Sunday Reader Question: Which Points Credit Card Is Best For Big Purchases?

by on June 10, 2012 · 23 comments

in American Express, Chase, Credit Cards, Sunday Reader Questions

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TPG reader Kate sent in an interesting question this week about what points-earning credit card or cards to put one month’s big spend on. It’s kind of like a credit card spend fantasy question – you’re going to rack up a lot of points no matter what, but the best way maximize those points and get the most return on your money is a whole other matter. Here’s what Kate asked:

“My parents are building their dream home and going to plunk at least $50k on a card this month for various expenses.  They are going to pay the charges immediately, so interest rate/pay later deals don’t appeal to them – it’s all about points/rewards.  My parents are loyal Amex users and United fliers. But they generously offered to let my brother and me have the points via us opening our own Southwest Rapid Rewards cards and charging the expenses to them, so that each of us can get a companion pass. This sounded like the best deal to them – we are both married and travel a lot.  I live in DC and trekking out to Baltimore to fly on Southwest for flights would be a pain, so I’m not sure it’s worth it.  I know everyone has different priorities, but which card would you choose in an isolated major spend situation?”

The Southwest Companion pass is indeed one of the best airline frequent flyer program benefits, but $50,000 in spend isn’t nearly enough to get one person a companion pass – even if you open your own personal and business Southwest Chase card since they are both at 25,000 points right now. You need 110,000 points, so even if you got both for 50,000 points, put $50,000 in spend – you’d still be 10,000 short to get that first companion pass. As you mentioned, if you aren’t going to get a lot of use out of the pass, blowing all of that spend and credit card sign-ups to get it might not make the most sense.

The United Airlines Option
I personally think United miles are one of the best mileage currencies out there as I ranked them recently as #1 against the other US programs. I like United because they have a huge number of partners as a part of the Star Alliance, allow one-way awards at half the price of round-trip, have flexible routing rules and low overall fees. Being DC-based, United miles are even more useful since there’s a Dulles hub and partner US Airways is really ramping up at Reagan International – making award possibilities easier than with either of the other two alliances (or Southwest via Baltimore).

So what card will rake in the most United miles? Assuming these are all construction-related expenses (not travel/dining/supermarket related), $50,000 in spend would net the following per person:
1. Chase Ink Bold: With new application and $50k spend = 100,000 United miles (Actual earning is Ultimate Rewards points, which can be transferred to United instantly at a 1:1 ratio). Base earning: 1 point per dollar spent, 5x on office supply, phone, internet and cable TV and 2x on gas and hotel. $95 annual fee, waived for the first year and 50,000 points after $10,000 spend within 3 months.
2. Sapphire Preferred: With new application and $50k spend= 96,300 United miles. (Actual earning is Ultimate Rewards points, which can be transferred to United instantly at a 1:1 ratio).  Base earning: 1 point per dollar spent,  7% annual bonus on all points accrued – even the sign-up bonus. $95 annual fee, waived for the first year, and 40,000 sign-up bonus points after spending $3,000 within 3 months.
3. United Explorer card: With new application and $50k spend= 90,000 United miles. (Note: There are targeted offers that may bring the total mileage up as much as 15,000 miles higher). Base earning: 1 point per dollar spent, $95 annual fee, waived for the first year, and 40,000 sign-up bonus points after spending $25,000 within a calendar year.
4. United Club card: With new application and $50k spend= 75,000 United miles. Base earning: 1.5 United miles per dollar spent. $395 annual fee, $95 statement credit with new account – first year annual fee waived if you get a promo code from a United lounge.

Other Airline Options
If you weren’t set on United miles, some other good cards with spend bonuses to think about are:
1. British Airways Chase Visa: With new application and $50k spend = 162,500 Avios plus a companion award ticket which is awarded at $30,000 in spend. Base earning: 1.25 point per dollar spent, $95 annual fee and 100,000 sign-up bonus points after spending $20,000 within the first year. Avios can be extremely valuable if you fly short-haul or American Airlines to anywhere but Europe. Read more about fees and the ins and outs of Avios here.
2. American Express Premier Rewards Gold: With new application and $50k spend = 90,000 Membership Rewards points which can be transferred to Aeroplan (Star Alliance), Delta (SkyTeam) and British Airways (Oneworld) among other partners. Base earning: 1 point per dollar spent, 3x on airfare and 2x on gas and groceries and a 15,000 point bonus with $30,000 in spend per calendar year. $175 annual fee waived for the first year annual. Amex is known for running transfer bonuses, like the recent 50% bonus to British Airways, so those 90,000 Amex points could have been 135,000 Avios.
3. Delta Reserve Card: With new application and $50k spend = 50,000 SkyMiles + 25,000 Medallion Qualifying Miles (Silver status) and 15,000 more if you could hit $60,000 in spend. Base earning: 1 SkyMile per dollar spent, $450 annual fee and 10,000 MQMs with first purchase and 15,000 additional MQMs with $30,000 in spend and a final 15,000 MQMs with $60,000 in spend.

