Brutal Realties: Collecting Travel Rewards in 2023

by Robert McGarvey

It is time to play hard. Winning at travel rewards requires cunning, guile and, well, a determination to win.

I just won but I am still amazed at what I did to pull this off. It wasn’t hard – quite the contrary – but it seemed so unlike me.

Regular readers will recall that a few months ago I got a barebones Southwest Air credit card via Chase – $69 fee per year. It delivers minimal perks. But – crucially – it offered 50,000 SWA miles when spending $1000 in the first couple months of the card.

I had a trip for two to Dallas on my calendar, just a handful of miles in my Southwest account and not much more at American, and, no, I am not flying Frontier or similar discounters because I’m not. So I was looking at around $700+ out of pocket for air for a short trip to Dallas from Phoenix for two.

I did the math and it seemed to me I was out $69 if I get the card plus, say, $20 in lost Amex miles value for the $1000 spent to collect 50,000 miles – but I would collect $700 in value with the two free tix. Case closed, I got the card, and yesterday I booked the flights for about 52,000 miles (I had the extras in the account from a years ago flight on SWA) plus $11.20.

Add it up and I’m out about $100…but I saved $600 net.

Probably I will cancel the SWA card when it comes up for renewal.

It took me a few seconds to apply for the card, it will take about the same to cancel it.

And then I’ll move on to another card with a sign up bonus. Probably Alaska Air because it has rich payoffs (even if I don’t see me flying it but the transfer partners are plentiful – oneworld members plus a handful more including Aer Lingus).

What is so strange about all this is that, just a few years ago, I looked with pity upon friends who were deeply immersed in playing the credit card and mileage games. It seemed like so much effort. And yet here I am.

What’s changed? Really, it all changed when the airlines ditched their awards charts and instituted “dynamic pricing” aka what the market will bear and, suddenly, roundtrip shoulder flights to Europe in Economy Plus (not business class) cost over100,000 SkyMiles on Delta and who would have thought the cost could hit that mark?

I had always thought miles were a kind of adult Monopoly money and, boy, did that become plainly fact in the era of dynamic rewards pricing where airlines seem to work on the belief that there always is a greater fool so let’s push the cost higher and someone with a bunch of miles who believes they were “free” will plunk them down.

That’s not me. Miles I earned flying are miles I feel in my body. I worked for them, I earned them.

Now, miles I get for playing a sign up hustle are different. They are free or close to it.

And, really, the only way to play the miles game now is hustling for sign up bonuses. Earn ’em, spend ’em, move on.

The Unofficial TripAdvisor Obituary RIP

by Robert McGarvey

I have long been something of a fan of TripAdvisor, especially when it comes to booking at an independent hotel. Yes, my confidence in it was rocked when it became evident that the site had deleted posts claiming sexual assaults by hotel employees. And then there were the reports of hoteliers offering bribes to guests who had posted cranky reviews if they took them down.

And probably the biggest problem in recent years has been a growing army of scribblers who for a dollar or three write up favorable reviews of hotels they have never stayed in – never even seen in person. But, frankly, this hasn’t bothered me as much as it has bothered others because I thought – possibly stupidly – that I could spot such reviews. The language was usually stilted, the praises were generic, and – always – they were too favorable.

I have long believed it is normal to write a cranky review of a place that disappointed – while you are waiting, maybe an hour, for room service to bring your morning coffee why not tap out a blistering write up?

When I see positive reviews I have been skeptical – but some have convinced me they are honest. I had persuaded myself I could spot the phonies and read the honest ones.

But there now is a new player in town and it will put all the scribblers out of work because it is AI. The Guardian has the headline: Fake reviews: can we trust what we read online as use of AI explodes?

The Guardian’s thesis: “Artificial intelligence produces plausible verdicts on hotels, restaurants and tech in an instant.”

You doubt it? So did I I. So I went to the free version of ChatGPT – https://chat.openai.com/ – and asked it for a review of Enchantment resort in Sedona, a property I know and have followed for a couple decades. It came back with a long review that included this: “Enchantment Resort offers a truly enchanting experience in the heart of Sedona. The combination of stunning natural beauty, luxurious accommodations, superb dining, and exceptional service creates a memorable and rejuvenating getaway. Whether you’re seeking relaxation, adventure, or a spiritual retreat, Enchantment Resort is an ideal choice.”

