Utilizing The Perks and Benefits of Your Credit Cards
There is more to credit cards than just earning points for travel. Some of the best cards out there, the ones with the high annual fees, combine points earning with other perks and benefits that can elevate your travel experiences! There have been multiple cases where I’ve been able to utilize benefits given to me by a credit card to enhance mine and my wife’s travel experience. There are so many different cards out there, so there are many different types of benefits that you can use towards your travel. But if you’re just getting started and are trying to figure out where to start your credit card journey, check out this post HERE to help you get started.
When I first started playing the credit card game, I mainly focused on earning points. I didn’t really give too much attention to the additional perks that were given to me, and to be honest, when I first started out the cards I had probably didn’t have too many perks to begin with. But now, it seems like to remain competitive, credit card companies are doing all they can to attract people to their product through the perks that they give with any given card, on top of the points that the card earns. If you’re feeling overwhelmed right about now, I can’t say that I can blame you. It is a lot to take in, but I think that’s why it’s important for you to base your credit card strategy around what you want for you and your travel. If your credit card strategy is aligned with your goals for your travel, it makes managing the different perks, benefits, and status a bit easier.
Let’s Talk Benefits
Now what kind of benefits can you get from credit cards for your travel? Two of the most popular are probably airline status and hotel status. These two types of benefits are common on co-branded credit cards for different airline and hotel brands. But many premium travel cards usually offer some type of hotel or airline benefits these days. On top of status, many cards also offer statement credits for certain types of spend. For example, my American Express Hilton Honors Surpass card gives me complimentary Gold Elite status with Hilton, but on top of all the perks that come with Gold Elite status, the Surpass card also gives me a $200 ($50 per quarter) annually on spend at Hilton properties. Cards like the American Express Platinum card or the Chase Sapphire Reserve are what people are calling coupon books. They come with many different credits that are automatically applied when the qualifying spend is put on the card.
For some, this may be a bit too complex and not worth the hassle of trying to figure out how all the credits work. The best thing to do is to do a little bit of research and find the card that gives credits for things that you already use. The annual Hilton credit that I mentioned above is a perfect example of a card that fits spend that I normally do in a year. Hilton is my hotel brand of choice, so whenever my wife and I travel, whether that be domestic or abroad, we stay at Hilton’s majority of the time. That means that I’m guaranteed to get at least some of that yearly credit that they give in $50 increments once a quarter. The Chase Sapphire Reserve is another card that I have in which I get value out of the credits on the card. For a while now I had used a premium subscription to Spotify, but when Chase started offering complimentary Apple TV and Apple Music for Chase Sapphire Reserve cardholders, switching from Spotify to Apple Music just made sense. Now instead of paying $11.99 per month, that money stays in my pocket on top of the cost that I’m saving from not having to pay for Apple TV. Now you might be asking “But doesn’t the Chase Sapphire Reserve cost $795 per year?”, to which my answer to that question would be yes. And that’s where the effective annual fee discussion comes into the picture.
What Is Effective Annual Fee?
Many credit cards out there have an annual fee that the cardholder has to pay each year they keep the card account open. The fees can range from as low as $0 up to $895 or even higher. Now to calculate the effective annual fee for a given credit card, you’re essentially going to take the annual fee and subtract the value of any credits you used that the card offers. For example, on the Chase Sapphire Reserve one of the popular credits on the card is the $300 annual travel credit. This credit will essentially wipe out any purchase that codes as travel under Chase’s policy up to the first $300. Here’s the math. The Chase Sapphire Reserve costs $795 per. Now, let’s say you received the full $300 travel credit for travel that you did in a calendar year. You then take $795 and subtract $300, giving you a new effective annual fee of $495.
