Does it make sense to upgrade your American Express card when you receive an offer? In this post, we are going to use the American Express Gold® Card as an example.
A few American Express Gold Card cardholders received an offer to upgrade to The Platinum Card® from American Express. The offer is to spend $1,000 to receive a 25,000 point upgrade bonus.
On the surface, it seems like a good deal, but it's more complicated because American Express limits your ability to get a intro bonus if you already had the product.
This means that if you take the upgrade bonus, you will not be eligible for a Platinum Card intro bonus in the future because you already have the card.
Why does this matter? We’ve seen Platinum Card intro bonuses range from 60,000-125,000 Membership Rewards points. By taking the upgrade offer, you’re effectively setting 35,000+ points on fire.
On the other hand, if you were not planning on applying for the Platinum Card in the future OR you previously had the Platinum Card, then taking the upgrade offer might be the optimal strategy.
TLDR: Don’t take an upgrade offer unless you previously earned an intro bonus for the card you’re upgrading to. You disqualify yourself from future intro bonuses (for the card you’re upgrading to) due to the “once in a lifetime rule” if you have or had the card, regardless of if you received a bonus.
The main difference between the two scenarios is one intro bonus. I wouldn't recommend going through the hassle unless it’s a high value bonus, but I think it's important to understand the game theory since this is technically a min-max problem.
These scenarios also apply to downgrades.
When you request a downgrade, you also disqualify yourself from receiving an intro bonus from the respective card.
It's not optimal to upgrade your card unless you don't plan on getting the respective card in the future because it will disqualify you from receiving an intro bonus in the future.
For other credit card issuers, these scenarios aren't applicable because they're more forgiving than American Express. With Chase, you can receive an intro bonus for a product once every 24 months.
No, you typically can’t upgrade a credit card within the first year, especially if there is a difference in annual fee due to the Credit Card Accountability Responsibility and Disclosure Act (CARD Act of 2009).
The CARD Act was passed by the United States Congress in 2009 to protect consumers from unfair practices from credit card issuers, which include changing the annual fee within the first card membership year.
For example, if you apply for the Chase Freedom card today, you can’t product change it to a Chase Sapphire Preferred a few months later since there would be a change in annual fee ($95). Banks are not allowed to charge you more than what you agreed upon the first year.
Unless you accept a product change offer, you will not get a bonus when you upgrade or downgrade your card.
This means that if you product change a Chase Freedom card to a Chase Sapphire Preferred (CSP), you will not receive the 60,000 points welcome bonus that’s usually associated with the CSP.
Again, you won’t receive a welcome bonus for the respective credit card when you do product change.
However, upgrade offers do exist with some card issuers like Chase and American Express.
We typically see an upgrade offer from Chase when they want you to product change to the newest version of a credit card.
For example, the “old” grandfathered Hyatt credit card has a targeted upgrade offer of ~5,000 points when you product change to the “new” World of Hyatt card.
Grandfathered card =
1) Card that was previously publicly available
2) Can’t be applied for
3) Potentially can’t be product changed to
Chase Hyatt (discontinued) ($75 Annual Fee)
- anniversary night = Category 1-4
- 3x at Hyatt
- status = Discoverist (Explorist if $50k spend cal. year)
Chase World of Hyatt ($95 Annual Fee)
- anniversary night = Category 1-4
- additional anniversary night = Category 1-4 ($15,000 spend, card year)
- 4x at Hyatt
- status = Discoverist
- 2 nights towards status (not free nights) per $5k spend
Since the Chase Hyatt card isn’t my only hotel credit card, it wouldn’t make sense to pay an increased annual fee when I’m keeping the card for the free anniversary night. I’m grandfathered into the $75 annual fee as long as I don’t accept the upgrade offer.
It depends on the credit issuer, but the general rule is that they prorate a refund based on the months you have the card.
This is an interesting strategy for people who missed downgrading the card on the anniversary date. You’ll receive a prorated refund based on how many months are left in the cardmember year.
