Image sourced by Avery Evans @averye457
I have four credit cards – one Visa credit card and three American Express cards. BUT. . .
That’s a story for another blog post. But for the moment, let’s zero in on my favorite: Hilton Honors American Express credit card.
American Express offers three varieties – Hilton Honors American Express Card:
Basic: Free – no annual fee (but with reduced cardholder benefits);
Surpass Card: $150 annual fee; and,
Aspire Card: $550 annual fee.
Each Hilton Honors American Express Card offers Different benefits as you may gather.
Based on my spending habits, the Aspire Card doesn’t work for me.
The Aspire Card’s primary benefit is a $400 statement credit per year in two installments for staying at a Hilton resort – $200 in each six–month period.
The problem is that I don’t go to a Hilton Resort, let alone twice a year.
With any loyalty rewards credit card, the Primary Question to ask yourself and your family is, “Will I use the credit card in the way(s) the card issuer requires in order to receive the benefits offered?”
For the Aspire Card as I mentioned, I never stay at a Hilton Resort. So for me, it’s Highly Unlikely that I would ever qualify for – earn – the $400 statement credits.
Now that we have kicked the Aspire Card to the curb, let’s explore the benefits the Hilton Honors American Express Surpass Card offers.
Welcome Bonus: 130,000 Hilton Honors Bonus Points when you charge $3.000 in the first six (6) months of Card Membership.
By my estimate, currently that’s two free nights at a Hilton hotel.
Which is approximately a $400 to $500 value.
Points Awards:
12X Hilton Honors Bonus Points on Hilton Purchases.
6X Hilton Honors Bonus Points at U.S. Restaurants, U.S. Supermarkets and U.S. Gas Stations.
4X Hilton Honors Bonus Points on U.S. Online Retail Purchases.
4X Hilton Honors Bonus Points on all other Eligible Purchases.
Complimentary Hilton Honors Gold Status.
$200 Hilton Credit per year – $50 statement credit per quarter when you spend at least $50 at Hilton properties.
FREE Night Reward Certificate when you charge $15,000 on the card during the membership year. And note that when you charge $15,000, you receive four (4) to 12 (twelve) Hilton Honors Bonus Points.
For argument’s sake, based on an average rate of 4X – four points per dollar – let’s say you earn approximately 60,000 points. Right now, a free night costs $50,000 to 60,000 points. So in effect, when you spend $15,000, you could earn two free nights.
I typically use the Free Night Reward Certificate to stay at a Hilton Hotel that costs $400 or more a night. Why not! Money in my pocket.
I’ve stayed at the Hilton Santa Barbara Beachfront Resort; the Hilton San Diego Bayfront; the New York Hilton Midtown; and a few more over time, for Free.
When I checked the Hilton App as we were writing this blog post, these hotels cost between $474 and $696 for a night’s stay. No doubt you get the points (No pun intended).
To maximize the value you receive for loyalty rewards credit cards, Keep these Key Points in mind:
The minimum credit rating – FICO® Score – tends to be relatively high to qualify for rewards credit cards. This is another reason why you want to build your credit rating.
Be sure to read the card’s fine print so you gain a clear understanding of the credit card’s rules of the road. And Can meet the requirements so you get the prize.
In other words, you have to be in a position to use the card – charge purchases – in a way that meets the credit card issuer’s requirements. Or you won’t receive the reward.
And you have to Actually use the card – charge purchases – in accordance with the credit card issuer’s rules and requirements. In other words, Read the Fine Print.
Credit card companies change the card bonuses and requirements periodically.
So make sure you can meet the requirements to receive the reward in the year ahead.
Or, look for a different rewards credit card. And. . .
When you’re reading this blog post Hilton may have modified the rewards points and new cardholder bonus described above; needless to say, evaluate any credit card’s offer based on the then current terms and conditions.
In addition, Your life – spending behavior and purchasing behavior – is likely to change over time. So when your credit card comes up for renewal, make sure it’s Highly Likely that you will use the card – make purchases – in a way that meets the credit card’s requirements so you receive the bonus rewards.
And Hilton and other hotel brands and airlines as well change the points cost for a hotel room and an airline ticket for that matter periodically. Based on their cost and the demand and supply of their stock – hotel rooms and airline seats. for example, based on seasonality; and for an airline, a flight’s scheduled departure time.
Be sure to pay your credit card statement balance in full every month.
Or at least the minimum payment – if you’re in a bind. Read the credit card’s rules but typically if you don’t pay your bill, you lose the card rewards and card benefits. And that defeats the purpose.
OH YES – if you carry credit card debt, STOP using your credit cards, reduce your spending and focus on paying off your credit card debt as soon as possible!