There are plenty of other options out there, but I thought these ones were the ones that offered the most unique benefits with a big level of spend. If I were in your shoes, I’d probably get the Ink Bold since that card is a charge card and can handle higher spend amounts vs. a traditional personal credit card with a set spending limit. Even though it’s a business card, Chase will likely approve you if you have good credit and use your Social Security Number and list yourself as a sole proprietorship. It is possible to get both Ink Bold and Sapphire Preferred on the same day and it will only count as one credit inquiry and both you and your brother could net over 100,000 points each. I normally caution people against applying for multiple cards with spend thresholds, but it wouldn’t be an issue in your case.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

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  • Tahsir Ahsan

    The best thing to do is to use what frequentmiler does in conjunction with tpg’s advice. Get the Ink Bold. Go to Office Depot. Buy a $2500 Visa Gift Card. You get 5X Points because of “Office Supplies”. so 12,500 + 2500. THAT’s BIG. If you want, sign your brother up for the bold as well and do that with his card too. So another 12,500+2,500. You can only do this once a month so if you can possibly spread out the payments of your house between two months, you can get about 60,000 points combined + whatever bonus you earn for the spending requirements. Also, if you’re really crazy about it. Go through the UR mall and try to buy gift cards to places you might buy things for from construction E.G Home Depot and what not. hope this helps.

  • rick

    It’s better to just buy $100 or $200 HomeDepot gift cards from OfficeMax, while going through the Ultimate Rewards online mall. They can buy a lot more than $2500 a month, have no card fees, and get a referral bonus from the mall. All told it could be 7x to 10x points per $ potentially.

  • zale123

    Agreed. If you have the patience, you should diversify your spending to maximize your rewards.

    Open several credit cards, and complete their spending criteria.

    I think that for all neutral spend (i.e. spend that doesn’t offer any bonus or for CC minimum spend) you should use the SPG from Amex.

  • Umut

    Other thing you should consider is once you put 20k spending on AmEx will freeze your accounts and will put you on a Financial Review. I passed thru Financial Review w AmEx twice in last 2 years, and it both happened after I put 20k spending in a week period. Their credit department treats people horrible and they’ll request your last 3 yrs tax returns from IRS. Good luck

  • Reader

    And get multiple sign up bonuses!

  • Stephen

    I seem to remember that the United Explorer card was offering 1.5 or 2 points per dollar on all spend through 6/30, or something along those lines. Unless I’m hallucinating (which is possible), it would impact the math quite a bit on $50K in spend (i.e., 125-150K points if all this month as she suggests).

  • Stephen

    Edit: 115-140K with the 40K signup bonus (again, hallucination disclaimer).

  • Akparsa

    With the United Explorer card, you also get a 10K point bonus when you hit 25K spend in the calendar year.

  • Grant

    You and your brother should both get a Chase ink bold card and a Chase Sapphire card. Earn the sign-up bonuses very easily and then combine the points into one account by transferring them from one card to the next. You should be able to rack up 100,000 points very easily

  • Zz

    One fat warning. At least with the AmEX gift cards you can only make purchases in the US. Was about to get at BA ticket from LHR to CDG. Couldn’t get it via expedia, orbitz, nor priceline or even AmEx travel. I don’t know what the rules are for the Visa gift card. But if you buy a lot of non-us based travel etc this may not be a good option.

  • BeachMiles

    Have them sign up for one from chase, one from citi and one from Amex. They’ve easily got the minimum spend met. For the Chase card, do go for the Ink Bold. Use it to buy Home Depot and Lowes Gift cards at Big Box Office Supply Store. 5 Ultimate Rewards points per $ on gift card purchases at Office Max , Staples or Office Depot. Also , unlike Visa Gift Cards, there is no added fee to pay at check out for Home Depot and Lowes gift cards.

