Category Archives: Sign Up Bonus Valuation

Barclaycard Arrvial World MasterCard: 2.22% Cash Back Card with $444 Sign Up Bonus

Posted on April 4, 2013 by MileValue | 38 Comments

The new king of cash back cards is the Barclaycard Arrival World MasterCard, which offers 2.22% back on all purchases in the form of free travel. Beyond that world-beating rebate percentage on all spending, the sign up bonus is worth $444 in free travel, making this card a must-add to my next app-o-rama.

There are two reasons to get this card: 2.22% back on all purchases and a sign up bonus worth $444 in free travel. Let’s talk about them in turn.

2.22% Back on All Purchases

The rewards of the Arrival World MasterCard are simple. You earn two “miles” per dollar on all purchases. I put “miles” in quotation marks because these aren’t miles in any airline’s frequent flyer program. Each “mile” is worth one cent toward statement credits or 1.11 cents worth of travel.

The way to redeem these miles is to purchase travel–airfare, hotel, cruise, train, car rental, etc–with the card, then request a statement credit as a points redemption.

Example: You have 20,000 miles in your account. You use the credit card to purchase a $150 roundtrip ticket from Los Angeles to Las Vegas on any airline you want. You request to redeem your miles toward the purchase of that ticket in the form of a statement credit.

Barclay’s redeems 15,000 of your miles, and the $150 charge disappears. You got a free $150 flight for your 15,000 miles. In addition, of course, you will earn miles from flying a paid flight since the airline you are flying to Vegas was paid cash for your ticket!

Because of this redemption method, there are no blackout dates or capacity controls. You can redeem the miles for any seat, any time, on any airlines, to anywhere.

What I’ve described so far is only 2% back, but there’s another perk that takes the deal up to 2.22%. You can redeem your miles for statement credits at a rate of 1 cent per mile. If you redeem them for statement credits for travel, though, you get 10% of the redeemed miles back. Let’s go back to the same example we just looked at.

Example revisited: We redeemed 15,000 miles for a $150 flight. Since the redemption was for travel, we get 10% of the miles back. 1,500 miles will be redeposited into our account.

The net result is 13,500 miles gets a $150 ticket, or 1.11 cents of value per mile. Since we earn 2 miles per dollar on all purchases, this is like getting 2.22% back on all purchases that can be used for any type of travel.

How does 2.22% back on all purchases compare to other cards?

It is 11% better than any other cash back card I know of. I haven’t seen better than 2% back on all purchases.

It is better than almost all rewards cards. It’s a bit beyond the scope of this post, but the only cards with a better rebate percentage on non-bonus categories in my opinion are the Starwood Preferred Guest from American Express and the United Club Card because I value one SPG point and 1.5 United miles above 2.22 cents.

$444 in Free Travel

The card has recently increased its sign up bonus to 40,000 miles after spending $1,000 in the first 90 days of card membership.

Those 40,000 miles can be redeemed for $400 in free travel. And doing that will trigger a 10% rebate in points. You can use that 4,000 points for $40 more in free travel. Of course, you’d also get 400 points back, which is $4 more in travel, which means 40 points back, $0.40 in travel, 4 miles back…

The 10% rebate is an interesting lock-in feature from Barclay’s. I think they’re betting it will keep you using the card since you will have a hard time zeroing out your balance with the constant miles rebates. Whatever Barclay’s reasoning, I just love that the 10% rebate on travel redemptions increases the value of a miles from 1 cent to 1.11 cents.

Who Should Not Get This Card

Do not get this card if you want to collect miles to fly international first class exclusively. Paid international first class is exorbitantly expensive–think $10,000. A $10,000 ticket would cost 1,000,000 of these miles, which is far more than the number of traditional miles paid first class costs.

It’s always sad to tell Award Booking Service clients who have accumulate miles on a card like this one and want to fly up front that they don’t have enough miles.

Who Should Get This Card

This card is ideal for people who fly economy, families, domestic flyers, and points omnivores.

Economy Flyers- If you mainly fly economy class, it’s hard to get even 1.5 cents of value per traditional mile. Most miles cards earn 1 mile per dollar, meaning they get economy flyers 1.5 cents of travel per dollar spent–if that! The Arrival World MasterCard gets economy flyers (and everyone else) 2.22 cents of travel per dollar spent.
Families- Families have two things working against them. It’s tough to book four capacity-controlled award seats on the same flight, and they usually have little date flexibility since they want to travel over school breaks. The “miles” earned on the Arrival World MasterCard don’t require you to find award seats. They can be redeemed toward any travel purchase. A family can book four tickets to Disneyland and use their miles from this card to make that flight–whatever flight they want–free.
Domestic Flyers- You’d have to spend $25,000 on a United, American, or Delta credit card AND find award space on the flights you want to get a domestic roundtrip. You’d have to spend far less on the Arrival World MasterCard, and you can book any flight you want.
Points Omnivores- This is my category. I’ll collect any mile or point I can to get more travel. I collect other types to get into international first class. I’ll collect this type to fly to more mundane places in economy class. A dollar saved is still a dollar saved. Bonus for points omnivores: Barclay’s doesn’t have a ton of great rewards cards, so this the Barclay’s card I’ll be getting on my next app-o-rama.

