5X everywhere without gift cards, part 1: Ultimate Rewards

At FTU in DC last weekend, I presented “You can still earn 5X everywhere.”  Many of the tips I presented involved reload cards, gift cards, and Bluebird cards, but I also showed how you can earn 5X almost everywhere without gift cards.  In this three part series, I’ll show you how.

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The cards shown above on the left earn Chase’s Ultimate Rewards points.  The cards on the right earn Citibank’s Thankyou points.  In this post, I’ll focus on Ultimate Rewards.  The next post will cover the ThankYou cards and I’ll finish up with a post about what to do with charges that don’t fit into the above buckets.

Ultimate Rewards

Ultimate Rewards points are my favorite form of currency.  Really.  All you need is one of Chase’s premium cards (e.g. Sapphire Preferred, Ink Bold, Ink Plus) to unlock Ultimate Rewards full potential.  For a frequent traveler, the points are better than cash.  If you want or need cash, fine.  Ultimate Rewards points can be exchanged for cash with a value of 1 cent per point.  Or, book travel through the Ultimate Rewards website and get 1.25 cents per point value.  Better yet, transfer points to any of numerous partners and you can often get far more value.

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Additional transfer partners not shown above include Marriott and Priority Club.

Some of the best redemption options for Ultimate Rewards points are via partners.  Here are a few examples:

  • Transfer to United Airlines and redeem for international business or first class travel on Star Alliance flights.  Redemption value varies widely but you can usually expect to get at least 3 cents per point value and often much more (if you find saver level availability).
  • Transfer to Southwest Airlines and redeem for “Wanna Getaway” fares.  For these fares, you’ll get 1.67 cents per point value.
  • Transfer to Hyatt for luxury stays.  Hyatt’s award chart tops out at only 22,000 points per night for their most expensive properties.  When redeeming for expensive hotel nights (think $500 and up) you can expect to get over 2 cents per point value.
  • Transfer to British Airways and redeem for short non-stop flights on BA partner airlines (American, Alaska, Aer Lingus, LAN, etc.).  One great example that I’ve taken advantage of is to use BA Avios to book American Airlines non stop from Detroit to NYC.  Non-stop round-trip flights are usually $700 and up for weekday travel, but I was able to book the same for only 9000 points.  That’s a value of over 7.7 cents per point!
  • Transfer to Amtrak and redeem for bedrooms or special routes.  With Amtrak’s special routes, they charge only 1500 points each way.  I’ve used this deal several times to ride the Wolverine train from Ann Arbor to Chicago.  Prices fluctuate widely, but in my experience I usually get over 3.5 cents per point value.  You can also do well by using points to book otherwise very expensive bedrooms for long-haul routes.

Sure, Starwood points are arguably more valuable per-point than Ultimate Rewards, but Ultimate Rewards points are much easier to earn and faster to transfer to partners.

5X almost everywhere

By filling your wallet with the right assortment of cards, you can earn 5 points per dollar almost everywhere you shop day to day.  Here are the Chase Ultimate Rewards cards that will help you get there:

Chase Ink 5X

I’ve said many times that the Chase Ink Bold (and its twin the Ink Plus) is my favorite card.  I even wrote a secure message to Chase to profess my love.  My feelings haven’t changed.

Chase Ink cards offer 5 points per dollar for office supply purchases, cell phone, landline, and cable.  Just by using an Ink card to pay your cell phone, landline, and cable bills you’ll rack up thousands of points.  And, of course, don’t forget to use the card whenever you shop at an office supply store.  Since Staples, OfficeMax, and Office Depot regularly offer specials that I blog about (such as Free after Rebate items and other lucrative discounts), the Ink card provides many ways to rack up points!

There are multiple versions of Ink cards: Ink Bold, Ink Plus, Ink Cash, and Ink Classic.  The Ink Bold and Ink Plus cards are premium cards with high signup bonuses (50K!) and $95 annual fees that kick in after the first year.  These premium cards award 5X for up to $50K per year of spend.  The Ink Cash and Ink Classic are no-fee cards with smaller sign-up bonuses.  These cards award 5X for up to $25K per year of spend.  For details of how these cards differ, please see “Preparing for Miles“. 

