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Comment by giarc | Hacker News Reader

The points can really be worth it though. In 2 years, over 3 cards (between my wife and I), I've racked up nearly 400,000 Aeroplan miles, which is valued somewhere around $8,400 (2.1c per mile). And this is regular spending, and pretty basic cards (AMEX Cobalt and TD Infinite). These aren't the $700+/year cards, all are $1xx/year.

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You are gambling that the airlines let you spend those points or miles on something that you would have bought anyway at a conversation rate of $0.021 per point or mile, but there is no guarantee. They hold all the cards and they can devalue those anytime they like.

To me, if I have to spend any extra time figuring out how to spend those miles and points, or if I have to make even a single extra stop or adjust my itinerary to make use of them, then it is not worth it compared to a simple 2% cash back scheme.

I'm about to book business class tickets over to Lisbon -> Amsterdam -> Vienna, for 140k points and $300 in fees. All it cost me was a few hours spread over a year as I signed up and churned through 3 different credit cards.

Easily worth it IMHO. If I'm spending that money anyways, putting a bit of effort in to maximize the rewards seems logical.

You’re 100% right. I had 800k points I was sitting on for years because it took weeks or months of advanced (in both senses of temporal and complexity) planning to try to spend them optimally. No one is getting optimal rewards under constraints. Sure, it is possible to get round trip business class SFO to SIN for like 60k points in some edge cases. But the more typical scenario is that only on certain flights at certain times that are scooped up immediately by people who are in the know and religiously checking for exactly these deals.

What really happens is you hope you can do that but then get frustrated and either sit on your points for years or spend 2-3x the “optimal value” amount for something basic. Don’t get me wrong I like points, and it feels good cashing in on international business class tickets, but spending them in any way close to optimal is a stressful mess of transferring between airlines, calling service reps to get hidden seats and deals, gambling on upgrade availability, etc.

Finding great deals is not something accessible to someone who is only willing to spend 1-2 hours looking for a flight. You really do need to make it a hobby. I asked on r/awardtravel a few months back where all the deals were for an international flight I was trying to book 5 months in advance and got downvoted to oblivion because “everyone knows those deals are gone by now, you need to look at least 9 months in advance”.

$8,400 over three years is about $230/month. And aside from the opportunity cost of your labor to optimize that, you should also theoretically account for any purchases that you wouldn't have made if you weren't trying to optimize your points (if any; I'm sure it's hard to attribute).

With current interest rates of around 5%, one could get the same stream of income ($2.8k/y) by just plonking $50k or so into a high-yield savings account or money market fund.

Mind you, the theoretical advantage here is that it's money you're making that doesn't require you to have $50k sitting around all at once time.

I have likely spent 1 hour applying for cards, loading them into Apple Wallet over 3 years. If you are doing the math on opportunity cost for something you spent 1 hour over 3 years, you are already wasting your time.

To be honest, the $50k argument isn't comparable. It's like saying "Oh you have a side gig making $10k/year, why don't you just invest $200k in a money market fund instead?" First, someone could do both. And second, it's not even a logical comparison.

Yes, but how much did you spend to get those miles? What is your effective % cash back?

Best consumer cash back card is 2%. I'd have to spend over $400,000 to get $8400 in cash back. I definitely haven't spent close to that. So if I value the $8400 at cash value, it's better than any cash back credit card available.

Aeroplan stole 300,000 points from me. Never again. I'll stick to cash back cards that give me my rewards every month in a form I can use.

It's been like 10 years since I looked into the options but at the time I was getting my first cards I was doing the math on various points cards to compare to cash back and what I found was, unless you were really gaming the system, the best you could hope for is roughly 1-2% returns. And the system, whether you're gaming it or not, also requires you to then play in the system so any given card might work out to like 5% if you spend those points on air travel... with a whole host of restrictions including but not limited to a specific airline. I don't have the time in my life to game the system so I can fly marginally cheaper with a specific airline and therefore restricted set of airports and scheduling options.

Travel cards haven’t been that restrictive in the time I’ve been using them (since around 2016). Chase Sapphire Preferred/Reserve and Amex Gold/Platinum don’t have any restrictions on what earns points, it just needs to code as travel (flights, rides, or hotels) or restaurants and while there’s some benefits from using the Chase/Amex portals to book even that’s not required. Similarly points can used towards anything that codes as travel.

Of course there are airline/hotel specific cards and those may be more restrictive but I’ve never seen the point in those.

> but I’ve never seen the point in those

The one points card I have actually is a Marriott card which obviously only works with Marriott, but Marriott is everywhere and doesn't restrict scheduling options so it was an easy choice at the time. I used to travel weekly for work and the hotel was on me for reimbursement whereas the airline was on company card, and Marriott was the preferred booking option by my company so it made a lot of sense to get the card. The math at the time for that was like 5-7% when spending the points at Marriott plus a free night for what was an $85/year card. Useful for personal travel.

I used to have a sapphire preferred, which promised 1.25x point value or something when spent on travel. When I went to book via the chase portal, everything was magically .25x more expensive when compared to the airlines page.

I can’t say I’ve observed that. Checking just now the prices I’m seeing in the Chase portal are identical to those listed on Expedia (which the Chase portal is built on). Some flights are slightly cheaper on airliner sites though.

hmm, maybe it was just jetblue specific, or something about the time I was booking. But it left a bad taste in my mouth, I decided to cancel the card at that point.

I can buy any flight from the airline directly and just apply points to my bill. Easy to do.

I’ve derived quite a lot of benefit from a Sapphire Reserve and Amex Plat over the years, though a lot less recently with the pandemic. They pay for themselves very quickly if you do any amount of travel at all, like recently I used the points earned from a trans-pacific flight to cut the cost of a hotel stay later during that trip in half (and booking that stay also netted me a nice chunk of points).

Might drop one of the two at some point though since they both cover the same niche.

I definitely believe it can be worth it monetarily. But to me it seems like such a maze of which cards to get, what point transfers to do. When it comes down to it, I don't even travel that much. Churning cards. One of my friends has a bunch a points that are going to expire, or there's point inflation or something?

I may waste my time on other things (like on hn, lol) but I don't think I want to spend it on that.

There are sites that basically walk you through optimal strategies depending on your situation. It's super easy nowadays.

Between Amex vs Chase Sapphire, I feel like the Sapphire points go a longer way than the Amex

And what would you have gotten from 2% flat cash back? Probably similar, I’m guessing.

To get $8400 on 2% cash back, you'd have to spend $420,000.

Exactly, there are 0 cards that would give cash back equivalent to what I've spent. I suspect it's like $100,000-$150,000. So being conservative, it's a 5% 'cash' back card.

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