The Unsung Hero of Card Benefits that You’re Not Paying Enough Attention To

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Credit Card Anniversary Bonuses

Credit Card Anniversary Bonuses: The Unsung Hero of Card Benefits

This morning I was having a conversation with a friend about whether to keep a card after the first year. One of the points that came up is that his JetBlue card comes with a 5,000 point annual bonus simply for renewing. In fact, this annual bonus is the reason that I don’t even bother considering canceling the card. I happen to love JetBlue and I know I’ll always be able to use 5,000 extra JetBlue Points.  Sure I have to pay an annual fee on my anniversary, but that fee is reduced by the value I will get out of those 5,000 miles. This got me to thinking about credit card anniversary bonuses in general.

All of a sudden it dawned on me, I think this is one of, if not the best benefit available on cards. At this point you’re probably thinking “this girl is crazy who cares about 5,000 points, what else can the card do for me?” But hear me out.

Credit Card Anniversary Bonuses List

Chase Marriott Rewards Premier (Business Version Also) Free Night
IHG Rewards Club Select Mastercard Free Night
Wyndham Rewards Visa Signature
6,000 Points Some report15K
Hyatt Visa Free Night
Club Carlson Premier Rewards Visa (Business Version Also) 40,000 Points
Club Carlson Rewards Visa 25,000 Points
Asiana Visa Signature 10,000 Mile Certificate
JetBlue Plus 5,000 Points
Southwest Airlines Rapid Rewards Premier 6,000 Points
Southwest Airlines Rapid Rewards Plus 3,000 Points
United MileagePlus Explorer 2 Club Passes

Annual Bonuses Are More Valuable than You Realize. Reasons Why:

  • Offset the Annual Fee
  • Uncomplicate matters and save time
  • Positive affect on credit score and relationship with banks
  • Opportunity for heavily discounted points

Offset the Annual Fee

Most of these cards come with some type of fringe benefit that you may not value enough to pay the annual fee.  For the airline cards, it tends to be priority boarding and free checked baggage.  For hotel cards, it’s generally some type of status, late check-out and maybe extra earnings on spending within the brand.  Maybe you only use a certain airline once in a while and you don’t always check bags, you may not think these annual benefits justify the fee. However, if you were getting a cardmember anniversary benefit on top of that, it helps offset your yearly fee. In this case, keeping the card feels like a no-brainer to me as long as you know that at some point you’ll be able to use those points, miles or free night.

Uncomplicate Matters and Save Time

The thing that I am by far the worst at dealing with in this hobby is the annual retention call to either cancel, downgrade or try to get the annual fee waived. I’ll be honest with you, I have forgotten to call or put the call off too long, more times than I care to admit. Knowing that I’m getting some value back every year when that fee gets charged enables me to justify keeping it open without having to worry about making the call.  Now I know it doesn’t seem like such a big deal have to make a call once a year, but when you have as many cards as most of us do, it can be a huge hassle.

Positive Affect on Credit Score and Relationship with Banks

Keeping a card longer helps you build credit and goodwill. The older your accounts are, the better it is for your credit score. Opening cards and then closing them after a year is okay, but it does lower the average age of your accounts, which is a negative. If you can keep the card open longer because it’s not actually costing you much, I see this as an additional card benefit.

Keeping cards longer also helps build good-will with credit card companies. Card issuers can look unfavorably on customers who only sign up for cards to get the sign-up bonus and then cancel before paying an Annual Fee. There you have it, another benefit- “Street Cred”

Opportunity for Heavily Discounted Points

Airlines

Let’s say I haven’t convinced you yet. How about this?  You could look at paying the annual fee as buying discounted points. Let’s look at some examples here:

JetBlue Plus Card

You can buy 5,000 JetBlue TrueBlue points for $175.50 (3.5 Cents each). The Annual Fee is $95, that’s like getting the points at 1.9 Cents each.

If someone offered to sell you JetBlue points for 1.9 cent, it may not be the best value for you because in my experience JetBlue points tend to be worth 1.2 to 1.6 cents a piece. But, also remember card holders get 10% back on points redeemed for award tickets- so really the price is closer to 1.7 Cents a piece. It’s not that far off in terms of actual value and let’s say you get just two free checked bags through the year for a price of $40. No-brainer! Your price per point then drops to 1.1.

Asiana Visa

Lets look at another example. You pay an annual fee of $99 and Asiana gives you 10,000 miles certificate towards a redemption each year used only towards Asiana flights. That’s less than 1 Cent a mile. That’s an incredible value. (Note, I did not see an option to purchase Asiana Miles, but I’m certain they would sell for well over 1 cent.)

