Getting The Most Rewards For Your Minimum Spend

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TPG contributor Jason Steele comes back this week to analyze minimum spend.

Perhaps we are living in the golden age of credit card rewards, where banks are eager to offer us so many valuable points and miles just for giving them a chance to earn our business. Nevertheless, most of these offers require a significant amount of spending (often referred to as the “minimum spend”) in order to qualify for bonus offers.

Unless you normally spend a large amount for your household or business, you’ll need to weigh the rewards offered by each card against its spending requirement. If manufactured spending isn’t your thing, we thought it would be helpful to examine current credit card offers and analyze the rewards you’ll receive compared to how much you’d need to spend to earn them.

The chart below examines the value offered by various credit card signup bonuses. To calculate the total value, we considered the value of each type of point as rated by TPG in his monthly valuation series, and we factored in the cost of any annual fee charged in the first year of card membership. Finally, we divided the total value by the amount of required spend as a measure of which cards provide the most value for the least spending effort. Check the chart to see what we found.

Personal Cards Bonus Min. Spend Total Pts Point Value Total Value 1st Year Annual Fee Value After 1st Year Fee Value per $ /Spend
Chase
Freedom* 20,000 $500 20,500 2.1 $431 $0 $431 $0.86
Sapphire* 10,000 $500 10,500 2.1 $221 $0 $221 $0.44
Sapphire Preferred 40,000 $3,000 43,000 2.1 $903 $0 $903 $0.30
United Explorer 30,000 $1,000 31,000 1.4 $434 $0 $434 $0.43
British Airways 50,000 $2,000 52,500 1.7 $892.5 $95 $797.5 $0.40
Marriott Rewards 30,000 $1,000 31,000 0.5 $155 $0 $155 $0.16
Marriott Premier Rewards 50,000 $1,000 51,000 0.5 $255 $0 $255 $0.26
Southwest Premier Visa 50,000 $2,000 52,000 1.4 $728 $99 $629 $0.31
Southwest Plus Visa 50,000 $2,000 52,000 1.4 $728 $69 $659 $0.33
Ink Bold / Ink Plus 50,000 $5,000 55,000 2.1 $1,155 $0 $1,155 $0.23
Ink Cash* 20,000 $3,000 23,000 2.1 $483 $0 $483 $0.16
American Express
Amex Platinum 40,000 $3,000 43,000 1.7 $731 $450 $281 $0.09
Premier Rewards Gold 25,000 $2,000 27,000 1.7 $459 $0 $459 $0.23
Amex Gold 25,000 $2,000 27,000 1.7 $459 $0 $459 $0.23
Gold Delta SkyMiles 30,000 $1,000 31,000 1.2 $372 $0 $372 $0.37
Platinum Delta SkyMiles 35,000 $1,000 36,000 1.2 $432 $95*** $337 $0.34
Delta Reserve 10,000 $0 10,000 1.2 $120 $450 ($330) NA
Starwood Amex 30,000 $5,000 35,000 2.1 $735 $0 $735 $0.15
Amex EveryDay 10,000 $1,000 11,000 1.7 $187 $0 $187 $0.19
Amex EveryDay Preferred 15,000 $1,000 16,000 1.7 $272 $95 $177 $01.8
Hilton HHonors 40,000 $750 40,750 0.5 $204 $0 $204 $0.27
Hilton HHonors Surpass 60,000 $3,000 63,000 0.5 $315 $75 $240 $0.08
Capital One
Venture Rewards 20,000 $2,000 22,000 1.0 $220 $0 $220 $0.11
VentureOne 20,000 $2,000 22,000 1.0 $220 $0 $220 $0.11
Citi
Hilton HHonors 40,000 $1,000 41,000 0.5 $205 $0 $205 $0.21
Platinum Select/AAdvantage 30,000 $1,000 31,000 1.7 $527 $0 $527 $0.53
Executive AAdvantage** 100,000 $10,000 110,000 1.7 $1,870 $250** $1,620 $0.16
BarclayCard
Arrival Plus 40,000 $3,000 43,000 1.1 $473 $0 $473 $0.16
Arrival 20,000 $1,000 21,000 1.1 $231 $0 $231 $0.23
Frontier 40,000 $500 40,500 1.2 $486 $69 $417 $0.83
US Airways 40,000 $0 40,000 1.9 $760 $89 $671 NA

 * Assumes you can transfer to Ultimate Rewards account that allows point transfers.
**Net after $200 statement credit.
***Net after $100 statement credit.

Conclusions

If you look at the value of the points and miles earned, per dollar spent meeting the minimum spending requirement, the cards with the smallest bonuses are actually favored. For example, the Frontier Airlines Mastercard from Barclaycard offers 40,500 total points after spending just $500, which we value at $417 after factoring in the annual fee (which isn’t waived the first year). Likewise, the Chase Freedom offers 20,500 total points worth $431 (assuming you can transfer to an Ultimate Rewards account) after spending just $500.

Other standouts include the Citi Platinum Select AAdvantage (American Airlines) card which offers 30,000 miles for just $1,000 minimum spending. Essentially, cardholders receive 31x miles per dollar for the first $1,000, which compares quite favorably to the 11x earned by the Citi Executive cards with the 100k offer for spending $10,000.

Of course, there is also the US Airways card and the Delta SkyMiles Reserve card, both of which offer their sign up bonuses after cardholders make their first purchase.

On the other end of the spectrum are cards like the Amex Premier Rewards Gold which offers 25,000 Membership Rewards points after $2,000 spent within 3 months and the Business Gold Rewards Card  which also offers 25,000 points but cardholders must spend a considerable $5,000 on their card within the first 3 months. Even the current Starwood Preferred Guest Card from American Express that offers 30,000 bonus points (10,000 after first purchase and 20,000 after $5,000 spent within 6 months) only comes out to 7 points per dollar spent by the time the complete sign-up bonus is earned.

To be sure, there are many other criteria that you should consider before choosing your next card, for example, we didn’t take into account the cost of the annual fee. But if you have a limited capacity to meet minimum spending requirements, this is an important perspective to keep in mind.

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