This sub is full of people who are convinced a travel rewards card is going to lead to these amazing trips they wouldn’t otherwise be going on. It’s practically every other post, I make $50k a year, how do I maximize my travel rewards? They’re chomping at the bit to go sign up for hundreds of dollars in annual fees so they can take this big trips they were told were possible.
Here goes: unless you’re spending >$40K a year on credit cards, travel rewards as a result of spending are likely a terrible deal.
Hotels – People don’t want to hear it but now that Hyatt is nerfed the high value redemptions are gone.
Flights – Redemptions are incredibly difficult but there’s still great value to be had. You’re looking at a minimum of 60k points to get a one way international business class fare which is where the real value starts and how I’m judging this.
If you’re a normal person spending $1.5k a month and manage to optimize all of that into 3x earning categories it would take you over two years to get a r/t ticket. A year of spend and you don’t even have a single one way ticket. Also did we factor in how much the annual fees are or how difficult these tickets are to book? Save up two and a half years, spend $1.5k in annual fees, spend $600 on fuel surcharges, spend $300 on repositioning flights, forgo the $800 of cash back you could have earned, and now you have a r/t flight to Tokyo. Sounds awesome but you effectively spent $3,200 on this flight.
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The winning strategy: Churn through cards for sign up bonuses, learn redemption sweet spots, and use the points as quickly as you can earn them. Don’t keep anything open past a year because it’s likely not a good deal.
Hot Take: Travel rewards are a bad deal for most people
byu/SportsBallBurner inCreditCards
Posted by SportsBallBurner
8 Comments
What’s new here? Maximizing rewards has always revolved around SUBs and referrals.
Most people (even on this sub) don’t spend enough money personally to earn significant rewards, even if you min-max bonus categories
The exception are business owners whose monthly spend is usually very high.
Churning is the best. Especially if your a couple. I apply for 5 cards a year hit the bonus points. My wife does the next year. We take a vacation. Then in the middle while we are waiting we apply for bank bonuses.
If your spending 1.5k a month. In 4 months that’s 4.5k. You will hit the spend bonus.
I got an 80k bonus for getting the $100 AF CSP. I used the $50 portal credit on a night at an amazing Westin in Boston, which turned the cost into $110 for the room, great value. I then used the 80k points for about $1500 of value for the Grand Hyatt in DC during the start to cherry blossom season. Subs are key. I am not even worried about getting insane value out of points, I care more about doing soemthing I wouldn’t have done otherwise
Obscure hobby is too obscure for general public. More at 11.
We know, my travel cards are paid perk cards with coupons. I usually cover 2-3 nights and a economy flight trip or two in a year. That’s not great, but my platinum status and various other perks, that’s what I like.
I think you’re mostly right, I also think you’re wildly underestimating “normal spend” and how many people do spend and pay 40, 50, even 100k a year.
1.5k a month? I wish.
I don’t spend anywhere near 40k a year on cards and still find great international travel deals. I stick to earning subs.
It’s not a hot take at all, this sub is full of a bunch of people who are cheap and think earning $60/month in cash back is better than chasing SUB’s and going on a $10,000 vacation for a couple hundred bucks in annual fee’s.