November 27th, 2013
Related post: The Best Credit Card For Spending In Every Spending Category.
Chase has several cards that earn up to 5 points per dollar. Spending in 5x categories can really add up quickly so trying to focus spending there is obviously a smart move.
On the consumer side there is the Chase Freedom which normally has a 10,000 point signup bonus but for a limited time has a 20,000 point signup bonus for spending $500 in 3 months. But even bigger than the signup bonus are the bonus points you can earn annually.
The Freedom card has no annual fee.
For the remainder of the year you can earn 5 points per dollar for up to $1,500 of spending on Amazon.com and at department stores. Department stores like Sears sell gift cards for other stores as well that will earn 5 points per dollar.
Plus if you have a Chase checking account you’ll get a 10% bonus in February on top of all points earned during the previous year which means that you’ll really earn 5.5 points per dollar.
Every quarter the Freedom 5x categories change, but if you max them out with $6,000 of spending in a year you’ll earn 30,000 points per year without a checking account or 33,000 points per year with a checking account.
I have multiple Freedom cards thanks to converting Sapphire Preferred cards into Freedom cards and each get 5.5x on $1,500 of spending per quarter.
For Q1 of 2014 you’ll earn 5x at gas stations, movie theaters, and Starbucks. Last quarter also had gas stations and I bought 9 One Vanilla gift cards for $500 each and cashed them out by loading them onto my Bluebird card. That’s the easiest 25K points you can get without applying for a new card!
The only problems with Freedom?
-It has a 3% foreign transaction fee.
-The Ultimate Rewards points it earns can be used for cash back but they can’t be transferred into far more valuable airline miles or hotel points.
Why are airline miles far more valuable than cash back?
-A first class ticket to Hawaii can cost $4,000 but you can use 60,000 miles for that same ticket, a value of 6.7 cents per mile. If you were using say, Capital One points, you would need 400,000 points per ticket.
-A last minute ticket or a ticket where you don’t stay for 3 nights from New York to Cleveland can cost $1,200 in coach but just 9,000 miles. That’s a value of 13.3 cents per mile. If you were using Capital One points you would need 120,000 points per ticket.
-A first class ticket to Asia costs $27,000 but you can use 135,000 miles for that same ticket, a value of 20 cents per mile. If you were using Capital One points you would need 2,700,000 points per ticket.
-A night at a Park Hyatt in Paris, Sydney, or the Maldives can run $1,000-$1,500 with tax but you can use 22,000 points for that room, a value of up to 7 cents per point. If you were using Capital One points you would need 150,000 points per night.
And that’s all besides for the fact that getting a Capital One card costs a minimum of 3 credit pulls whereas you can get 3 or 4 Chase or American Express cards with just 1 credit pull.
However if you or your spouse has a Sapphire Preferred, Ink Plus, or Ink Bold card (or get one in the future) you can transfer your Freedom points there and transfer them into airline miles or hotel points.
The Bold and Plus cards have very generous 50K signup bonuses and all of them offer highly lucrative bonus categories:
-The Ink Plus card is a credit card that can be paid over time. It has a 50K signup bonus for spending $5,000. The $95 annual fee is waived for the first year. It can transfer Ultimate Rewards points into miles. It has no foreign transaction fees.
-The Ink Bold card is a charge card that must always be paid in full. It has a 50K signup bonus for spending $5,000. The $95 annual fee is waived for the first year. It can transfer Ultimate Rewards points into miles. It has no foreign transaction fees.
-The Ink Cash card is a credit card that can be paid over time. It has a 20K signup bonus for spending $3,000. There is no annual fee. It can’t transfer Ultimate Rewards points into miles without a Sapphire Preferred, Plus, or Bold card. It has a 3% foreign transaction fee.
-All of the Ink cards offer 5 points per dollar on internet/cable service and telecom purchases, so that’s a nice rebate when you purchase a new cell phone and off your cable bill.
They also earn 5 points per dollar at office supply stores. There are hundreds of gift cards sold by office supply stores.
-Upgrading at your local carrier’s store to an iPhone or Galaxy S4? 5 points per dollar.
-Buying gift cards for gas? 5 points per dollar plus you’ll pay the lower cash rates at the pump.
-Buying gift cards for Amazon, Bed Bath & Beyond/Buy Buy Baby, Gap, Groupon, Kohl’s, Macy’s, Marshalls, Nordstrom, Southwest Airlines, TJMaxx, Whole Foods, etc? 5 points per dollar.
-You can save even more money at Staples thanks to bonus points with Plink.
