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If you’re new to this hobby, one of the most important decisions you’ll have to make is choosing which travel rewards credit cards to carry in your wallet. Very few travelers can rack up thousands of points and miles through travel alone, so your everyday spending habits can play a critical role in boosting your account balances. This holds true even if you select a single card to use on a regular basis. Today I’ll continue my series that looks at just how lucrative this strategy can be.
In previous posts, I’ve looked at a variety of cards like the Chase Sapphire Reserve, the SPG American Express, the Southwest Premier Card, the Amex EveryDay Preferred Card and the Alaska Visa Card. Today I’ll focus on a relatively new card to the market and analyze how rewarding the Ink Business Preferred Credit Card can be in just your first year of cardmembership.
Sign-Up Bonus and Benefits
The card is currently offering a sign-up bonus of 80,000 Ultimate Rewards points after you spend $5,000 on purchases within the first three months. This bonus is worth $1,760 based on TPG’s most recent valuations thanks to the array of valuable ways to redeem Ultimate Rewards points, especially through transfers to partners like Hyatt and United. The card also offers 3x points on the first $150,000 in combined purchases on travel, shipping, internet/cable/phone and advertising with social media sites and search engines.
The card does carry a $95 annual fee, but there are a few other attractive perks that provide value for cardholders:
- Cell phone protection: When you charge your monthly bill to the card, you and eligible employees on the plan receive up to $600 per claim for damage or theft.
- Primary car rental coverage: If you rent a car for business purposes, you’re covered for theft and damages in the US and most countries around the world without filing a claim with your own insurance company.
- No foreign transaction fees
For a complete analysis of the card and its perks, check out my Credit Card Review: Ink Business Preferred Card.
So if you open the Ink Business 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 the most recent year available (2016) to estimate what an “average” household would spend (and thus earn) on the card in one year.
In doing so, I made the following assumptions:
- Only the “Other lodging” category under “Shelter” can easily be paid with a credit card (since you’ll pay a fee for paying most mortgage and rent payments with credit cards).
- The “Vehicle purchases” category under “Transportation” can’t be paid with a credit card, but all other transportation expenses can.
- 50% of the “Healthcare” category consists of premiums via payroll deductions and thus can’t be paid with a credit card.
- All “Personal insurance and pensions” expenditures can’t be paid with a credit card.
- All other expenses (including “Entertainment” and “Education”) can be paid with a credit card.
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 cardmembership translate to Membership Rewards points:
|Food at home||$4,049||1 point/$||4,049|
|Food away from home||$3,154||1 point/$||3,154|
|Alcoholic beverages||$484||1 point/$||484|
|Housing (other lodging)||$798||1 point/$||798|
|Phone services||$1,431||3 points/$||4,293|
|Utilities, fuels and public services||$2,453||1 point/$||2,453|
|Household operations||$1,384||1 point/$||1,384|
|Housekeeping supplies||$660||1 point/$||660|
|Household furnishings and equipment||$1,829||1 point/$||1,829|
|Apparel and services||$1,803||1 point/$||1,803|
|Transportation (gasoline)||$1,909||1 point/$||1,909|
|Other vehicle expenses||$2,884||1 point/$||2,884|
|Public and other transportation||$623||3 points/$||1,869|
|All other expenses||$6,363||1 point/$||6,363|
As you can see, the “average” American consumer would earn over 116,000 Ultimate Rewards points in the first year of using the Ink Business Preferred Credit Card. Not too shabby!
What does this get you?
Of course, earning points is one thing, but knowing how to redeem them for maximum value is a completely different story. Fortunately, the Ultimate Rewards program has a variety of valuable redemptions, most of which involve transferring to the program’s partners.
Here’s a sample of what you can get from one year of using the Ink Business Preferred:
1. Up to Four Round-Trip Economy Tickets to Hawaii
Planning a trip using points and miles to the Aloha State isn’t always the easiest goal in this hobby. However, you have a couple of options at your disposal through the Ultimate Rewards program. My personal favorite is for West Coast residents. By transferring points to British Airways, you can take advantage of the carrier’s distance-based award chart to book tickets from several gateways to Hawaii for just 25,000 Avios per person, including Los Angeles (LAX) and Phoenix (PHX) on American or San Diego (SAN), Oakland (OAK), Portland (PDX) and Seattle (SEA) on Alaska. The year’s worth of points from the Ink Business Preferred would get you four round-trip tickets, and you’d even have over 16,000 Ultimate Rewards points leftover!
For those readers on the East Coast, you also have options to redeem this haul of points for up to four tickets to Hawaii by transferring to Korean SkyPass or Flying Blue, the loyalty program of Air France and KLM. Since the carriers are a part of SkyTeam, you can redeem their miles on Delta flights, assuming you can find availability. Korean has the slightly better rate at 25,000 miles per person for a round-trip economy award ticket, though the carrier’s booking process can be a bit cumbersome. Flying Blue allows these awards to be booked online, though you’ll need to redeem 30,000 miles for the benefit.
