Rental Cars and your Credit Card Benefits

Greetings everyone, it has been a long while since I last made a post, but having a little one will do that to your life. I plan on making some posts regarding travel with a little one, but for now I'd like to share my experience with you regarding Rental Cars and your credit card insurance benefits.

Background:

While up in the Pacific Northwest, I was on the highway when suddenly *WHAM* something struck my windshield. Moving at 60+ mph in the evening, I did not see what it was that hit me. It could have been a rock in the road, or something from the overloaded truck driving just ahead of me. Whatever it was though, scared the living daylights out of me and did some serious damage to the windshield. Fortunately my view wasn't severely degraded, I wasn't distracted, and I kept full control of the car. 

After safely reaching my destination, I immediately begin the claims process. Most credit cards offer the benefit of some form of insurance when you rent a car and place some/all of the charges on the card (check your card benefits for specifics), and as long as you deny the rental company's insurance. The best travel cards will offer greater coverage amounts etc. This was my first experience claiming this benefit.

Starting the claim was pretty easy; call the number on the back to get started. Do this as soon as possible, my cc's give up to 30 days to initiate the claim. They will most likely direct you to a website to upload various documents to complete the claims process. In all honesty, the process is actually pretty easy and simple. You'll need receipts from your rental (including the departure and final receipt), some insurance documents, CC statements showing the charge for the rental, itemized list of repair charges, and pictures of the damage.

All in all it may take you a month or more to get all of these docs, depending on when the rental company gets the damage repaired. Not to worry though, most states allow up to 1 year to complete the claim, and I think in CA its even longer. And the repair charges will not/should not be charged to your card directly. In my situation, a 3rd party company - Viking Billing - was collecting on behalf of the rental company. This is where it gets interesting.

After the car was repaired (or quoted for repair) I received the final bill from the 3rd party company; I contacted them requesting the itemized list (both were needed for the benefit claim). At this point they asked if I wanted to pay the bill. I informed them that I would be working through the cc benefit claims, which they accepted.

About 2 weeks later, I was contacted via phone by the same company; they were looking for collection which I told them was still processing with the benefit claims. The agent asked if I wanted to pay the administrative fee, since the claim would not cover that anyways. I gently declined and stated I'd rather see what they decide before making any payments. This was the right decision.

Ultimately, my entire claim was approved: repairs, lost time fees, etc. Albeit the total amount paid by the cc benefit claim was less than what was charged. The reason is that your cc will negotiate to pay a lesser amount. (This was also the reason the claim took longer than the website noted for a response time on claims; 5 days became several weeks). Noticing the different amounts, I contacted the cc benefit department to find out if I would be liable for the difference; they confirmed that the billing company signs a wavier that they would not come after me for the difference.

Overall, it was a decent experience - smooth if only a bit lengthy. I would have liked to be kept more in the loop regarding the claim, especially after their self-imposed 5 day deadline. But I'm pleased with the outcome and all of my interactions were professional and courteous. The benefit worked liked it should have and I'm happy to keep using that card (Chase SW in case you're wondering).

Key lessons learned:
1) Don't pay anything; definitely not until everybody else has paid.
2) Keep all your rental paperwork until you've turned in the car and everything is fine.
3) The card benefits work! Take advantage of them!

And most importantly, be safe out there! You never know when the unexpected will happen.

Manufactured Spending and Maximizing Points

Now you know what you can do with points and you have decided on the cards that work best for you, we can discuss the strategy to maximize your points. Aside from using your card FOR EVERYTHING (seriously there is no reason to pay by any other means), there are opportunities to earn more points without actually spending more.

Manufactured Spending

I will not spend too much time on this topic, because the most beneficial avenues for making this strategy work have been cut off by the card companies.  It is good to know though because the rare opportunity may come back and you will want to jump on it quickly.

The concept behind manufactured spending (MS) was to make it look like you spent a lot of money, without actually spending any money at all, or just a small fraction. For some of the rewards cards, you have to spend several thousand in a short amount of time to qualify for the fat bonus. Someone just starting out in this game, they may not have the revenue stream to support that; you can do things like pay for a group dinner and collect the cash, etc but that will only get you so far.

MS in principle is quite simple but required using 3 things: your Rewards Card, a Visa/MC Debit Gift Card  (must have the Debit symbol), and an AMEX Bluebird Account.

