Sunday Reader Question: Which Credit Card is Best for Large Purchases?

by on September 23, 2012 · 11 comments

in Credit Cards, Sunday Reader Questions

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TPG reader Craig is looking for advice on which credit card is best to make a big purchase on:

“I am looking to make a fairly expensive purchase for my parents’ anniversary and wanted to see what credit card (of the ones I have) would help me get the best value in terms of points.  I travel a lot internationally for vacations so ideally would love to get flying miles with the cards I have.  The purchase is around $17,000 and it will be made at a Duty Free store in the Caribbean islands.  

The credit cards I currently have are:

 -          Chase Sapphire Preferred

-          American Express Platinum Optima

-          Citi Cash Returns (1%)

-          Chase United Mileage Plus

 I have airline miles with United (no status but a ton of miles), Delta (Silver status), British Airways (Bronze), and hotel points with Marriott and IHG.  Any thoughts you might have here would be much appreciated.  I am not sure if I will get double miles if I use my Chase Sapphire Preferred as I am not sure the Duty Free Store will be considered “Travel”.

If you think it makes sense to consider another credit card for this purchase, I would welcome your suggestions as well.”

First off, unfortunately Duty Free purchases do not qualify as travel expenses under the Sapphire Preferred 2x points on travel (but if anyone has had a different experience, please comment). To maximize your points on this purchase I’d keep several things in mind:

Foreign Transaction Fees
If you are making the purchase at a Duty Free store outside the US, it’s critical that you use a card that has no foreign transaction fees. The only one you have now that waives these fees is the Sapphire Preferred. If you end up using a card that has these fees, you’ll likely be paying between $459 and $510 in fees on the purchase, likely negating the value of any miles/points earned. If you are purchasing within the US, you can disregard this warning! Check out this post for a rundown on credit cards that don’t charge these fees.

Spending Threshold Bonuses
Many credit cards offer fantastic perks when you meet certain spending thresholds, and with a charge like $17,000, you’d already be pretty close to meeting several of those. Some to keep in mind:

Hyatt recently announced a slew of new perks for the Hyatt Visa that include 2 stays / 5 night credits toward elite status when you spend $20,000 annually, and an additional 3 stay / 5 night credits when you spend $40,000 annually. 

Citi Hilton HHonors Reserve cardholders who spend $10,000 annually get an anniversary free weekend-night certificate as well that can be used at any Hilton property, adding potentially a lot more value to having this card in your wallet if you spend that night at one of the chain’s high-end properties around the world. Cardholders also receive Diamond status when they spend $40,000 annually, conferring a host of additional perks including a 50% bonus on all base points, free internet, a dedicated reservations center, room upgrades, access to the executive club lounge regardless of whether they are upgraded to a club room, 1,000 bonus HHonors points, complimentary continental breakfast daily for two, and other welcome amenities. Those who carry the Hilton Amex get complimentary silver status, but can earn gold status by spending $20,000 annually as well.

You can get Starwood Gold Status when you spend $30,000 annually on the Starwood Amex, and one of the benefits of the Ritz-Carlton Rewards Credit Card is that you get  Gold status every year you spend $10,000 or more on the card.

In terms of airline cards, many offer companion tickets for meeting spend thresholds. For instance, one of the main benefits of the Chase British Airways Visa is the “Travel Together” companion ticket you get when you spend $30,000 within a calendar year.

There are also tons of bonus miles and even elite-qualifying miles to be had by meeting spend thresholds. For example, the Delta Reserve card comes with 10,000 MQM’s with the first purchase, an additional 15,000 MQM’s and 15,000 SkyMiles if a member hits $30,000 in spend within the calendar year, and an additional 15,000 MQM’s and 15,000 SkyMiles if they hit $60,000 in spend during the same calendar year.

So there are a lot of great opportunities to get extra perks out of your cards by meeting higher spending thresholds.

Spread the Sign-up Bonus Love
However, I’d encourage you to think a little more creatively in this instance and consider spreading out the entire expenditure over several cards so you can reap several lucrative sign-up bonuses at the same time.

It sounds like you already have the Sapphire Preferred, so to really maximize your points, you could get the Ink Bold (which has a 50,000-point bonus when you spend $10,000 in 3 months)- plus there are no foreign transaction fees. You could go a step further and buy gift cards at an office supply store and then use those gift cards to make the purchase. You’re looking at turning a 17,500 purchase into 87,500 Ultimate Rewards points- which is enough points for four nights at the Park Hyatt Maldives!

Another alternative is if you’re looking to top up your Amex Membership Rewards account would be to apply for the current Business Gold Rewards card offer with a 50,000-point sign-up bonus when you spend $5,000 within 3 months.

If you value United lounge access, the new United Club card might make sense as well. The only sign-up bonus right now is a $95 statement credit with first purchase, but the advantage of this card is that you earn 1.5 United miles on everyday purchases, meaning your $17,000 purchase would net at least 25,500 United miles.

The bottom line is, if you already know you have the spending to meet minimum requirements, there are tons of great ways to use that spending to your advantage – whether it’s by meeting thresholds for added perks like even more bonus miles and elite-qualifying miles, or to think about what the most lucrative sign-up bonuses that interest you the most for your upcoming award travel and to spread out a large charge like this one intelligently and reap the most points possible out of this charge.

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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  • Concerned reader

    Way to cram as many referral links into one post as possible.. This blog has gone downhill.

  • Josh MacDonald

    Curious about the Ink Bold offer. I haven’t seen the 50k in for 5k spend and then another 50k for 10k? so 100k UR for 15k in a year? I just got in on the 50k UR for 10K spend. This is a far better deal.

  • Rebecca

    Your Ink Bold links goes to an offer for 25k points after first purchase and another 25k after $10k in purchases. I haven’t see the 50k after $5k spend in 3 months in a while.

  • Lark


    I do not have a great method of tracking annual spend across various cards to make sure I put my spending where I should to capture teh annual spend bonuses.

    I am pretty good at tracking initial spend to receive sign up bonuses – it’s easy because I usually have only one card at most that I have to meet initial spend on in a certain time.

    But I’ve applied for my cards at various times of year, so it becomes more difficult for me to track annual spend with all of their different start / end dates for annual spend.

    What do you use to track annual spend? Excel? Do you have a format of a spreadsheet you recommend?

    Whenever a big purchase comes along, I stress out trying to easily figure out which card I should put it on! :)

    Thanks for any insights,


    PS Do you have a consolidated list of cards by their annual spend bonus? You mention Hyatt, there is Hilton, Ritz/Marriott where you can earn status with certain annual spend. Fairmont you can earn stay credit and a free night. SPG stay credit. And some have a points bonus for meeting an annual spend too, right? I know I can look at each of your card listings to learn this, just wondering if you have consolidated this in one place.

  • Mike

    That’s fine. One less complainer to read through when I read this blog. Good riddance.

  • thepointsguy

    Sorry- fixed. It is 10k in 3

  • Grace

    I think you are awesome so I say damn the begrudgers! And also, they must think you are too since they make a point of looking up your blog!!! :-)

  • Lively

    It’s a big Internet. If you don’t like it here…..

  • Lively

    I use an Excel spreadsheet. I have credit card name on the left hand side. On top I have Amount spent and date paid. Then I have a formula adding up the expenses for the year. This works for me.

  • Curtjenny

    1 thing that no one seems to have mentioned is that you should also be careful about whethrr you need extended warranty or purchase protection. Many cards offer enhanced protections like this, and they might be more valuable than a few extra miles.

  • Anon

    The merchant may also be willing to split the charge across multiple cards. I did this for my wife’s orthodontic work to meet minimum spends on three cards.

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