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Update: Some offers mentioned below are no longer available – The Amex EveryDay Preferred Credit Card from American Express, Citi ThankYou Premier Card
I often discuss how helpful credit card sign-up bonuses and spending can be for earning award travel, but some readers are intimidated by the idea of opening new accounts. To help you get started, TPG Senior Points & Miles Correspondent Nick Ewen demonstrates how much a single card can offer you in travel rewards.
Award travel can be a daunting hobby to take up, especially when it comes to credit cards. If you don’t travel regularly for work, your everyday spending habits play a huge role in earning (and then redeeming) points and miles. However, with so many options, you may not know where to start. In this post, I’ll continue my series looking at how easy it is to earn rewards by opening and using even a single card for one year. In previous posts, I’ve looked at the Chase Sapphire Preferred Card, the Citi Hilton HHonors Reserve Card, the Chase Ink Plus Business Card, the Citi ThankYou Premier Card, the Wyndham Rewards Visa Card, the Marriott Rewards Premier Card, the SPG American Express and the Southwest Premier Card. However, a noticeable gap in this series has been cards that accrue Membership Rewards points. Today, I’ll remedy that and look at a card with some valuable bonus category potential: the Amex EveryDay Preferred Credit Card from American Express.
Sign-up Bonus and Benefits
The card is currently offering a sign-up bonus of 15,000 Membership Rewards points after you use your new card to make $1,000 in purchases within the first three months. While this bonus is worth just $300 based on TPG’s most recent valuations, the other benefits can make this a lucrative option to use as your primary credit card:
- Earn 50% more points: Make 30 or more purchases with your Card in a billing period and get 50% extra points on those purchases less returns and credits.
- 3x points at US supermarkets on up to $6,000 per year in purchases (then 1x); 2x points at US gas stations; 1x points on other purchases.
- You can use Membership Rewards® Pay with Points to pay for all or part of your flight, hotel booked and paid in advance, vacation or cruise booking through amextravel.com.
The card does come with a $95 annual fee that isn’t waived for the first year.
So if you open the Amex EveryDay Preferred, earn the sign-up bonus and use the card exclusively for the first year, where does that leave you? Obviously, the answer depends on your spending patterns, so for this analysis I used consumer-expenditure data from the Bureau of Labor Statistics for 2013 and 2014 to estimate what an “average” household would spend (and thus earn) on the SPG Amex card in one year.
In doing so, I made the following assumptions:
- 60% of “Housing” expenditures cover mortgages or rent, and thus can’t be paid with a credit card (unless you’re willing to pay fees by using a service like Venmo or ChargeSmart).
- “Transportation” expenditures are split evenly between car payments (which typically can’t be paid with a credit card), gasoline and other transportation costs (parking, tolls, train/subway/bus tickets, etc.).
- All “Healthcare” and “Other” expenditures can be paid with a credit card.
- All “Personal insurance and pensions” expenditures can’t be paid with a credit card.
- Because this is your primary credit card, you make at least 30 transactions on the card every month.
Again, your situation may differ substantially, so feel free to adjust these assumptions in order to calculate your own earning potential.
Here’s a quick table that shows how these spending patterns in the first year of card membership translate to Membership Rewards points:
|Food – At home||$3,977||3 points/$||11,931|
|Food – Away from home||$2,625||1 point/$||2,625|
|Apparel and services||$1,604||1 point/$||1,604|
|Transportation (gasoline)||$3,001||2 points/$||6,002|
|Transportation (other)||$3,001||1 point/$||3,001|
|All other expenditures||$3,267||1 point/$||3,267|
|50% bonus on purchases||–||2 points/$||20,701|
As you can see, the “average” American consumer would earn 77,103 Membership Rewards points in the first year. Not too shabby!
What Does This Get You?
Of course, earning points is one thing; knowing how to redeem them for maximum value is a completely different story. Fortunately, the Membership Rewards program has a variety of valuable redemptions. Here’s a sample of what you can get from one year of using the Amex EveryDay Preferred:
1. One-way Singapore Suites flight
One of the most sought-after awards in the frequent flyer world is Singapore Suites class, available exclusively on the carrier’s A380. Singapore currently flies this massive plane from New York-JFK to Frankfurt (continuing onto Singapore) and from Los Angeles to Tokyo-Narita (also continuing onto Singapore). Unfortunately, Singapore Airlines typically doesn’t open up award space in first class to partners. However, the KrisFlyer program is a 1:1 transfer partner of Membership Rewards, and a one-way flight on either of these routes is within reach using this haul of points from the Amex EveryDay Preferred:
- JFK-FRA: 57,375 miles
- LAX-NRT: 74,375 miles
Of course there are many other routes where you can snag these awards on the A380. For more details on these options (and tips on how to find availability), check out Eric Rosen’s post on booking Singapore Suites Class with miles.
