> We are skeptical that once all credit-card expenses are taken into account, you are not actually saving any money on your expensive business class ticket.

Your surcharge comment is interesting in multiple ways.

First, I’m surprised that major merchants in Australia put a surcharge just for accepting Amex. Second, I’m surprised that the surcharge is so TINY (less than 1%???). Third, it shows that you are not approaching credit card points via the mainstream way at r/churning, which is chasing sign-up bonuses.

Yeah the game is very different in the U.S. and outside of the U.S. So when you say “you are not saving any money”, most of the “you” in this subreddit are based in the U.S…

Your surcharge comment is interesting in multiple ways.

First, I’m surprised that major merchants in Australia put a surcharge just for accepting Amex. In the U.S., that would be, uh.. how do I put this mildly.. “stuck up scrooge” behavior on the merchant’s part. A small mom and pop shop store/restaurant, I can understand. (But I suspect they exagerate their credit card processing fee woes. What they are really avoiding is chargebacks and consumer protections, I suspect.) But *everything* in Austrlia gets a surcharge for using Amex? That’s unexpected. I mean, I’ve read that in a lot of countries they just don’t accept Amex at all, so I guess a surcharge is better than that.

Second, I’m surprised that the surcharge is so TINY (less than 1%???).

Third, it shows that you are not approaching credit card points via the mainstream way at r/churning, which is chasing sign-up bonuses – it indicates that your approach is “maximizing multipliers”, which is more r/creditcards territory. People do dabble in a little bit of multiplier chasing, but the dominant philosophy at r/churning is “nonstop SUB chasing all year long”.

What gets charged surcharges in the U.S.

Surcharges landscape in the US

You live in another country, let me give you a little showcase of what paying for things with credit cards in the U.S. is like:

  • Buying something for $20 on Amazon: all cards accepted, no surcharge
  • Buying or paying for anything online: all cards accepted, no surcharge
  • Buying something for $100 at a Department Store: all cards accepted, no surcharge
  • I will abbreviate “all cards accepted, no surcharge” as A+N from now on
  • Paying $10 at McDonalds: A+N
  • $60 at a restaurant: A+N
  • $50 at a Korean food restaurant: visa and mastercard, no surcharge. Sometimes cash only. (very rare, but exists) The higer end restaurants ($30+ per person) accept Amex, and no surcharge.
  • $10 at a Taco Truck: any card via stripe, $0.50 surcharge
  • $500/month Blue Shield health insurance: A+N
  • $300/month at LA Care Covered California health insurance: visa and mastercard, no surcharge
  • $2,000/month rent payment via an Online Rent Portal: any card, 3% fee for credit cards, $5 fee for bank ACH/debit card, or no fee for checks/cash
  • $100/month Spectrum Internet Service: A+N
  • $150/month LADWP Electricity Bill: visa+MC
  • $100/month Verizon Phone Service: all cards, and no surcharge but there’s a $5/mo “discount” for bank ACH autopay payment option so I guess that means a $5 charge for credit cards.
  • $70/month Google Fi Phone Service: A+N
  • When paying for gas, I think some stations/chains give a rate discount of ~2% for paying with.. cash?
  • $1,000 Low-cost Wedding Furniture Rental: any card, 4% surcharge
  • $10,000 Low-cost Wedding Food Catering: prefer check, but can put a portion of the payment on credit cards.

If there’s a vendor that only accept checks (for example house remodeling or kitchen work, or wedding vendor, etc), sometimes churners will issue a check to the vendor through Plastiq, and Plastiq charges a 3% fee for making the payment through a credit card.

Surcharge Percentage

Credit Card surcharges are not that common (they definitely exist, and depending on your lifestyle you may see surcharges in 20% to 80% of your spending categories), but I have never in my life seen a credit card surcharge that is lower than 2%. They only charge you 0.3% in Australia? Mind boggling.

Costs and Benefits

This is something that I think about every once in a while. Have the credit card companies tricked me into thinking that I’m saving money? Am I overspending to meet MSR or to reach for certain travel benefits that may not essential? Well.. maybe.

Let’s do some math. I booked a trip to Korea which I’m about to take in two months.

What would this trip have cost without any points?

