Low Value Credit Cards I Came Shockingly Close To Obtaining
I love points and miles – sometimes too much. How do I recognize that my love has gone too far? When I come dangerously close to applying for low value credit cards. And in this context, I mean low value for me – others may get great value out of the same cards. I’m easily intrigued by new or obscure cards, and I can often turn those into big wins. On the flip side, I sometimes put way too much research into products I don’t go after. Here are just a few low value credit cards that I almost fell for and why I ultimately decided not to apply.
Drury Rewards Visa
While I love bank points currencies, I get the biggest thrill out of hotel credit cards. I love directly booking hotel rewards with great hotel point value (Hilton Honors is my favorite program). So naturally, I’m willing to give virtually all hotel programs a try and consider their respective credit cards. Drury Hotels is a fairly small chain of about 150 US properties; locations in the Western US are conspicuously absent. My favorite feature of Drury is that all properties include complimentary breakfast and evening reception.
What about their credit card? The Drury Rewards Visa includes a 15k point welcome offer with just $500 spend within 90 days of account opening. The no annual fee and low spend requirement are attractive. Cardholders earn 5x points at Drury Hotels, 2x at gas stations/restaurants/utilities, and 1x everywhere else. But what kind of return can one get from these points?
While exact redemption rates vary, I’ve consistently found redemption rates just below 0.8 cents per point. Cardholders obtain returns of about 4 cpp for Drury spend (just ok), 1.6 cpp for gas/dining/utilities (eww), and 0.8 cpp everywhere else (no). Also, the 15k welcome offer is only enough points for one night in most properties up to the ~$150 range. No, thanks!
Air France KLM World Elite Mastercard
Full disclosure, I was first attracted to the Air France Mastercard by its appearance. I just think it’s oddly eye-catching. The card offers 50k miles plus a $100 statement credit after $2k spend within 90 days of account opening. The annual fee of $89 is not waived the first year. Therefore, I consider this a 50k welcome offer with no annual fee the first year under the current card terms. Not bad so far.
The card earns 3x on Air France/KLM and other Sky Team spending, and 1.5x everywhere else. No doubt, the 1.5x everywhere caught my eye. With just $50 spend in a cardmember year, cardholders get a 5k mile card anniversary bonus. Also cardmembers earn 20 Experience Points each year, and an additional 40 with $15k spend. These points are great for those interested in Air France status but are no good for me.
According to MtM’s average miles valuations, a Flying Blue mile is worth 1.9 and 3.1 cents for economy and business air travel, respectively. Therefore, the credit card reflects 2.85 cpp and 4.65 cpp average returns for all credit card spend, depending on how one redeems. The catch for me is I have zero plans of flying with Air France, KLM, or Sky Team partners (especially internationally) in the next few years for great value. And since I prefer to fly economy, I would only be getting 2.85 cpp, anyway. Instead, I can earn at higher or similar rates and redeeming for cash more immediately (via Discover it Miles and Amex Blue Business Plus). This one’s a no for me, but I may be up for it in a few years (if it’s still around).
Frontier Airlines World Mastercard
I was originally attracted to the Frontier Mastercard to earn top tier elite status simply through credit card spend. As Disney World fans, we travel to Orlando often; our regional airport has routine non-stop service to MCO. This card provides a 40k mile welcome offer with $500 spend within 90 days of account opening, which could be enough for two round trip flights.
The card earns 5x on Frontier purchases (I would never actually buy a ticket), 3x at restaurants (other cards do better), and 1x everywhere else. Again, the value of a Frontier mile varies, but we can reasonably expect around 1 cpp. But does obtaining Frontier Elite status sweeten this card’s spend?
Not really. Cardholders can reach 20k, 50k, and 100k elite status with card spend (1:1 spend per elite mile). Frontier status is largely forgettable. You must achieve the top 100k status just to check a bag for free! This “perk” is automatic for anyone who flies my favorite domestic airline, Southwest. Discount Den membership only comes with the top status – nevermind that Southwest’s prices are competitive or better than these prices for the routes I fly most often. Other than (maybe) two free round trip flights with the welcome offer (which isn’t amazing), this card is a real stinker.