For example, if you have an Amex Platinum card that just renewed, but you want the Gold card instead, Amex would refund the prorated amount for the Platinum and then charge the Gold card annual fee. This assumes that you did NOT receive a retention offer for the Amex Platinum card.
If you received a retention offer, keep the Amex Platinum for the year to avoid getting blacklisted. It’s in the terms of the offer that closing a card shortly after accepting a retention offer can qualify as “abuse.”
It depends. The general rule is that you can only product change within a family of cards (same point system).
For example, the Chase Freedom can only be product changed to a Chase Slate, Chase Freedom Unlimited, Chase Freedom Student, Chase Sapphire, Chase Sapphire Preferred, or Chase Sapphire Reserve.
You cannot product change the Chase Freedom to a World of Hyatt or United Explorer card, vice versa.
A few items to keep in mind:
No, they are completely separate credit issuers. You cannot product change across different credit issuers.
No, you can’t product change international products across the same credit issuer. American Express Hong Kong, Amex Canada, Amex UK, etc. are all separate entities that have different regulations.
International organizations have different…
However, if you are an international and looking to gain U.S. credit, American Express has a Global Transfer Program.
You might be able to do this, but I don’t advise it. American Express explicitly has terms that say they can close your account for “gaming” the upgrade bonus.
“ If we in our sole discretion determine that you have engaged in abuse, misuse, or gaming in connection with the welcome offer in any way or that you intend to do so (for example, if you applied for one or more cards to obtain a welcome offer (s) that we did not intend for you; if you cancel or downgrade your account within 12 months after acquiring it; or if you cancel or return purchases you made to meet the Threshold Amount), we may not credit Hilton Honors Bonus Points to your account. We may also cancel this Card account and other Card accounts you may have with us. “
Source: Offer terms https://online.americanexpress.com/dapply/partner/preacq/hil/hhas-upg-51/cmupgrade/carddetails#/cshop
If you accept an upgrade bonus, I recommend keeping the respective card open for at least 12 months.
Chase Ink business cards like the Ink Business Unlimited® Credit Card and the Ink Business Cash® Credit Card are marketed as cash back cards, but they actually earn Chase Ultimate Rewards points.
Per the Chase Ink offer details page:
Cash Back and Points: "Cash Back rewards" are the rewards you earn under the program. Cash Back rewards are tracked as points and each $1 in Cash Back rewards earned is equal to 100 points. You may see "Cash Back" in marketing materials when referring to the rewards you earn.
For example, the Ink Business Cash® Credit Card has a $750 intro bonus after you spend $7,500 on purchases in the first 3 months from account opening. When you earn the intro bonus, your account will be credited 75,000 Ultimate Rewards points.
Points do not expire as long as you have a Chase Ultimate Rewards earning card open.
Points can be redeemed for cash back, gift cards, and travel through the Chase Ultimate Rewards portal.
If you have multiple Chase Ultimate Rewards earning cards, you can pool the points together for redemption.
Chase Sapphire Reserve® cardholders can redeem points for travel at 1.5x via transfer partners or Chase Ultimate Rewards.
Chase Sapphire Preferred® Card and Ink Business Preferred® Credit Card cardholders can redeem points at 1.25x through Chase Ultimate Rewards.
The Discover It 5% cash back category for Q2 (April-June) 2018 is grocery stores. As a reminder, you need to activate the 5% promo to receive the cashback bonus. Earn up to 5% on up to $1,500 in combined category purchases when you activate.
If you're in the first year of your Discover It card, then the 5% cash back is 10% with Cashback Match.
You can view credit card offers by going to the "Credit Card Offers" tab. Find offers for the respective cards in "Cash Back Credit Cards." You don't have to use our links, but we're grateful when you do. Thank you for supporting AskSebby!
The reason why Discover Q2 categories sound familiar is that it's the same exact category for the Chase Freedom card as well. Learn more about the Chase Freedom Q2 categories here.
