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

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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.

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