Delta’s $250K MQD waiver rule. What will I do? What should you do?

Yesterday we learned that, as of January 1 2018, Delta has increased it’s MQD waiver requirement for Diamond Status to $250,000 in credit card spend.  I promised an analysis.  Here it is…

MQD Waiver Background

In order to earn top tier Diamond status, Delta SkyMiles members must meet the following requirements within each calendar year:  Earn 125,000 MQMs (Medallion Qualifying Miles) or 140 MQSs (Medallion Qualifying Segments), and $15,000 MQDs (Medallion Qualifying Dollars).

MQMs and MQSs are typically earned by flying (although MQMs can be earned through credit card bonuses and spend as well).  And MQDs are earned by spending money on Delta flights.  An alternative to earning $15,000 MQDs is to get an MQD waiver.  Until now, that has been relatively easy: spend $25,000 within a calendar year across one or more Delta branded cards, and the MQD requirement is waived.

It is that last part that is changing.  Starting January 1 2018, $25,000 spend will still give you an MQD waiver that let’s you get Silver, Gold, or Platinum status, but you’ll need $250,000 spend to get a Diamond MQD waiver.  Or you can do what Delta really wants you to do and spend $15,000 or more on Delta flights.

This change has absolutely no impact on those who strive for any elite status other than top tier Diamond status.

Diamond Winners, Losers, and Inbetweeners

Winners

Some groups of Diamond elites aren’t directly affected by the new rules.  They win because the new rules should thin the Diamond herd a bit beginning in 2019.  With fewer Diamond elites, the chances for upgrades should increase.  And maybe, if they’re really lucky, Delta will unveil new and better Diamond perks.

Big Spending Frequent Flyers:  If you already spend enough on Delta flights to earn the required $15,000 EQDs each year then you’re good to go.

Big Credit Card Spenders: Those who already spend over $250,000 per year on Delta credit cards won’t have to do anything different.

Foreign Mileage Runners: MQD requirements are only enforced for “U.S.-based Members”.  If you’re not a  U.S.-based Member, then you can fly those cheap long distance flights in order to earn the needed 125,000 MQMs, and you’ll be Diamond.

Losers

Several types of elites will be most hurt by these changes.  Does it help them to know that Delta’s MQD waiver rules are better than United’s, and that AA doesn’t have a real waiver at all?  Probably not.

Platinum+ Frequent Flyers:  This is the group that flies more than enough to earn Platinum status, but not quite enough for Diamond.  Through this year, they have used Delta credit card spend to get over the hump.  They spent at least $25,000 in order to waive the Diamond MQD requirement, and they spent enough on their Delta Platinum and/or Delta Reserve cards to get the extra MQMs they needed.  My guess is that a large percentage of Diamond elites fall into this bucket.  This is the group that I expect to be most bitter about these changes.

Mileage Runners: If you previously earned Delta Diamond status primarily by flying cheap long distance flights, you’re probably out of luck for earning Diamond status going forward.  One caveat is that it is possible to earn EQDs from certain partner airlines based on a percentage of the distance flown rather than the amount spent.  So it is technically possible to reach diamond status from cheap flights, but it is probably impractical for most.

Rollover Elites: Several times in the past few years, my wife has been able to roll over enough MQMs from the prior year to get to Diamond status early in the current year. This was great because at times she needed new global upgrade certificates for mid-year travel.  All we had to do was to make sure she spent $25,000 on Delta cards as quickly as possible, and she was good to go.  This won’t work anymore.  Those with huge stockpiles of MQMs that roll over from the previous year now won’t get top tier status until they meet the $250K spend MQD waiver or earn $15,000 MQDs (which do not roll-over from prior years).

“2 Player Game” Credit Card Mileage Runners: In previous posts (such as this one) I’ve described how it’s possible for two people to work together to keep both at Diamond status through credit card spend.  While there are many ways to make this happen, most rely on one “player” gifting MQMs earned with their Delta Reserve card to the other every other year.  When played this way, neither person spends anywhere near $250,000 on Delta credit cards.  So, going forward, this simply won’t work to get to Diamond status.

Inbetweeners

Those who are regularly close to meeting the new requirements will have to make a tough decision.  Do they do whatever is needed to get to Diamond or stay with Platinum?  I think there are at least two groups of inbetweeners:

Almost There Frequent Flyers:  This group is similar to the Platinum+ group, but is even closer to achieving Diamond status through flying.  To get to Diamond starting next year, this group would have to opt for a few extra Delta flights each year, or purposely buy some higher price tickets than they would normally do.

~$200K Spenders: This group already puts a tremendous amount of spend on their Delta credit cards.  As shown below, people who maxed out credit card spending opportunities for MQMs were already spending $220K per year.  Now the question will be whether to spend even more…

From $220,000 to $250,000

In my post “Pushing the envelope on earning Delta elite status through spend” I showed that it is possible for one person to earn 100,000 MQMs by spending $220,000 across four credit cards as follows:

• Delta Platinum Personal: Spend $50K within a calendar year and earn 20K bonus miles and 20K MQMs.
• Delta Platinum Business: Spend $50K within a calendar year and earn 20K bonus miles and 20K MQMs.
• Delta Reserve Personal: Spend $60K within a calendar year and earn 30K bonus miles and 30K MQMs.
• Delta Reserve Business: Spend $60K within a calendar year and earn 30K bonus miles and 30K MQMs.

To many, that would sound insane, but those who master manufactured spending techniques can make it work.  Is it worth it?  To some, yes.  I covered that question in the post “Manufacturing Delta Diamond, retrospective.”

