When Is It Worth It to Go After Credit Card Tiered Spending Bonuses?
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One trend that’s emerged recently is a shift in how credit card issuers are working to attract customers. Instead of the standard welcome offer — spend X amount in the first 3 months, earn Y amount of points, we’re seeing more tiered spending bonuses that require six to 12 months of spending, and more cards starting to reward customers for continuing to spend large amounts even after they’ve earned the initial welcome bonus.
Many of these offers require tens of thousands of dollars of spending a year to unlock bonus miles, free hotel nights or to give you a jump-start toward qualifying for the next level of elite status. Of course, this comes with an opportunity cost. At the very least, by putting a large amount of spending on a co-branded airline or hotel card you’ll end up with a lower earning rate on everyday spending, which will likely make up the bulk of these large bonuses.
Depending on how much you’re able to charge to your credit cards each year, you might even have to pass on other new credit card offers in order to reach these goals. For most people, spending $50,000 a year on a single credit card requires 12 months of careful planning and tracking. Once you’re committed to this goal, it can be hard to abandon it even if a better deal comes up.
Today we’ll take a look at the two different types of high spending offers you’ll find on many co-branded cards — those that help with elite status and those that give free points or hotel nights — and talk about how you can evaluate if these deals make sense for you.
Spend Your Way To Elite Status
Let’s start by taking a look at the different co-branded hotel credit cards that help you earn elite status with high annual spending. For the purpose of this post, I’m ignoring cards like the Hilton Honors American Express Aspire Card that come with automatic top-tier Diamond elite status, and focusing on cards that require you to spend to earn the benefit.
|Credit Card||Current Welcome Bonus||Annual Fee||Annual Spending Threshold||Elite Status Spending Benefits|
|Marriott Bonvoy Brilliant™ American Express® Card||Earn 100,000 bonus Marriott Bonvoy points after you use your new Card to make $5,000 in purchases within the first 3 months.||$450 (See Rates & Fees)||$75,000||Earn Marriott Platinum elite status|
|Marriott Bonvoy Boundless Credit Card||Earn 75,000 Bonus Points after you spend $3,000 on purchases in the first 3 months from account opening.||$95||$35,000||Earn Marriott Gold elite status|
|Hilton Honors American Express Ascend Card||Earn 125,000 Hilton points after spending $2,000 in the first 3 months||$95 (see rates & fees)||$40,000||Earn Hilton Diamond status|
|The World Of Hyatt Credit Card||Earn up to 50,000 Hyatt Points: 25,000 after you spend $3,000 on purchases in the first 3 months and an additional 25,000 points after spending $6,000 total in the first 6 months||$95||$5,000||Earn 2 qualifying night credits toward elite status for every $5,000 spent on your card|
With the exception of the World of Hyatt Credit Card, the elite status offers generally require you to spend a set amount of money each year and earn a higher elite status.
I’ve explained before why I don’t think anyone should bother spending $75,000 on the Marriott Bonvoy Brilliant card to earn Marriott Platinum status. If you hold any of the Marriott Bonvoy cards you’ll get 15 elite night credits each year (you only get one set of 15 credits no matter how many Bonvoy cards you have), which means qualifying for Platinum status only requires you to spend 35 more nights in a hotel each year. Spending $75,000 on a single card has a huge opportunity cost, and if you aren’t staying enough to qualify for Platinum organically, you’ll have a tough time getting enough value out of your new elite status to justify the cost.
The same argument applies to the entry-level Marriott Bonvoy credit cards, which let you earn Gold status by spending $35,000 a year. Gold status isn’t worth much at all in the new Bonvoy program — TPG editor Nick Ewen values it at $845 a year assuming you earn it through actual hotel stays. Gold status doesn’t include suite upgrades, free breakfast or any kind of lounge access, and the 25% points bonus isn’t all that much.
Gold status is earned after 25 nights, which means that if you hold a Marriott Bonvoy credit card you only need 10 hotel nights (plus your 15 elite night credits) to earn it. If you aren’t even staying 10 nights a year at a Marriott property, there’s no reason to pursue this offer. Instead, you might consider applying for the Platinum Card® from American Express, which offers complimentary Gold status at both Marriott and Hilton.
