TPG reader Laura sent in a question via my Facebook page this week about how to strategize some big annual credit card spending.
“What credit cards do you recommend for someone who spends over $100,000 a year on credit? Should I get a bunch of cards or stick with the top 3?”
You might not think this question applies to many people, but the thing is, you don’t have to be rich and spending extravagantly to rack up $100,000 or more on credit card spending every year. Many small business owners do so many times over each year simply in the course of doing business, so keep an eye on your spending and see if you’re getting anywhere near this mark.
Apart from that, if you’ve been taking advantage of American Express’s Bluebird card and loading it up with Vanilla Reloads you’ve purchased at CVS using a points-earning credit card then paying your bills such as utilities and mortgage with it or even withdrawing cash, remember you can load up to $5,000 a month in Vanilla Reloads on your Bluebird, so right there you are getting up to about $60,000 in potential spending. So there are lots of ways that you can reach the $100,000 spending level without actually buying anything you don’t need.
That said, there are a few points-earning credit cards out there specifically geared toward high spenders, and many of them are for those who have significant private banking funds with major banks.
The JP Morgan Chase Palladium card earns 35,000 Chase Ultimate Rewards points when you spend $100,000 annually. That’s not so bad given that I value those points at about 2 cents apiece. So I’d say that bonus is worth just about $700. However, the card does have a $595 annual fee, so much of that value is canceled out right there. You can get a card such as the Sapphire Preferred with a much lower annual fee ($95 waived the first year) and earn a 7% annual points dividend and 2X category spending bonuses on travel and dining, potentially earning a ton of bonus points right there.
The Morgan Stanley Platinum Amex currently offers a bonus of 50,000 Membership Rewards points after $1,000 spent within 3 months and offers a $500 credit when you spend $100,000 annually, though that’s not actually a huge reward at all given the spending required and the fact that the card carries a $450 annual fee (although you get all the perks of an Amex Platinum card).
The Goldman Sachs Private Banking American Express, which does not currently offer a sign-up bonus, awards cardholders with 40,000 Amex Membership Rewards points annually when they spend $100,000 per calendar year, though it does carry a $450 annual fee. You’ve also got to be banking a fair amount of funds with Goldman in order to even qualify for this piece of plastic.
Personally, I wouldn’t focus on just one card – you should always consider diversifying your points strategy and there are a lot of credit cards out there that offer calendar year spending bonuses.
I spend a lot on my cards every year. I always go for the 15,000-point bonus I get on my Amex Premier Rewards Gold card for spending $30,000 in a calendar year – plus I earn 3X points on airfare and 2X on gas and groceries so I can really maximize this card to up my Amex point balance.
Other cards will award you with elite status, such as the Delta Reserve card, which has a sign-up bonus of 10,000 Medallion Qualification Miles (MQM) upon your first purchase with the Card and SkyClub access, and when you spend $30,000 in a calendar year you can earn a Miles Boost of 15,000 MQM’s. Spend $60,000 in that same year and you can earn an additional 15,000 MQM’s. Those 30,000 MQM’s are not only for Medallion status but can be used as redeemable miles as well. So you’re getting a potential total of 40,000 MQM’s from this single card, which is more than enough for Silver Medallion status and almost all the way to Gold without even stepping on a plane.
The Citi Hilton HHonors Reserve card offers cardholders a free weekend night when spending $10,000 in a calendar year and Hilton Diamond status for spending $40,000 in a calendar year.
I would mix and match if I were you so that you can rack up a few different bonuses of credit card points, airline miles and hotel points so that when you get ready to redeem some awards you’ve got a nice diverse points portfolio from which to draw. Here are a few of the other cards out there with great spending bonuses that you can consider:
British Airways Visa Signature Card: Every calendar year you make $30,000 in purchases on your British Airways Visa Signature card, you will earn a Travel Together Ticket good for two years when you redeem for a flight on British Airways.
Platinum Delta SkyMiles Credit Card from American Express: Earn a Miles Boost of 10,000 Medallion Qualification Miles when you reach $25,000 in eligible purchases during a calendar year. Earn an additional Miles Boost of 10,000 MQMs when you reach $50,000 in eligible purchases the same calendar year.
Chase United MileagePlus Explorer Card: Earn 10,000 bonus redeemable miles each calendar year you spend at least $25,000 on your card.
United Club Card: Although it doesn’t offer a spending threshold bonus, this card earns 1.5 United miles (the most valuable frequent flyer miles in my opinion) per $1, so spending $100,000 = 150,000 United miles, worth about $3,000 by my estimate since I value United miles at about 2 cents apiece.
Southwest Airlines Rapid Rewards Premier Credit Card: Earn 1,500 Tier Qualifying Points for every $10,000 in purchases. Get up to 15,000 Tier Qualifying Points annually.
Starwood Preferred Guest Credit Card: Spend $30,000 in a calendar year and receive complimentary SPG Gold status.
US Bank FlexPerks Visa Signature: Earn 3,500 bonus FlexPoints each year when you spend $24,000 in net purchases per cardmember year.
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