If you're in the first year of your Discover card, it makes sense to take advantage of the Cashback Match.
Discover It = 5% for groceries
= 10% if in Year 1
= 5% if in Year x
Chase Freedom = 5x for groceries, PayPal, Chase Pay
= 5% as a statement credit
= 6.25% with CSP
= 7.5% with CSR
= 10%+ via transfer partners (CSP/CSR/CIP)
If your Discover card is not in the first year, then you have some balancing to do between the Discover and Chase Freedom cards.
The Chase Freedom card extracts more value from Ultimate Reward points when you transfer the points to a Chase Sapphire card to redeem for travel. In the example below, if you maximize the 5x with grocery stores alone using the Chase Freedom, you'll receive more value than the Discover card.
Assumptions
Discover != Year 1
discover_max_value = 5%
freedom_max_value = range(5% to 10%)
Spend
Groceries = $1,500
PayPal = $0
Chase Pay = $0
Allocation
Groceries = $1,500
= 100% to Chase Freedom
For most people, it depends if the merchants you shop at take Chase Pay or PayPal to earn the 5x points.
In the example below, I use the Discover card that's in the first year to maximize the groceries category, and I use the Chase Freedom to maximize the PayPal category.
Assumptions
Discover != Year 1
discover_max_value = 5%
freedom_max_value = range(5% to 10%)
Spend
Groceries = $1,500
PayPal = $1,500
Chase Pay = $0
Allocation
Groceries = $1,500
= 100% to Discover
PayPal = $1,500
= 100% to Freedom
If you're having a hard time maximizing the grocery store category near the end of the quarter, buying store-branded gift cards are always an option.
The points game is always changing when it comes to valuations and redemptions. Should you diversify your points to de-risk?
The main factors that come into play for diversification are:
To simply things, we created this quadrant to determine your strategy.
If you’re someone who has a high amount of spend, but you don’t want to add that many credit cards, then Quadrant 1 is for you.
Pick a points system that works for your spending habits based on categories, and what you want to redeem the points for.
For example, if you don’t care about travel and prefer cash back, then I suggest looking into the Bank of America card set up to earn cash back.
If you have high spend and you want to redeem points for first class or business class flights, then American Express, Chase, or Citi cards would be ideal.
Quadrant 2 is for people who have a high amount of spend and want to obtain more credit card bonuses that provide outsized value. Diversifying your points portfolio should be relatively easy based on spend.
For people who spend less than $1,000 per month and want to optimize for cash back, I suggest picking one card or a simple cash back system.
A flat-rate cash back card like the Citi Double Cash or the Chase Freedom Unlimited card is ideal.
If you want to play the 5% cash back game, then adding the Chase Freedom, Discover It, and ABOC Platinum card is optimal.
The Chase Sapphire Preferred is another card to consider since the welcome offer is worth $500 in cash, and the $95 annual fee is waived the first year. You can product change it to a Chase Freedom or Chase Freedom Unlimited after 12 months of account opening.
If you have low spend, but you’re willing to add a few more cards, then going for cards that offer $100-200 as an intro offer is ideal.
There are a handful of cards in the travel, hotel, and cash back categories that fit the bill.
For cash back, cards like the Bank of America Cash Rewards card offers $200 after $500 in spend within the first 3 months of account opening.
For travel, the Capital One Venture card offers 50,000 bonus miles after $3,000 in spend within the first 3 months of account opening.
Monthly spending is an interesting topic because some people might not spend that much money on a day-to-day basis. However, they might have large monthly bills to pay like health insurance, rent, mortgage, or student loan payments.
The ideal strategy is taking the large monthly bills and paying them with a credit card to meet a minimum spend requirement on a new credit card.
We're partnering with LastPass to create this post. LastPass relieves the trouble of looking for passwords, and anxiety around getting locked out of accounts. With LastPass, you don’t have to write, remember, or reset passwords. They keep track of it all so that you can stay sane. Put your passwords on autopilot with LastPass.
