Lesson 3

Navigate hidden cardholder benefits

The anatomy of a rewards card & fringe benefits

Birth of the charge card

It’s 1949 on West 33rd St in NYC. Frank McNamara just finished his meal and realizes that he doesn’t have any cash on him. After his wife brings him cash for his bill, he sets off to spare that embarrassment on anyone else.

Less than a year later McNamera launched the Diners Club Card. Despite its cardboard construction and limited acceptance in the early days, it was a novel idea and blazed a trail for the first official credit card, the Bankamericard.

Visa & MasterCharge

Bank of America launched the Bankamericard in 1958 and went on to become Visa. As other banks took note of Visa's success they joined together to create “MasterCharge” the predecessor to today’s Mastercard.

Visa, Mastercard, American Express & Discover still dominate the credit/charge card industry. In today’s issue we’re dissecting the anatomy of a rewards card and all the fringe benefits they come equipped with.

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Maui, Hawaii

Prior Lesson Recap

In Lesson 2 we covered the rules of the game. Key takeaways being:

Burgenstock Hotel, Lucerne, Switzerland

Lesson 3: The Anatomy of a Rewards Card

A rewards card is a coordinated effort between various companies, but it all starts with 1-3 of which that play the lead roles:

The AMEX Platinum card is an example of one company doing most of the heavy lifting on their own, while the World of Hyatt card entails Visa, Chase & Hyatt working together. While most of us won’t notice a difference in service, I mention it because just like Chase or Capital One offering premium card benefits, Visa & Mastercard each have their own respective service tiers that come with benefits.

Visa & Mastercard Service Levels

While American Express and Discover issue their own cards, the levels above are helpful as another framework for quickly sorting through potential cards. Generally speaking, any card with an annual fee of $300 or higher should qualify as a top tier card, the exception being co-branded cards.

Airlines like American, Delta, and United have co-branded cards that may not be top tier, but have high annual fees because they include lounge access to that specific airline. In my opinion those cards are not worth the cost since they lock you into a specific airline and many of the lounges they offer are outdated in comparison with AMEX Centurion or Capital One lounges.

Going back to Visa and Mastercard for a moment, I was perusing their rewards sites linked below and was surprised to see a number of unexpected benefits that each program offers. Here are a few examples:

While these perks aren’t mindblowing, they may provide reason to diversify your card holdings. Let’s explore some additional hidden card benefits across all premium cards.

Palm Springs, California

🍬 Sweet Spotlight: Fifth Freedom Flights

Fifth freedom flights offer opportunities to experience fantastic business and first class products at a significant discount in price (and points). While the name is odd, it stems from commercial aviation agreements between countries and specifically references a flight that is traveling between two countries, neither of which is its home base.

For example when Singapore Airlines travels between New York and Frankfurt, Germany. While that plane may continue to Singapore, the stop in Frankfurt allows for us to experience Singapore without continuing on the full journey to Singapore. If the plane was only stopping to refuel and didn’t deplane, it wouldn’t be a fifth freedom route.

A few sample routes:

Many of these routes have sweet spots available, and I’m personally a big fan of the Emirates NY to Milan and Athens routes as my preferred method of getting to Europe.

Guggenheim Museum, Bilbao, Spain

💳 Credit Card Review | Chase Sapphire Cards

To wrap our mini-series I wanted to end where it all began for me, and that’s with the Chase Sapphire Reserve® (CSR) card. Since its launch back in August 2016, it has been the crown jewel in the Chase portfolio of cards. Let’s do a comparison of the Reserve with the Chase Sapphire Preferred® card, to see if either is right for you.

Chase Sapphire Reserve®

Chase Sapphire Preferred®

Before learning more, remember that in yesterday’s Rules of the Game, Chase only allows you to hold either the Reserve or the Preferred at any given moment. Additionally, you only qualify for either Chase Sapphire welcome bonus once every 48 months. Lastly, Chase has a strict 5/24 rule, meaning you can only open a Chase personal card if you haven’t opened 5+ new cards in the past 24 months (note that if you’re added as an authorized user that will likely count towards this total).

Learn more

🎓 Drop some knowledge

You did it, three days of content and you likely have a better understanding of credit card rewards programs than most people. Let’s recap a few key learnings:

1. Points are more valuable than you may think - If you’re spending a few grand you will likely shop around for value, the same principles should be applied to spending points.

2. Banks and card companies each have their own rules - You cannot simply open card after card to rack up intro bonuses. Instead you should be discerning with your selection of cards and aim to open cards that you’ll receive long term value from.

3. Cards come with plenty of fringe benefits - It’s easy to scoff at $500+ annual fees, but if you understand and utilize the perks, it may prove to be a fantastic deal.

❤️ Love notes

Great job – started from the top, now you’re here! A quick disclaimer, I’m not a financial advisor and this isn’t financial advice. This mini-course took hours to put together, special shout out to all who helped edit and those of you who choose to share it.

Editorial Disclosure

Opinions expressed here are the author's alone, not those of any bank, credit card issuer, hotel, airline, or other entity. This content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post. The content on this page is accurate as of the posting date; however, some of our partner offers may have expired.

🧭 Book a 1:1 Session

Book a free one on one consulting session here or email us at info.allwaysaway@gmail.com with questions and what you’re looking for and we can try to offer any suggestions. Obviously we’re not financial advisors and any advice should not be considered financial advice.