The review is written in first person and – notably – it included that the easy access to hiking trails from the resort is a real plus. That is true.

Was there anything false? I don’t think it’s in the “heart” of Sedona – it’s out of town – but, really, the review was otherwise accurate.

Duplicate this experience yourself. Here’s the prompt I used – write a review of enchantment resort in sedona. (With large language model AI tools, they kick into action when given a prompt, kind of an AI variant a Google search command. Good prompting takes practice. If you don’t like what you get back, try another prompt.)

The ChatGPT review worried me. So I went to Google’s Bard – https://bard.google.com/ – and gave it the same prompt.

Bard came back with what I judged a better, even more credible review. Again it’s written in the first person and it even included a list of Cons:

  • Expensive
  • Some of the amenities, such as the spa and golf course, can be costly
  • The resort is located in a secluded area, so it can be a bit of a drive to get to Sedona’s main attractions

Bard concluded: “Overall, I would highly recommend the Enchantment Resort to anyone looking for a luxurious and relaxing vacation in Sedona. It is a bit pricey, but the experience is worth it.”

How will we spot these AI generated reviews? Probably we won’t. The Guardian’s reporter, Patrick Collinson, observed that before we could spot fake reviews by their bad English, today “one sign that a review is fake will be that the sentence structure is a bit too perfect.” How are your Chicago Manual skills these days?

Meantime, TripAdvisor et. al. had been fighting trench wars with bogus posters – Collison said it identified 1.3 million fake reviews in 2022, a year that I’d guess saw fewer reviews than most because who was traveling then?

A scary reality is that Bard and ChatGPT spit out those reviews in seconds.

TripAdvisor isn’t clueless about this. It notes in a recent report, “As with all new technologies, the benefits of generative AI also come with challenges, and we expect to see attempts from businesses and individuals to use tools like ChatGPT to manipulate content on Tripadvisor. Our Trust & Safety team will continue to monitor the use of these tools on the platform and will take all available steps to stay ahead of threats to Tripadvisor’s brand integrity.”

Good luck with that. Arguably, AI tools could be trained to spot AI generated content – a kind of real world Terminator battle – but, for now, I am swearing off looking at “user” reviews of anything, from Amazon products to hotels and restaurants.

The machines are winning this battle.

Another Card In My Wallet in a Heraclitean World

by Robert McGarvey

I couldn’t resist the offer. The mailer popped in my box – genuine US mail – and the headline blared Earn 40k 65K Bonus Miles.

The sender was Delta where, despite me having no memory of having have ever paid for a flight on it, I have cashed in miles and points (via Amex) to get three roundtrips to Europe in the past 10 years.

The 65K miles had my attention. I had scorned prior 40k mile offers but at 65k it got a second look from me. Probably I could cash that in for two roundtrips to NYC from Phoenix.

This is an Amex card with a $99 annual fee, free in the first year. The only requirement for collecting the mileage bonus is spending $2000 in the first six months.

The card has the usual airline card perks – free first checked bag, priority boarding and an intriguing wrinkle where award flights are discounted 15%.

What about my cashback strategy? It remains in play but as I’ve said I don’t see it generating more than $2000 or $3000 for me this year and while that is a pleasant spiff, it’s not ample for me to change my life course. Getting more cashback would necessitate me putting a lot more time into this than I am prepared to do.

But the 65k miles in effect just fell into my lap. The value of the 65k points is around $900, per The Points Guy’s calculation. It may even be higher with that 15% discount on awards tickets.

It will be effortless to get the bonus. I’ll probably spend the $2000 on groceries and, yeah, I sacrifice 3% back on a Venmo card – but the Gold Card offers 2% back (in miles) on groceries so that’s, what, a $20 loss. No big deal.

I also pat myself on the back for resisting the Alaska Air current 50k miles account opening bonus, but that’s mainly because Alaska doesn’t go a lot of places I want to go to.

Will I keep the Delta Gold card after the first year? Hard to say but probably. If I dump any card in my wallet it’s likely to be the Southwest card which I got for a 50k miles signing bonus that I already know what I’m spending it on.