All of the Ink cards are business cards.  Yes, you do need a business to qualify.  If you have a new business (rental property, buy/sell things, consultant, blog author, whatever…) you do not need to lie about your business income, even if your income to-date is zero.  Hopefully you have other income or assets that you can also list to help assure Chase that you’re credit-worthy!  For more information, please see “How to sign up for the Ink Bold (or Ink Plus).”  If you have multiple businesses, you can get multiple Ink cards and you should get the signup bonus for each one (at least, that was my experience).

Chase Sapphire Preferred 4.28X

If you had to settle for just one rewards credit card, for most frequent travelers I recommend the Sapphire Preferred.  While it doesn’t offer any 5X categories, it does offer 2X for all restaurant and travel purchases, and it offers a 7% annual dividend on all points earned.  So, regular earnings are really 1.07X, and 2X earnings are really 2.14X.  With no foreign transaction fees, this is a great card to have in your wallet when dining or travelling (although it does lack a PIN at the time of this writing).  Of course, the card offers a terrific 40K sign-up bonus, so that doesn’t hurt either!

The trick for getting nearly 5X when using the card for travel expenses is to take advantage of the Ultimate Rewards Mall.  By initiating your online shopping through Chase’s Ultimate Rewards Mall, you can earn extra points above and beyond those earned by your credit card.  So, when booking travel, go through the Ultimate Rewards Mall to a site like Travelocity (which currently offers 2 bonus points per dollar) and pay for your travel with your Sapphire Preferred card.  With 2 bonus points from the Ultimate Rewards Mall and 2X earnings for travel with the Sapphire Preferred, you will earn 4 points per dollar.  Then, if you factor in the Sapphire Preferred card’s annual 7% dividend, you would earn 4.28 points per dollar.  It’s not 5X, but its awfully close!

Chase Freedom 5X to 5.5X

The final piece of the puzzle is the no-fee Chase Freedom card which offers 5X in rotating categories each quarter.  For example, this quarter, from April through June, the Freedom card offers 5X for restaurants, movie theaters, and Lowe’s.  Note that 5X earnings are limited to $1500 in spend each quarter.

If you have a Chase checking account, you will also qualify for a 10% annual bonus on points earned (see “The new king of the Ultimate Rewards Mall“).  This means that regular spend earns 1.1X, and 5X spend becomes 5.5X!

Wrap Up

The cards detailed above give multiple opportunities to earn 5 very valuable Ultimate Rewards points per dollar across many types of transactions: office supplies, cell phone, landline, cable, travel, and rotating categories.  In general, if you have competing cards that earn 5X for the same categories, I’d recommend going with the card that earns Ultimate Rewards points whenever feasible.

In the next post in this series I’ll show how it’s possible to earn 5X ThankYou points across many other categories of spend.  And, I’ll show you how to make the most of those points.

More details about the cards shown above,and signup links for each, can be found on either of these pages:

 

Caution

The purpose of this series of posts is to show how it may be possible to earn 5 points per dollar almost everywhere, but that does not mean that you should.  Not everyone can (or should) get all of the cards I’ve listed.  While it is true that between my wife and I we have all of the listed cards, this is not meant to be personalized advice for you.  Is this right for you?  Only you can decide.  And, as always, I do not recommend signing up for rewards credit cards unless you always pay your balance in full every month.  Otherwise the cost of the interest payments will far exceed the benefit of points earned.

About Greg The Frequent Miler

Greg is the owner, founder, and primary author of the Frequent Miler. He earns millions of points and miles each year, mostly without flying, and dedicates this blog to teaching others how to do the same.

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Comments

  1. While I understand why everyone tends to include the 7% annual dividend for Chase Sapphire Preferred (and 10% rebate for Barclays Arrival etc.) in their calculations, it does imply you’ll keep the card continuously. But we are after all card churners. In order to get the 7%, you’ll have to keep the card beyond the free year and many will have cancelled by then. Sure, in the beginning, you got the 7% at the end of the calendar year rather than your anniversary year, but I’m not sure that’s the case these days.

