Category Archives: Miles and Points

When Meeting Credit Card Minimum Spending Requirements Is Not a Good Deal

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Most welcome bonuses are and have always been contingent on meeting credit card minimum spending requirements. We all know that. But hitting these minimum spending requirements with a regular spend is getting harder and harder, reaching the point when you might be foregoing other, more lucrative opportunities.

A couple weeks ago I wrote about the new Chase Hyatt credit card benefit that could effectively get me the Diamond status for just a little bit of work.

Considering a Last Ditch Attempt to Snag Hyatt Globalist Status in 2021?

I must admit I was thinking hard about getting that card in an attempt to gain Globalist. I believe the Hyatt Globalist status is arguably the only top hotel status worth pursuing, but I eventually decided against it for the following reasons.

  1. I love being a free agent. I can choose where to stay, what points to use, and whether I even want to stay at a hotel rather than a vacation rental.
  2. I value the welcome bonus above anything else in a credit card, and, alas, the Chase Hyatt bonus is just 45,000 points. Yes, 45,000 and not 60,000 as they misleadingly claim. The other 15,000 points are awarded as an extra point for spending – but hey, you can spend $15,000 on anything and get your points.
  3. On the other hand, Hyatt points are valuable. 45,000 points wouldn’t be so bad, if it weren’t for the $15,000 spending requirement. That kind of spend on a consumer card is brutal and, quite honestly, doesn’t make any sense considering the low award amount.

In this post, I’d like to talk about how credit card minimum spending requirements should might influence your decision to apply for a credit card.

It’s all about training you to use the card – always!

Remember the times when a $3,000 minimum spend in three months was considered a lot? Nowadays, it’s almost nothing compared to some Chase, AmEx, or Capital One cards that want you to spend $15,000 – $100,000 in order to get the second part of the welcome bonus.

In fairness, most credit cards don’t do that. Most still require a low-to-moderate spend from $1,000 to $7,500. Why are they doing that in the first place? Because most people are not miles / points junkies. Most people use one or two credit cards, tops. By making consumers buy everything with the same credit card for months, issuers hope this newly acquired habit will stay with the cardholders well beyond that period. In most cases this strategy works, otherwise they wouldn’t be doing it.

But does it work for you?

For the sake of this exercise let’s keep working with the Hyatt card, which offers 30,000 points after spending $3,000 in the first 3 months and an additional 15,000 points for spending another $12,000 ($15,000 total) in the first 6 months. Remember, it’s 15,000 points you’re getting, not 30,000. Chase’s 30,000-point claim is just a sneaky math trick to convince you that you’re getting a helluva deal. 🙂

Now, again: Hyatt points are valuable. It’s not that hard to get a value of 1.5 or sometimes even 2 cents per point, especially if you use Hyatt points on better rooms or suites.

But $12,000?

Here is what you can do with $12,000

2% cashback cards

$12,000 spent via one of the readily available 2% cashback cards (like Citi Double Cash, AmEx Fidelity Rewards, or PayPal Cashback) gets you a very straightforward $240. Is 15,000 Hyatt points worth more than $240? It might sometimes, but there is nothing phenomenal, nothing outstanding, nothing that screams what-a-great-deal about it. I wouldn’t go out of my way to pay 1.6 cents for 1 Hyatt point, would you?

Also, don’t forget that the Citi Double Cash can earn you Citi ThankYou points rather than cash back. While I don’t value Citi points as much as Chase points, they’re still worth much more than a penny in my book.

But wait, there is even more, as they say in every bad infomercial you’ve ever seen.

2.5% cashback cards

The Alliant 2.5% cashback card does have some hoops to jump through. For one thing, you need to join the Alliant Credit Union, which is easy enough if you’re willing to donate to Foster Care to Success (the lowest donation listed is $10, but I think you can donate any amount). I wrote about the Alliant back when it used to offer 3% back for the first year, but it did have an annual fee back then. There is no annual fee now.

Spending $12,000 with the Alliant card would get you $300. Now, imagine you’re playing in a TV game show and offered a choice of $300 or 15,000 Hyatt points – what would you choose?

3% cashback cards

Discover it Miles earns 3% cash back, but not right away. You get 1.5% cash back in the first 12 billing cycles; then Discover will match it. It’s not immediate, but you’ll still get 3% cash back eventually. And these so-called “miles” are very easy to cash out, so don’t worry about it. Another option to consider is the Santander credit card. Santander offers 3% cash back on the first $20,000 in the first year. Unfortunately, it’s only available in states where Santander bank is physically present.

  • Connecticut
  • DC
  • Delaware
  • Maine
  • Maryland
  • Massachusetts
  • New Hampshire
  • New Jersey
  • New York
  • Pennsylvania
  • Rhode Island
  • Vermont

Now if you go down of these routes, then spending $12,000 with a 3% credit card gets you $360.

There are other cards and other options, but I’ll stop right here

There are some other cards that would help you get ahead versus putting your spend into satisfying the Hyatt requirements. Note, my beef with the Hyatt spend requirement is the second part of the bonus. I would hardly argue against spending $3,000 for 30,000 points, but this is a very low bonus. The worst ever, I believe! I’m going to wait and see if Hyatt might return to the old structure (50,000 points for a slightly higher spend) or if they put another deal on the table later on. Keep in mind that this card, should you apply for it, will claim one of your precious 5/24 slots. Are 30,000 Hyatt points worth it?

Because if you’re hungry for every Hyatt point you can get – check if you have all Chase Ultimate Rewards cards that can transfer points to Hyatt. Most of othem are much better deals in terms of their respective welcome bonuses.

Premium cards:

  • Sapphire Preferred (100,000 points) or Sapphire Reserve (60,000 points) – you can get one or another
  • Ink Business Preferred Credit Card (100,000 UR points)

No-annual-fee cards:

  • Ink Business Unlimited Credit Card (75,000 UR points)
  • Ink Business Cash Credit Card (75,000 UR points)
  • Freedom Flex (20,000 UR points)
  • Freedom Unlimited (20,000 UR points)

All these cards allow you to transfer UR points to Hyatt at a 1:1 ratio, although you must have at least one premium card to transfer points from the no-annual-fee cards.

To recap

Do this little exercise every time when the card issuer wants you to spend $$$$ to get their welcome bonus, and see which is better – cash back or points. Sometimes, having to meet credit card minimum spending requirements may be simply not worth the bonus. A flat 2% cashback card is the easiest to get and use, and the Citi Double Cash can earn you valuable Citi points rather than cash back. But you can earn even more than 2% cash back with Alliant, Discover It miles, and Santander cards, which makes spending a lot of money to get the bonus even harder to justify.

What’s your take on meeting huge credit card minimum spending requirements versus earning cash back?

Feature image by: Robert Scoble

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