But there is and likely will continue to be lots of motion in my credit card inventory. I’ll tell you this: after years of having a static deck of credit cards, this year there has been more shifting and additions to my cards than I can recall before in this century. But there’s a reason: it just is getting harder to intelligently play the credit card rewards and airline mileage rewards games and win. The rules keep changing, the “prices” keep going up, and the only way I see to play this is to keep in motion myself. The era of having one mainstay card – Amex Plat for me – that was used everywhere that accepted Amex simply are over.

Heraclitus called it right: The only constant in life is change.

My Shrinking Bucket List: Camino, China, and Places Not Visited

by Robert McGarvey

Do you have a bucket list?

Most everybody I know has one. Antarctica is on a lot of bucket lists (personally I open my freezer, look at the ice for a minute and the thought of traveling there vanishes). Tibet is on some lists and it might be on mine except it ceased to exist a long time ago. Moscow and St. Petersburg are on a few lists but, pending regime change, I won’t visit either. Ditto Tehran. Rome, Paris, Berlin are on some lists but I’ve been to all and, yes, would happily return but have nothing planned.

Here’s the deal. As I have aged my bucket list has decidedly grown smaller. There are many, many places that I know – although they are desirable – I almost certainly will never go. New Zealand is a case in point – just too far. The Baltic Republics are another for instance – which shouldn’t be confused with the Balkans where I also probably will never go although I admit Albania tempts me (with a gorgeous shoreline and also Roman ruins) as an add-on to a Greece vacation so maybe I will go to the Balkans, just not the Baltics.

With age there also comes a realization of diminishing time. I just don’t have a month to spend poking around South America and, yes, I have been, perhaps 25 years ago, to Chile (lovely country, by the way) and I am tempted by both Peru and Argentina (an odd couple if ever there were) but I sincerely doubt I will want to put in the time to know either and the idea of a quick, check the box (done that!) trip to either holds no appeal to me. Too much wear on the body for too little benefit.

Look, it’s not just countries that aren’t on my travel to do list, it’s around 24 US states, too, that I have never visited and I doubt I ever will, from Idaho to New Hampshire and Kansas to Alabama. Some states make the no go list because they are culturally unacceptable to me (just as I probably am culturally unacceptable to them). Others make the list because they, well, offer no reason to want to go. I have some friends who are determined to check off all 50 states for a bucket list goal but I am satisfied with the 26 or so I have been to and am doubtful I will check off any further states. (Note to state tourist boards: this means you. I ain’t going, don’t ask.)

What about Iceland? Yes, it scores high on the travel lists of many friends but not mine. There’s a hot tub in my backyard I never use and if the idea of going to Iceland popped into my mind I’d go sit in the hot tub until the idea vanished.

What about Tanzania? Possibly. What Baby Boomer who grew up watching Mutual of Omaha’s Wild Kingdom wouldn’t have curiosity about the Serengeti, the big five animals, and all the rest? If ever there were a prime bucket list trip this is it.

Ditto Egypt and the pyramids. Leading edge Boomers grew up watching a lot of TV horror movies about mummies and pharaohs and pyramids and just about all of us got an implanted idea that Egypt was a place to see – and the idea sticks with me. Even if not a one of those movies was shot on location.

But probably the second biggest possibility of a bucket list trip I might take is China, where I have never been (unless you count a 1997 trip to Hong Kong a few months after the handover). If there is a nation that is charting a specifically 21st century it is China and that is not to ignore its human rights abuses and its fast and loose relationship with facts and truths. But Shanghai, Chengdu, essentially instant cities of over one million in population, what’s soon to become the planet’s biggest auto industry (say good night, Detroit, Tokyo too), a huge tech sector, a rich intellectual, artistic and spiritual past – if ever there were a nation that deserves to be on a bucket list it’s China.

But China ranks second. What’s first? A 2027 500 mile walk of the entire Camino Frances. I slot it for six weeks when it will be probably my final Camino. This trip already has a place in my calendar.

Will I get there? That’s the question, isn’t it? Bucket lists are inherently aspirational, that is, things to live for. And I am all in with that idea.

What about you and your bucket list?