    • WeddingSpend: That’s true. If you don’t plan to keep the card past ~Feb, then you shouldn’t count the 7% dividend. For my wife and I, we plan to keep one CSP account indefinitely (we’re keeping my wife’s account and I am an authorized user with my own card on her account).
      CTravlr: Of course it does depend on when you want to fly, but yes weekdays tend to be very expensive. For dates I’ve flown in the past, $700 and up was the least I could find on any airline for non-stop once I excluded Spirit (that I don’t want to fly on). I just plugged into Kayak May 27 to 29 and got similar results.

  2. The cards you feature are my “go to” cards, but the Discover Rewards, with its 5% back rotating categories, is also a great gap filler for the above set and the percentage back from using their portal often exceeds that offered by the Ultimate Rewards mall. Granted, Discover rewards are either cash back or gift cards and so the redemption value measurement is different for some.

  3. Any way to get x5 for current Thank You card holders? I assume this is the special promo card which was available few months ago.

    • Bored Russian: You would have to apply for a new ThankYou Preferred card with the appropriate link (see my Best Credit Card Offers page).
      Jeremy: Yes, of course that’s true, but the point of this series is to show people how far they can go without gift cards 🙂

  4. Dont forget you can always buy gift cards to stores you frequent at office supply stores getting 5x on things like dining has and travel.

  5. I also get 10 points per transaction on my Chase Freedom, besides the 10% bonus for the checking accounts, and the 5% bonus for the rotating promotions.

    • Ricardo: You still have the old Chase Exclusives program, but Chase is phasing that out. You probably won’t get the extra 10 points per transaction after this year.
      Jones: Thanks for the grammar lesson

  6. “For my wife and I, we plan to keep one CSP account indefinitely…”
    It should be: For my wife and me, we plan to…

    For a person who writes for a living, you still have a lot to learn about the stupid English language.

  7. Hey, I know I am acting like the United valuation police and this is a bit off topic, but 3 cents per mile is a bit of an overestimate. I am probably United’s #1 fan and always optimize United miles getting free one-ways, adding stopovers, openjaws and usually travel during high season on Saver awards to the most desirable destinations (yes, not easy to find those, but I manage!)

    You live in Ann Arbor, which is a fairly uncompetitive market so you can reach 3 cents sometimes, though that’s not typical. If you live in Chicago, NYC, LA, Texas, tickets are cheaper and 2 cents per mile is more realistic. Sure, you can get international business class, which costs much more, but most of us would only value business class tickets at 1.5 – 2 times economy. It should be about how much we’re saving compared to what we *may* consider paying in cash.

    Nevertheless, you’re completely right. Ultimate Rewards points are significantly more valuable when transferred to partners, regardless of what valuation I assign. 🙂

    • The Miles Professor: For valuing international business class or better I’m going by a simple metric: A competitive price for business class round trip to Europe is $3K. United charges 100K miles. That translates to 3 cents per mile. Sure you can argue that I won’t earn miles that way and that maybe I wouldn’t be willing to pay that much so I can’t call it 3 cents “value”, but this is a simple and straightforward way to think about it. Also, I don’t think its right to say the value is based on how much we’re saving compared to what we may consider paying in cash (although I know many people think of it that way). I think that is a useful metric, but it is not “value”, it is “savings” which is different in my mind.

  8. The problem is that ThankYou points are worth much less than Ultimate Rewards points. I regularly use my Ultimate Rewards for United, where I value my miles at about 2 cents each. ThankYou points can be used at a rate of 1.2 cents each for booking flights (although those flights earn miles). Earning 5X ThankYou is closer to 3X Ultimate Rewards.

    • Scottrick: I don’t see it as a problem that UR points are worth so much. I think it’s great! That’s why I would always tell people to earn 5X UR before earning 5X TY (which are 1.33 cents for flights BTW).

  9. @Scottrick: Unless you’re planning on trading them on a point exchange market, the values are not directly comparable in terms of valuation. I interpret your 2 cent UA valuation to mean that you get a value of 2 cents per point conditioned upon you using them; i.e., you don’t use them every time. Theoretically, you’d only use ThankYou points when you can’t reach your valuation for United miles and you’d be receiving a value of significantly less than 2 cents per mile for the United miles use. That’s when you’d use the ThankYou points and, conditioned upon only that situation, they are comparable in value as an alternative to United miles. More formally, EV(UA miles | paying cash) = about 1.3 to 1.5 cents per mile where EV is the expected value conditioned on when you pay cash.