Other Card Info

Here are the main things to know:

40,000 bonus miles after spending $1,000 in the first 90 days
2 miles per dollar on all purchases
Miles can book any travel any time from any company
Redemptions for travel have a 10% rebate
No foreign transaction fee
Complimentary TripIt Pro membership ($49 annual value, Rookie Alli is a big fan of TripIt)
No annual fee the first year, $89 thereafter

Recap

The Barclaycard Arrival World MasterCard is currently offering a sign up bonus worth $444 in free travel, plus the card earns 2.22% back toward travel on all spending!

This card is ideal for economy flyers, domestic flyers, families, and points omnivores. The card is also ideal for anyone who doesn’t like to search for award space. The miles earned from this card can be used on any airline for any flight. (And you’ll even earn miles on that flight!)

Application Link: Barclaycard Arrival World MasterCard

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Tagged Arrival World MasterCard, Barclay's, Barclaycard

Why You Shouldn’t Get the 75k AMEX Gold Business Card Available Today Only

Posted on October 24, 2012 by MileValue | 30 Comments

Today (10/24/12) only, American Express is doing one of its once-every-few-months, one-day-only 75k Membership Rewards sign up bonuses for the American Express Gold Business card. The last one was September 12.

I won’t give a full rundown of the rules and benefits of the card–you can get that anywhere–but I will answer the following question: should you get the 75k sign up bonus on this card or the 50k sign up bonus?

There are two AMEX Gold Business Card Offers out there right now, the today-only offer for 75,000 Membership Rewards after $10,000 in spending. And the running offer for 50,000 Membership Rewards after $5,000 in spending.

If the answer to which card to get seems obvious, it is not. In my post, “The Two Ways to Value Credit Card Sign Up Bonuses,” I described both the absolute-value method and rebate-percentage method.

The absolute-value method is what most people are probably more familiar with. Add up the benefits of the sign up bonus and subtract the first-year annual fee if any. Right now I value 75k MR at $1,342.50 (75k * 1.79 cents per MR).

There is no annual fee the first year on the AMEX Gold business card. Excluding the category-bonus premium of the AMEX Golds, the absolute value of the 75k MR card, $1,342.50, dwarfs the absolute value of the 50k MR sign up card, $895.

Stop reading here and get the AMEX Gold business card today if you spend tons of money per year on credit cards ($100k+) or you are only getting 1-2 cards this year because of an upcoming mortgage application. The absolute value of the sign up is mouthwatering.

But if you, like me, spend very little on cards each year ($30k), then this is not the best AMEX Gold business offer.

Instead the best offer is the 50k MR sign up bonus. The reason is that the 75k MR sign up bonus has a $10k minimum spend to unlock the bonus. The 50k MR card has only a $5k minimum spend requirement.

People who don’t spend enough to clear all the minimum-spending requirements for all the cards they want should use the rebate-percentage method to order cards on their wish list.

The rebate-percentage method takes the absolute value and divides by the spending requirement to get the percentage of the minimum spend that is rebated in the form of points or other benefits.

The 50k MR card’s rebate percentage is a solid 17.9%. The 75k MR card’s rebate percentage is only 13.4%.

That means, if you are looking at the most bang for your small buck like me, you should get the 50k MR card. Several weeks ago, I did get the 50k Membership Rewards offer, and I am very happy I did. It was the right move for my spending habits, and it will allow me to get more total benefits from my cards this year than if I had gotten the 75k AMEX Gold.

Take a look at my Best Current Credit Card Offers, which I update frequently to see where these offers place!

Recap

75k MR American Express Gold Business, Application Link

Issuing bank: American Express

Rebate percentage of sign up bonus: 13.4%

Absolute value of sign up bonus: $1,342.50

50k MR American Express Gold Business, Application Link

Issuing bank: American Express

Rebate percentage of sign up bonus: 17.9%

Absolute value of sign up bonus: $895

I can’t say exactly where the annual-card-spending cutoff–and you can increase your annual card spending with Bluebird–is where you can move from the rebate-percentage method to the absolute-value method. But I do know that the 50k MR sign up bonus is right for me.