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Plus, consider these additional insights:
I Don’t carry any credit card debt, except for the current month’s charges. In other words, I pay my statement balance off in full, every month. So I receive net value equal to the value of the rewards I receive minus the annual credit card fee.
In addition, a decent percentage of my spend arises from business expenses. And my company reimburses me on the 15th of every month – assuming I submit my Travel & Entertainment (T&E) Expense Report within two days of the prior month end.
So, business expenses help me reach the $15,000 required spend.
Typically, a day or two after the company reimburses me for the prior month’s business expenses when the funds clear – become available as “good funds”, I send the money to the applicable credit card right away.
This reduces my credit card balance and my checking account balance.
This also helps me maintain a realistic and accurate view of how much extra money I can spend before the next paycheck without running out of money.
And ensures that I have enough money to pay off my credit card statement balance in full on or before the due date.
Depending on your living cost and lifestyle, crazy to say, it’s Not all that difficult to charge $15,000 in a year.
And for the last few years and probably at least the handful of years ahead, I expect to travel for business several times a month.
And whenever practical, I stay at Hiltons.
This helps me lock in the $50 quarterly statement credit.
Plus, by staying at Hiltons whenever I can, I stack the Hilton Honors rewards points.
Which helps me earn more points and bonuses (Free nights) and reduce the cost of my vacations.
In other words, my spending activity and purchasing behavior makes paying the annual fee worthwhile.
I monitor how much I’m charging throughout the month and I Rarely spend (charge) more than I can afford to pay that month. And. . .
If I happen to overspend in one month, I maintain a standing reserve – in my checking account – of $1,500.
So when I overspend, I have cash on hand to cover the extra purchases. Then, I avoid incurring Costly credit card debt.
If I use my cash reserve, during the subsequent month I reduce my spending to create free cash. This helps me replenish my reserve.
I also charge most purchases with a credit card for convenience and to earn the loyalty rewards points.
But I analyze whether the vendor charges a “convenience fee” which is a euphemism for “surcharge.” Really, for the vendor’s convenience, Not the cardholders’. ☺
The convenience fee or surcharge typically runs 3% to 4% of the purchase price. These fees can really add up!
Depending on the purchase and the amount – high or low – I may use my credit card or pay by check or ACH.
For a great example of how convenience fees sneak in and add up, read our blog post about our Chubb insurance quarterly premiums – click here.
Recently, I changed the way I pay my Cable Bill (WiFi) from my Visa credit card to ACH.
This saves me $10 every month!.
In comparison, the value of the rewards points was only $2.
No-brainer!
Although this point is Not directly related to credit card loyalty rewards. . .
Often, I tag on a mini-vacation to my business trip.
This reduces the cost of vacation and leisure time when I take a business trip that’s on a Thursday. Often I have a client dinner or business event on the Thursday night so it’s impractical to fly back to New York. So I stay overnight on Thursday. Although I suppose there’s always the redeye.
Often, I’ll stay on Friday and Saturday night and relax and visit friends. Since the company reimburses me for the airfare and transportation to and from the airport, I avoid that cost.
I cover the cost of the extra hotel nights and the meals.
Depending on the dollar cost of a weekend night at a Hilton compared with the number of rewards points needed for a free night, I’ll pay for the room with my Hilton Honors Credit Card; or use Hilton Honors Rewards Points.
Right now, every other month or so I have business in Ft. Lauderdale and Miami. So happens that my brother and sister-in-law, my college roommate and a few other close friends live there.
Oh. . . and to answer the question embedded in the title, “Why I Love Rewards Credit Cards!”:
I Love rewards credit cards because they offer a puzzle – a way to make money and get rewards that are fun and useful. In other words, get free vacations.
That is so long as you can “work the system”.
To learn more about loyalty rewards credit cards and find the right credit card for you, visit CreditCards.com – click here. And to. . .
Build More Wealth Right Now Click here.
See you on the Beach.
Arthur V.
Aka Arthur VanDam, CPA MBA
To Build More Wealth Right Now Click here.
Budget and Grow Rich® – ISSN: 2992-9296 – USA International Standard Serial Number (ISSN)
Disclaimer: OH and Please Remember, we are Not financial advisors, financial planners, attorneys or accountants and are Not providing any specific financial, tax, accounting or legal advice here. Be sure to conduct your own due diligence and consult your own professional advisors to get sound professional advice that’s specific to your financial and personal circumstances, risk tolerance, time horizon and investment goals and objectives among other key factors! In addition, note that companies change their offers and terms and conditions periodically so the savings presented in this article / blog post may be outdated when you are reading it.
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