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

Update: Some offers mentioned below are no longer available. View the current offers here.

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.