1) You would buy a Visa/MC Debit Gift Card using your Rewards Card.
2) You take the Visa/MC Debit Gift Card and load the money onto an AMEX Bluebird Account. You had to go to Walmart to make this transaction.
3) You pay off the Rewards Card using the money loaded onto the AMEX Bluebird Account via on-line.

On the surface this seems pretty simple and is almost a Zero-Sum transaction, but there two major pit falls:

• The Visa/MC Debit Gift Card usually has an upfront fee ~$2.95-6.95. It would cost you money to buy money. This was only beneficial in certain situations; 
• Using the Chase INK card, you would earn 5x the points (max card value was $200, so 1000 points, this is when cents per points (cpp) became very important factor)
• There was a time when Office Depot would give you $10 off if you bought a $200 gift card. $200 + $6.95 fee - $10 = ~$197 out pocket but $200 into your AMEX Bluebird. That's a $3 profit per card. (People would buy up thousands of $$$$ in those gift cards when this promotion was around; by "people" I meant me.).
• If you were just short of the spending requirement to get the huge bonus and did not want to actually spend all that money, you could eat the fee and make it an almost Zero-Sum transaction and qualify for the bonus.
• Time. If you are using the Chase INK you would have to go to the office supply store, and then if there was a promotion you'd have to make the purchases on individual transactions (if you could convince the manager to allow it), and then you would have to go to Walmart and stand in line to make the deposits onto your AMEX Bluebird... it was a significant amount of time invested. For me personally, this was the big killer.

Ultimately what killed MS was that the credit companies caught on and the office supply stores would only allow you to purchase the Visa/MC Debit Gift Cards using cash or debit. This nullified any benefits. Occaisionally some stores will pop up and allow you to make the transaction on a credit card, but it is pretty locked out now.

Maximizing Your Points

You do not want to spend more money just to get points. That is completely counter productive to the whole idea of traveling on points!! With a little patience and planning however, you can maximize the points you earn spending the same amount you normally would have.

Online Reference Malls (Rapid Rewards Shopping/Chase Ultimate Rewards Shopping) 

If you have ever used the website E-bates.com, some of the rewards programs - specifically the Rapid Rewards (Southwest) and the Chase Ultimate Rewards - have a similar set up. I call them Online Reference Malls. The basic idea behind the mall is that you go to these reference sites first, then click on the site that you actually want to shop at. What happens here is that you will get a bonus for going through the reference site; usually in the form of a point multiplier i.e. 3x, 4x, etc. 

If you are a big online shopper, this works excellently to your benefit! There's a couple of things to keep in mind though:

• You MUST FIRST go to the reference site! In some instances they can tell if you have already added items to your shopping cart, left the site, went to the reference site and then came back. Just to be safe, clear your browsing history and cookies if you forget to go to the reference site first. 
• The Chase UR Shopping site requires that you use the specific card with the Ultimate Rewards points. The Rapid Rewards Shopping site does NOT! (And this opens up a world of options discussed below).

In my last post I discussed how you can the Chase INK card to buy store specific gift cards (Amazon, Starbucks, etc) from office supply stores; this way you get 5x points on something you are already buying.  Combining the Chase INK with the Rapid Rewards Shopping site, allows you to get points on two different systems and earning 5+x points in certain situations.

Here is an example of how this works:

• Purchase a $50 Macys gift card from the office supply store using your Chase Ink card. Earn 250 UR points.
• Login to Rapid Rewards Shopping site and click on Macy's.com, which is currently 4x points per dollar spent. Buy that $50 Michael Kors (ha!) purse you have been eyeing and earn 200 RR points.

The Rapid Rewards Mall will also have the occaisional special promotion so instead of the normal 4x points at Macy's.com it could be 10x points. Some office stores also sell Southwest Gift Cards, so there is an opportunity to do some crazy double dipping. On a recent trip to Staples I even found a gift card for Netflix, which could be used for existing accounts. 

This process takes up some time, but I think it is worth it since you are using it to purchase items you would normally; a little bit of time and patience and you can be earning 10x points!

Credit Cards that work for You

The inevitable question I get everytime I talk about my trip is "How did you get all of those points?!" Everybody is so excited to get on the plane that they forget to stop and consider, "is that really the trip for me?" Now honestly, who would not want to take a 2.5 week around the world, staying in luxury hotels, and flying in business class? But the way the points game is played today, it is more about chess than it is about checkers. Rumor has it that Chase has started to screen for "travel hackers" and will disapprove applications for a new card for anybody that has applied for 5 or more cards in the last 2 years! So before you jump into this game, you need to consider which cards will be best for you**.

