The way I look at it, there are three components to the value of a credit card:
- The sign-up bonus
- The value the card gives you for everyday spend
- Any bonuses you may get for having the card long term
Regarding that last category, there are several cards out there that offer considerable value just for keeping the card in your wallet and paying the annual fee. For example, the Priority Club Visa, Hyatt Visa, and Marriott Rewards® Premier Credit Card all offer a free anniversary night each year just for having the card. The Club Carlson Visa offers 40,000 points upon account anniversary. The Southwest Visa offers 6,000 points upon account anniversary. And that’s just a few of them — there are plenty of cards out there that offer huge anniversary bonuses that more than justify the annual fee.
But what about the cards that offer anniversary bonuses that require meeting a certain spend threshold? Can they be worthwhile? I figured I’d cover some of the cards out there that offer threshold bonuses for completing spending, and which I consider to be worthwhile.
Threshold bonus: Starwood Gold status after spending $30,000 in a calendar year
There’s no doubt this is a high threshold, given that Starwood Gold status isn’t all that valuable. It gets you late check-out, “preferred” rooms, and free internet, but that’s about it. Spending $30,000 for that is a lot, given that with Hilton $40,000 of spend will get you top tier status in their program.
But the reason it could still totally be worthwhile is because Starpoints are probably the single most valuable points currency, so this is already the best card for everyday spend in a non-bonused category. So if you’re a big spender I totally think it’s worth putting $30,000 on the Starwood American Express, but not exclusively for the Gold status — it’s just a nice added bonus.
Threshold bonus: 15,000 bonus Membership Rewards points after spending $30,000 in a calendar year
The Premier Rewards Gold Card is already one of the best cards out there given that it accrues triple points on airfare and double points on gas and groceries. The catch is that the annual fee is a steep $175, though it’s waived for the first year. So while it’s definitely worthwhile for the first year, beyond that it probably depends on how big of a spender you are.
I probably put $30,000 of airfare spend on my card each year (most of which is reimbursable and not for my own travel), so for that I’m earning 90,000 Membership Rewards points, plus the 15,000 point bonus, for a total of 105,000 Membership Rewards points. That’s hugely valuable, especially when programs like British Airways run transfer bonuses. We’ve seen 40% transfer bonuses from Membership Rewards to British Airways, so 105,000 points would convert into 147,000 British Airways Avios. That would be an amazing return for $30,000 in spend.
Threshold bonus: 30,000 bonus redeemable miles and MQMs after spending $60,000 in a calendar year
While I’m not a huge fan of Delta’s frequent flyer program as such, the ability to earn status exclusively on credit card spend is ridiculously lucrative. $60,000 of spend on their card will earn you 90,000 redeemable miles and 25,000 MQMs. You can actually earn bonus MQMs and redeemable miles through several of their co-branded credit cards, so see this post for all the details. In all, $220,000 of spend could earn you 100,000 MQMs, more than enough for Platinum status.
Threshold bonus: Anniversary night after spending $10,000 on the card in a cardmember year, and HHonors Diamond status after spending $40,000 in a calendar year.
So I’m kind of torn with this one. Up until March I loved the HHonors program, though it was hugely devalued at that point.
Still, for spending $10,000 on the card you get a free weekend night certificate which can be redeemed at virtually any property worldwide, even those that ordinarily go for 90,000 points per night. In addition to that you get three HHonors points per dollar spent on the card. I value three HHonors points conservatively at a cent, and that free night certificate at maybe $250. So spending $10,000 would net you 30,000 HHonors points plus a free night, which I’d value at ~$350. Definitely a fairly good return on $10,000 of spend, in my opinion, assuming that spend wouldn’t otherwise qualify for a bonus category on another card.
What about Diamond status for $40,000 of spend? I actually went for that this year, and to be honest haven’t noticed much of a difference between Diamond and Gold status. You get Gold status for as long as you have the card without any spend requirement, so I really don’t think I’d put $40,000 of spend on the card for Diamond status if I had to do it over.
Threshold bonus: Award companion certificate after spending $30,000 on the card in a calendar year
So the issue with the companion certificate is that it’s only valid for roundtrip travel on British Airways flights, and travel has to originate in the US. Of course the issue with awards on British Airways is the fuel surcharges they impose. For a roundtrip you’re looking at paying over $1,000 per person including taxes, fees, and fuel surcharges.
The funny thing about the companion certificate is that people either love it or hate it. I know people more desperate to collect them than Pokemon, that say “Only 120,000 Avios plus ~$2,200 for two people to fly between New York and London in first class? That’s basically a gift.” And then I know people that say “I have to pay $2,200 on what’s supposed to be a ‘free’ ticket? What an absolute scam!”
I stand somewhere in the middle. If traveling between the US and London I do think it’s a fairly good value. With most airlines you’d pay 125,000-135,000 miles per passenger in first class, so figure you’re saving that number of miles by using a companion certificate. Instead you’re paying roughly $800 per person in fuel surcharges. I’d say spending $1,600 to save 125,000-135,000 miles isn’t a bad deal.
And for that matter, if you want to fly British Airways first class you have no choice but to pay the fuel surcharges, since all of their partners impose them on award redemptions.
Threshold bonus: Free night certificate after spending $12,000 on the card in a year
On one hand I think a free night certificate after spending $12,000 on their card is generous, since Fairmont has some really great properties. At least it would be in conjunction with other valuable points. While there are many awesome perks to Fairmont’s program, I find their award chart to be a bit overpriced. A free night in a base room requires between 25,000 and 65,000 points per night, and aside from their credit card or actual Fairmont stays, their points are rather tough to rack up.
So the issue is that I doubt I’d ever get any value out of the points I earn on the Fairmont credit card, since it would take me a long time to earn enough points for a free night at a property I’d like to redeem at. The free night itself might be worth the $12,000 of spend, but I wouldn’t value the points otherwise earned far beyond that. So generally the free night threshold doesn’t tempt me.
Which threshold bonuses do you guys find most valuable?
(In the interest of full disclosure, I earn a referral bonus for anyone approved through some of the above links. All are for the best available offers. Thanks for your support!)