I don’t write about the details of MS. I write about using miles.
However, I do think about MS in terms of redemptions. Like when I hear how much a hotel costs in points, I tend to think, “that would be like x runs to the grocery store”.
|Co-Brand Credit Card||Category Bonus||Transfers||Category Bonuses||Cost for Cat 1 (@1%)||Cost for top Cat (1%)|
|Hyatt||Hyatt||1x||Chase||Ink Bold 5x||$10||$60|
|IHG||IHG||2x Grocery, Gas||Chase, Citi||Ink Bold 5x||$20 ($10 for PointBreaks)||$100|
|Hilton||HHonors Surpass||6x Grocery, Gas||Amex 1:1.5, Citi 1:1.5||Citi ThankYo||$6.66||$126.66|
|Club Carlson||Club Carlson||5x everywhere||Club Carlson 5x||$9||$70|
|SPG||SPG||1x||Amex 0.33:1||SPG 1x||$20||$350|
|Marriott||Marriott||1x||Chase||Ink Bold 5x||$10||$70|
|Best Western||Best Western||1x||Amex||Amex Gold 2x||$40||$180|
|Choice||Choice||2x Everywhere||Amex||Amex Gold 2x||$30||$175|
Basically, there are 3 main banks that I’m talking about with transfers. And there are only a few cards that I’m talking about. But I figured I would go ahead and explain that there are a couple other options.
|Chase||Ink Bold/Plus||5x Office|
|Amex||Gold Premier||2x Grocery, Gas|
|Citi||Citi Forward||5x Bookstores|
I figured I’d mention the Citi Forward (even though it’s dead) because it’s an awesome deal, plus a number of people have the Forward card or another deal that gives 5x. Citi transfers 1:1.5 just like Amex, and the math works out the same, for example shown for Hilton. Category 1 for $6.66.
Doing the math.
The math is simple.
[hotel points needed] ÷ [bonus given by card] x [net loss during MS] = actual cost of points via MS
Given that everyone has different MS strategies, I’ll go ahead and explain why I chose 1% as the net loss in the graphs above.
It seems like a safe assumption that most people could find $500 gift cards selling for $3.95 and can liquidate for $1 somewhere. That’s about $5 for about $500 in spend. 1%.
The reason I show the math is to say that to do anything not a top category or a category 1 at any of these chains, my math wouldn’t be relevant. So you can do it yourself.
You need to know: cost of desired hotel, biggest category spending on cards you have, and cost of MS (or assume 1%).
For example, let’s say I want to stay at the Hilton Prague Old Town, which is 40,000 points. But the best bonus I have is the HHonors Surpass 6x at Grocery.
40,000 ÷ 6 x .01 = $60
This is a lot of effort to pay (what for me is) a high amount. BUT it’s a heck of a lot better than paying the $150 to $300+ the hotel goes for.
How can I do better?
Since there are only 3 factors, you have three options to lower that price.
1) Stay at a cheaper hotel.
You could use another hotel’s currency for this trip and find cheaper destinations to use the points. Or stay at the Hilton Prague which is 30,000 points a night.
2) Get a bigger bonus.
Like the Citi Forward 5x with a 1:1.5 transfer. For the same hotel with the card, you would only need 26,666 Citi points. The math would have been:
26,666 ÷ 5 x .01 = $53
That wasn’t all that better… but it’s the right thought.
3) Find a cheaper MS.
You can learn new tricks, find cheaper giftcards, cheaper ways to liquidate, etc. Of course this is easier said than done, but I would start by reading Frequent Miler. Maybe by adding some category bonuses you can lower the cost (which I guess can also fall into step 2).
Let’s figure the new cost based on these three tips. Like staying at the slightly cheaper Hilton, using a better card, and assuming I found a way to get gift cards for $2.50 per $500 and a way to liquidate for free (bringing the cost down to .005%).
30,000 points after transferring from Citi would be 20,000 TY points. And with the Citi Forward, you’d do 5x and therefore need to spend $4,000. And now we’ve lowered our cost. It would look like this:
20,000 ÷ 5 x .005 = $20
That I can do.
If I were MSing for a hotel trip, I would do this…
I would make the same chart but with hotels. Actually, lets really run through an example.
Here’s what you need to do.
- Figure out what points you can earn. Assess what credit cards you have… or be willing to get all of them and therefore do the first two steps after choosing hotels (step 3).
- Figure out the category bonuses.
- Write down every hotel and how many points it would cost.
- Do the math: [points] / [bonus] x [cost of ms]
I did an example with Prague, using some basic cards listed above. And the math would look like this (also assuming MS costs .01%).
|Chain||Hotel||Points Needed||Bonus X||cost @.01|
|Club Carlson||Radisson Blu||44,000||5||$88|
|Hilton HHonors||Hilton Prague||30,000||6||$50|
|Hilton Prague Old Town||40,000||6||$66.66|
If you don’t do a lot of travel in general and/or you don’t have a ton of cards to start out with you may get more benefit from a signup bonus than the spend bonus. In other words, you might consider getting a card with a large signup bonus instead of getting a card with a small signup bonus just to do the spends.
That being said, if you’re good at MS, you have as much travel as us, and as many cards as us, try to have some goals for your travel. Now you don’t hear me advocate for goals often but MS is different. Because by default it’s easy to MS for cash, as it always seems profitable. But sometimes, you would actually do better MSing for points. But without a goal MSing could be an endless trail of expenses.
These are some things to think about when MSing for hotels. Which cards give bonuses, how to properly calculate for which hotels, and the general concept of looking at all the hotels you’re considering, or the regions you’re considering.