  10. @Yo, yes, you do get 1.25 cents per point when redeeming UR Points for airfare plus and frequent flyer mileage flown. Unfortunately, you don’t get the perks of the airline’s credit card if you have it. For example, since I have the Chase United card, I would get a free checked bag both ways, but if I use my UR points for booking a United flight, I would have to pay bag fees. If you are flying with no checked bags, you can use the points to pay for the flight without worry.

  11. The Miles Professor: I got a r/t US to China for 65,000 miles on United via UR. The ticket would have cost $2500. So I figure that was almost 4c per UR point.

  12. @Jack L: Congratulation on find a good ticket 🙂 I got two tickets from LAX to visit Singapore, Phuket and Tokyo for 65k each and then a 120k business class ticket from NYC to the same destinations. This is from Christmas to New Year’s with tickets over $2k even in economy. And I still value UA miles at 2 cents each. If you only collect 65k miles, then you may be able to value them there, but only if you would not sell your 65k miles for the $2500 (i.e. if you have to go to China and that’s the only option). If you collect more, you can’t get that high value every time. In some sense, the fewer miles you have, the higher their value. You have to value them at where you would give up a single mile, much like the stock market values a share at which you can buy a single lot.

    @FM: Valuation isn’t about savings, but it’s the lowest price above which you’d sell. If someone offered you $3k for your 100k miles and you’d sell your ticket, then you can’t value the miles at 3 cents each. Maybe you’d earn more miles and buy another ticket. I value them at 2 cents each because that’s where I’d sell at least a few miles. I would probably pay much less to buy, but a bid-ask spread is expected.

    Anyway, getting off topic. Excellent post. We can save miles valuation arguing for another day 🙂

    • The Mile Professor: I agree with you 100% about the value of points/miles when looked at independently from a redemption. When looking at a redemption, though, you can calculate the value of that redemption on a per mile basis. If you play the game well, the redemption value will be much higher than the independent value (what I call “fair trading price”).

  13. @Grant: Do you mean to say if I have united explorer card and pay for fare by redeeming UR points directly I do not get the perk of Free check bag?

  14. I must say I think the Citi TY Preferred GGDx5 combined with a Citi TY Premier is a great combo for buying tickets for Mileage Runs to maintain airline status. Yes, I love my UR points, but I also really like having United 1k and those TY points work well for that purpose.

  15. @Murtuza, yes I believe so. I haven’t done that with UR points but I did that with Citi thank you points and I was charged for my bags each way. I tried my luck by going to the counter and showing them my chase united card, but it was no use.

  16. Scottrick: true about Thank You points, but don’t forget buying tix with TY points will earn mileage. So if there a MR and you can get on it thru TY portal plus get another 30% knocked off, its a hell of a deal. Thats what I used mine for.

  17. Is there some reason you really don’t like US Bank? The Cash+ card works great for me: 6.25% cash back for restaurants (I eat out a lot) and, this quarter, electronics (I’m buying two, possibly three computers). Next quarter is the quarter I pay my insurance balances (renter’s, auto, business, and inland marine… all paid in full, of course) so it will probably be restaurants and ‘monthly bills’. After that, I’m not sure, but I’m 100% sure I can find something that will do well by me.

    With that, plus the Blue Cash Preferred (groceries, drugs (via in-grocery-store drug stores), plus the occasional gift card), and my JCB card (3% cash back anywhere that takes Discover), seems like I’ve got more or less what you have. And I don’t have to feel dirty by dealing with Citi (one of the most egregiously bad banks in the country) or Chase (THE most egregiously bad bank in the country).

  18. Hello, FM! I have a CSP and a Chase checking, today I applied/approved for a Freedom. Do I automatically get in on the 10% yearly bonus? or I have to manually request for it?

  19. Can you do the reverse? Can you transfer Southwest Rapid Reward miles to Ultimate Rewards, for instance?

  20. the most amazing UR redemption I received was TLV / CCU. Revenue in Y would have been $2400. The business class seat was available for $14,500 or 35k mileage plus miles. No brainier. Got to sample TK MS and TG on that route 🙂

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