I've been using LastPass for the past three years, and it's made my life a lot easier. Instead of keeping track of dozens of logins, I just have one login with LastPass.
When we think of hotel status, we think of checking in and finding out we have a free upgrade. Most hotel status programs require staying a lot of nights to earn status. Credit cards come into play here because you can "buy" status at different hotel properties.
For the top tier status, you still need to accumulate nights or spend a lot of money with the respective credit card.
Today, we're going to look at the four main hotel programs:
With Hilton, IHG, and Hyatt, you can earn status by accumulating points throughout the year. The big benefit of having status is you can earn more points when you stay at the hotel.
FREE HOTEL STATUS VIA CREDIT CARDS
For all of the brands, except for IHG and Hyatt, you get the 5th night free when you book a 5-night consecutive stay.
Moving onto the interesting part, you will not receive free upgrades at Hilton, even if you have Diamond status. With the other brands, free upgrades are specifically listed as a benefit for top tier status.
IHG offers upgrades, Hyatt Discoverist offers upgrades to preferred rooms, and Hyatt Explorist offers upgrades, but it excludes suites/clubs.
If you frequent Las Vegas often, Hyatt gives you status at MGM properties. If you have Discoverist, you get Pearl status, and Explorist will give you Gold status.
At Marriott, you receive upgrades at the Gold and Platinum levels. Ritz-Carlton offers free upgrades to Gold and Platinum members; Platinum includes suites.
HOW TO GET HOTEL STATUS
The Amex Hilton Surpass and the Amex Platinum cards will grant you Hilton Gold status in the first year. When you spend $40,000 in a calendar year with the Hilton Surpass, you can earn Hilton Diamond status.
By having the Chase IHG card, you automatically get IHG Platinum status.
By having the Chase Hyatt card, you automatically earn Discoverist status. After spending $50,000 in a calendar year with the card, you earn Explorist status.
If you want Marriott Silver status, you can achieve that just by having the Chase Marriott card. If you spend $105,000 in a calendar year, you can earn Gold status and Platinum status with $180,000 in spending.
With the Chase Marriott Business card, you can earn Gold Status after spending $50,000 per the calendar year.
If you have the Amex Platinum card, you automatically earn Gold status.
An important note is that if you have status at one Marriott property, you automatically get status matched at all the other brands like SPG and Ritz-Carlton.
By having the Ritz-Carlton card, you automatically earn Ritz-Carlton Gold status. If you want Platinum status, you'll have to spend at least $75,000 per the calendar year on the card.
Whenever you signup for credit cards, they typically ask you for a hotel membership rewards number to link to your account. This means you can get elite status at a hotel, even though you don't have the hotel chain's specific credit card or stayed nights there.
With all of the hotel membership reward numbers and logins, I use LastPass to keep track of all my logins.
View the current public hotel card offers by clicking the hotel banner in the top right sidebar.
When you’re excited about a hobby or topic, you might naturally want to share it with friends and spread the word. However, before you talk to friends about credit cards, be sure that they’re 100% financially responsible first. The last thing you want to do is help someone get into more debt.
For people who aren’t financially responsible (carry high balances on credit cards, only pay the minimum each month, high utilization, etc.), tempting them to open a new credit card is like offering an alcoholic more alcohol.
People who’ve been burnt by credit cards from irresponsible behavior will probably have a strong disdain for cards. It’s not worth wasting your energy by arguing with people who don’t like credit cards, especially family members.
They might think you’re insane for opening cards, and that you must be in debt from all the travel. The best approach is to reassure them that you’re not in debt and that you’re financially responsible (you better be!!).
If you can’t do basic math, you probably shouldn’t be using credit cards. Ideally, you should be getting positive expected value with the cards you have and the services you use.
One example is people who use Plastiq (2.5% fee) with a cash back credit card like the Citi Double Cash (2% — 1% at purChase plus 1% upon payment). There’s not a reason to use a service unless you’re getting positive expected value like hitting a minimum spend requirement or using a card that earns more than 2.5% on the specific category.