Spending your way to Hilton Diamond status with the Ascend isn’t the worst deal ever, but it doesn’t stack up to the Hilton Aspire card, which pays for itself more than any premium credit card on the market. The Aspire’s $450 annual fee (See Rates & Fees) is more than covered by a $250 annual airline fee credit, a $250 annual Hilton resort statement credit at participating hotels and a $100 property credit on eligible stays of two or more nights at Waldorf Astoria and Conrad hotels. Of course the Aspire also comes with automatic Diamond status with no spending requirement to worry about, so if you’re gunning for Hilton status this is hands down the best option to consider.
The World of Hyatt card is interesting in that it’s up to you how much you want to spend to level up your elite status. I like this option. If you find yourself ending the year at 58 nights you can spend $5,000 to quickly qualify for top-tier Globalist status, instead of spending an obscene amount to earn all 60 elite night credits ($150,000 if you’re starting from scratch).
Airline credit cards offer a shortcut to elite status in one of two ways, generally by offering additional elite-qualifying miles after spending a certain amount, or by waiving that pesky revenue requirement (EQDs/PQDs/MQDs) for high spenders. Some cards even offer elite-qualifying bonuses as part of their welcome bonuses, but we won’t focus on that here. Unfortunately, American Airlines recently cut elite status earning from credit cards, but United and Delta still offer it in some form. Here are the different options for you to consider:
|Credit Card||Current Welcome Bonus||Annual Fee||Annual Spending Threshold||Elite Status Benefits for Meeting Spending Threshold|
|United Explorer Card||Earn 60,000 bonus miles after you spend $3,000 on purchases in the first 3 months your account is open.||$95 (waived first year)||$25,000||Earn 500 Premier-Qualifying Points by spending $12,000 in a calendar year, up to $24,000 in spending and 1,000 PQPs. Additionally, bonus PQPs will only apply up to Premier Platinum (not 1K).|
|Platinum Delta SkyMiles® Credit Card from American Express||Earn 5,000 Medallion® Qualification Miles (MQMs) and 35,000 bonus miles after you spend $1,000 in purchases on your new Card in your first 3 months and a $100 Statement Credit after you make a Delta purchase with your new Card within your first 3 months. Terms Apply.||$195 ($250 if application is received on or after 1/30/2020) (see rates & fees)||$25,000 (spend an additional $25,000 and get the bonus a second time)||Earn 10,000 MQMs, 10,000 bonus miles, and an MQD waiver for Silver, Gold and Platinum Medallion status|
|Delta Reserve® Credit Card from American Express||40,000 miles and 10,000 MQMs after you spend $3,000 in purchases in the first 3 months. Terms Apply.||$450 ($550 if application is received on or after 1/30/2020) (see rates & fees)||$30,000 (spend an additional $30,000 and get the bonus a second time)||Earn 15,000 MQMs, 15,000 bonus miles, and (after $25,000 in spending) an MQD waiver for Silver, Gold and Platinum Medallion status|
|Citi / AAdvantage Executive World Elite Mastercard||Earn 50,000 miles after spending $5,000 in the first 3 months.||$450||$40,000||Earn 10,000 EQMs|
|JetBlue Plus Card||Earn 40,000 points after spending $1,000 in the first 90 days and paying your annual fee.||$99||$50,000||JetBlue Mosaic status|
Even after Delta jacked the spending requirement for a Diamond Medallion MQD waiver all the way up to $250,000, this type of spending bonus remains incredibly lucrative. Obviously airlines want to reward their most valuable (not just their most frequent) customers with elite status. If you’re a savvy traveler redeeming miles and searching for low fares, you might spend a lot of time flying with a certain airline, but never spend enough to qualify for elite status. Using a co-branded credit card to get an MQD or PQD waiver can be a great way to make sure you earn the benefits commensurate with your amount of travel, as opposed to your out-of-pocket spending with a single airline.
