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It's Credit Card Smash-and-Grab Time Again
Thursday, November 15, 2018 -- It was only three months ago that we talked about the "smash and grab" strategy for dealing with credit cards.
In short, airlines and credit card companies are desperate for you to take new cards. Airlines want the revenue, banks want the charge volume (that means revenue) and they have abandoned any concept of long-term loyalty or sane interaction. Smash your previous ideas of loyalty, grab their acquisition bonuses and use the miles and points to your benefit. No deep thinking about loyalty or strategy. Just tactics. They're offering. You should take and not look back.
So why are we back here again? Because the airlines and credit card companies continue to up the ante. They are dangling huge new bonuses in our faces. We'd be foolish not to take them. And an old bank player that had faded from consciousness seems intent on pushing its way back to the forefront. That means even more smash-and-grab opportunities.
THE RETURN OF CAPITAL ONE
Once upon a time, Capital One cards were go-to vehicles for business travelers because they were among the very few that didn't add foreign exchange fees. But once Chase, Amex and Citi removed the nuisance charge from their best travel cards, Capital One stopped mattering. And its proprietary points program, while offering a net rebate of about 2 cents on spending, was a closed shop. Capital One points couldn't be transferred to third-party airline or hotel programs.
Sensing opportunity, however, Capital One has been pushing its way back into the travel space. It cut a fairly lucrative deal with Hotels.com earlier this year for its flagship Venture card. In August, it introduced a credit card with a 4 percent rebate on dining. And this week it bulled its way into the points-transfer game, too, a move designed to battle American Express Membership Rewards, Chase Ultimate Rewards and Citi ThankYou.
Capital One Venture and Spark cards next month will begin to allow you to transfer Capital One points to airline programs. The rate? Two Capital One points will equal 1.5 airline credits. That's the equivalent of 1.5 airline points per dollar charged since you receive 2 points per dollar spent on Venture and Spark. The first twelve transfer partners do not include any U.S. carriers, but they offer a path into all three airline alliances. From the Star Alliance roster are Air Canada Aeroplan, Avianca and EVA Air. From SkyTeam are Air France/KLM Flying Blue, Aeromexico and Alitalia. From the Oneworld Alliance are Cathay Pacific, Finnair, Qantas and Qatar Airways. There are also two unaligned transfer partners: Etihad of Abu Dhabi and Hainan Airlines of China.
What's the smash-and-grab opportunity? The Venture Card offers a 75,000-point acquisition bonus if you spend $5,000 in the first three months. The $95 fee is waived in the first year. If you are a big spender (or charge larger business expenses), the Spark Miles card acquisition bonus is 200,000 points. That's 50,000 points for $5,000 spent in the first three months and 150,000 more if you spend $50,000 in the first six months. Another benefit of Capital One cards? If you've topped out with Chase--it turns you down if you have acquired five new cards from any issuer in 24 months--or maxed out at Amex--it caps you at four to six of Amex cards--Capital One is a new-card haven.
AMEX BUFFS UP THE GOLD CARD SOME MORE
Amex overhauled its Gold Card last month with a new name, a cutesy new color variation and solid new spending benefits. Now it has doubled the acquisition bonus to 50,000 points. (You must spend $2,000 in the first three months.) Also new: a 20 percent rebate on U.S. restaurant spend during the first three months you have the card. And do not sweat the draconian admonition that "this offer may not be available if you leave this webpage and return later." I've tested it several times this week. The acquisition bonus and restaurant credit are always there.
THE CHASE FOR A SOUTHWEST COMPANION PASS
You can love or hate the Southwest Airlines Rapid Rewards program, but no one hates the Southwest Companion Pass. (See Phil Baker's review here.) You need to accrue 110,000 Rapid Rewards points in a year to earn the Pass and there are basically two ways to do it: fly or spend on a Southwest credit card. The good news? Acquisition bonuses count toward earning a Companion Pass and Chase has bumped the bonus on all four of its Southwest cards to 60,000 points. (You earn 40,000 points for $1,000 in spend in the first three months and 20,000 more for $12,000 in total spend in the first year.) If you're going for any of these cards, be doubly tactical. The Companion Pass is valid for the remainder of the year you earn it as well as the next full year. In other words, if you earn one early in 2019, it is valid through 2020. That's a lot of free travel.
UNITED EXPLORER IS BETTER THAN UNITED AIRLINES
Chase has recently upgraded the entry level United Explorer card with two points per dollar spent at restaurants and hotels. Holding the card also guarantees United MileagePlus miles don't expire and you'll get a slightly better spread of award seat availability, too. In other words, $95 spent on the annual fee is worthy if you fly United Airlines. If you don't have the card, now's the time to get it. Chase has bumped the acquisition bonus to 65,000 miles. You'll get 40,000 bonus miles when you spend $2,000 in the first three months and 25,000 more when you spend $10,000 in the first six months. The annual fee will be waived in the first year.
PLASTIQ FOR YOUR PLASTIC
I'm not a big fan of Plastiq, a payment system that allows you to use a credit card for items such as rent, mortgages or other things that don't accept credit cards. Plastiq's 2.5 percent fee generally obliterates any benefits of earning some extra miles or points. But the calculation may be different when you're looking to hit those spending minimums for acquisition bonuses. If you're coming up short, consider Plastiq. A 2.5 percent fee on a mortgage payment could be worth it if it helps you score a big acquisition bonus.
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