I recommend using Plastiq for hitting minimum spend requirements on new credit cards by paying bills like rent, tuition, or car payments.
To be successful in the credit card hobby, it’s essential to be organized. It doesn’t mean that you need a spreadsheet for everything, but at a minimum, you should have calendar reminders of due dates or minimum spend deadlines.
A few other items worth tracking:
There have been a few times where readers reach out with simple questions that could easily be answered with a Google search. Questions like,“is United Airlines a Chase transfer partner?” or “what is Chase 5/24?” can be Googled.
A lot of people seem to ask questions first before trying to solve or research the problem themselves. Spend at least 5 minutes trying to find the answer yourself, and then reach out for help.
Having a basic grasp of financial literacy is essential for credit card success. Understanding the difference between statement close dates and payment due dates, how to set up auto pay, or how to add a bank account to pay your credit card are basic functions you should know.
If you don’t understand the basics of how to use a credit card and how to avoid fees, you are set up for failure.
The most highly effective credit card users have a financial goal in mind to work towards. The goals are usually geared towards travel or cash back. The two goals have different optimal credit card setups, so you should pick one path to focus on.
If you’re switching between cash back and travel, it’s hard to get maximum value since most travel cards have lower points value when you redeem for statement credits. The value of travel cards is when you use transfer partners, and not cashing the points out.
I recommend taking the time to reflect on the path you want to take and focusing on cards that help you achieve that goal.
Customer service representatives can be useful at times, but there are often behind the scene factors that you don't see. Even though if you talk to a frontline rep, the information may not be accurate.
The Rewards Abuse Team (RAT) is a division within American Express that looks into accounts who try to game or abuse the rewards system.
Often, people will tell me that they called into the American Express customer service line and talked to an agent, and cleared everything with them. However, what they don't realize is that there is a secondary team, RAT, that will review the account.
For example, a handful of people messaged me recently telling me that their plan is to open the new Marriott Bonvoy Brilliant™ American Express® Card, acquire the welcome bonus, and use the $300 Marriott credit, all within 30 days. They plan to close the credit card within 30 days to avoid paying the hefty $450 annual fee.
Their rationale is that they cleared this with a frontline representative, but they don't realize that the RAT team will audit the account later. Closing a card within 30 days of opening and acquiring the welcome bonus is one of the easiest ways to get your account blacklisted.
Another example is with Chase. People often tell me that they walked into a physical Chase branch and the banker told them that the Chase 5/24 rule doesn't exist.
A few reasons for this:
We know that the Chase 5/24 rule exists because people online have been the data point they would like to see. By having enough data points, you can infer some rules.
The main takeaway from this post is always to do your own research, and to look at data points online to see if what the consequences are for each action.
American Express cards earn Membership Rewards (MR) points, and Chase cards earn Ultimate Rewards (UR) points, which point system is best for you?
We're going to look at the best use cases for both of these programs, and also consider the long-term strategy at the end of this post.
Amex MR points are great for first-class and business-class products. You'll need to transfer the MR points to transfer partners to redeem the points.
Good for aspirational travel ("YOLO redemptions").
Examples:
One thing to be aware of is that first class flights require significantly more points. From the chart below, round-trip economy class tickets cost 60,000 miles, and round-trip business class tickets cost 120,000 miles.
For most people, especially if you're younger and just starting out on your credit journey, I recommend going for economy flights. Set up flight alerts and book discounted fares with points.
For deals I use:
When it comes to airline transfer partners, Amex has a better list than Chase for international flights.
American Express
Chase
In case you're curious, it's hard to get outsized value from transferring to Ritz-Carlton, as far as I know. Many properties are Tier 5 (70k Ritz = 70k UR points) that can be booked for $500 to $800 (33k to 53k UR points via travel portal w/ CSR).