Bonus Points and Miles for Spending
While a number of credit cards offer limited-time spending bonuses, many also offer ongoing bonuses that let you earn extra points and miles or other benefits year after year. As you’ll see, these offers are almost entirely for free nights.
|Credit Card||Current Welcome Bonus||Annual Fee||Annual Spending Threshold||Spending Bonus Offer|
|Marriott Bonvoy Business™ American Express® Card||75,000 bonus Marriott Bonvoy points after you use your new Card to make $3,000 in purchases within the first 3 months. Terms Apply.||$125 (see rates & fees)||$60,000||One additional free night certificate worth up to 35,000 points|
|The World Of Hyatt Credit Card||Earn up to 50,000 Hyatt points: 25,000 after you spend $3,000 on purchases in the first 3 months and an additional 25,000 points after spending $6,000 total in the first 6 months||$95||$15,000||One free night valid at Category 1-4 hotels|
|Hilton Honors American Express Ascend Card||Earn 125,000 Hilton points after spending $2,000 in the first 3 months. Terms Apply.||$95||$15,000||One free weekend night certificate|
Hotel free night certificates have the power to be incredibly valuable, especially the Hilton weekend free night certificates that aren’t capped. This means you can use them at any property in the portfolio that has award space, including ultra-luxurious hotels like the Waldorf Astoria Maldives or the iconic Waldorf Astoria New York.
While the Hyatt free night is capped at a Category 4 property, that’s still several hundred dollars of value and $15,000 a year isn’t an outrageous spend requirement. Spending for a second night on the Bonvoy Business Amex is much higher at $60,000, but I still think it can be worth it especially for Marriott elites. I’ve found Marriott’s Category 5 to be jam-packed with valuable hotels, including the St. Regis Beijing, Sheraton Sydney and Mira Moon Hong Kong, a member of Design hotels and one of my all time favorite hotel stays. I feel confident that I can get $250-$300 in value from a 35,000-point free night certificate, so this is a path I plan on pursuing.
While both the Delta Reserve and Delta Platinum offer bonus miles after hitting certain thresholds, the appeal of those offers are the bonus MQMs you can earn. Spending that much just for extra Delta miles is not a good value proposition, especially when you can top off your SkyMiles account by transferring 1:1 from Amex instead.
General Tips for Evaluating Spending Offers
If you survived that deluge of information and made it all the way to the end, kudos to you! While I’ve picked apart a few of these offers individually, there are a couple of general questions you can ask yourself to help decide if one of these “spend more, earn more” offers is right for you.
The first question is what is your opportunity cost of going after this deal? There are two important pieces to consider here: What other card would you be putting this spend on, and would you earn more points (via bonus categories) or more valuable points (transferable points instead of airline miles). The second half is whether going after this offer will prevent you from meeting the minimum spend requirement on new credit cards this year, in which case your opportunity cost shoots up by hundreds or even thousands of dollars.
If you’re looking to spend your way to elite status, the next question to ask yourself is how much value you can get from it if you don’t travel enough to earn it organically. You can look at Nick Ewen’s valuations for any hotel or airline status to get a baseline idea, but remember his numbers are based on the assumption that you travel 20% more than needed to qualify for that status. If you’re traveling much, much less, your value goes down accordingly. The exception here would be airline PQD or MQD waivers, where you might travel very often without spending much money. In this case, leveraging your credit card spending to earn elite status can be a great decision.
Last but not least, before embarking on this journey you should make sure you can responsibly spend this large amount. If you miss even a single payment or carry a balance and rack up interest, the damage to your credit score and the massive financial costs will outweigh any rewards you earn. If you’re planning to spend $60,000 a year on a Bonvoy Business Amex to earn a second free night, you should have a clear road map written out for where that $5,000 a month is going to come from and any large purchases that might help you get there faster.
We’re seeing some cards shift away from large upfront bonuses to instead offer greater value over the long term for high-spending customers. Learning how to evaluate these bonuses and use them to your advantage, is an incredibly important skill. While TPG himself currently has about 20 credit cards, some people might be better off sticking to a smaller number and spending more on them to unlock bonus points or elite status benefits.
For rates and fees of the Bonvoy Brilliant, please click here.
For rates and fees of the Hilton Ascend, please click here
For rates and fees of the Hilton Aspire, please click here.
For rates and fees of the Platinum Delta SkyMiles, please click here
For rates and fees of the Delta Reserve, please click here.
For rates and fees of the Bonvoy Business, please click here.