  • Scott Garanflo

    I’m pretty sure Southwest Airlines has discontinued, as of mid March 2012, allowing the 50K Mileage Promotional sign up bonuses for both personal and business cards from counting towards the 110K Mileage needed for the Companion Pass…

  • Christian

    I don’t think considering the sign-up bonuses when answering the question “which card to use for $50k spend” is right, it paints a skewed picture. At least not any bonuses that are tied to 1 mile/point per $.

  • Larry

    I agree that including sign up bonuses skews things. You don’t need to spend 50k to get the bonus. If you decide to use Amex gold for this spend, you can still get the Sapphire next month, so which has the better sign up bonus doesn’t matter get them both.

    For high spend, I think the best card is the old Ink Bold with Chase Exclusives ond threshold bonuses. A 50k spend translates to 82.5k of UR points. (10k for the 20% Exclusives bonus and 22.5k for hitting the 50k threshold.)

    Hilton Surpass is another option to think about. You get 150k for the spend. While perhaps not as good as air points, it gives you elite status.

  • PJ

    CHASE BOLD approcah as suggested here and Multiple new card signups or even better with new card sign up by trusted ones to maximize the sign on bonus is clearly the best apporach .

    I wonder if anybody can get an InkBold without a strong proof of having a ligitimate bunisess ?
    Without Inkbold, I am in Little Leauge: even with 2 Freedom cards, I have run out the 5% rebate allowance on Freedom cards. I did charge $1900 ( 5% discount) for $2000 a NJ Supermarket Gift card which I use to pay for groceries and GAS cards or if I even need Home Depot or Red Lobster gift cards>>basically getting >10 % off throught the CHase 5 % grocery rebate plus the 5 % discount when I buy $1000 gift cards. I did also find a $500 gift card which I paid $505.95 ( with the 5 % rebale and 10/10 Chase Exclusives) with Chase Master card

    WITH inkbold, you are virtually live in the super kingdom of more than 5 % rebate all year around. As other readers report, occasionally you can catch the special 10% off at Office Depot via Unltmate Rewards shopping portal

  • PJ

    many contractors pay Cash in Home Depot ; I bet they dont mind getting paid partially with some Home Depot cards

  • PJ

    I would certainly give credit cards issuers a headup before I run up a major pruchase

  • Tahsir Ahsan

    Here’s what to do. I spent a few hours thinking lol. Go to Officemax, buy $2500 Home Depot Gift Card, but only if you have to spend that much there. $12,500 points + $2,500 Points. Then go to the UR Mall and pay for the home depot purchases with that. That will earn you an EXTRA 5 Points. + 12,500 more points. Boom, you just got 27,500 points by buying one $2,500 gift card from office depot. Not only that, you can buy as many home depot gift cards as you want whereas american express caps you at $2500. Enjoy :)

  • PJ

    I think United Explorer is running 1.50 % rebate until July 9.

  • PJ

    Can I assume it does not hurt if I try for the InkBOLD with my social## and get declined for not having solid business proof?

  • PJ

    if you need to use ONLY ONE CARD and no signon bonus in pciture, obviously INK BOLD with dipping into Visa/Master GIFT cards with 5 % rebate at OFFICE DEPOT is THE TOP REWARDING approach.
    However if your trusted famil memebers can get as many inkbolds with sign on bonus them 50 K spend rakes in 50X5 CHase Unltimate Rewards plus 50K X N approved Inkbold cards.

    Would this also mean: is it simply SO SO good to have an INKBOLD ? With INKBOLD you can secure 5 % off virtually 24/7/365

  • Mary Lynn

    Are you suggesting they physically go into an Office Depot store to buy a $2500 Visa Gift Card? Or can it be purchased on-line? The Office Depot store in my area routinely sells out of the higher level Visa Gift Cards – only $100 and $200 cards are usually available. I’d like to be able to buy them on-line, if possible, but haven’t figured out how to do so.

  • Tahsir Ahsan

    The problem with buying them online is that they often exclude Gift Card purchases from bonus points earning. The best thing to do is buy a small amount reloadable american express giftcard from anywhere. After that, there is a special card sold at office depot called the Vanilla card. This card is super simple and it basically reloads the amex card you buy. You can put any amount on it from $20-$500 and it usually works well. You have to have a chase ink bold though or else you wont be able to get the 5X points. Essentially by doing this, you’re getting 5x points everywhere. The problem is that the money you put on the card has to be spent somewhere eventually. You can take out about $400/day from any atm with the card, but the banks catch onto this. Hope this helps!

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