Let’s use my current scenario with my Chase Sapphire Reserve to show how using multiple different credits lowers the effective annual fee more. Currently, I’ve already redeemed my $300 travel credit. I’m also using the Apple Music credit which if I were paying for Apple Music out of pocket it would cost me $10.99/month or $132/year. Lastly, as of right now, I’m going to use the Apple TV credit as well. Apple TV would normally cost me $12.99/month or $156 per year. Ok let’s do the math, $795 – ($300+$132+$156) = $207 effectively for the year. Now there are still a handful of credits on the card I can use like the StubHub credit, The Edit credit, and a handful more. If I were to use The Edit credit which gives you $250 back for a 2 night or longer stay at one of Chase’s Edit hotels two times in a calendar year for a total of $500, I could use that one time and effectively come out net positive on what started out as a $795/year credit card.
You can go down a deep dark rabbit hole trying to maximize your credits, so let’s bring this back to utilizing benefits on your credit card. I think the best way to show this is to tell a quick story of a way I was able to use one of my cards recently to book a nice little staycation for my wife and I. Now this wasn’t some crazy international trip or even an extended weekend getaway. We did a one night stay at a hotel that we’ve come to like and because of perks and benefits on one of my credit cards, we were able to cut the cost of this one night getaway pretty much in half.
My Story of Using Card Benefits
This story is going to be centered around the Chase Sapphire Reserve, Chase’s premium travel credit card. Last year the card went through an update that changed the cards design, but more critically increased the annual fee from $550/year to $795/year. Now, $550/year was already pretty steep but with Chase’s $300 annual travel credit, you could bring the effective annual fee down to $250 with just that credit alone. I decided to keep the Sapphire Reserve despite the annual fee increase and for this staycation I used it and some of its benefits to greatly reduce the cost of our stay. First, where did we stay? We stayed at the Westin Anaheim that is right by the Disneyland Resort. We stayed at this hotel back when we got married and loved the property. It’s right behind Disney’s California Adventure and it’s about a 15 minute walk to Downtown Disney. When we stayed there last time we had a theme park view room and were able to watch the Disney fireworks from our balcony. So, this time around we went for the same theme park view room. In all honesty, our room view was better last time as this room looked more over the valet with the theme park in the background. But this time around we utilized more of the resort than we did the last time. Let’s start with the booking! I booked the hotel through Chase’s Travel portal and this property in particular is one of the premium high-end properties that is a part of Chase’s The Edit collection. Now with the Sapphire Reserve you can get $250 back as long as your stay is 2 nights or more. You can do this 2 times per year for a total of $500. To keep cost down and due to time we elected to only stay 1 night. Because my Chase Sapphire Reserve just renewed, that means that I had my $300 annual travel credit available. So we were able to reduce our room cost by $300.
The perks and benefits continue because, again, this hotel is part of The Edit by Chase. Since I booked through Chase, we got complimentary breakfast for two which we took advantage of the morning of check-out day. The Westin had a nice restaurant in the lobby that we were able to have breakfast at. Now the complimentary breakfast only covers the breakfast buffet and either coffee or orange juice, which for us was perfect. In addition to the free breakfast, that saved us around $75, another benefit is the $100 food and beverage credit that can be used on property. The Westin had a nice bar in the lobby that we went to and got drinks and watched some of NCAA March Madness. And on check-out day we still had a little bit of the credit left so I got a mimosa with breakfast (that wasn’t included in the free breakfast buffet). It was really easy to use this credit as all we had to do was make sure to charge any food and drinks to our room, then at check-out the credit would wipe off the first $100 off the bill. Another perk was that were allowed a room upgrade, if there’s one available. We got an upgrade at check-in, but again the room view wasn’t as good as what we had before. But we did notice the bathroom was a bit bigger and had a free-standing tub as well as a walk-in shower. The last perk that we took advantage of was late checkout. Now we only got an extra hour, but it was just enough time for us to do breakfast the day of check-out and also go back to Downtown Disney that morning before checking out to come home.
This is just one of many examples of how one can utilize the benefits that come with credit cards to enhance and reduce the cost of their travel experiences. The icing on the cake from this experience was that since the Westin Anaheim is also a Marriott property, I was able to earn some Marriott points from our little staycation that can be used for a future trip. I’m already looking forward to our next trip and seeing what is possible with miles and points. If you haven’t checked out my Japan on Points series, I encourage you to give that a read as that’s my most ambitious attempt at using points and miles for our travels!
