but not by orders of magnitude

• Category bonuses available year around

• Ideal:

• Meet sign up bonus spend within each card’s bonus categories

• E.g. Meet Hilton HHonors min spend at grocery stores, drug stores, and gas stations

• Otherwise, meet spend where no good 5X categories exist

Worth it!

Use tools to make card selection easier

(more on this later)

6X groceries, gas, drug

stores

2X Travel, Dining

5X restaurants, bookstores,

movies

5X telecom, cable,

internet, office supply

Best Category Bonuses

5X Rotating

categories

5X Select two categories

Cash+

•2X Travel/Dining •$95 Annual Fee •No Forex Fee

•5X Rotating Categories •Gas/Drugstores/Amazon •ZERO Annual Fee

And/Or

Chase Ink Bold/Plus/Classic/Cash • 5X Office Supply Stores, Cable, Internet • 2X Hotels & Gas • $95 Annual Fee/ No Annual Fee

Category Bonuses – Simple Solution

• $200 monthly telecom = 5 X $200 = 1,000 Pts (Ink)

• $300 travel & dining = 2 X $300 = 600 Pts (Sapphire Preferred)

• $500 monthly Chase Freedom = 5X $500 = 2,500 Pts

Simple Solution - Payoff

= 4,100 Points Monthly or 49,200 Annually

• ~2 United domestic coach tickets or $821 Southwest

• $615 in travel through Ultimate Rewards portal

• 2 Category 6 Hyatt nights

What to do with 49,200 points?

Another Simple Solution

6X groceries, gas, drug stores, telecom

5X restaurants, bookstores,

movies

Simple Solution 2 Payout

Hilton Amex: 5400 monthly, 65K annually • $200 monthly telecom = 6 X $200 = 1,200

• $500 monthly groceries= 6 X $500 = 3000

• $150 monthly gas = 6 X $150 = 900

• $50 monthly drug stores = 6 X $50 = 300

Citi Forward ThankYou: 1250 monthly, 15K annually • $200 dining = 5 X $200 = 1000

• $50 books & movies = 5 X $50 = 250

What to do with 65K Hilton & 15K ThankYou points?

• Two nights category 5 Hilton

AND

• $200 airfare

Advanced Solution 6X

groceries, gas, drug

stores

2X Travel

5X restaurants, bookstores,

movies

5X telecom, cable,

internet, office supply

5X Rotating

categories

5X Select two categories

Advanced Solution Payout

• 60K Hilton HHonors

• 50K Ultimate Rewards

• 15K ThankYou

• $800 cash back

What to do with all that?

A trip for two:

• Two round trip award flights on United

Plus

• $200 revenue flight or car rental via ThankYou points

Plus

• Two nights Hilton

Plus

• Cash for dining, excursions, extra hotel nights, etc.

Tools to find and use Category Bonuses…

Frequent Miler page

Best Category Bonuses

Wallaby

Wallaby iPhone app

- I-Phone App

- Easy to Add Cards

- More locations

Tools: Glyph

- Tracks Your Rewards

Tools: Glyph Wallet

- Shows You How Much You Lost

Tools: Glyph – Dashboard

- Not Accurate all the Time

- Doesn’t Explain How “%” is Calculated

- Crashes

Tools: Glyph – Guru

TAKE IT FURTHER

Use Gas Station Gift Cards at Affiliated Grocery Store

- E.g Kroger/Kwik Trip

Gift Cards at Grocery Stores / Gas Stations

- Buy Gift Cards from Grocery Stores/ Gas Station With Category

Bonuses

Amazon Gift Cards Restaurant Gift Cards

Gift Cards at Grocery Stores / Gas Stations

Reload cards

Questions?

Program Card(s) Point Value (cents per point)

Value at ~2X

Value at ~5X

Ultimate Rewards

Ink, Freedom, Sapphire

1 (2) 2 (4) 5 (10)

US Bank Cash+ 1.875 3.125 6.875

ThankYou Forward 1 (1.33) N/A 5 (6.65)

Hilton HHonors

Amex .5 1.5 (at 3X) 3 (at 6X)

Membership Rewards

Premier Rewards Gold

1.5 3 4.5 (at 3X)

Backup slide: Point values