-Plus you can buy $200 Visa gift cards that earn 1,000 points and can be uploaded to Bluebird or used for cash back, bill pay, money orders, etc. Or you can use them for everyday spending thereby getting 6-7% back on everything you buy anywhere via the Visa gift cards.
You can 5x points on up to $50,000 in annual spending on the Plus or Bold card and on up to $25,000 in annual spending on the Cash card.
-Ink Bold and Ink Plus also earn 2 points per dollar on gas and hotels. Ink Cash earns 2 points per dollar on gas and dining.
Yes, the Ink cards are business cards. But you may be already running a business that qualifies for a business card and there are several huge advantages that business cards have over consumer cards as you can read here.
If you have a side business or even if you are just starting one you can get a business card. For example if Joe Smith sells items on Ebay or on Amazon and wants a credit card to better keep track of business expenditures he can open a business credit card for “Joe Smith Sole Proprietorship” as the business name. You don’t need to file any messy government paperwork to be allowed to do that.
Just be sure to select “Sole Proprietorship” as the business type and just use your social security number in the Tax Identification Number field as well as in the social security number field.
If you do run more than one business you can get the same card for each business. I’ve been able to do that myself.
The really great thing with these business cards is that they don’t report your spending on your personal credit report.
On personal cards if you spend money on your card your credit score will be hurt even if you pay your bill on time. A whopping 30% of your credit score is based on credit utilization. You can pay off your card before your statement is generated to avoid that, but that takes a lot of effort and laying out money well before you have to. Additionally it’s good to have the statement close with a few dollars to show the card is active and being paid every month.
On a business card it’s just not reported, so you can wait until the money is due and even max out your line without it having a negative effect on your score. Plus if you close a business card it won’t ever have an effect on your score.
On a card like Ink Cash with 0% APR for purchases and balance transfers for 6 months you can owe money without having any negative effect on your credit score.
Chase Ultimate Rewards offer instant and fee-free transfers to top-notch mileage and points programs at a 1:1 ratio.
Transfer partners include:
-United (Star Alliance) will still be an excellent currency, even after the devaluation coming next February. They never charge fuel surcharges, have very flexible routing rules, they allow one-way awards for half the mileage, they have a short-haul awards for 10,000 miles, they allow for a stopover and an open-jaw so that you can really maximize a single award ticket into several free trips, and they have dozens of partners to fly on, most of which can be booked on their website.
-British Airways (OneWorld) is awesome for short-haul awards. Just 9,000 miles for a round-trip zone 1 or 15,000 miles for zone 2 short-haul award. The zone 3 award for 25,000 miles round-trip can also be a bargain, for example for flights between the west coast and any of the Hawaiian islands or between Boston and Ireland with no fuel surcharges. Flights to Israel on Air Berlin are 60,000 miles with no fuel surcharges. They allow one-way awards for half the mileage. There are no close-in or expedite fees. You can cancel an award for as little as $2.50. Infants are only charged 10% of the miles on international trips instead of 10% of the full fare like US carriers charge. Plus they don’t collect fuel surcharges on AA within the western hemisphere, on Qantas within Australia, on Air Berlin, Aer Lingus, Alaska, or LAN and you can transfer points to Iberia to limit fuel surcharges there as well.
-Korean (Skyteam) offers the best first class availability of any airline in the world (A380 First Class Trip Report here) and they also have true bargains on partner travel, just 30,000 miles to fly round-trip on Hawaiian or Alaska to Hawaii in coach or 60,000 miles in first. And it’s just 20,000 miles to fly to Alaska in coach or 40,000 miles in first. You can even get a free stopover on the way to or in Alaska!
-Southwest offers award travel without capacity controls though the value per point will dip from roughly 1.9 cents to roughly 1.65 cents come next April. If you prefer points can be transferred to Airtran for flat-rate awards like business class upgrades or free tickets at a flat rate instead of a rate that corresponds to the ticket price.
-Virgin Atlantic has some niche uses like discounted awards on Delta and transfer to Hilton at a 1:2 ratio.
-Hyatt will also remain a powerful currency even after its upcoming devaluation in January. They definitely made things less painful by adding a new cash and points option that offers some excellent values, but more importantly you will earn points, elite stay credit, and will be able to use suite upgrades on cash and point stays. It remains far less expensive for high-end hotel stays than any other hotel program. Or you can always funnel points through Hyatt to Southwest to qualify for a free Southwest Companion Pass which gives you a free companion every time you pay for or redeem for a free ticket.
-You can also transfer points to Marriott, Ritz Carlton, Priority Club, and Amtrak.