What Technology Is In Your Travel Bag?

by Robert McGarvey

It occurred to me the other day as I packed for a trip that just maybe the biggest change in my packing isn’t in the clothes (remarkably similar to what I packed 30 years ago) but in just about everything else.

Remember, now I prefer a backpack – a 35 liter Cotopaxi or a 40 liter Osprey – whereas decades ago my bag of choice was a big garment bag, mainly because folding clothes has never been a skill of mine. Still isn’t but I have grown to accept wrinkles, in my face and my clothes. A backpack is a functional choice and it is a change for me but it by no means is the biggest change in how I travel.

Probably the even bigger change is in the tech I tote and that’s despite the fact that tech today is a near universal reality whereas 30 years ago it was something of a rarity.

Rare it may have been but back circa 1990 I always brought a Toshiba T1100 Plus laptop, a modem, extension cords, a power bar, a screwdriver, and still more to insure I could in fact plug into the hotel’s phones and access CompuServe and/or AOL which were the online networks I used in those days. I also owned an acoustic coupler that I occasionally brought. Sometimes I also packed a bulky tape recorder (with spare D batteries) and a three pound Tandy-100 notebook which ran on batteries, had a tiny 8 line display and could store data on audio tape (thus the tape recorder). I remember transcribing an interview with Gerry Adams, the legendary Northern Irish politician, as a sat in a Belfast guest house and pecked away on the Tandy (which probably is the only oldtime tech I wish I still had – it was genuinely cool).

Add up all that weight I had to be lugging 20+ pounds of tech.

Looking back I have no real idea why I was so fixated on staying connected. I got few emails (I remember when CompuServe charged for emails). The Tandy could do most of what the Toshiba could do and, well, I guess I was just exhibiting my inner tech geek in my fondness for bringing so much gear on my travels.

But now it is 2023 and I travel light. Very light. For a computer my choice today is either a 9th generation iPad which cost under $300 and weighs about a pound or a Samsung Galaxy S6 Lite tablet which also weighs around a pound and cost $250. Note: I used to buy iPad Airs with all the bells and whistles but it occurred to me I didn’t use those features so I went cheap this past year. Either device does just fine with email, web searching, and the occasional writing chore.

Oh, the tablet, whichever I bring, also will double as my portable library with around 2000 Kindle books on tap in my library. Just think about how much weight that alone eliminates from my baggage.

WiFi is built into both tablets, no modem needed.

If I want I can bring a $30 Fosmon mini keyboard (it fits in a shirt pocket) or a lightweight Logitech keyboard, also $30. I probably will only bring a keyboard if I anticipate writing lengthy documents.

Of I course there’s also an iPhone 12. On it is a $23 Hindenburg field recorder app that recorded five interviews on a recent trip – very good sound quality without using an external microphone. The iPhone also can produce a powerful hotspot to handle my devices if I prefer to avoid public WiFi at hotels, airports etc (which I often boycott – security issues make using them unwise unless you deploy robust VPN).

Add in a USB cord or two and a USB outlet plug and tech is handled.

In a pinch, of course I could take quite good, even printable, photos with the phone (but I don’t customarily do photography). But if I had to I could.

Total weight is maybe three pounds, max.

And of course I can actually do much, much more with today’s pared down gear. Less is more.

How has your packing changed in your years of business travel? Speak up in the comments below.

Can AI Handle Our Travel Planning? Testing Chat-GPT and Bard

by Robert McGarvey

Everywhere I turn suddenly the word I hear is AI. AI can do this, it will do that, but can it in fact plan our travels?

Remember, the AI tools are 1.0 versions. They are very, very far from perfect.

Case in point: moments ago I asked ChatGPT, the current AI leader, to plan a two night business trip from Phoenix to Dallas. Seems simple right? A fast flight via American or Southwest, stay in a hotel near the event, and that’s 75% completed.

Not with ChatGPT. Here’s how it started: “Start your journey early in the morning and drive from Phoenix to Albuquerque, which is about a 6-hour drive.”

Note: I specifically asked this: Plan a two night trip from Phoenix to Dallas. The itinerary I got back showed one night in Albuquerque, one night in Amarillo and one night in Dallas, then returning home., presumably by driving but those details are not specified.