Unfortunately for you, I am not the guy that will give you every option. Do a quick search and you will find several very worthy blogs that will give you ALL the info you could ever want. However, lucky for you I do care about quality, so I will tell you about the cards that I have and why they worked for me. 

Southwest Rapid Rewards Visa (Premier):

This is my primary card because as much as I love international travel, I rarely have the time off to make it worth while. With 52 weekends in the year however, I do squeeze in many quick domestic trips. Many good memories can be squeezed in during a 2-3 day weekend, even from LA to NYC. The beauty about Southwest is that they offer the Companion Pass, which means when the primary account holder flies, their designated companion flies for free. It does not matter if you are flying on dollars or on points, as long as the primary person is flying the companion is free.

No matter what flight you take it automatically becomes 50% off when you have your companion with you. Every flight you take instantly becomes worth it! LA to NYC $800 RT? For two people, it is not that bad... Obviously the advantages of the Companion Pass lean towards married couples and people in a long term dedicated relationship, but for you single people... you can change your companion up to 3x a year. So if you can hang on to someone for a fiscal quarter, it may still be worth it if you take at least one trip a month.

Acheiving Companion Pass status is a challenge (earn 110k points or fly 100 flights) and your best opportunity is to do it the first year you have the card with signing bonus points. The neat thing about Companion Pass is that once you achieve it, it is valid for the remainder of the current calendar year and all through the next. One strategy that people have done is sign-up for the Premier and non-Premier cards (totally allowable) early in the year, and then focus their spending (or do Manufactured Spending; a topic for another day) to get to the 110k early in the year. For anyone with a house and family you could probably work your way there through out the year. There are opportunities to earn multiple points per dollar spent i.e. tickets on Southwest, rentals/reservations with their travel partners, or my favorite way using the Rapid Rewards Shopping Mall.

If you have ever used a site like E-bates.com, the Rapid Rewards Shopping Mall works in the same way; except instead of earning cash back you get points. You log into the Rapid Rewards Shopping site, find the merchant you want and then make your purchase normally. The points you earn will be based on the amount purchased and the Rapid Rewards site will usually give you a multiplying factor. Occassionally they will send out emails about merchants that are offering double the normal factor, or 10x, etc. Another great thing about the Rapid Rewards Shopping site is that they do not require that you complete your purchase with the SW Visa; you can pay via any method that works for you (which opens up a whole other strategy that I will talk about later).

*** If you are interested in applying for this card, hit me up for a referral link, you'll get 50k bonus points after spending $2k in 3 months ***

Chase Ink:

This is officially a business credit card. If you're concerned about the business aspect, let me just say that if you own ANY business you can apply for this card. I rent out a room in my house, that's a business. You do freelance artwork on the side? That's a business. You cut your neighbors lawn when they are out of town... what are you 12? That's a business. Meeting the qualifications for a business is not hard, they did not say a successful or profitable business, just a business.

The Chase Ink gives you points towards Chase Ultimate Rewards, which allows you to transfer those points (usually for free) to other rewards systems like Rapid Rewards (Southwest), United (Star Alliance), etc.  They also have their own travel site where you can book directly through them and get 20% off the points price. This is one of the most flexible rewards programs and the ability to transfer to another rewards program is great!

A unique thing about the Chase Ink is that it gives you 5x for any amount spent in an office supply store, cellphone, internet, and cable. This is great for those regular recurring bills, you just set those accounts to autopay onto this card. The real bonus though is that office supply store perk. You may not normally buy anything from Office Depot or Staples, but they do sell gift cards for other places (Amazon, Macy's, Starbucks, etc.) So if you know you are about to make a purchase there, it behooves you to stock up on a few gift cards on your way to the store (in another post I will talk about combining this with the Rapids Rewards Mall to max out your points).

The Chase Ink also gives you 2x points for all gas purchases, so I keep this one handy in my car.

Chase also has the Ultimate Rewards Mall, which operates much like the Rapids Rewards Mall. The one catch is that they do require you to use the eligible card to earn the bonus points. You may have to flip between a couple sites to determine which is the best option for you, but we will discuss strategy in another post.

