Why I Choose To Earn Fewer​ Points On My Cell​ Phone Bill Each Month

Earning points on recurring charges, like your cell phone bill, is an easy way to build your balances without much effort. All you need to do is set up a monthly payment with the card you have that earns the biggest bonus for that category and you’re set. I have a card that earns 5x points on telecommunication charges, so why would I willingly choose to pay my bill each month with a card that earns less?

When making decisions like this, I rarely just pick the card that earns the most points. While that’s a major factor in my decision, there are several other things that can influence me to use another card. As I’ve written before, I’m generally a risk-averse person and if I have to give up a few miles here and there for a little piece of security, that’s a choice I’ll usually make.

The card I previously used to pay our cell phone bill was the Ink Business Cash Credit Card. While it took me forever to convince Chase I had a business, they were willing to give Sharon an Ink Bold card years ago (granted she had the 1099’s and W2 forms to back up her application). When that card was phased out, we changed it to the Ink Cash which had almost identical benefits for a better price, for free.

This no-annual-fee card from Chase has some fantastic bonus categories, earning 5% cash back on the first $25,000 spent in combined purchases each account anniversary year at office supply stores and internet, cable and phone services. It also earns 2% cash back on the first $25,000 spent in combined purchases each account anniversary year at gas stations and restaurants.

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Earning 5% cash back is a great return but it can be even better if you have one of the other premium Chase cards since you can transfer points from your Ink Cash card to a card, like the Sapphire Preferred. You can then use the points for travel bookings at 1.25 cents per point (giving you a 6.25% return) or transfer the points to a hotel or airline program where you can easily earn more than 2 cents per point (a 10% return).

However, I changed the card on our T-Mobile bill around the middle of last year. Right after I was approved for the Ink Business Preferred card.

One thing I loved about the Ink Preferred is the 80,000 Ultimate Reward sign-up bonus for the card. There was one other perk this card provided that I didn’t get from any other card I have.

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Cell Phone Protection.

You don’t have to pay for the phone with the card for your phone to be covered, you only need to be paying the phone bill with your Ink Preferred card. The coverage starts the day following your cell phone monthly bill payment and remains in effect until the last day of the calendar month following the payment. Unlike other coverages, there’s no restriction on how old the phone is or when you purchase coverage, which is nice because I might just keep my $1000 phone for more than 2 years before upgrading.

Here are the details of the coverage:

Get up to $600 per claim in cell phone protection against covered theft or damage for you and your employees listed on your monthly cell phone bill when you pay it with your Chase Ink Business Preferred credit card. Maximum of 3 claims in a 12 month period with a $100 deductible per claim. 

The downside is the Ink Preferred’s bonus categories aren’t as generous as the Ink Cash, which has always confused me that the free card earns more points than the one with the $95 annual fee. The Chase Ink Business Preferred earns 3X points on the first $150,000 spent in combined purchases in the following categories each account anniversary (not calendar) year.

  • Travel
  • Shipping Purchases
  • Internet, cable and phone services
  • Advertising purchases with social media sites and search engines

You can check out my full review of the Ink Preferred card here. If you want to sign up for the 80,000 point offer, we’d appreciate it if you use our referral link (full disclosure: if you do use our referral link, we get a small kickback, which we would appreciate).

Looking at the options

I sat down and weighed my options to see if I was making the right decision by giving up the points. Let’s break it down by phone line because the math is easier:

I’m earning 3x points for my T-Mobile bill when I pay with the Ink Preferred. Our bill is around $120 a month (or $60 per line) so I’m missing out on 120 Ultimate Rewards Points per month (per line). If I wanted to buy any other type of insurance for the phone, the plans are typically for 24 months. 120 points x 24 months = 2880 points, If I value the points at 1.5 cents each (what they’re worth at the Chase Travel Portal with the Chase Sapphire Reserve), the points are worth $43.20

Most cell phone insurances need to be purchased when you get the phone but I’ll assume for this exercise that I’m purchasing a new phone and can still get any coverage.

  • SquareTrade – $8.99 per month. $149 deductible for all claims. $216 for 24 months.
  • T-Mobile – $15 per month. $249 deductible for all claims. $360 for 24 months
  • AppleCare+ – $9.99 per month or $199 for 2 years. $29 deductible for screen replacement and $99 deductible for other damages.

The best deal here would obviously be the AppleCare+ which has a lower deductible for screen damages and otherwise has similar coverage.

Since I’m going to get insurance for a $1,000 phone, my choices are to pay with the Ink Cash and earn the extra points (+$43.20) as well as purchase AppleCare+ coverage (-$199), which leaves me -$155.80. Or I can pay with the Ink Preferred and earn fewer points (-$43.20) but get free coverage ($0) putting me at -$43.20.

The only drawback with the Ink Preferred is the $600 limit of coverage. That’s a risk but I get insurance in case I need to use it. but I’m hoping I don’t have to and I’m not going to pay an extra $110 for an extra $300 of coverage.

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This post first appeared on Your Mileage May Vary

 

 

 

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