I gave Bard the same direction and it at least put me on a plane. It also suggested a trip to the G W Bush Library at SMU; I didn’t know it was there.

For day 1, Bard suggested: “In the evening, have dinner at one of Dallas’ many great restaurants. I recommend Tei-An, Uchiko, or Fearing’s Restaurant.”

Not bad actually. Score one for Bard.

I next asked ChatGPT to plan a six day walking itinerary on the Camino Ingles in northern Spain. A big win: it started me in Ferrol, not A Coruna which is the bigger city in that part of Galicia, but a pilgrim needs to start a few miles west in Ferrol if he/she wants a Compostela, an official document testifying to completion of a pilgrimage to Santiago.

As for Bard it returned a route of 93 kilometers…which is shy of the 100 minimum to qualify for a Compostela.

The ChatGPT route involved 117 KM.

The Stingy Nomads stages route – a human created route; I’ve found them reliable on past Caminos – comes in at 116 KM.

Score one for ChatGPT.

Next test: I asked both to plan a three night trip to Belfast to see the history of “the Troubles.”

Bard did ok, suggesting a Black Taxi tour to travel the Falls Rd, the Shankhill, and the Crumlin Rd museum. But on Day 3 it fizzled out with a suggestion to see the Titanic Museum. A fine stop for many but it has nothing to do with the Troubles.,

As for ChatGPT, it waived a white flag: “The server had an error processing your request. Sorry about that!”

You probably heard the recent story of tourists in Hawaii who, following GPS. drove directly into a harbor. There’s video. Personally I think that incident has more to do with human error than machine error but, then again, I have not see the directions the tourists were given, nor do I know what GPS mapping tool they used. Maybe it was in fact a machine malfunction.

But back to AI and travel. My best guess is that two or three years from now, AI will be able to plan most business trips literally in seconds with high accuracy, assuming the question is framed properly. The “prompts” – as they are called in AI – are crucial in shaping the results. Poor questions will produce poor results.

Why am I optimistic that better times are just around the bend? Partly it’s because the AI tools will get better – their databases will grow and their speed will accelerate. Partly it’s because we will get better at shaping our prompts.

Give it a couple years and about all that will be left for travel agents will be trips involving enormous complexities and poor source materials – such as travels in sub-Saharan Africa or India. I’ve tried to plan such trips myself and frankly gave up.

For now, however, by all means play with AI, even ask it simple questions. But always remember the machine is fallible. I just asked Bard the best steak houses in Manhattan and came back with a list headed by Peter Luger which happens to be in Brooklyn and, well, don’t ask Pete Wells what he thinks of the joint. On this list of 10 there were at least two more that just do not belong on any list of the best steak houses in Manhattan.

I asked ChatGPT the same question and, again, it offered up Peter Luger and on its list of five one other – clearly – did not belong.

But both named Wolfgangs which is at the top of my list.

The answers will keep getting better. Give AI time.

Inflight Misbehaviors: Are They or Aren’t They?

By Robert McGarvey

A passenger on your flight is flagrantly drunk. Is this OK with you? Or do you disapprove?

A baby cries – ok or no?

A couple has a public display of affection – are you tolerant or not?

Blogs and newspapers are chock full of flagrant inflight misbehavior – here are a few record-setting FAA fines imposed for genuinely over the top misbehavior including head butting flight attendants and attempting to open airplane doors in flight.  No reader will dispute that these passengers are completely out of line and my vote is to ban them forever from flying commercial.

It’s with the peccadillos, the smaller violations, where doubts arise, even down to: is this okay behavior or isn’t it? Let the debates begin.

For instance: is it ok for a passenger to listen to audio without wearing a headset? Ask me and the answer is: Nope.  If I wanted to hear c & w flying to Madrid I’d have downloaded some to my phone. I just don’t want to hear what you want to hear. What’s your opinion? Before answering understand that there’s a recent YouGov poll that took a deep dive into exactly these types of behaviors.  Are they social infractions? Or ignorable instances of individuality? Vox populi.

Understand: the most widely disapproved behavior is drunkenness with 55% calling it completely unacceptable and another 20% saying it is somewhat unacceptable. That is the high water mark in this exercise with 75% thumbs down.  By the way, 4% called it completely acceptable and of course we know where those sports fans come from. The miracle is that they were sober enough to record a response.  

