Money Matters
bmo88
member
Dear Community,
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Our tech team has launched updates to The Nest today. As a result of these updates, members of the Nest Community will need to change their password in order to continue participating in the community. In addition, The Nest community member's avatars will be replaced with generic default avatars. If you wish to revert to your original avatar, you will need to re-upload it via The Nest.
If you have questions about this, please email help@theknot.com.
Thank you.
Note: This only affects The Nest's community members and will not affect members on The Bump or The Knot.
MM: Paying Graduate School Tuition with Rewards Credit Card
So, just considering something and wondering what other people's thoughts are on this. DH and I have recently starting doing credit cards rewards hacking. We have done it with a few other cards and had some success.
Currently, I am thinking about opening up a Chase Sapphire card because after $4,000 of purchases (within 3 months), you get $50,000 points (worth $625 toward travel, or $500 cash), and another 5,000 points (about $50) for adding an authorized user. I would probably cancel the card in one year, when they charge the annual fee. I am not worried about it effectng my credit because it is already really high and we do not plan on making any large purchases soon.
If I opened the card, the only way I would need to spend that much is if I put my graduate school tuition on it and paid it off right away. The total is $3,552 for the semester. I could pay it cash, but I like the idea of getting rewards for it. The only catch is that if you use a credit card, the school charges a 2.75% fee (or $97.68). Still, I would come out with $577.32 in rewards points.
I am hemming and hawing about doing it, but have to decide in the next week. What would you do?
Currently, I am thinking about opening up a Chase Sapphire card because after $4,000 of purchases (within 3 months), you get $50,000 points (worth $625 toward travel, or $500 cash), and another 5,000 points (about $50) for adding an authorized user. I would probably cancel the card in one year, when they charge the annual fee. I am not worried about it effectng my credit because it is already really high and we do not plan on making any large purchases soon.
If I opened the card, the only way I would need to spend that much is if I put my graduate school tuition on it and paid it off right away. The total is $3,552 for the semester. I could pay it cash, but I like the idea of getting rewards for it. The only catch is that if you use a credit card, the school charges a 2.75% fee (or $97.68). Still, I would come out with $577.32 in rewards points.
I am hemming and hawing about doing it, but have to decide in the next week. What would you do?
Re: MM: Paying Graduate School Tuition with Rewards Credit Card
However, before signing up for the sapphire preferred, I suggest waiting a week to see what the new Sapphire reserve card looks like. It's supposed to be released on Aug. 21. It has a higher annual fee - $450 - but you get a $300 "travel credit" (TBD what that means, exactly - people are speculating it's for any travel expense). You also get a 100K sign up bonus, with 3x points for travel and dining and a higher redemption rate through the chase travel portal. The sign up bonus alone is worth $1500 redeemed through the travel portal.
It also has lounge access and a global entry credit.
It has a $4,000 spending minimum too.
FYI, Chase has a newly-instituted 5/24 rule, which means they will deny you new credit if you have opened 5 or more new cards from any bank in the last 24 months. Becoming an authorized user also "counts" for the 5/24 rule, but you can sometimes recon your way toward getting the card if it's AU's that put you over 5/24.
Churn strategically
I have only opened 2 cards in the last year and DH has opened two as well. So we should be good on the 5 card limit.
Wow, $1,500 is a lot of rewards? Do they have any restrictions or penalties if you close it down after the first year? Or is the $450 fee waived at all? Or does it hit the first year you have it?
Also, the $300 travel credit is very likely to be per calendar year - so if you use it before the end of the year, it will reset in January and you can use it again before you close the card next year.
Lounge access is going to be priority pass.
Also, it's a Visa Infinite. One of the perks of Visa Infinite is you get $100 of two round-trip domestic tickets when booked through Visa Infinite. People who have access to that portal say the prices are no different than Kayak, etc. You can use that $100 off benefit as much as you want.
I would suggest starting with Sapphire Reserve and then next year either open Sapphire Preferred (if you qualify under 5/24) or product change to Sapphire Preferred (if you don't qualify under 5/24) so that any points you haven't used are saved. One great thing about Chase UR points is that you can transfer them between spouses and also between various cards that earn them. H and I actually have 4 different UR products between us, and we use them for different things and then consolidate all of our points earned on 4 cards into a single account.