While 100,000 MQMs isn’t in itself enough to earn Diamond status, it does get you 80% of the way there.  And you don’t even have to bridge the gap by flying.  It’s possible to roll over extra MQMs from the previous year or to receive MQMs gifted from another Delta Reserve cardholder (MQMs earned from Reserve card spend are giftable; those earned from Delta Platinum card spend are not).

For the rare few of us that max out our MQM earnings through spend each year, the new MQD requirement isn’t that big of a deal.  We already spend $220,000 across our Delta cards.  Beginning in 2018, we’ll have to spend $30K more in order to keep Diamond status.  If we don’t do the extra spend then we get Platinum status (which requires 75K annual MQMs) and the extra MQMs will roll over to the next year.  In some circumstances that may be preferred.

Platinum vs. Diamond, What’s the Difference?

Both levels of status offer my favorite feature: free award changes and cancellations.  This feature alone makes our miles much more valuable.  When we see a great available award we can snag it even if we don’t know for sure whether we’ll fly it.  We did this recently when we booked saver level awards on the new Delta One Suite (see: How to book Delta One Suite saver awards).  We booked two separate flights because we don’t yet know which we’ll fly.  We’ll cancel the other when plans firm up.  We’ve also used this perk to get multiple saver seats on a single flight.  One time, for example, we wanted to fly three to London in business class, but only two saver level seats were available.  So, I booked two seats and checked back later for another to open.  A day or two later, another seat did open.  If it wasn’t for the ability to cancel the award, I wouldn’t have risked initially booking just two.

Another great feature that both status levels share is the ability to choose four regional upgrade certificates as a Choice Benefit when reaching Platinum status.  These certificates sometimes let you upgrade at the time of booking to first class on domestic flights.  More often, you get wait-listed for an upgrade, but that’s OK too.  It has the effect of bumping you to the top of the upgrade list.

So, what’s left that Diamond elite status offers that Platinum does not?  Here are my favorite Diamond-Only benefits:

• Your choice of 3 Diamond Choice benefits each year.  My favorites are:
  • 4 Global Upgrade Certificates.  Love these — especially the global ones.  Consider all of the cheap flights we’ve seen recently to Europe (often around $400).  You could buy dirt-cheap economy tickets, but still fly in lie-flat business class by applying these certificates.  Often you have to wait-list for the upgrade, but we’ve had 100% success in clearing the upgrades so far.  Caution: upgrades can be much less likely on certain routes.
  • Delta Sky Club Guest Pass (Credit Card Access).  Many of us already get access to Delta SkyClubs when flying Delta thanks to having either Delta Reserve or non-Delta Amex Platinum cards.  This new benefit will let us bring in guests while only cashing in one Choice Benefit.
  • Gift Gold status.  To achieve Gold status, some people go to great lengths with end of year mileage runs, or they pay Delta outrageous prices for end of year MQMs (Medallion Qualifying Miles).  This is a great alternative.
  • 25000 Bonus Miles. This isn’t an exciting option, but if you have no one to gift Gold status to, it’s still pretty valuable.
• Free CLEAR membership ($79 per year for other elites and select Delta credit card members)
• Better chances for free upgrades due to the higher level status.

What will I do?

I’m a $220K Spend Inbetweener.  To earn Diamond status in 2018 for the 2019 elite year, I’ll have to spend $30,000 more than I would have otherwise.  Since that extra spend won’t help to earn bonus miles or MQMs, it will drag down the overall value per dollar of my Delta spend.

Currently, $220,000 of spend results in earning 320,000 redeemable SkyMiles and 100,000 MQMs.  If we value SkyMiles at a penny each and MQMs at 3 cents each, then we are getting $3,200 + $3,000 = $6,200 value from that spend. That amounts to a 2.8% return on spend.  Not bad at all.

If we throw in another $30K of spend though, we’ll earn 350,000 redeemable miles and the same 100,000 MQMs.  At the same valuations, that comes to $3,500 + $3,000 = $6,500 in value for $250,000 in spend.  That amounts to a 2.6% rate of return.  That’s still not bad but it drops slightly below the rate we can earn instead with the BankAmericard Travel Rewards Card or the BankAmericard Premium Rewards Card.  And with those cards we are not limited to spending our rewards on Delta.

My wife is in the same situation.  We’ve been using manufactured spending techniques to spend $220K annually on her Delta cards too.  The difference is that she regularly flies to Europe for work and she’s required to book economy.  The Global upgrade certificates are extremely valuable to her because they provide a way for her to fly in lie-flat luxury.  So, for my wife, the extra spend makes sense.  We’ll do it.

Back to me…  My wife’s four global upgrade certificates make it possible for her to upgrade two round trip flights per year.  That’s not enough.  If I get Diamond status again, I could join her on one of her trips (I often do anyway) and use my four certificates to upgrade both of us both ways.  Is it worth all that for one trip?  Probably not.

The reasonable thing for me to do would be to cut my Delta spend in half to $110K.  With roll-over MQMs and actual flying, that will still be enough to keep Platinum status.  And as I said before, Platinum status already offers two of my favorite elite perks: free award changes, and regional upgrade certificates.

So, that’s settled.  I now know the logical thing to do.  The question is whether I’ll do the logical thing.  Airlines count on people making irrational decisions for the perceived glow of elite status and miles.  Will I be swayed by the Diamond allure?  Maybe I will.  Honestly I won’t know for sure until I’m forced to make the decision next year.

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