Hat Tip The Deal Mommy

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Tagged 75k AMEX Gold, American Express Gold, business card, sign up bonus

Citi AAdvantage Visa and American Express: $2,099 Sign Up Bonuses

Posted on October 23, 2012 by MileValue | 19 Comments

Citi AAdvantage Visa and American Express Quick Facts

Issuing Bank: Citi

Absolute Value of Sign Up Bonuses (combined): $2,098.77

Rebate Percentage of Visa: 49.4%

Rebate Percentage of American Express: 22.2%

Application Link Visa: Citi American Airlines Visa

Application Link American Express: Citi American Airlines American Express

Preface

I am combining my analysis of these two cards because hundreds of people have reported you can get both cards on the same day! I’ve done it myself, and getting both at once is a no-brainer.

The issuing bank is Citi for both cards. “American Express” can be a confusing term because American Express is both an issuing bank and payment processor. American Express is the issuing bank for many cards like the American Express Platinum Card or Delta SkyMiles card. It is not the issuer for either of these cards–though it processes payments for one. When applying for many cards at once, we care about applying for only one personal card from each issuing bank (or two in this special case.)

Sign Up Bonus Analysis: Visa

The best Visa offer is 50,000 American Airlines miles after $2,000 in spending within four months of getting the card. I value 1 AA miles at 1.77 cents, so 50,000 are worth $885.

This card earns 1 AA mile for every dollar spent and 2 AA miles for every dollar spent on American Airlines. I wouldn’t expect to reap any gain from that category bonus.

All the following benefits come from getting any Citi AA card. I am recommending getting two cards. Since getting two doesn’t double any of the benefits, I will apportion half the value of each benefit to this card and half to the Citi AA AMEX.

Citi AA cards come with priority boarding on AA flights. I value this at $5. You can get one free checked bag per ticket. I rarely check a bag, so I will value this at $25. You get a 10% rebate of AA miles redeemed per calendar year up to a 10k rebate. I redeem 100k+ AA miles per year, meaning I would earn the full rebate worth $177. The half of these benefits attributable to the Citi AA Visa is $103.50.

The Citi AA Visa has no annual fee the first year, and an $85 annual fee thereafter.

That makes the absolute value of the sign up bonus for the Citi AA Visa $988.50 ($885 + $103.5).

Since the spending requirement is $2,000 to unlock the bonus, the rebate percentage of the sign up bonus is 49.4%.

Read The Two Ways to Value Credit Card Sign Up Bonuses if you don’t know why I value cards two ways, or which way you should pay attention to. See my Best Current Credit Card Offers to see where the Citi AA cards stacks up.

None of what I’ve described can be found on the application page that I am linking to. The link is a zombie link without a landing page. The above description is from a FlyerTalk thread where people have reported getting in on the deal. I, and thousands of people, have successfully signed up through zombie links, so I recommend it to friends and family. Your mileage may vary.

Sign Up Bonus Analysis: American Express

The best current Citi AA AMEX offers 40,000 AA miles after spending $2,000 in the first four months of card membership. Spending $3,000 more ($5,000 total) in the first twelve months unlocks another 10k miles (50k total.) I value 50k AA miles at $885.

The card offers a $1 statement credit for every dollar spent on American Airlines purchases in the first year up to $100 total. Since this is like $100 off an AA flight, I would be sure to get $100 value from this.

This card earns 1 AA mile for every dollar spent and 2 AA miles for every dollar spent on American Airlines. I would expect to spend at least $100 on AA in the first year on this card to unlock the $100 statement credit, so the category bonus would earn me an extra 100 miles worth $1.77.

The card comes with two free passes to the Admirals Club. I already get free access with my Platinum card, but if I didn’t, I would value the passes at $10 each or $20 total.

The other benefits from the Citi AA Visa also apply. The half of those benefits that I attribute to this card are worth $103.50.

The Citi AA AMEX has no annual fee the first year, and an $85 annual fee thereafter.

That makes the absolute value of the sign up bonus for the Citi AA Visa $1,110.27 ($885 + $100 + $1.77 + $20 + $103.5).

Since the spending requirement is $5,000 to unlock the bonus, the rebate percentage of the sign up bonus is 22.2%.

The link is a zombie link with a landing page, where I got the offer information.

Eye to Award Booking

As I said yesterday when talking about the Chase Sapphire Preferred, United miles are the most versatile miles. American miles have strengths and drawbacks. The strengths are to Latin America, where there is great availability, Asia, where you can fly Cathay Pacific, and domestically. The weakness of AA miles is business class to Europe, the most common award booking request.