2. Two round-trip Virgin Atlantic flights to (or from) London
Traveling across the ocean in business or first class is obviously appealing to many, but others simply want to keep money in their pockets and extend the value of their miles even further. One way to do this with a year of spending on the Amex EveryDay Preferred card is by transferring your Membership Rewards to Virgin Atlantic Flying Club and locking in round-trip economy tickets from the Northeast or Midwest to London. Virgin currently charges just 35,000 miles per person for round-trip coach awards from the following gateways:
- New York (both JFK and Newark)
- Washington, DC
The carrier is also currently offering a 20% discount on round-trip economy awards from the US to the UK, which opens up additional departure cities like Miami, Los Angeles and San Francisco. This isn’t quite as lucrative as the award sale the carrier ran in May but still represents a nice way to get to London (one of my favorite cities in the world)
In addition, if you happen to have Diamond of Platinum Medallion status with Delta, you can actually enjoy access to Virgin Atlantic’s Clubhouses on these flights, even though you’re booked in economy (Gold Medallion members only have access to the US locations). TPG visited the Clubhouse for the first time earlier this year, and I agree with his assessment that it’s one of the best lounges out there.
Just be aware that even economy award tickets on Virgin Atlantic from the US to the UK will set you back ~$500 per person in taxes and fees due to the carrier’s unfortunate fuel surcharges. Nevertheless, availability tends to be solid on these routes, so it’s a great way to cross the pond.
3. Up to 19 one-way award tickets using British Airways Avios
Another potentially lucrative transfer partner with the Membership Rewards program is British Airways. Even though the Executive Club program just underwent a devaluation in April, there are still some solid redemptions to be had using the carrier’s distance-based award chart. For example, one-way short-haul flights of less than 651 miles are just 4,000 – 4,500 Avios (depending on whether your travel date is off-peak or peak season), so this haul of Membership Rewards points could get you 19 of these award tickets.
Unfortunately, earlier this year American Express announced that it would be lowering the transfer rate for converting Membership Rewards points to British Airways Avios by 20%, dropping the potential one-way redemptions to just 15 flights. However, Amex has offered transfer bonuses for British Airways in the past, so you may still be able to get some great value out of this partnership, even with the lower transfer rate (which doesn’t go into effect until October 1, 2015).
4. One-way Star Alliance first class to (or from) Europe using Aeroplan Miles
A final redemption that is within reach is a one-way first class flight on a Star Alliance carrier from the US or Canada to Europe using Aeroplan miles, also a 1:1 transfer partner of the Membership Rewards program. Aeroplan charges just 62,500 miles for this one-way ticket to Western and Central Europe (Eastern Europe would also be available at 72,500 miles). TPG used this exact redemption to fly from Washington to Madrid via Frankfurt in Lufthansa first class earlier this year. Aeroplan does add $400-$500 in fuel surcharges on these award tickets, but it’s a significantly lower outlay of miles than United’s 110,000 miles for the same redemption.
The Amex EveryDay Preferred Credit Card from American Express was a great boost to the Membership Rewards portfolio of credit cards when it was added last year. While I’d love to see a higher sign-up bonus on the card, it still offers some valuable category bonuses (especially at grocery stores and gas stations) and the card did very well in Jason Steele’s comparison to the Chase Sapphire Preferred Card. In addition, keep in mind that the above calculations may be too conservative:
- The calculation assumes that you’re the average consumer. If you typically spend more in a year, then your earnings will be even higher.
- The calculation assumes that you only open one card. Other travel rewards credit cards with terrific sign-up bonuses (like the Citi ThankYou Premier Card or the Starwood Preferred Guest Credit Card from American Express) can be opened and used alongside the Amex EveryDay Preferred for even more earning potential.
These items notwithstanding, I hope I’ve illustrated that one card (especially in the first year) can open up a wealth of redemption possibilities.
How would you redeem one year of points from the Amex EveryDay Preferred Credit Card?