It’s tax season. That time of the year where part of the population gathers paperwork as soon as possible to file for a refund and the rest of us put off the task until the last minute because we don’t want to see how much money we’ll owe the government. In the past, the way to pay the Internal Revenue Service was to write them a check and make sure that it was postmarked by the end of the tax deadline (April 15th, or later due to holidays or weekends). Now that many people choose to eFile their taxes, you can easily add your banking information to have your taxes due removed from your bank account. This is a fee-free option and I’m sure many people take advantage of the ease of doing this. As someone who’s always looking for a place to earn extra points and miles, I was interested when I saw that you can pay your taxes with a credit card…but with a catch.
All of the larger airlines in the U.S. offer co-brand credit cards. These cards, which provide extra benefits to cardholders, range from ones with no annual fee to premium cards costing up to $450 per year. While you’d think that using a co-branded card would be the best choice for earning points with your flight purchase, that’s usually not the case. For most airlines, you don’t earn any extra points for airfare purchases for having a more expensive card either.
In most cases, instead of using a co-brand card, it’s better to use a card that earns flexible points like Membership Rewards, Thank You Points or Ultimate Rewards. These cards provide the opportunity to earn more points as well as the flexibility to use points on multiple airlines. You’re able to transfer points from these programs into your airline mileage account when you need them.
Here are the earnings multiples on airfare for the main flexible points cards from each bank:
American Express (Membership Rewards)
- Platinum card ($550 annual fee) – 5x points on flights booked directly with airlines or with American Express Travel
- Gold card ($250 annual fee) – 3x points on flights booked directly with airlines or with American Express Travel
Chase (Ultimate Rewards)
- Sapphire Reserve ($450 annual fee) – 3x points on travel worldwide (including airfares purchased from airlines or travel agencies/websites)
- Sapphire Preferred ($95 annual fee) – 2x points on travel worldwide (including airfares purchased from airlines or travel agencies/websites)
Citi (Thank You Points)
- Citi Prestige ($495 annual fee) – 5x points on purchases at airlines and travel agencies
- Citi Premier ($95 annual fee) – 3x points on purchases at airlines and travel agencies
The AMEX Platinum and Citi Prestige both offer 5x on airfare but the AMEX card only counts purchases direct from the airline or their website. When I had both cards, I used the Citi Prestige because I valued the additional travel insurance coverage but I know people would rather earn Membership Rewards than Thank You points. Of the $95 cards, the Citi Premier earns the most points on airline purchases at 3x.
So how many miles will you earn by using an airline co-brand card to purchase airfare and when does it make sense to do so? I’ve indicated which airlines are partners of one (or all) of the flexible currency cards so you can compare earnings potential between cards.
In May of 2018, I wrote an article that told everyone to pool their Chase accounts into whichever one was the most valuable because the ability to do so might be going away. It was a big story for like a week and there was plenty of hand wringing and mumbling (Sharon: “Was this all happening in the points and miles blogger world?” Joe: “Yes.” Sharon: “Oh, OK. Cuz I don’t remember wringing my hands and mumbling but I don’t do the points and miles thing, so that make sense now.”) but eventually, nothing happened. Everyone moved along to the next crisis and the issue was pretty much forgotten with no new news. And when it comes to points and miles, Gary Gnu taught me growing up that no gnews is good gnews.
The Great Space Coaster, but I digress. Back to the topic, combining Chase Ultimate Rewards.
At the beginning of 2019, Gary from View from the Wing (no relation to the Gnu) posted that while Chase had considered stopping customers from combining points, there was no current plans to implement such a restriction. He provided a quote from an article in the Wall Street Journal:
JPMorgan executives debated whether to stop letting cardholders pool together points from multiple cards, according to people familiar with the matter. JPMorgan’s [spokeswoman Mary Jane] Rogers said the bank has no current plans to stop cardholders from pooling points.
Like he says, this is no guarantee they won’t change their minds about this but I guess it’s still more of a positive than a negative for them, both from financial and publicity standpoints.
So why do I think it’s wise for you to combine your points into a single account?
Fuel Rewards is a program that provides discounts at Shell gas stations. It’s free to sign up and everyone who joins automatically gets some type of savings. You can save more by taking certain actions (i.e. using a shopping portal or dining program) or by having a card belonging to one of their partners.
Let’s first talk about signing up for Fuel Rewards.
If you’re not already a member, you can get 25 cents off per gallon on your first fill up after joining. We have a referral link where we’ll also get a credit for for new signups. You want to support YMMV, don’t you?
Once a member, you have automatic gold status for 6 months. The ongoing membership process is a little more difficult to follow:
The $95 annual fee was due for Sharon’s Chase Sapphire Preferred card. That’s the time each year when I think about the card’s benefits vs. the cost and if I should keep, downgrade or cancel it. After giving it some thought, I decided that we’d keep the card but that didn’t mean I wouldn’t try to get a retention offer from Chase.
I had Sharon call (she hates these calls so I try to not to make her do them often) and she was told by a representative that there were no offers available for us right now. As per the notes I gave Sharon, she thanked them for looking and said that we could keep the card for now.
The Sapphire Preferred is a good card for $95 but we hardly use it anymore now that I have the Sapphire Reserve. I was updating the annual fee spreadsheet and gave one more look at deciding if I wanted to keep the card or not. Continue reading “Why You Should Keep Your Sapphire Preferred Card”