$37.50 for peace of mind and 10,000 points

My wife just received a 10K bonus point offer from Barclaycard for her Wyndham card. All she has to do is spend $500 per month for three months:

10,000 points

This is not nearly as good as an offer I got recently from Barclaycard for 15,000 AAdvantage miles after spending $500 per month for three months, but it’s certainly not a bad offer.

15,000 points

10,000 pointsEven though my wife’s Wyndham card has been thoroughly sock-drawered after earning its original signup bonus, I thought it might be worth the effort to get the extra 10K points, but I didn’t think it was worth causing my brain to explode (see: “How to prevent your brain from exploding”).  So, I scheduled three $500 monthly payments using the Plastiq bill pay service.  I figured that Plastiq’s fee was worth the peace of mind.  I wouldn’t have to take the Wyndham card out of the house and I wouldn’t have to think about the promotion any more.  Nice.

The Math’s the thing…

Unfortunately, the Wyndham card is a Visa card so it doesn’t qualify for Plastiq’s current 1.99% promotional rate, so I’ll have to pay 2.5% to use this credit card to pay bills.

  • At 2.5%, each $500 payment incurs a $12.50 fee.  So, three payments = $37.50.
  • The Wyndham card earns 2X everywhere, so I’ll earn 3,075 points from spend ($1537.50 x 2).
  • Plus, I’ll get 10K bonus points
  • Total cost per point = $37.50 / 13,075 = .29 cents per point

In other words, by incurring a fee to meet the bonus offer terms, I inadvertently bought Wyndham points at just under 1/3 of a cent each.

A slight mistake

Is .29 cents per point a good price for Wyndham points?  My published Fair Trading Price for Wyndham points is currently .55 cents per point, so .29 cents is pretty good.  Similarly, Wandering Aramean’s Hotel Hustle tool shows the current median value of Wyndham points = .574.

Still, I don’t need Wyndham points.  I generally advise against buying points unless you have a solid plan for how you’ll use those points.  I have no such plan.

Luckily, this mistake is extremely minor.  I can afford to lose the $37.50 if it comes to that.  And, who knows, maybe we will make good use of those points and I’ll have blundered into a great success.  It could happen.

Next time

Next time I’ll do the math first and think through whether I really want to buy points or miles by incurring a bill pay fee.  I think that the general solution is a good one: pay a small amount to simplify life.  But, going forward I’ll only do so when I’m sure that I’m willing to buy points or miles at the price it would cost through this method.

Last updated on November 13th, 2015

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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LACLONGQUAN50FrequentMilerAl10,000 points for $37.50; 319,000 points after $33,000 spend; the Truth about Delta; and more - The Frequent MilerRaghu Narayanan Recent comment authors

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Sam
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Sam

At what rate is it worth buying SPG points and holding on to them even if there is not an immediate need to use? Thanks

Larry
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Larry

Isn’t there an opportunity cost aspect to plastique as well? Since it’s not really a manufactured spend points machine kind of thing — you can’t pay credit cards — there is an upper limit to how much most people can use plastique. It’s basically limited to bills you can’t otherwise pay with a credit card fee free, right?

So, if using the Wyndham card means that’s $500 x 3 less you could have put on plastique, shouldn’t that be taken into account too? For example, if you could have used amex cards purchased with everyday preferred, isn’t there an opportunity cost to foregoing the 2,250 nearly fee free Amex points? Again this assumes you’re maxing out plastique on your otherwise unpayable with credit card bills and haven’t found a way to run unlimited payments through it.

katye
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katye

Larry, you are causing my brain to explode. lol
I think there is no opportunity cost if you don’t plan to use Plastique on meeting spend for other credit card. If there are other options (min spend, etc, you need to meet), then you will need to figure out what’s best for you (here comes the sound of my brain exploding again).

Laurel
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Laurel

@Larry It is not limited to bills that can’t be paid with a credit card but it makes absolutely no sense to pay bills that can be paid with credit card with Plastiq as you have to pay fees.

Larry
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Larry

@Laurel — yes, right, that was my point. I think either way there’s an opportunity cost problem. If you use your Wyndham card to pay three $500 bills on plastique that you can’t otherwise pay with a credit card fee free, you lost the opportunity to use plastique with another combination of cards that could have earned other rewards. If you use your Wyndham card to pay three $500 bills on plastique that you can otherwise pay with a credit card fee free, then you’ve lost the opportunity to pay with a different credit card without a fee and earn those rewards.