The most widely accepted behavior: crying babies.  9% called this completely unacceptable while 20% said it’s completely acceptable.  

As for passengers not using headsets, 59% call it wrong.  

Try this one: is it wrong for a passenger to remove footwear (shoes, socks, etc)?  51% say it is.  Just 25% say it’s ok, kind of.  Color me puzzled because I usually remove shoes on international flights (I can’t recall doing it ever on a domestic flight) – but my socks stay on even when flying to Madrid.  I don’t feel a twinge of guilt about doing this.

Here’s a flash point: is it ok to fully recline a  seat (in coach)?  You may remember I have written often and favorably about KneeDefender so that’s probably a tip off to my position and, yes, I think a fully reclined seat in coach is a violation of the social contract.  Do most travelers?  Yep. just 21% think it’s acceptable, while 53% label it unacceptable.

A few more questions to ponder:

Is personal grooming inflight ok? That’s hair combing, nail clipping etc.

How about chatty seatmates – ok or nay?

What’s your tolerance for loud and noisy children (not babies)? Are they out of line on a plane?

Backing up, public displays of affection are fine with 28% but 39% walk the Puritan line and say save it for home. What’s wrong with a public kiss? Don’t ask me, ask them.  I see no problem with displays of affection.  Better that than displays of disaffection such as slapping or punching.

As for personal grooming, 55% give it the green light.  

As for that chatty seatmate, 39% say it’s fine and and 34% just shrug that they have no onion on this.  That neutral group is the largest of any of the survey questions which surprises me.  I thought opinions would be stronger, pro and con.

And when kids are loud and noisy, 51% want to 86 them. Just 22% say it’s acceptable.

Which shows: what do I know?  Just about nothing and that’s why these surveys intrigue me. I know what I think is ok – but it is fun to find out where the larger public disagrees.

Even when they are wrong.

Would You Spend >$500 on a Hotel Room?

By Robert McGarvey

Call me a hotel cheapskate.  I don’t recall spending more than $500 on a hotel room night, ever.  Occasionally I got comped a room that is that much or more but I wouldn’t personally shell out that much because, well, a room is just a room, a bed is just a bed.

Now it turns out I have company, lots of company, according to an MLIV Pulse survey for Bloomberg where 69% of respondents said $500 was their top hotel dollar and another 24% put their high mark at $1000. Respondents are Bloomberg readers which tells you money is on their minds.

Keep in mind that an average room at the Mark in Manhattan will run upwards of $800 most nights, the Watergate in Washington DC runs $600 and higher, the Langham in Chicago usually is $450 and up, and the list goes on.  It just is very easy to eclipse $500 in major US city hotels.

Per Bloomberg in explaining our tight fistedness: “This may be a reflection of diminishing consumer confidence or complaints that inflated pricing hasn’t been accompanied by a proportionate increase in service quality.”

Probably it’s a combination of both is my guess.

Service complaints, often at five star hotels, have hit new, high levels. Even Robb Report has sniffed, “Hotels Are Trying to Recapture Losses With Skyrocketing Prices. Too Bad Service Isn’t Following.”

As for diminished consumer confidence, even among executives, during a recent week in Boulder where I chatted with multiple fintech executives, I heard loud teeth gnashing about the failure of Silicon Valley Bank and what that portends for other, aggressive regional banks.  Worries were heard about deposit safety – a topic last aired in 2008 as many banks failed.  There also appeared to a growing belief that we are in for a recession this summer, although it is likely to be of short duration and mild impact.  Nonetheless, there is no disputing that consumer confidence – even among very high rollers – is on a downswing.  

The Bloomberg poll also asked participants about their “revenge spending” on travel post pandemic. That is, will they splurge to make up for lost travel due to the pandemic?  50% said nope. 18% added that they planned to reduce spending.  Just 25% said they might splurge on travel “a notch higher” than their norm. Only 7% said they would “really splash out” on their travels.

Will you “really splash out” or will you pull the belt in a notch? Personally I am more in the pull the belt in crowd – not so much because I envision an economic cataclysm as that I see us in what will turn out to be three to five years of a choppy economy with definite downs.  

