Is it doable to have too many factors? How TPG recommends a reader redeem 35 million miles

You would possibly take into account a 100,000-point welcome bonus on a brand new bank card to be an enormous haul, and it’s, however not all factors balances are created equal.

Enterprise homeowners with important month-to-month enterprise bills may discover they’re incomes factors even sooner than they will redeem them with the right credit card.

Up to now, we have seen some spectacular level balances from readers (and even TPG staffers), however this is likely to be the most important but.

Here is how one can spend tens of millions of bank card factors.

TPG reader Larry M. contacted us in search of some recommendation on find out how to use his factors. He is been accumulating Membership Rewards points by means of his American Express cards for over 13 years and want to e book a cruise utilizing them.

Larry at present has a staggering 27 million Membership Rewards factors, in addition to 3.8 million Hilton Honors factors, 1.8 million Marriott Bonvoy factors and a pair of.8 million American Airways AAdvantage miles.

He earned most of these on The Business Platinum Card® from American Express. He often redeems round 1 to 1.5 million factors for journey annually.

He particularly requested what number of factors it will take to pay for a $10,000 cruise with the Amex Enterprise Platinum versus the Chase Sapphire Reserve® or one other card that TPG recommends.

Methods to maximize tens of millions of bank card rewards

The Factors Man founder, Brian Kelly, shared his recommendation in his recent weekly newsletter:

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You will get one of the best worth for these Amex factors when utilizing them for airfare — whether or not transferring to airline companions or by means of Pay with Factors utilizing your Amex Enterprise Platinum card to get the 35% rebate on sure flights.

That stated, Amex factors should not nice when redeeming for cruises. By means of Amex Journey you are solely getting round 0.7 cents per level.

There are not any good cruise bank cards, so overlook that. What you really want is a stable cash-back cost card — ideally one with no preset spending restrict or a big credit score line (since you spend lots). Many playing cards provide 2% again on all purchases with out worrying about any bonus classes.

Let’s do the maths on this — for each $1 million you spend, you are going to get $20,000 in money again. You should use that money again to purchase cruises, rental automobiles, you title it. In distinction, 1 million Amex factors, while you redeem for a cruise, can be price $7,000. So, you’d get almost 3 times the worth by spending on a 2% cash-back card.

I feel it is time to cease placing all of the spending on the Amex and begin incomes money again. The factor with money again versus factors is that you would be able to make investments the money and it may develop over time. Your Amex factors stability will not be growing in worth over time.

So use your stockpile of Amex factors for flights and resort factors for lodges, and use your money again for every thing else.

Let’s break down a few of Brian’s recommendation:

• The Business Platinum Card from American Express gives American Express Travel’s Pay with Points function, which lets you obtain a 35% rebate while you use factors towards first- and business-class flights on any airline and economy-class flights on your selected airline. The 35% rebate is capped at 1 million factors again per calendar yr. If Larry have been in search of a simple option to redeem his factors, maybe to affix a cruise departing from Europe or Asia, he may simply redeem his Membership Rewards factors for 1.54 cents every with out worrying about switch companions or award availability.
• Whereas Larry may book cruises using his Amex points, this isn’t an effective way to make use of them as he would solely obtain 0.7 cents per level in worth.
• Somewhat than incomes tens of millions of factors he might not simply be capable to use, Larry may take into account a enterprise bank card that earns beneficiant money again, which he may use to pay for any cruise he wished. Whereas it may not be as horny because the Enterprise Platinum Card, Larry may take into account the Capital One Spark Cash Plus, which gives a sign-up bonus of $1,200 after you spend $30,000 within the first three months of card membership with an annual price of simply $150 (see rates and fees) — which is waived while you spend $150,000 on the cardboard in a yr. Plus, he’d earn a vast 2% money again on each buy, all over the place — with no limits or class restrictions. One million {dollars} spent on this card annually would earn Larry $20,000 in money again (plus the $1,200 welcome bonus), sufficient to pay for 2 luxurious cruises annually.

Associated: Best business credit cards of 2024

Different redemption choices

If Larry have been to modify to a cash-back credit card, he nonetheless has an eye-watering variety of Membership Rewards factors he may use. Whereas his focus is on cruises, he has so many factors he may simply take into account another journey.

Listed below are some suggestions:

• Fly a household of 4 in enterprise class round-trip to Europe for 400,000 Membership Rewards factors by transferring them to Air France-KLM’s Flying Blue program and utilizing the flexible calendar search to search out availability throughout the yr.
• Larry may switch Membership Rewards to Singapore Airlines’ KrisFlyer program to fly a household of 4 to and from Singapore in enterprise class on the world’s longest flight, reserving extra available Benefit awards for 287,000 factors per individual (so simply over 1 million Amex factors). That may very well be even cheaper if he is capable of finding saver-level awards — although these are usually fairly scarce on this route.
• With that many Amex factors, it is unlikely Larry would ever must fly economic system once more. Nonetheless, transferring his Membership Rewards to British Airways Executive Club would permit him to e book flights to Hawaii from simply 16,000 Membership Rewards every means on American and Alaska Airways from the West Coast. Home first-class flights value the next 42,000 Avios every means, but when he can discover availability, this might nonetheless be an amazing redemption possibility.

Larry additionally has almost 3 million American miles, and with the AAdvantage program’s change to dynamic pricing for AA-operated flights, Larry’s stability may very well be shortly swallowed up. Just some long-haul journeys along with his household may do it, because it’s common to see 400,000 AAdvantage miles per flight in premium cabins.

Fortuitously, AA has, for now, retained an award chart for flights operated by partner airlines. Whereas British Airways ought to typically be averted resulting from its excessive carrier-imposed surcharges to Europe, there are many nice offers to be discovered if Larry can e book both properly upfront or on the final minute on the likes of Japan Airways, Iberia, Etihad Airways and Qatar Airways.

Larry additionally has seven-figure balances of resort factors. Listed below are a few of our favorite uses of Hilton Honors and Marriott Bonvoy points.