Southwest Plus and Southwest Premier

You can buy Rapid Rewards points at a rate of 2.75 cents each. Your Annual Fee is $99, so you can look at this as purchasing points for 1.65 Cents each. Or for the Plus Card, the Annual Fee is $69, so points would be 2.3 cents each- still better than the going rate ot buy. Again, I wouldn’t jump at the chance to buy these miles for those prices, but when you factor in other card member benefits, it pays for itself.

United Mileage Plus Explorer Card

Here’s one anniversary bonus that doesn’t justify the annual fee if you’re getting other value from the card. 2 Club Lounge passes is definitely not earth shattering and probably shouldn’t be the deciding factor in holding onto a card.

Hotel Cards

I’ve looked at only airline ones up until this point. Hotels are admittedly more subjective and in my opinion, harder to value because the fringe card benefits are not easily quantifiable. A checked bag has a price, but a potential room upgrade or priority check-in is very subjective.

Club Carlson

You can buy points for .7 cents a piece. Your  Annual Fee in this case, gets you 40,000 Points- that’s just .187 cents a piece- clearly a huge savings and you can usually redeem them for double that.

Wyndham

You can buy points for 1.1 Cents each. $75 Annual Fee, anniversary bonus gives you 6,000 points- that’s 1.25 cents a point. This is the first one where it’s actually more than you can buy them for. You would skip this one unless you get enough value from the increased earn at Wyndham. (Do keep in mind that you may only purchase up to 5,000 Wyndham points a year.)

Evaluating an Anniversary Free Night

The free night award cards including IHG, Marriott and Hyatt are only no-brainers if you will use the free night. The fact that the free night expires makes it worth less to some than the flexible reward point type bonuses. For me, the IHG Rewards Club Card is one that I will continue to renew year after year even if I don’t get to use it each time. It’s only $49 and you can use the Free night certificate at ANY IHG. Thus, even if I forget to use it one year, I can still get my $49 worth the next year.

Conclusion

Anniversary Bonuses are a great way to add value to cards and help offset annual fees. Keep in mind, these are just anniversary benefits. Cards come with a whole slew of other benefits and if I can get the annual fee lowered by a yearly benefit, the card is that much more likely to take up permanent residence in my wallet. The key here is your ability to make use of the benefit, otherwise you’re probably throwing away money on the fee. Unfortunately for me, many of the cards that feature these types of bonuses are not associated with loyalty programs I use. But hey, a girl can dream!!!

 

 

17 COMMENTS

  1. The Wyndham Fee Card you reference comes with automatic Platinum status. Wyndham awards another 3,000 WRewards/yr for having Platinum status. Along with the 6,000 cc WR, that is instead 9,000 WR/yr at a value of $99 (at .011 though I value them more) which MORE than offsets the $75 fee (instead of less!).

    Those 9,000 WR get you 60% towards a 15,000 free room anywhere at any of their brands. For me it is the best hotel anniv deal on your list because the room is not limited to a category (like Hyatt) and offers better rooms than IHG & Club Carlson (includes Dolce Napa & Carribean/Mexico all-inclusives) & Wyndham Grands (Bonnet Creek & Athens) & TRYP (Times Square). Also, WR expire with no activity after 18 months rather than a 1-yr certificate expiration.

    As you note, the most WR you can buy a year is 5,000. There IS no other way to earn them (other than Wyndham hotel spend) than thru their cc. They have no transfer partners! I have personally received 3-4 cents value out of WR. I rank it the best of your hotel list & certainly not the worst!

    • I actually left those out intentionally because you have to buy a ticket in order to use it. I was thinking more passive bonuses.

  2. Some folks are still grandfathered in to 10,000 AA miles per year from the Barclays Red Aviator card. Even if it weren’t child’s play to get them to waive the AF each year, this is another bonus event that makes keeping the card a no-brainer.

  3. As usual, UA is a loser. You may add also, that with many cards if you have not transferred or used your points, you may lose them if you cancel the card, making the AF an essential expense.

  4. The Asiana card does not offer 10000 miles every year. They offer you a 10000 mile redemption discount which requires you to make a redemption every year to get value out of it. You can also only use it on Asiana and not Star partners.

  5. Good article. I love the IHG card – I think it’s the most underrated card out there.

    Under Southwest you mention “Again, I wouldn’t jump at the chance to buy these miles for those prices, but when you factor in free bags, it pays for itself.” I am not sure what bags have to do with the cost of miles – and Southwest offers free bags to everyone regardless of being a credit card holder or not.

    • Thank you! I fixed that oopsie a little while ago. Not sure what I was thinking! On another note, I’m so happy people actually read the whole post.

      I also love the IHG card. Where is your favorite place to use the free night?

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