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There was a time when I was solidly in the cash back credit card rewards camp, and you couldn’t have convinced me to apply for a frequent flyer credit card. But that was then, and this is now…
Last summer I applied for a Platinum Delta SkyMiles Credit Card from American Express. I travel semi-frequently, and our family also takes periodic trips. Given that almost all of this travel (when it involves flying) is done on Delta, I thought a targeted card like this might make sense for us.
Upon approval, I was granted 20k bonus miles, 5k of which were MQMs (i.e., they count toward upgrading my flyer status), along with an extra 2500 bonus miles for my wife’s card. As far as ongoing rewards go, I earn one mile per dollar spend with double miles on purchases from Delta. I also get chunks of additional MQMs at specific spending levels (10k MQMs for each $25k spent) as well as free checked bags and one “companion” certificate per year.
All in all, it’s been a good experience. Thanks to the bonus MQMs, I’ve been able to upgrade my status such that I earn mileage at a higher rate when I fly, I get occasionally get upgrades, and I also get to reserve seats in the sought after exit row – this is no small thing when you’re 6’5″.
All of that is well and good, but how much are these rewards actually worth? I place a very high value on the status upgrade, as that pays dividends in multiple ways. But what about actual cash savings? Well…
My wife is taking two of our kids to visit family this fall. Last night, while making arrangements, I was able to use miles to snag one of the tickets (albeit at a slightly inflated price) and then use the companion ticket for a buy-one-get-one-free pair of tickets for the other two.
The reward ticket cost 32, 500 miles – a bit higher than the base 25, 000 due to availability – with a $5 booking fee. That ticket would have otherwise cost $385, so I saved $380. That works out to just shy of 1.2 cents per mile. Not the steal of the century – I’ve done better in the past – but a pretty solid deal.
As for the companion ticket, I was really pleased with this in that it was very easy to use. There were some taxes/fees that weren’t covered on the companion fare, which added $21 to the overall bill, but we got away with two tickets for $406. Not too shabby.
Adding it all up, we got three plane tickets worth $1155 for $427 out-of-pocket. Even after adding back in the $150 annual fee for the Platinum card, we ended up paying about half what these tickets would have otherwise cost us.
Sure, if we had a cash back reward card we could’ve put those rewards toward a flight, but we wouldn’t get the companion voucher, free checked bags, enough bonus MQMs to upgrade my status, etc.
15 Responses to “Saving Money With My Amex Delta Platinum SkyMiles Credit Card”
I was unable to use my companion ticket this year an was extremely disappointed. Every date I submitted was blocked. I have not had this difficulty the last 2x. Will go back to Amex without fee
Tryed to sign up for this but kept telling to do it again! How many agains are accepted?
Cory: While I agree that you can’t directly include non-monetary benefits in a straight up comparison, I did consider them when choosing this card. Being able to book that exit row is a huge benefit for me.
Right, I should have reread what you were originally saying but I just wanted to get my point out there as well because it is often overlooked by even an above average user of miles/cashback cards. My apologies for going off on the tangent.
What’s even better about your calc is that if Nickel could have gotten the ‘saver’ availability for 25k miles, he would have had a 3.46% rewards rate.
Regardless, I hope that the above average user of rewards card (who does a bit of traveling) can see how airline cards can just blow even the best regular cashback cards out of the water.
@Infamousdx: you’re arguing over how to do the comparison. My point is that most don’t even bother with one in the first place when praising the values of a miles rewards card. I think a case could be made for that ticket being comparable to 33% cash back, a “priceless” experience that isn’t feasible to purchase, or the best alternative rewards you could get with a different card (say, $3,000 cash with a 2% rewards card). Any of those are preferable to a “look what I got with my card!” post that doesn’t give a frame of reference.
@Cory: That’s the long-time debate of the travel hacking community. One side says amount of miles divided by cost of ticket = reward rate.
The other side argues that market value should not be used on these astronomically priced tickets vs. the amount you’re willing to pay had you used cash.
e.g. You can redeem a round trip first class ticket to Asia with UNLIMITED stopovers for 150,000 British Airways miles. Seriously, unlimited stopovers, as long as they are in the same direction of travel. There are people redeeming 10 stop itineraries. Now try pricing that out with a revenue booking and, if it’s even legal, you would probably be looking at upwards of a $50,000 ticket. Math says that you get 33% cashback. But are you really getting that rate? Would you even pay $50k for the revenue ticket?
This is just an example of why the premium cabin rewards game is a bit more complex.