Your business-class-to-Europe options with AA miles are:

British Airways: fantastic product, but $300 plus fuel surcharges per person per direction
American Airlines: angled lie flat
airberlin: recliner seat
Finnair: great product, but only one seat generally released on its only US route JFK-HEL
other bad options

How to Get Both Cards at Once

Open up two browsers. Your computer had one preinstalled–either Internet Explorer or Safari. Hopefully you’ve downloaded Firefox or Chrome already, since those are both superior. If not, install one now.

With one browser, navigate to the Visa application page. With the other, navigate to the AMEX application page. Fill out one form. Fill out the other. Click submit on one form. Click submit on the other.

Hopefully both applications will be approved instantly, and you’ll receive your cards soon. If you get denied for one or both, call Citi’s reconsideration department at 800-763-9795. If they ask why you want two cards, give a plausible reason like wanting to track expenses separately or because your favorite store doesn’t accept one type of card.

Recap

I strongly recommend applying for both the Citi AA Visa and Citi AA AMEX at the same time to reap 100k AA miles. The cards have slightly different sign up bonuses. The Citi AA Visa earns a higher rebate percentage, and the AMEX has a higher absolute value.

The combined value of the sign up bonuses is a staggering $2,099, and they earn a combined rebate of 30% on the $7,000 combined minimum spending requirement.

I personally opened both these cards on the same day to earn 75k miles per card. That offer is long gone, and I don’t expect it to return soon. A 100k total haul is still incredible, and I recommend these cards to friends and family.

Application Link Visa: Citi American Airlines Visa

Application Link American Express: Citi American Airlines American Express

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Posted in AAdvantage, Citi, Sign Up Bonus Valuation

Tagged American Airlines, American Express, Citi, Visa

The Two Ways to Value Credit Card Sign Up Bonuses

Posted on August 2, 2012 by MileValue | 26 Comments

Tomorrow I’ll be listing the top current sign up bonuses for rewards credit cards. But what does it mean for a card to have a top bonus?

There are two equally valid ways to value a credit-card sign up bonus. The method that is appropriate for you depends mainly on how much you spend per year on credit cards.

Absolute Value Method: Calculate the total value of the sign up bonus in dollars. Rank the sign up bonus offers by their value in dollars.

Rebate Percentage Method: Calculate the total value of the sign up bonus in dollars. Divide the value by the spending requirement to unlock the sign up bonus. Rank the sign up bonus by the result of the division–the rebate percentage of the sign up bonus.

The absolute value method is the better method for big spenders. The rebate percentage method is better for small spenders. Let’s take a deeper look at the methods with some examples.

Which method for you?

The rebate percentage method is the better method for valuing credit card sign ups if the amount you spend on cards limits how many cards you can sign up for.

If, instead, you limit the number of cards you sign up for to preserve your credit score in the short term or your applications are only limited by how many new cards banks will approve, the absolute value method is right for you.

Why? If you’re like me and spend less than $50,000 per year on cards, that level of spending does not allow us to get all the great rewards cards. For instance, last week there were three cards that had minimum spending requirements that added up to $50k to clear them completely.

If I put all my spending towards clearing those three, I would miss out on every other card with a minimum spend for the whole year. Since my spending ability limits my cards, I need to get the cards with the highest rebate percentage. This includes cards without a minimum spend requirement and cards with a big sign up bonus for a small spend requirement.

If you’re a huge spender, or you’re limiting the cards you apply for in anticipation of getting a mortgage, you need to focus on signing up for the cards with the highest absolute value of bonuses.

We all–big spenders and small spenders–should focus on getting the highest total absolute value of all our cards combined. But small spenders need to use the rebate percentage to figure out which cards will achieve the highest total absolute value of all cards combined.

So use the appropriate method to rank the cards from biggest to smallest sign up bonuses.

People using the absolute value methodology would go down their list and sign up for the cards on top first. They would stop applying when they were limited by a need to keep a high credit score in the short term or by the limits of how many cards a bank will approve.

Small spenders need to populate their list with the rebate percentages (of each tranche of a multilevel sign up bonus) and the minimum spend.

Small spenders also apply top to bottom. But they are cut off where their spending ability cuts them off.

Recap

Today’s post talked about the two ways to value a credit card sign up bonus: by its absolute value or by its rebate percentage. Nobody can apply for every rewards card, so we all need to value sign up bonuses somehow to choose the best ones to get.

The goal of every applicant should be to maximize the total value of card sign up bonuses he gets. Big spenders or conservative appliers do that by applying for the cards with highest absolute value card bonus. Small spenders get there by focusing on the biggest rebate percentages.

This is important to understand because tomorrow I’ll be offering two lists of the best card sign up bonuses, and you’ll need to know which ones to focus on.

For more great posts like this, sign up for the MileValue RSS feed, like the brand new MileValue facebook page, or follow me on Twitter @milevalue. Get your friends involved too, so you can have more companions for your Free First Class Next Month.

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