• http://milevalue.com/ MileValue

    Sounds like you’re basically advocating looking at Rebate Percentage instead of Absolute Value of sign up bonuses. This is clearly the best thing for small spenders to look at to maximize their spending. Big spenders should focus on Absolute Value. –> http://milevalue.com/the-two-ways-to-value-credit-card-sign-up-bonuses/

    • Julian

      Interesting way to look at it, Scott — thanks for sharing. I suppose though with the way things are right now with manufactured spend, almost anyone can be a Big Spender!

      • http://milevalue.com/ MileValue

        Anyone can be for sure. But most people don’t have the inclination or discipline to heavily manufacture spending, and that’s fine too. I personally do very little manufactured spending.

    • rick b

      I take advantage of my 10k miles after $25k spend on United biz card. It may not seem like much of a bonus, but every other day I stop at my local 7-11 and buy $1-1.5k of VGCs, so after less than a month, I buy 60k miles for about $260 in total cost of fees.

      • Julian

        But if you did this same spend on an Ink card, you’d get 2x for the gas category and wouldn’t have to worry about hitting $25,000. In fact, $25,000 in spend would get you 50,000 UR/United miles, versus just 35,000 United miles on the business card.

        • rick b

          Huh? United business card gives a 10k mile bonus for spending $25k AND 2x at gas stations, hence I get 60k for 25k spend. How would INK be better?

          • Julian

            Oops, sorry, didn’t notice you said the United business, not the personal. Yes, you’re right, Ink would be the same, though the points would be more flexible.

  • Vicar Borgio

    “Hey kid. Get out of my YARD. ” – By the way, that’s the “big spender” psychology you’re really yearning to understand. Mathematics won’t help you I’m afraid.

    • Julian

      That one made me laugh!

  • Rusty Longwood

    It’s a good analysis, but I’m not sure if the Avios card warrants stopping the spend entirely. Sure 3.75x is slightly less than a 5% category card, but it means the Avios is still the best card for non category spend up to 20k.

    • Julian

      Yep, it’s all about thinking of it as multipliers. If you’ve got a better multiplier on another card, you should use that card. Otherwise you can do the high Avios spend. But often there is a higher multiple option, at least in bonus categories.

  • Geoff

    On the PRG example you assumed one point per $$ spend. I would postulate that most people use this card for air, groceries and/or gas. If not, then I agree there would be very little use to the card. Yes, $30K spend must be achieved to unlock the bonus, but to counter the simplistic example you showed, if a person were to spend ALL $30k on bonus categories(like many do, even at the lowest 2X multiplier) then 45,000 points becomes at LEAST 75,000. If used for air exclusively(admittedly a bit of stretch) then $30,000 spend becomes 105,000 Mr’s.
    All for $175. Not bad for a card with multiple transfer partners.

    • Julian

      Your math is 100% correct but even if you managed to spend all $30,000 in the air category at 3x and got 105,000 points with the bonus, you’re still only at an effective multiplier of 3.5x. You might be better off getting something like the old AmEx Blue card and using its 5% cash back on categories like drug stores where it’s easier to manufacture spend. You’d also get a higher multiplier without having to worry about meeting a threshold.

      • shay peleg

        You are Forgetting that if people use Mr points for travel they get a higher cpm then 1 cent per MR

        • Julian

          True, but as we’ve talked about in past posts, cash is more flexible than miles so there’s additional value there. Plus we could make the same argument using other 5x options like the Ink card where the points are also worth more than 1 CPM. The point is only that there are many factors to consider when allocating spend and one shouldn’t automatically assume that completing tiered signup bonuses is always better than using that spend on another card.

  • http://www.travelcardguide.com/ TravelCardGuide

    I have never had a hard time earning enough points for travel by just earning sign-up bonuses, however someone that travels non-stop could say differently.