  • $2,200 roundtrip two people LAX-ICN via a low-cost carrier, or $2,800 roundtrip two people via Korean Air. So let’s set it at $2,500 for comparison.
  • $1,400 for 14 nights in hotels or airbnbs ($100/night average)

Of course there are other costs elements to a trip, but these are where the points contribute to costs.

How the trip was booked, including costs associated with acquiring the points:

  • $100 from two Amex Gold cards (P1 and P2), for 90k+75k+30k sign-up bonus, after putting $4,000 spend on each Gold card. Their annual fee is $250 each, and the “benefits” are $120 Uber and $120 Grubhub. So you are forced to spend money on them, so let’s account for some opportunity cost and make the actual fee $50 each.
    • Given the situation in the U.S., I have never paid a surcharge while meeting my Amex Gold spend requirement. Same for the Hilton or CSP card below. If they don’t accept Amex, I had another card meeting MSR in the works that I had as a backup.
  • 150k and $200 LAX-ICN Asiana oneway business for two
  • 48k and $80 ICN-LAX Korean Air oneway economy for two (Virgin Atlantic transfer bonus)
  • $100 Hilton Business card annual fee for 150k points+FNC, after putting $4,000 spend on each card.
  • 5 nights at a 4-star Hilton for 140k and $0 ($830 cash price)
  • $20 from one CSP annual fee. The annual fee is $100 (just rounding up numbers here), but there’s the $50 hotel credit, and the CSP actually gave 80k after putting $4,000 spend on the card and since I only used 36k here, I’m counting $20 of the annual fees for this trip
  • 3 nights at a 4-star Hyatt for 36k and $0 ($850 cash price)
  • 4 nights at a regular hotel for $340
  • 1 night at a traditional Korean architecture themed airbnb for $220
  • $200 from Amex Plat annual fee ($700), since the $200 is the benefit I’m using in this trip
  • 1 night at a 5-star resort hotel for $20 after Amex FHR. ($220)

Points covered the full flight and 8 nights. (I’m not counting the FHR night since that’s not on points)

The full flight and 8 nights would have cost $2,500+$800=$3,300. That would have been economy both ways, and definitely 3-star hotels, not 4 or 5.

Instead, I spent a total of $500 in flight booking fees and credit card annual fees, while flying business for 13 hours. And in far fancier hotels than I would have booked otherwise.

I suppose you could argue that me counting Amex Gold fees as only $100 after partially accounting for Uber and Grubhub creditis “cheating”, and we need to count the full $500 fee. Sure. That adds another $400 in costs.

That’s still $3,300 when paid in cash vs $900 when paid with points.

If paid only with cash, I would be stretched very thin after paying for the flight alone and bracing to save on hotel and food.

Because there was more headroom, I spent towards a more expensive trip than I would have otherwise done. A dumb airbnb booking and a FHR hotel just so that we spent the FHR credit. Even the regular hotel with cash was an upgraded room with more space.

Now, this is not to say that I *never* paid credit card fees. Sometimes, when I’m in a rush to get points or when I stretched myself too thin meeting multiple SUBs, I put estimated tax payments on the cards, which takes a 2% fee.

Take our Hawaii trip for example.

I originally booked an airbnb in Hawaii for 4 nights for $1,200. Then I started looking for alternatives, and learned that I could book a Vacasa (another Airbnb competitor), listed for $1,400 for 54,000 Wyndham points+$0.

So I quickly got a Wyndham Business card 4 months before our trip, immediately put a $4,000 tax payment on it to meet the spend right away, and got my 54k points a month later. The tax payment incurred in $74 in fees. With that, I booked a similar Vacasa listing and cancelled the Airbnb. (We had booked an Airbnb with no cancellation fees)

In thie case, the fees are: $100 card annual fee, $74 tax credit card surcharge, $174 total, vs a $1,200 Airbnb. So a $1,000 savings, or a $1,200 savings if taking the “value” of the Vacasa unit pricing.

So I think there’s definitely major savings here, and a significant upgrade in the flight and hotel stay experience despite the savings.

Unfortunately, this is a U.S.-exclusive situation.