Sonesta World Mastercard
Here’s another hotel card that easily distracted me. Bank of America’s Sonesta World Mastercard offers 60k points after $1k spend within 90 days after account opening. Cardholders can add an authorized user for another 5k points. You can earn another 30k bonus points each year with $7.5k spend. The $75 annual fee is waived the first year.
Cardholders earn 3x points at Sonesta properties, 2x on airfare/car rental/dining, and 1x everywhere else. The bonus categories do nothing for me – I hardly ever pay cash for hotels, and I can do better with other credit cards in the other bonus categories. Effectively, this would mean 5x points for exactly $7.5k spend each year.
The catch? Sonesta has a relatively small footprint. I simply don’t have plans to travel enough to where Sonesta has properties. And when I do, there are plenty of other chain properties I would rather pursue. Rooms start at 15k per night, but most of the desirable properties start in the 20-30k per night range.
With $7.5k spend in a year, a cardholder earns 37.5k points. Looking beyond the first cardmember year, for a $75 annual fee (starting the second year) and $7.5k spend, a cardholder gets two free nights at a Sonesta property annually. That’s not bad, but not great either. Alternatively, one could just spend ~$200 for two nights and not have to deal with the card and spend nonsense.
The 65k welcome offer is okay, but I would only consider this card if I had a specific future Sonesta stay in mind, which I currently don’t.
The Lowest of the Low Value Credit cards – Red Roof Inn RediCard
Admittedly, this is maybe where I reached my darkest place in credit card rewards. The Red Roof Inn Redicard, which Comenity launched in 2015 and discontinued in 2016 (shocker), had a 6k point welcome offer after one Red Roof Inn purchase. The card offered 5x points at Red Roof Inn properties, 2x on gas/fast food purchases, and 1x everywhere else. Free night redemptions at the lowest end properties start at 6k points. At the risk of stating the obvious, I could (and did) do much better with other cards. Looking back, I attribute my interest in this card to sheer boredom.
Low Value Credit Cards – Conclusion
Luckily, I avoided all of the above cards which wouldn’t have provided any significant near-term value. Regardless, I try to keep an open mind with all of the different credit card offers. I can achieve huge rewards, but I must remain responsible and vigilant with some of the low value credit cards. And you may notice I did not use the word “never” above. Indeed, I may pursue the Air France/KLM and Sonesta Mastercards at the right time. What are some low value credit cards that tempted you? Did you go for it or abstain?
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The Air France card seems reasonable, to eliminate the program’s mileage expiration hassles. The card’s annual 5K miles make up for most of the annual fee, and the current SUB is OK. Air France seems to be the best transfer partner to use for domestic Delta flights (with connections, at least 3 weeks out) and there is a recurring AmEx 1.25x transfer multiplier to them.
The link to valuations goes to the wrong page I think.
EricF,
Indeed, there’s stuff I like about the Air France card. It easily rises to a great card for some in certain situations. I’ve updated the link – thanks for the heads-up!
Benjy,
I am seriously considering getting the Frontier credit card. Obviously would use for spend (even on Frontier since my Amex Platinum is better).
Only reason I would get it is to keep miles alive (they typically go away after 6 months w no activity) and avoid paying for reward redemption. 40,000 bonus is nice also.
I’m currently at 5/24 but adding this card would still have me under the Chase limit by 10/21. Right now I have 4 Amex cards and 3 Chase so have my bases covered both on all spend categories and key programs.
IMHO the $79 a year is well worth it to keep miles alive. I fly Frontier a couple times a year but don’t anticipate flying them until at least March. My miles would go away and only other option is spending $25 to buy 1000 miles.
Agree low value but worth it IMHO if you have all the cards you need and could use the card to extend miles for future rewards
AA Flyer,
You actually mentioned one of the better benefits of simply holding the Frontier card – an easy means to keep your miles alive. It sounds like that’s important to you, and bravo to having a fit for your situation. Thanks for reading!