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TPG reader Harrison tweeted me to ask:

@thepointsguy- “With the increased Delta MQD requirements, do you think it’s a good idea to spend $25,000 on a Delta Amex card for the waiver?”

In 2014, both United and Delta added a revenue requirement to elite status qualification, meaning that  customers would have to spend a certain amount on airfare in addition to flying a certain number of miles or segments in order to gain or maintain elite status. Unfortunately, those requirements will be even higher in 2015.

However, Delta offers an alternative to this spend requirement, which is to spend $25,000 on a Delta co-branded card. If you spend that much annually on credit cards, this is an easy way to opt out of the requirements, but there’s a significant opportunity cost.

On general spending (aside from Delta Air Lines purchases), these co-branded cards earn one Delta SkyMile per dollar spent. In my most recent Monthly Valuations of points and miles, I list Delta SkyMiles at 1.2 cents a piece, which makes them some of the least valuable points out there. Additionally, the SkyMiles program is changing this year to include new (higher) award tiers, which means you’ll most likely need more miles to book Delta award tickets than you did previously. Therefore, I anticipate that Delta miles will become even less valuable over time. Granted, there are also some positive changes (like allowing one-way awards), but Delta miles just aren’t worth much.

Every dollar you spend on a Delta co-branded card is a dollar you’re not spending on a card that earns more valuable points. For example, I value Starwood Preferred Guest points at 2.4 cents apiece—twice as much as Delta SkyMiles. The miles you earn by spending $25,000 on a Delta co-branded card are worth about $300, whereas that same spending applied to the Starwood Preferred Guest Credit Card from American Express would be worth $600. Starwood points transfer to Delta anyway, so even if you do value SkyMiles highly, you’ll get more of them by using the Starwood card and then transferring, especially since you get a 25% bonus for transferring 20,000 Starpoints.

Spending 25K on a Delta co-branded card has an opportunity cost: losing out on earning more flexible and more valuable points. Photo courtesy of Shutterstock.
Spending $25,000 on a Delta co-branded card will waive your MQD requirements, but there’s an opportunity cost. Photo courtesy of Shutterstock.

So as you can see, by spending so much on a Delta co-branded card, you’re losing out on the opportunity to earn more flexible and valuable points. If you can meet the Medallion Qualifying Dollar requirement by flying, that’s ideal. If not, then you’ll have to decide how much your elite benefits are worth.

In general, I would much rather put spending on a card that earns more flexible and valuable points in a program like SPG, Ultimate Rewards, or Amex Membership Rewards.

If you have any other questions, please tweet me @thepointsguy, message me on Facebook, or send me an email at info@thepointsguy.com.

Starwood Preferred Guest® Credit Card from American Express

The best sign-up bonus we've ever seen from the SPG Amex is here, for a limited time only. Earn up to 35,000 Starpoints which can be used for hotel redemption around the globe, transferred to over 30 airline partners, and even transfer from Starwood to Marriott Rewards at a 1:3 ratio.

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More Things to Know
  • Earn 25,000 bonus Starpoints® after you use your new Card to make $3,000 in purchases within the first 3 months.
  • Limited Time Offer- Earn an extra 10,000 bonus Starpoints® after you make an additional $2,000 in purchases within the first 6 months. Offer ends 4/5.
  • Earn 2 Starpoints® for each dollar of eligible purchases spent on the Card at participating SPG® & Marriott Rewards® hotels. Earn 1 Starpoint for all other purchases.
  • No Foreign Transaction Fees on International purchases.
  • Redeem Starpoints® at over 1,300 participating hotels and resorts in over 100 countries and for flights on more than 150 airlines with SPG flights, all with no blackout dates.
  • $0 introductory annual fee for the first year, then $95.
  • Terms Apply.
  • See Rates & Fees
Intro APR on Purchases
N/A
Regular APR
15.74%-19.74% Variable
Annual Fee
$0 introductory annual fee for the first year, then $95.
Balance Transfer Fee
3.00%
Recommended Credit
Excellent Credit
Terms and restrictions apply. See rates & fees.

Editorial Disclaimer: Opinions expressed here are author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

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