Traveling Smart with Credit Card Benefits (신용카드 혜택)

2014 has been a travel-packed year for Christine and I.  Just this year, we traveled to Beijing, Bangkok, all over the United States West Coast (California, Oregon, Arizona, Nevada), and even several staycations in Seoul which may have appeared a bit pretentious by staying at 4/5 star hotels like Park Hyatt Seoul and W Seoul.  But let me tell you a little secret - we stay at most of these 4/5 star hotels for FREE.

Well, sort of.. kind of.  I don't exactly consider hotel/airline points to be free.  Airline and hotel companies have a whole separate accounting line for loyalty points so you, as the consumer, should also take very good care of them, as if they were cash.

So there are THOUSANDS of credit cards out there with different benefits such as cash back, airline point, and hotel points.  First off, cash back rewards are the least bang for your buck.  Most cash back cards offer 1% cash back, with 3, 5, even 6% cash back on specific categories on a rotating basis (i.e. 5% cash back on gas from Jan-Mar).  How much gas could you possibly spend compared to your everyday spending?  So if you are carrying a cash back reward credit card, you are not doing yourself justice as far as rewards.

Next is airline and hotel rewards.  Your typical airline reward credit card will give you 1 point for every dollar spent, and 3-5 points for every dollar spent on their airline.  The same goes for hotel reward credit cards.  But let me show you why I prefer hotel points vs airline points.

It's simple math and it really boils down to how many dollar (or really cents) you can get per reward point.  For example, let's say you carry a Korean Air SKYPASS Visa which rewards you a point for every dollar spent.  Let's take a look at Korean Air's Reward Chart.

A flight from Korea to North American (USA) requires 70,000 points during off peak season and 105,000 during peak season.  The fact that there are two separate categories for off and peak season irritates me already.  For the sake of this simulation, I'll use an off peak season (November).  In order to maximize these points, I'll pick New York City as the destination, the farthest and most expensive flight from Korea.  Kayak search shows a Korean Air flight for $2,061.

$2,061/70,000 = 0.02944

In this case, you are getting 2.9 cents for every point which is not a bad deal at all.  If you had to fly on a peak season, your points value would diminish to almost 2.1 cents per point. (Kayak search from ICN to JFK from Dec 24-26) 

$2,203/105,000 = 0.0209   

Now, let's compare hotel reward points.  Just as I did with airline reward points, I'm going to maximize these points by picking the most expensive locations.  Let's try NYC.

The rate for a night at Park Hyatt New York is $1,023 or 30,000 Hyatt Gold Passport points.

$1,023/30,000 = 0.0341

You are getting 3.4 cents per reward point - much higher than airline points.  Let's try another example.

A night at the St. Regis New York costs $1,395 or 35,000 SPG points.

$1,395/35,000 = 0.0398

This is almost 4 cents per reward point which is extremely rare.

So in conclusion, it really depends on what you prefer and use most.  Some people fly often due to work and rather prefer to rack up airline miles in order to upgrade the ticket that their company provided them.  Some people rarely travel and rather simply get cash back for their spending.  I personally value hotel reward points and carry two cards - the American Express Starwood Preferred Guest and Chase Hyatt Credit Card.

This card is free for the first year then incurs a $65 annual fee after the first year.  The annual fee is worth having a credit card that racks up Starwood points.  Starwood points are extremely versatile as you can transfer these points 1 for 1 to most airlines as well.  You receive an automatic Starwood Gold status when you spend at least $30,000 on the card (status kicks in the following calendar year).  The bad thing about this card is that it has a foreign transaction fee and for a guy like me that lives overseas, it can be a burden.  I've thought about cancelling this card on my occasions.  But everytime I am really close to making that decision, I'll stay at a W property and get an amazing upgrade.  So this has deterred me from cancelling and I just suck up the foreign transaction fees as well as the annual fee.  For example, I booked a regular King Room at the San Diego St. Regis for two nights this past July (12,000 points each night).  They upgraded us to the Presidential Suite!  We stayed in a $1,300 a night room using 12,000 Starwood points per night.  We've received upgrades at the W Westwood and W Bangkok as well all within this year.

 This was included as part of the Presidential Suite.

 

The second card I carry is the Chase Hyatt.  Christine and I got married at the Grand Hyatt Seoul and they provide 110,000 Gold Passport points to newlyweds.  So in order to build on those points, we got the card.  This card carries a slightly higher annual fee of $75 after the first year but here are the amazing benefits of the card:

1.  2 Free Nights at ANY Hyatt location worldwide after making $1,000 in purchases in the first 3 months.  This is a very very precious benefit.  So you can stay at Park Hyatt NYC, Park Hyatt Tokyo, Park Hyatt Paris, you name it.  But here's the catch.  All those properties are extremely hard to book so you basically have to match your vacation time to their availability.  And the 2 free night stay has a 1 year expiration date so we unfortunately had to use them in Korea.  We used them at the Park Hyatt Busan and most recently at Park Hyatt Seoul before it expired at the end of this month.  I had them originally booked for 2 nights at the Grant Hyatt Tokyo (average $400-500 a night) but my work schedule just did not allow for a trip to Japan.

2.  Instant Platinum Hyatt Gold Passport status.  As long as you carry the Chase Hyatt, you are a Platinum Hyatt member.

3.  1 Free Night every year you renew the card.  This free night is good for use at any Hyatt property upto Category 4 (excludes locations like Park Hyatt Tokyo, NYC, etc).

4.  No foreign transaction fee.  Our strategy is to use the SPG AMEX whenever we are in the states as well as internet shopping through US vendors upto $30,000 (in order to maintain SPG Gold status) and then use the Chase Hyatt after that.  We obviously don't spend all $30,000 in the states or through US vendors so we do fork up $300-$400 in foreign transaction fees annually but again, this is worth it for us with all the amazing upgrades we receive as SPG Gold members.

If I had to choose between SPG and Hyatt Gold Passport, I would go with SPG.  Although Hyatt has much more properties worldwide and their signature Park Hyatt properties are top notch, Hyatt is pretty stingy when it comes to upgrades.  If you are a Diamond member, that's not a problem but for a regular Joe like myself with a Platinum status, upgrades are rare.  But you do get treated very well as a Platinum member.  The last upgrade I can remember from Hyatt is at Dubai on a layover during our honeymoon.  Granted, we may have gotten the upgrade just by being newlyweds but they upgraded us to the Ambassador Suite which is several categories above the regular King Room.

Grand Hyatt Dubai Ambassador Suite

Ambassador Suite provides Club Access with free breakfast and free drinks throughout the day.

I honestly don't understand people who use cash or debit cards to make purchases.  I'll swipe even on a $3 purchase in order to get rewards points.  So rack up those credit card points and use them wisely!