| | The right card for the right purchase | | by Brian Kelly | |  | There was shocking news Sunday that Alaska Airlines was going to buy Hawaiian Airlines — it surprised everyone, including me. So, what does this mean? The U.S. government has not been keen on approving airline mergers since there has been so much consolidation in the industry. Future consolidation means less competition and higher fares, so there's pressure on the airlines to prove that a merger is good for consumers.
This week wrapped up the government's lawsuit against JetBlue as it tries to purchase Spirit Airlines. What do I think about that one? I like the concept that if JetBlue takes over, all Spirit planes will become premium, with JetBlue's extra legroom and lots of amenities, but the U.S. would lose a low-cost carrier. So those who are used to Spirit's low fares and no frills will have less choice. And frankly, on planes with fewer seats and more legroom, you're going to generally see airfares go up. So, for many consumers in the middle and upper end of the market, it will be good news.
In the case of the Alaska-Hawaiian merger, it's a little different since they plan to operate separately. I'm sure there will be some changes — especially with the frequent flyer programs. Overall, I'm generally supportive of Alaska buying Hawaiian. Strong airlines are good for consumers. These days, to make money in the industry and survive the ups and downs in the economy, airlines have to be financially sound. The larger the airline, the easier it is to do that.
Now, as we go into the final weeks of the holiday season, having a strong earning strategy to accrue maximum points on an annual basis is not only about earning lucrative welcome bonuses (such as the six-figure welcome bonus on The Business Platinum Card® from American Express) but also about having the right card in your wallet for the right purchase. Here's a look at how my wallet stacks up for some of the most common expenses.
Food
This usually tends to be the biggest expense category for most people, aside from rent (and I use my Bilt Mastercard® for rent payments). Full disclosure: I'm an adviser and investor in Bilt.
For dining at restaurants and getting takeout, I always use my American Express® Gold Card to earn 4 points per dollar. You'll earn the same at U.S. supermarkets, on up to $25,000 per year, then 1 point per dollar after that.
Travel
My next-highest spending category is travel, and I have a few different cards that I use depending on the type of purchase I am making.
Airfare: I use The Platinum Card® from American Express for flights since it earns 5 points per dollar (on up to $500,00 on these purchases per calendar year), and it comes with flight delay and cancellation coverage*. If you are thinking about getting an Amex Platinum or Amex Gold card, be sure you are checking to see if you're targeted for an even higher welcome offer through CardMatch.
Hotels: I use my Chase Sapphire Reserve when booking hotels or rental cars because I earn 10 points per dollar if I book through the Chase Travel portal. I also use this card for general travel purchases such as cruises, tours, ride-hailing services and trips booked through third-party travel websites like Expedia and Priceline, which earns me 3 points per dollar. The current offer of 60,000 bonus points after you spend $4,000 on purchases in the first three months from account opening is worth $900 toward travel when you redeem through Chase Ultimate Rewards.
Gas: The Citi Premier® Card is my go-to for gas since it earns 3 points per dollar. With Citi's current offer on this card, you can earn 60,000 bonus ThankYou points after you spend $4,000 on purchases within the first three months of account opening. This sign-up bonus is worth $1,080, according to TPG's valuations.
Now, for shopping or all other spending, I'm using my Capital One Venture Rewards Credit Card or Capital One Venture X Rewards Credit Card because they both earn 2 miles per dollar spent regardless of category, so they have become great everyday cards for me. Both cards are currently offering 75,000 bonus miles when you spend $4,000 on purchases in the first three months from account opening, equal to $750 in travel.
I hope this insight can help you learn more about which card to use for similar purchases so you can maximize your points-earning potential.
Have a great weekend,
BK
*Eligibility and Benefit level varies by Card. Terms, Conditions and Limitations Apply. Please visit americanexpress.com/benefitsguide for more details. Underwritten by New Hampshire Insurance Company, an AIG Company.
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