The way I read the Bloomberg poll results, lots of their readers share my cautions and concerns about the short-term economic outlook.

And then there is my lifelong stinginess when it comes to hotels.  On a recent trip to Boulder CO I spent $175 per night on a room at the Hilton Garden Inn and, you know, I had no complaints. I don’t think there are any hotels in Boulder that charge above $500 per night anyway. Either way, I was satisfied with my room and don’t wish I had splurged on a better experience.

For an upcoming trip to Dallas I am booked into the Crescent Court at significantly under $500.  Sure, Dallas has hotels that cross that mark but do I need them? Nah.

What if I have to go to New York? Probably I’d stay in Jersey City – a room at the Hyatt Regency on the Hudson runs around $250 (and the views are indeed gorgeous). In Washington DC I’d stay at the Washington Plaza Hotel in Thomas Circle, a midcentury hotel across the street from where I lived many decades ago (and just a few blocks from the White House). In Chicago the Palmer House Hotel is around $200 per night. Pretty much wherever I’ll go there’s a hotel in my price range that I like.

I’ll blame it on my concerns about the economic outlook – but, really, we both know I am just stingy about splurges at hotels.

Playing Cashback Roulette: It’s Harder Than You Think

by Robert McGarvey

I am three months into a cashback first philosophy – putting miles accumulation secondary, mainly because miles, increasingly, seem a fool’s errand.  Just when you have enough, the carrier pushes the goal out further because, of course, the era of awards charts is history.

So, how am I doing with cashback? Lemme tell you, it’s harder than I thought. The key is remembering to use the right card at the right place at the right time. If you liked calculus with multiple variables you’ll love playing cashback roulette.

Here’s the inventory of my cashback cards: Discover, where I will have maxed out the 5% grocery cashback in Q1 and earned around $80 In the first three months. In Q2 restaurants earn 5% cashback and I expect to pick up some coin there.  My 2023 goal for this card however is just $150 in cashback.

Amex Blue Preferred – where I will pocket around $100 in cashback in my first three months and am also galloping along to a $200 bonus for spending $2000 in the first six months. It’s picking up my supermarket spend with its 6% cashback (up to $6000 in groceries). I also buy gasoline with it (3%) and I pay for Netflix with it (6%). The fee is $95 after the first year.  My cashback goal for this card in 2023 is $600.

Affinity Cash Rewards – a newcomer to my wallet. I swapped out a great Affinity FCU credit card where the interest rate on a carried balance was very low. But I don’t carry a balance.  I happened to notice Affinity offered this no fee cashback card which offers 5% back on Amazon purchases, 2% cashback at restaurants, gas stations and supermarkets. It also offers $200 back after spending $3000 in the first 90 days. I will collect that bonus. My cashback goal for this card is $500 in 2023. A fee free card.

Apple Card – I realized I owned this card when I moved my cards from one wallet to a new one (with a built-in slot for an Apple Airtag!).  Up until now I have only used this card to buy from Apple (3% back).  But when I looked into it I realized I could also get 3% at Panera Bread, Walgreens, and Ace Hardware, all of which I patronize. My cashback goal for the Apple Card is a paltry $100 in 2023. Fee free.

REI Capital One – 5% back on REI purchases, 1.5% back on purchases elsewhere.  Mainly I will use it at REI but last year I did use it at European hotels because there is no foreign exchange fee.  Goal for 2023: $50.  I don’t plan much REI shopping this year.  Fee free.

Venmo – 3% back on my biggest spending category. A flexible card, it lets the user pick his/her biggest spending category. So far this year I have gotten $25 which I took in Bitcoin, not cash. This card has fallen to the back of my wallet but I imagine I’ll get back around $100 all in by year end.

That’s $1525 total.

Am I working too hard for the money?  I wonder.  Truth is, the main work is remembering to carry and use the right cards at the right places and I am hoping that over time I will form memories that free me from much of that conscious effort.

The main casualties are that I earn fewer rewards miles on my Amex Plat. I probably will sideline a Chase card that gets me 5% back at Amazon in favor of using the Affinity card but that is as much a consequence of my pique with Chase as anything else.  The card is the last remaining piece of our relationship and I will be happy to jettison it.