@Infamousdx: that doesn’t mean it’s impossible to compare miles rewards with cash rewards. If you can’t put a monetary value on it, then don’t include it in the calculation. Simple.
@GL – Basically, 1 dollar spent = 1 mile. But when you redeem, you are not redeeming the DISTANCE of the trip. You are redeeming an arbitrary amount of miles that the airline sets.
@Cory – Then you throw in people that are redeeming for premium awards (first/business class), like myself, and things get a lot more complicated.
I’ve heard a lot of people say they prefer miles for rewards instead of cash, but what I rarely hear is a breakdown of the financial benefit of reward miles. For instance, here’s a naive breakdown:
“$1155 for $427 out-of-pocket. Even after adding back in the $150 annual fee”
$1155 – $427 = $728 – $150 = $578 benefit
32,500 miles / 1.5 miles per dollar spent (assuming half your purchases were Delta flights – conservative estimate) = $21,667 spent
$578 / $21,677 = 2.67% rewards
Armed with that number, you could say this card is better than a flat 2% cash back card (my best card currently, though you probably can’t get rewards like that with a new card anymore) but not as good as, say, my Chase Freedom’s current promotion of 5% cash back on travel purchases.
Admittedly my numbers don’t take in enough data, such as your actual flight vs. non flight purchase ratio, financial benefit of free baggage ($0 if you wouldn’t normally check a bag) and financial benefit of upgrading your status (this would be tricky to calculate, but I’d love to see it attempted even if it’s hypothetical).
“The reward ticket cost 32,500 miles â€“ a bit higher than the base 25,000 due to availability”
Wait a minute… I know very little about frequent flyer credit cards, but I thought you said you get one mile per dollar spent, and 1 mile = 1 mile when you redeem them for a plane ticket. In other words, unless you’re booking a ticket for a 25,000-mile trip (around the world and then some? lol), the exchange rate is a bit off. Assuming that an average trip is ~1,250 miles, shouldn’t it be “0.05 miles per dollar spent”?
Yea I think it would definitely have to be weighed out depending how much you fly, how often you check bags, how much you save on companion tix (though you did mention that).
I guess I’m speaking on my personal situation, but hoarding Amex MR points and then waiting for a lucrative transfer bonus (that apparently Delta & Amex run regularly) will easily yield more miles. Granted, it does hinge on a bonus that you never truly know WILL be there in the future though. But with the right bonus and categorical spending, the Amex PRG card could yield 50%+ over the Delta Amex.
infamousdx: But then I’d lose the free companion fare, free checked bags, and MQMs. You pointed out those benefits (except for the voucher) but then argued in favor of switching away to a card that offers marginally more miles (the 1% vs. 2%/3% difference). That simply doesn’t make up for what I’d be losing.
Tech: Ummm, really? Can you point out a card that gives me a free companion fare on Delta without an annual fee? The Gold version of the card (no annual fee) has a companion voucher, but you pay $99 to book. And the MQM miles, which have bumped up my flyer status, allowing for preferred seating, more rapid miles accumulation (I earn miles at a higher rate when flying), occasional first classe upgrades, etc.? You don’t get MQMs with the free version.
While I generally agree that you shouldn’t pay an annual fee for a credit card (and I never have before getting this card), there are instances in which it makes sense to do so.
Make sure you cancel it before getting charged next annual fee. You can get same or better benefits with credit cards that don’t have annual fee
I agree that co-branded cards can be very beneficial for things like free checked bags or bonus MQMs (EQMs), but I still believe there are better options.
In your case (flying Delta), I like any American Express card that participates in Membership Rewards points. They transfer directly to Delta 1:1 and they often run promotions for bonuses on transfers. Recently, they have done a 40% points rebate on transfers and even a 50% bonus as well.
Specifically, the Premier Rewards Gold card is virtually unbeatable for ‘everyday’ spending.
3x on any airfare. That’s 1 more bonus point on airfare than the Delta card and with the Delta card, you’re limited to Delta purchases only.
2x on gas & groceries. Those are just 2 commodities that any person might spend a good amount on day to day.
The annual fee is comparable, I believe, as the Amex PRG is $175 a year (waived first year).
Sometimes, it’s better not to go with a cash option. It’s like when you have the option between cash and a gift card for rewards the non-cash option is generally higher. Plus, like you said, the savings covered the annual fee too which makes it that much easier to handle having a fee to get the card (similar to Flexo’s post on cards with fees).