$1500 is actually a low estimate for the value of 100K reward points. It's actually worth more like $2,000-$2,500 when transferred directly to transfer partners.
I'd also maybe look around at other cards too to see if any of them have even better bonuses for signing up, or better rewards on purchases.
It does depend on what you want to do of course. IMO Chase's best travel partners from a redemption standpoint are Southwest, United, Korean Air, and Hyatt. AirFrance/KLM also has some good redemptions for economy flights to Europe. Actually, 100K points would buy you two RT flights to Europe in economy through AirFrance/KLM.
Virtually all of those travel partners give you more than 2 cents per point in redemptions.
All that being said, if you can't make use of these travel partners, then you should be looking at some other rewards program instead.
Anyway.
People did get a few screen shots of the T&Cs regarding the $300 travel credit. It will truly be for any travel-coded purchase, not just airline incidentals. I have the Sapphire preferred, and it codes all planes, hotels, trains, cruises, parking decks, uber, and online travel agents as "travel."
So your $450 fee is really $150 if you spend at least $300/year on "travel."
So with that update, I think it's definitely worth getting for at least the first year. The sign up bonus is obviously huge, and the $300 credit will be calendar year-based (also confirmed on the screen shot). You will have a $300 credit that can be used between now and the end of 2016 and then another $300 that will be eligible starting in January.
You would have plenty of time to decide if the card is worth keeping for year 2 at $150/year. I know a lot of people say no annual fees, but if you travel a lot, it's amazing how much money you can save with the fee cards. H and I have literally saved thousands over the last couple years.
1) 2 round-trip flights to Europe: $1650/each
2) 3 nights at Hyatt in Cologne, Germany: $260/night
3) Flight for my H to join me at my firm retreat in California: $275
4) Two puddle-jumper flights from LAX to SFO to see family while in California: $75/each
5) 1 night at Hyatt in downtown Nashville for a wedding last April: $375
and upcoming...
6) 3 nights at Hyatt at the Grand Ole Opry in Nashville for a wedding over Labor Day: $225/night
7) 2 round-trip flights to Las Vegas for my 30th birthday: $325/each
8) 2 nights at the Venetian in Vegas: $275/night
Grand Total: somewhere around $6,755 in travel for $357 in credit card fees.
I also have around 90K UR points in my account right now, because UR bonus categories seem to match how H and I naturally spend money. We earn the points really fast.
EDIT: Except for the Vegas trip, all of these are things we would have paid cash for if we had not had the points to cover our costs. I'll admit the Vegas trip was a "Hey we have points we can burn!" thing. However, I will finish my LLM degree about 2 weeks before my 30th birthday. I have spent two years practicing law full time and going to school part-time with no breaks, so Vegas is a weekend getaway to celebrate both.
ETA: Figured out the release date is August 22.
With tuition/fees, I will spend $3,552. The university will charge a 2.75% credit card fee which is $96. Then I am going to pay for our winter trip to California to see my parents (about $500) with the card. That should earn us our $300 travel credit, lowering the fee of the card to $150.
So in total, fees will be $246.25, but after the 100,000 point sign up bonus (valued at $1,500 or $2,100 depending on the travel partner), I will come out at least $1,253.75 ahead! Possibly even $1853.75.
So excited. DH has $785 in travel credit on his Citi Thank You Card that we are hoping to use soon. So if we plan it right, we can book hotels on his card and flights on my card.
We are thinking about going to either Iceland or Hawaii in March. We will have at least $2,000 in free points toward our trip, which is super exciting!
we haven't decided what we are going to do about this card yet. H is over 5/24 because of being an authorized user on my cards (which is something they will often ignore), but he will fall out of 5/24 completely in March before we go to Spain. We are probably going to wait until then to apply just to be sure we get the sign up bonus. Even if it's lower than 100k points by then it's better than product changing our current sapphire card and not getting any bonus.