With Chase UR points, the best hotel redemption is for Hyatt properties. Chase UR points transfer at a 1:1 rate for Hyatt points. You can use 5k UR points for $100-$200/night Hyatt Place (Category 1) or use 30k UR points for $700/night Park Hyatt (Category 7).
Transfer partners (hotels):
When I stayed at a Hyatt Place in Arizona, I was able to find a reward redemption for 5k points ($50).
Depending on the retail price of the hotel, you're getting at least 2-4 cents per point in value.
a) $100 / night = 2 cents per point
b) $200 / night = 4 cents per point
In my opinion, transferring UR points to Hyatt is the best redemption for hotels compared to other hotel groups.
By transferring the points out and paying with points, you'll be able to avoid taxes and resort fees.
Chase UR points have good redemption value when it comes to last-minute United flights or Polaris flights. You can also use UR points to book Southwest Airline deals or to get Companion Pass.
Transfer partners (airlines):
Important: Don't transfer your points out until you have a specific redemption in mind. You can always transfer UR points -> Airline, but you can't transfer the points back.
For flight deals, I recommend using the Chase Travel Portal via the Chase Sapphire Preferred Card, Chase Sapphire Reserve, or the Ink Business Preferred Credit Card .
Chase travel portal (CSP/CSR/CIP):
Although American Express has better airline redemptions, I recommend going for Chase cards first because of the 5/24 rule. You will not be approved for the core selection of Chase credit cards if you have opened more than five cards from any credit issuer in the past 24 months.
You can always get Chase cards first, and then move on to Amex cards, but not the other way around (unless you wait 24 months).
For most people, I recommend getting the Chase Quadfecta first and then move on to Amex cards. If you want to talk strategy on what card to get next, feel free to fill out a free card consultation form.
One of the main reasons we're covering this is because the Google Pixel 2 and iPhone 8 just came out, so a lot of people are looking to make a cell phone purChase.
You can view credit card offers by going to the "Credit Card Offers" tab. Find offers for the respective card in "Business Credit Cards." You don't have to use our links, but we're grateful when you do. Thank you for supporting AskSebby!
To maximize my cell phone protection, I product changed my Ink Business Cash Credit Card to a Ink Business Preferred Credit Card. Even though the Chase Ink Preferred has a $95 annual fee, it's a no-brainer card because of the cell phone insurance.
There are a few other card that have cell phone protection, but they're either cards I don't have, ones that I don't want, or ones that I can't get. To me, it doesn't make sense to apply for a card solely for cell phone protection.
Other cards that have cell phone protection are the Wells Fargo personal cards, US Bank Platinum Visa, and the FNBO Absolute Rewards card. The cards I can't get are the ones for the Navy Federal Credit Union.
Cell phone protection will reimburse the eligible cardholder for:
With the Chase Ink Preferred, you're covered for damage and theft, but only for phones that are purChased brand new. This means that refurbished or used phones do not qualify. You're covered up to $600 per claim, with up to 3 claims per 12 months; this comes out to $1,800 (maximum) for 3 claims in 12 months. There's a $100 deductible for each claim.
If you want to read through the terms yourself, jump to page 48 of the benefits guide.
Depending on the type of phone you purChase, it might make sense to go through the manufacture's insurance. For example, if you purChase an iPhone, Apple Care is a great option.
On the other hand, if you purChase a cheaper Android phone that's ~$600, then credit card protection might be the optimal route.
One thing to consider is the cell phone insurance is supplemental, so if you have homeowners insurance, renter's insurance, or employer's insurance, those have to be used first.
Once the primary insurance is exhausted, the Chase Ink Preferred's cell phone protection will cover the damage to, theft of, or involuntary accidentally parting with the cell phone up to $600 per claim. You'll be responsible for the $100 deductible.
The Benefits Administrator will choose to repair or replace the cell phone for the lesser amount up to $600.
Under normal circumstances, you'll be reimbursed within 10 business days of receipt and approval of the claim form and all required documents.