*** The Chase Ink is having a 60k bonus point promotion after spending 5k in 3 months. 5k in 3 months can be a lot but find a way to use it up. At 60k that's one of the highest point bonuses I have seen, and actually when I got the card it was 70k. ***

Chase Sapphire:

To be fair I have not received this card nor started to use it, but I will be making it my temporary primary card to earn the initial bonus (40k pts with 5k for adding an authorized user). This card is useful if you dine or travel regularly; earning you 2x points for dining and airfare, hotel, tolls, etc... If you travel for business a lot, this could be the card for you. The points also go into the Chase Ultimate Rewards program.

I picked up this card mostly because of the dining out feature, which I do fairly often. However, remember that though each card has it's different benefits and you want to maximize on those, you have a limited budget. Gaining more points in UR may slow down your approach for Companion Pass on SW. Have a goal in mind and get there first.

You may want to think about what trip(s) you want to do in the near future and see what you need to earn to get there. Or if you are like me and take a lot of domestic trips and Companion Pass is your focus, put everything on that card until you achieve it and then switch to Ultimate Rewards. Remember that Ultimate Rewards points can be transfered to Southwest, but they will not count towards your Companion Pass accumulation.

In the next post I will write about "Manufactuered Spending"; the basics of how it works and whether it is in your advantage or not. I will also talk about the strategy that works for me and I believe anybody can follow.

** A quick note before you dive into this world of rewards credit cards. **

1) You should have great credit and the ability to pay off your entire bill every month. These cards have great benefits, but if you are paying monthly interest to get these rewards, their value takes a very steep dive.

2) All of these cards have an annual fee. When I was younger I was taught only go for cards without an annual fee, why pay to use a card. Well some of these cards will waive the first year's fee, or in the case of the Southwest Visa they will give you an annual bonus boost of points (which totally makes up for the fee). The reality is that you get what you pay for. You can cancel these cards after the initial year, but remember Chase has implemented that check for how many cards you have applied for.

A Luxury Trip Around The World in 17 Days, 330,000 Airline Points, 436,000 Hotel Points, and $800

Around-The-World in 17 Days on Points?!

This past July and August, I had the amazing and unique opportunity to go on a trip circumnavigating the globe. Los Angeles to Washington DC to Paris, France to Taipei, Taiwan, to Tokyo, Japan and back to Los Angeles.  It was my first time accomplishing such an unique trip; but to make all of it that much sweeter, almost all of the flights and hotels were paid for on points.

There are already several very popular blogs out there that tell you about how to maximize your points to take these epic trips. I started along my path with traveling on points by consulting with dedicated followers of those blogs and diving into some of them myself. A trend that I found within those blogs however, was that for many of these individuals, these Points were their hobby. They enjoyed maximizing and plotting out CPP (Cents Per Point); they got highs off researching deals, locating stores where they could bend rules to maximize deals, etc.

It was a lot of concerted effort; much like any hobby if you wanted to master it, you had to invest the time into it. For about a month I dived into that world myself, but like many other hobbies I have tried, I found it was all too time consuming. I was not getting the same 'highs' and started to realize that I was losing out on opportunity costs i.e. participating in the hobbies where I would get my highs. Pretty quickly, I fell out of the hobbyist status; at the same time the credit card companies started to clamp down on the loopholes that allowed for some of the more ridiculous CPP (or in some cases getting paid for points).

Despite my loss of dedication and increasingly restrictive deals, I was still able to pull off this once in a life time trip mostly on points, and I believe with some careful planning anybody can too; without having to go into crazy points acquisition mode.

The table below breaks down each leg of my trip, showing the points cost, out of pocket dollar costs, and any special notes regarding that trip leg.

Flights:

Leg	Airline	Class	Points	$$$	Notes
LAX to DC (2)	Southwest	Economy	+882	$180.60	Companion Pass
DC to Paris (2)	United	Economy	-60k	$11.20
Paris to Taipei (2)	EVA Airlines	Royal Laurel	-150k	$228.80	Hello Kitty Plane
Taipei to Tokyo (2)	EVA Airlines	Economy	-30k	$18.80	Hello Kitty Plane
Tokyo to LAX (2)	Delta	Economy*	-90k	$80 + $240^	*Upgraded at the gate ^Fee for xferring points

Hotel/City	# of Nights	Points
Hilton Paris Opera	2	160k
Hilton Paris CDG	1	40k
Grand Hyatt Taipei	3	36k
Hilton Tokyo (Shinjuku)	4	200k

In the posts to come, I will delve more into how with a little bit of planning an patience you will still be able to maximize your points, key factors to consider, and also some more about my trip!