Like last time in 2012, US Bank is offering a larger sign-up bonus for its FlexPerks Rewards credit card linked to the upcoming Olympic Games. New applicants through March 7, 2014 will receive the usual 20,000 bonus points as well as 100-500 bonus points for each medal awarded to U.S. athletes. But I’m still skeptical about its value.
There are so many predictions for who will win the most medals at the 2014 games in Sochi. One team of economists says the number of medals is closely linked to GDP and puts the U.S. figure at 36, with a range of 33 to 38; this is close to the 2010 record of 37 medals. Others look at the individual sports and contestants and come up with a wider range of 22 to 52.
One story on Yahoo suggests 16 gold, 9 silver, and 4 bronze medals. It seems like a cautious estimate compared to the numbers above, so I’ll run with it. That means you would earn 10,650 bonus points in addition to the 20,000 points for completing the minimum spend requirement of $3,500 in the first four months. However, in the Vancouver games the distribution was more heavily weighted toward silver and bronze, earning only 9,550 bonus points.
You can continue earning more points with 1 point for every dollar spent on most purchases, 2 points for every dollar spent on gas groceries, or airline purchases. The particular category changes each statement period to match the one where you spent the most money. You’ll also get 2 points for every dollar on mobile phone expenses.
The most unique feature of this card is 3 points per dollar on charitable contributions. Many frequent travelers make small loans through Kiva, earning points with their credit cards. When the loans are repaid they withdraw them in form of a check, paying off the original balance. (Don’t do this unless you can actually pay the credit card bill immediately to avoid interest penalties. Also, you may want to ladder your loans over several months.)
Unfortunately, redeeming points is rarely a good deal and one reason I don’t recommend this card unless there are particularly good sign-up bonuses or if it would suit some specific need such as Kiva loans. Each redemption level is for a specific ticket price up to a certain maximum. If your ticket costs less than that, you are leaving money on the table. If it costs slightly more, you might need to redeem many more points. And the lowest award level — 20,000 points for $400 or less — is higher than necessary for most domestic leisure flights booked in advance.
Redemption Levels
- 20,000 points — up to $400 value
- 30,000 points — up to $600 value
- 40,000 points — up to $800 value
- 50,000 points — up to $1,000 value
- 70,000 points — up to $1,400 value
- 100,000 points — up to $2,000 value
- 150,000 points — up to $3,000 value
- 225,000 points — up to $4,500 value
- 350,000 points — up to $7,000 value
- 500,000 points — up to $10,000 value
So you see, if you get this card only for the sign-up bonus, you might find yourself with about 34,000 points after the Olympic bonus is awarded and you consider the points earned through reaching the minimum spend requirement. That is enough for a $600 ticket. Not bad, and certainly good enough for travel to Hawaii if you live on the West Coast.
But it can still be a wide range. You need to price your ticket perfectly in order to maximize the value of a redemption. Book a $400 ticket for 20,000 points and you can get 2 cents per point in value. If you need a $401 ticket, you need to redeem 30,000 points and will obtain roughly 1.34 cents per point in value. So your sign-up bonus could actually be worth much less than $800 in free airfare. US Bank is also a pain when it comes to getting application’s approved, so read Amol’s helpful tips about freezing your credit report.
I’m not impressed with the bonus categories. For purchases that earn 2 points per dollar, well, many other cards offer double points on groceries (Amex Premier Rewards Gold = 2), flights (Sapphire Preferred = 2.17 and Amex PRG = 3), or gas (Ink Bold/Plus = 2). These are good cards that I already recommend you carry with you and are even worth the ongoing annual fees in my opinion. The only bonus category that really matters for the FlexPerks Travel Rewards card is charitable contributions.
Why have I completely ignored the 1 point per dollar on general purchases? Look at it from the perspective of return on each dollar spent. You’ll get between 1.34% and 2% back on every dollar when you redeem your points for travel through US Bank’s rewards program. You can do better with a much simpler card — the oft mentioned Barclaycard Arrival World MasterCard. Barclay’s Arrival card earns 2 points on every purchase. Each point is worth 1 cent for every ticket. And you get 10% of those points back after you redeem them, so it’s really like getting 2.2% in rewards.
Which would you rather have: 2.2% on every purchase or a range of 1.34-2% with a few awkward category bonuses? I’d pick the former, and that’s why I recommend the Barclaycard Arrival to most travelers who want to use their points to book any ticket without worrying about award availability. Just book it like you normally do through an airline or travel agency and call Barclays to request a statement credit.
Links
Barclaycard Arrival™ World MasterCard® – Earn 2x on All Purchases
- 40,000 points (worth up to $440) after $1,000 in three months
- $89 annual fee waived first year
FlexPerks® Travel Rewards Visa Card
- 20,000 points (worth up to $400) after $3,500 in four months + Olympic bonus
- $49 annual fee
Disclosure: I may receive compensation if you use my link for the Barclaycard Arrival World MasterCard to apply. But the US Bank FlexPerks Travel Rewards card is not an affiliate link. Each card works best for different people.
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