Of course, you could also book just one or two tickets and have money left over to cover your hotel stay through the next option…
2. Up to 23 Free Nights in Hyatt Properties
Another terrific redemption involves transferring your points to World of Hyatt. The program has very reasonable redemption rates that start at just 5,000 points per night for a Category 1 property, though even top-tier locations like the Park Hyatt Zurich would set you back just 30,000 points for a free night. Here’s a breakdown of how many nights you could get across the program’s property spectrum:
- Category 1 (5,000 points/night): 23 nights
- Category 2 (8,000 points/night): 14 nights
- Category 3 (12,000 points/night): 9 nights
- Category 4 (15,000 points/night): 7 nights
- Category 5 (20,000 points/night): 5 nights
- Category 6 (25,000 points/night): 4 nights
- Category 7 (30,000 points/night): 3 nights
I’m particularly intrigued by the option to book a week-long stay at a Category 4 property like the Andaz Peninsula Papagayo Resort in Costa Rica with a year’s worth of points from the Ink Business Preferred. A quick search of dates for this spring shows some rates at over $500 per night, giving you over $3,500 of value. Remember too that this doesn’t even consider the program’s Cash + Points option, so if you’re willing to spend some additional money out of pocket for your stays, you can extend the value of these earnings even further.
3. Round-Trip Business-Class Award Ticket to Europe on United
If you’re looking to get to Europe in an economical fashion, consider redeeming your haul of Ultimate Rewards points for a round-trip business-class flight on United. The carrier charges fewer miles for transatlantic flights on its own metal in premium classes compared to those on Star Alliance partners, so you’d need just 115,000 miles for an itinerary like this:
If you book on partners, the price would jump to 140,000 miles per person, so as long as you can find availability on United, that’s your best bet.
4. Two or Three Nights in New York City Plus Airfare From Multiple US Cities
A final redemption would be a trip that includes both flights and a hotel stay. If you’re looking for an “all-inclusive” trip like this, consider a weekend jaunt to the Big Apple. Once again, you have some options when it comes to this itinerary. For flights, one of the most economical options would be for those readers east of the Mississippi and would again utilize British Airways. Flights of 1,151 miles or less in distance require just 7,500 Avios each way, so if you can find availability on American, you and your spouse/significant other/friend could fly there and back from cities like Charlotte (CLT), Miami (MIA) and Chicago-O’Hare (ORD) for a total of 30,000 points.
You also could consider transferring to Southwest Rapid Rewards, as the carrier serves both New York-LaGuardia (LGA) and Newark (EWR). Even though Southwest follows a revenue-based redemption scheme, you can still get some great value on Wanna Get Away fares. At a very quick glance, I was able to find round-trip tickets from Orlando (MCO) to Newark (EWR) for a random weekend in the spring for just 9,750 points apiece.
For hotels, you could always look at spending a couple of nights at the Andaz Fifth Avenue or Andaz Wall Street, two of my favorite Hyatt properties that require just 25,000 points for a free night (a couple of other Hyatt hotels in Manhattan are just 20,000 points per night). However, you also have the option of transferring points to Marriott, which can unlock additional redemptions through either Marriott Rewards or Starwood Preferred Guest (thanks to the impending merger and the ability to transfer points freely between the two programs). While I’d recommend going the Hyatt route, it’s always nice to have alternatives, depending on where you’d like to stay.
I’m a huge fan of the Ultimate Rewards program and have gotten a ton of value from my redemptions over the years. The Ink Business Preferred Credit Card is the newest option for earning these points, and by opening and using the card exclusively for just a single year, you’ll unlock a wide variety of valuable rewards. Note that even though the card is clearly targeted for small business owners, you may be able to get approved as a sole proprietorship by using your Social Security number, though remember that the card is subject to Chase’s notorious 5/24 rule.
Keep in mind too that the above calculation may be even a bit too conservative:
- The calculation assumes that you’re spending what an average consumer would. If you typically spend more in a year or have more purchases in different bonus categories, then your earnings will be even higher.
- The calculation assumes that you don’t make any purchases through an online shopping portal. The Ultimate Rewards shopping portal allows you to earn bonus points at close to 300 online retailers, a nice way to boost your earnings even more.
- The calculation assumes that you only open one card. There are many others that will earn you bonus Ultimate Rewards points in certain categories, including the two that make up TPG’s trifecta of cards: Chase Sapphire Reserve and Chase Freedom Unlimited. These cards (and others like them) can be used right alongside the Ink Business Preferred to boost your balances even higher.
Regardless of these last few details, I hope this post has demonstrated just how rewarding a single travel rewards credit card can be, especially in the first year.
How would you redeem one year of Ultimate Rewards points from the Ink Business Preferred?
Know before you go.
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WELCOME OFFER: 80,000 Points
TPG'S BONUS VALUATION: $1,600
CARD HIGHLIGHTS: 3 points per dollar on the first $150,000 in combined spending on travel, shipping purchases, internet, cable and phone services, and advertising purchases made with social media sites and search engines.
- Earn 80,000 bonus points after you spend $5,000 on purchases in the first 3 months from account opening. That's $1,000 toward travel when you redeem through Chase Ultimate Rewards®
- Earn 3 points per $1 on the first $150,000 spent on travel and select business categories each account anniversary year
- Earn 1 point per $1 on all other purchases–with no limit to the amount you can earn
- Points are worth 25% more when you redeem for travel through Chase Ultimate Rewards
- Redeem points for travel, cash back, gift cards and more – your points don't expire as long as your account is open
- No foreign transaction fees
- Employee cards at no additional cost
- $95 Annual Fee