Last Q: would it still be convenient for you to have an Amex if you were not into credit card points? It’s clear from your reply that you devote time and attention to optimising your credit card benefits. The issue is that my wife could never do that, so trying to gauge if the considerable benefits would still be there with a “sign up and forget” (while still putting as much as one can on the card) mentality. Thanks again!

That’s a tricky situation, I think. There are different ways we would go about this.

Is the only problem that your wife doesn’t have time/interest in managing credit cards? Do *you* have the time and interest?

My wife also is interested in travel but not in card management. I happily do everything for her ever since we got married. I fill out her credit card applications. I do recon calls to the company when put on pending and just tell the rep that I am her. I strategize future card applications. Book flights. I just give her a new card every 1-2 months (we pursue 2-3 overlapping SUBs at a time) and sometimes give some pointers on how to use them. “Use this one for restaurants and supermarkets” (I sometimes tape a label over the card), “for any and all purchases, use the Amex one first, and if they don’t accept Amex use this Visa card”. I sign up for shopping portal miles bonuses for both my name and her name. Her most stressful time was when she had to sit with a Chase Relationship Banker to open her business checking account as a sole proprietor, but I sat with her and we told the banker that I manage the “business”‘s operations.

So that’s one way to pursue things.

If both of you are not interested in card strategy & management, then we have two choices: are you still interested in travel cost savings?

If you are interested in travel but can’t/don’t want to put too much time in cards, then we could pursue a “points chaser light” typ approach. Just apply for 1-2 cards a year, when you see a good offer on the card. I can only comment on the U.S. side of things, so I’ll give U.S. examples. I would sign up for a Amex Everyday card (the most basic card that earns MR) and Chase Freedom Flex card, both of which have no annual fees, and over the course of the next few years, see if the companies mail you offers, or if you see a good deal online. For example, if you see a 90k MR for Amex Gold for $4,000 MSR in 3 months, that’s one that may be worth signing up in the first year.

Whether that card will still be worth it after the first year will be a bit YMMV.. with some management, you can keep the theoretical cost of ownerhip of a Amex Gold low enough to keep around and keep earning supermarket/restaurant/flight multipliers on purchases beyond the initial 3-month period. If you can’t put the time to use their Uber and Grubhub credits each month, then we are spending $250 each year just to have some multipliers. If there’s no time to manage, I would cancel the Gold after the first year.

The initial 90k is still worth it. 90k MR gets me a 1-stop, all-business Vietnam Airlines flight SYD-SGN-CDG booked with 90k Delta miles. (This is an Australia flight but booked with U.S. system points so won’t apply to you, but just giving some examples here) So if I get a Gold card and wife also manages to get a Gold card, then we have enough points for a one-time, one-way business flight. (Each person would need to book the flight separately with their own points. Just need to book for the same flight, seats next to each other.)

Unfornutately an economy flight in points is still 60k, so we might as well use those points in business since economy is not going to stretch it very far.

Then after that flight, that’s almost the end of it for the points chase light approach. You got a free flight (almost free, there’s still a $100 fee per person). Maybe you will get a couple deals like that, for example an 80k for CSP, then again cancel or downgrade after the first year.

It’s gonna be boring and a bit anticlimatic, but that’s how far the “light” version will get you. 1-2 flights in business, in your lifetime, for super low cash commitment.

Maybe experiencing the business class flight will give both you and your wife the itch to keep the Gold, and maybe even overspend on it in the long term to keep getting flights. Don’t. That’s not gonna get you very far, and the $250 annual fee is just gonna eat into your gains. If you got some motivation, reconsider whether you would like to become a more active churner. (Getting multiple new cards each year)

Lastly, if you don’t have tim plan for cards, and have no hopes of making savings for travel, here’s an even lower management approach that still gets you *something*: the passive cashback consumer.

Just get a basic cashback card of your choice, get your dining or supermarket multipliers (1% on other categories), and cash out the points periodically as statement credits on a 1 point = 1 cent ratio. It’s going to be a visa or mastercard so everyone will accept it. It’s not much, but it’s something. You are still saving some money, for minimal effort. This is what the vast majority of consumers in the U.S. do. There’s a lot of card options to choose from. None of them get too much, but they get something.

This would be what I would do, as someone living in the U.S. In Australia your options seem limited & constrained, so it would lead to a different assessment.