Are there better – different – cashback cards that I could get? Possibly. But for the present I am satisfied with my arsenal.

Btw Amex Plat is still paying for itself – $20/monthly towards a NY Times digital subscription, $15/monthly for Uber, $50 on a Saks credit. By year end I will more than cover the $695 annual fee. Even as I divert spending into the cashback cards. I remain a fan.

The Dirty Secret About Credit Card Rewards: Who’s Paying?

By Robert McGarvey

Sure, I get a kick out of mentally counting my cashback and other rewards – in recent weeks 1200 Amex points via Rakuten just for filing my taxes with H & R Block, maybe $25 in credits at Amazon because I used a particular Chase credit card, $35 at Discover for buying groceries; another $35 for buying more groceries with the Amex Blues Preferred, $10 a day at a Hilton stay for food purchases because I have elite status via Amex Plat and the list could go on.

You get the idea: every month I am getting well over $100 in rewards just because I have and use particular credit cards.

Now chew on this: “Credit card perks for educated, usually urban professionals are being subsidized by people who have less. In other words, when you book a hotel room or enjoy entry to an airport lounge at no cost, poor consumers are ultimately footing the bill.”

That’s from a New York Times op-ed written by a Stanford finance prof and a grad student.

Their piece explores the question: what pays for our perks?

That question matters because – obviously – perks are increasing, Just look at the many card acquisition bonuses that today cross $1000 in value. What’s paying for that?

Reality #1: It’s not our imagination. Perks are getting richer.  Write the Stanford duo: “In 2022, the Federal Reserve published data showing that the cost of rewards, as a share of total transaction volume on credit cards, increased 25 percent from 2015 through 2021.”

Reality #2: Maybe credit card issuers swallow some of the increased costs as marketing expenses but they don’t swallow all of it.  How do they cover these costs? Per the Stanfords it’s via what’s called interchange fees which are the charges imposed on merchants when they accept a credit card in payment. On a $1 purchase, a merchant will in fact get somewhere between 94 cents and 98 cents depending upon their deal with the credit card outfits and the card used in the transaction.

Except the interchange fees apparently have been climbing, to cover the costs of our perks.  Claim the Stanfords: “A recent study at Stanford found that when credit card rewards increase, so do these fees.”

In that study Lulu Wang, another Stanford graduate student, says: “Data on bank payment volumes and consumer payment preferences suggest that consumers are sensitive to rewards, but merchants are insensitive to fees.”

They may be insensitive but that’s because they pass them on. Writes Wang: “Merchants pass on merchant fees to retail prices, creating a regressive transfer from cash and debit card consumers to credit card consumers.”

Therein is the nub of the whole argument.  When Chase hands out 100,000 points to a new Sapphire Preferred cardholder, we all pay a bit more at retail to cover that cost – and that’s true whether we have a Chase card or not, indeed whether we have any credit cards or are simply hand to mouth cash paying customers.

Can’t the cost of credit cards be passed on by the merchant to consumers? That was not legal until 2013 but now almost all states allow merchants to impose a credit card surcharge.  (Connecticut and Massachusetts still outlaw surcharges.)

Me, I live in Arizona, which allows surcharges, but I can’t say I have seen any except at gas stations.

Which means that all the other places I shop the surcharges are eventually paid for by all consumers in the form of higher prices.

You might think we are quibbling over pocket change. Wang disagrees.  He writes “consumers receive around $50 billion per year in rewards to use cards.”

That’s a mighty big pocket. 

The Stanford op-ed authors sum this up: “Lower-income consumers are forced to pay higher prices on the goods they buy, but they rarely receive any benefit from rewards programs, according to the Federal Reserve, which has been tracking the distributional effects of card rewards. Its December 2022 report estimates an annual redistribution of $15 billion in rewards value from poorer people to richer people”

Understand, this analysis does not necessarily apply to airline miles, at least ones awarded for actual travel. Many other factors are involved in calculating the costs to airlines, not least of which is that at most carriers the goal is to “sell” seats that otherwise would go empty. That math gets very complicated.

As for rewards on other purchases…I don’t know what I plan to do.  

But the math is disturbing.  Very disturbing.