So, say FM has $2,000 per month he can’t pay with credit card otherwise, and his plan is to use Amex gift cards purchased with Amex EDP to pay those bills, which will net him 9,000 points at a negligible fee. Now, he uses Wyndham to pay for $500 of those bills each month — so he uses Wyndham to pay $1500 over those three months and the EDP/Amex GC to pay for the remaining $1500 per month, or $4500. Now, he’s only earned 6,750 negligible fee Amex points, so part of his cost of the peace of mind of using the Wyndham is 2,250 Amex points.

If, on the other hand, he’s using Wyndham through plastique to pay for bills that he could have paid with a credit card fee free, to buy his peace of mind, then what he’s lost is both the fee he has to pay plastique plus the lost opportunity to earn points by paying those bills directly. So, for example, he sets up plastique through Wyndham to pay for cable and utilities, which he otherwise could have paid directly with a 2 percent cash back card or an EDP. Now, in addition to the plastique fee, he lost $30 in cash back or 2,250 Amex points for his $1500 in spend.

As mentioned in the original post, though, this opportunity cost analysis only applies if one assumes that he hasn’t found an unlimited points machine use of plastique, like a way to pay himself with his Wyndham and then directly pay the credit card off. Then his only cost truly would be the plastique fee he pays to use the Wyndham, instead of using the Amex GCs. It’s the assumption of a $2,000 upper effective plastique limit that creates the opportunity cost.

Eric
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Eric

Larry,

I don’t typically correct people for simple typos but since you spelled Plastiq wrong so many times you must not realize that is it is actually spelled Plastiq (not “plastique”).

Eric
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Eric

Yes, I did ironically make a mistake myself by writing “is it is” instead of just “it is”. There’s no edit feature unfortunately.

Randy
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Randy

Great reminder to analyze both opportunity AND cost before pushing the send button!

wise2u
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wise2u

another example of why Plastiq is not worthwhile for most situations….should have gone with the standard $500VGC from WM at $5…..and you must be jaded to have considered passing on 10k wyndham points…I don’t care for them either but 2/3 of the points needed for a free night at any of their hotels for $15 and 3 purchases is easy compared to some of your convoluted schemes.

aarodg89
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aarodg89

I love having my square with the fee-free amounts right now. I just need to find someone in my maize and blue hometown that needs to spend some money, and can accept my credit card back. It’s only a few thousand but with periodic referrals that add money, I could swap $500 a month thru December with someone. And I couldn’t get to Trump in Birch Run yesterday, darn.

Will S
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Will S

Perhaps you, like most bloggers in the travel zones, are much underestimating the newly revised Wyndam Rewards point structure. There are times, when 10,000 points can go a LONG way. Happens I’m currently going ’round SW Utah — where the hotels major chains are few and far between, or extremely overpriced point wise.. (as is the case around most major US national park areas, like Yellowstone)

By contrast, you get lots of Wyndham (& Choice) options…. and many of them are available via the new 3,000 pts. and some cash “Go Fast” rates. (Wyndham’s web site is not helpful in finding these, but they ARE more widely available than commonly known… Sure, Days Inn is rarely more than a nice two star place…. Yet paying 3k points plus $45 for a place in Kanab, Utah sure beats paying $130 in peak season.

Raghu Narayanan
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Raghu Narayanan

Hi
I buy SPG points by getting $500 Visa GC at CVS for 4.95 . i.e. < 1 cent a SPG
I have 2 Redbirds, so potentially I could MS 10K SPG points. Will Amex do a Financial Review i.e. i s 10K going overboard.

I also have 3 Everyday Prefered cards between me and my wife where we regular spend 24K annually and MS spend 12K. (Safeway Visa GC)

so are we within reasonable limits or should we shift some of the MS to Chase UR

Also even with all these spend it is about 33% of my gross annual income
Please advise

Raghu

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[…] $37.50 for peace of mind and 10,000 points – I paid $37.50 to make life easier while securing 10,000 bonus points.  Was that the right move? […]

Al
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Al

Why did you need a paid service to schedule bill payments??? Most checking accounts have such online bill pay features.

LACLONGQUAN50
Guest

Please tell me how to get that offer.

Thank you.