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Interesting point inflation blog post


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https://www.uscreditcardguide.com/inflation-hits-the-miles-and-points-game/

 

Fairly interesting and makes a point about the recent large bonuses and implications of potential more rapid devaluation at some point.  I find it an interesting parallel to the the DXY if ignoring its recent bounce up which may change as the Fed on friday was pretty doveish but really who knows.  Look at DXY from end 2020 to just before recent bounce.  Its interesting because the points based compensations are much easier for companies to devalue as fiat currency and its in some ways in their interest to do so.

 

https://www.cnbc.com/quotes/.DXY

 

 

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Yeah, I've been on the fence on getting into the points game. I am interested in the AmEx Gold card for the basically uncapped 4X on dining and groceries. But, point devaluation worries me and I would really like to have the travel benefits of the Platinum if I am going to pay an annual fee like that. And there's no way in hell that I will be paying for the Gold card and Platinum card annual fees at the same time. Also, if I went the Platinum route, it would essentially be a sockdrawered card, except for airfare and traveling. Most of my spend would go on other cards, so it is a bit of a conundrum. 

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On 9/6/2021 at 1:46 PM, RehabbingANDBlabbing said:

Yeah, I've been on the fence on getting into the points game. I am interested in the AmEx Gold card for the basically uncapped 4X on dining and groceries. But, point devaluation worries me and I would really like to have the travel benefits of the Platinum if I am going to pay an annual fee like that. And there's no way in hell that I will be paying for the Gold card and Platinum card annual fees at the same time. Also, if I went the Platinum route, it would essentially be a sockdrawered card, except for airfare and traveling. Most of my spend would go on other cards, so it is a bit of a conundrum. 

I seriously considered platinum but that fee scares me a bit.  The first year ofcourse is paid for with the 125K some offers give + the small business 15X is certainly worth more then the $695 fee but to me personally I would not value it more then the upcoming 1.1c charles schwab cash out rate so its reasonable to say its worth $1375 + a bit more if you use some of the bundled cash back but otherwise its about two years worth of annual fee, to me thats not attractive.  It would be if I traveled a ton or used airline lounges, but im not at present and I dont know when I will be as im focused more on wealth accretion rather then experience accretion.  Of the versions of it the only one that would really make sense does not pay the best sign on either (Schwab version) and rather it would go something like: get a platinum with bonus, down convert before next annual fee to another version that better pays for itself for me, later get a schwab platinum and cash out via transfer to a brokerage.  Not the most value but would be the most value to me.  The other thing to consider is how much time and effort is spent thinking on it vs just working a little longer for the same amount of $.  

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19 hours ago, Wander907 said:

I seriously considered platinum but that fee scares me a bit.  The first year ofcourse is paid for with the 125K some offers give + the small business 15X is certainly worth more then the $695 fee but to me personally I would not value it more then the upcoming 1.1c charles schwab cash out rate so its reasonable to say its worth $1375 + a bit more if you use some of the bundled cash back but otherwise its about two years worth of annual fee, to me thats not attractive.  It would be if I traveled a ton or used airline lounges, but im not at present and I dont know when I will be as im focused more on wealth accretion rather then experience accretion.  Of the versions of it the only one that would really make sense does not pay the best sign on either (Schwab version) and rather it would go something like: get a platinum with bonus, down convert before next annual fee to another version that better pays for itself for me, later get a schwab platinum and cash out via transfer to a brokerage.  Not the most value but would be the most value to me.  The other thing to consider is how much time and effort is spent thinking on it vs just working a little longer for the same amount of $.  

I think I could make the Gold card annual fee work. They have the $10 monthly Uber credit, which you can use on Uber Eats to pick up food from a restaurant. I don't pay for food delivery, so this make sense to me, because the cost to pick it up is the same as if I ordered it from them otherwise. That's $120. I might be able to use the dining credit as well, but I am unsure how viable MR points will be in the long run. I would use the SUB for a trip this year, but I honestly do prefer cash back over baking travel points for future trips. I definitely prefer wealth accumulation over experience accumulation.

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On 9/10/2021 at 7:54 AM, RehabbingANDBlabbing said:

I think I could make the Gold card annual fee work. They have the $10 monthly Uber credit, which you can use on Uber Eats to pick up food from a restaurant. I don't pay for food delivery, so this make sense to me, because the cost to pick it up is the same as if I ordered it from them otherwise. That's $120. I might be able to use the dining credit as well, but I am unsure how viable MR points will be in the long run. I would use the SUB for a trip this year, but I honestly do prefer cash back over baking travel points for future trips. I definitely prefer wealth accumulation over experience accumulation.

That card seems to be all about supermarkets + Dining with reasonable midlevel airline rewards tacked on.  If you are sure you can use the uber eats credit then I think that makes the annual fee atleast for now: $250-$120= $130.  The SUB is 60K MR so reasonably could value at $660 if you value MR at 1.1c / point (the Schwab cash out rate).  It would therefore take 5 years to end up a net loss assuming no other benefits beyond uber eats and SUB.  The other question to see is: is the 4MR for dine and grocery (4.4% back in theory) worth pursuing?  The 3.3% back in airfare is nice but easily matched.  I suppose it depends how much dine and grocery expense you and family do.  For example if you had less then $500 a month in Grocery store (not including costco or sams) or separately in restaurants expense you could do a Citi Custom Cash with no annual fee and a $200 sub and get 5% back.  Lets say you used it on dining instead you could do something like a blue cash everyday for no annual fee and 3% cash back on grocery or pay $95 and get substantially higher grocery back with a blue cash preferred (6% back on grocery) and get a $150 SUB + 20% back on amazon for 6 months for a total of $350 SUB.   Yes the SUB is less with two other cards and one reward is less but the reward in one of the two categories is actually better  (5% back dine, and 3% back grocery with total of $400 SUB but opening two cards). If you went the Blue cash preferred + Citi Custom Cash route you would get potentially an easy $350+200 SUB ($550) and a annual fee of $95 total with 6% back in grocery and 5% back in dining up to $500 a month without having to worry about uber eats.  Ofcourse it would mean opening 2 cards not one and you still would need a reasonable airfare card (how much do you actually fly?).... Just how I think about it.  Figure out your actual yearly Grocery and Dine out expenses and make a decision based on that and alternatives and SUB.

 

 

Personally because I have a blue cash every day card they (AMEX) are bombarding me with offers of:

"Upgrade and Earn $75 Cash Back

After you use your Card to make $1,000 in purchases in your first 3 months. You will receive the $75 back in the form of a statement credit.†

Upgrading your Card is simple – Your account number will not change and any existing Additional Card(s) will also be upgraded. You can continue using your existing Card(s) until you receive the new Card(s).
"

 

Which as soon as my Chase Freedom stops paying 5% on grocery at the end of this month I will upgrade too for atleast a year for the $20 total fee (because I would spend that amount on grocery in 3 months anyway and I dont spend enough forever to cover a $95 fee but I definitely do to cover a $20 fee with the extra 3% back over the base Blue cash everyday).  In a year if there is no incentive I will just downgrade it back to the blue cash everyday.  Also keep in mind AMEX has some fairly nice offers in there shopping portal even with the Free card (Blue cash everyday).  I have saved just over $150 this year on stuff I would have bought anyway so I like that card even if it does not max out grocery.  

 

Hope this helps.  

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