Points value (paying for)?

[pottsy]

Is it worth paying my apartment service fees of $800 a month with Citibank payall? 0.5 points per dollar spend at a cost of 0.95% per dollar. (Sorry, can never work out if these things are worth it or not for points).
I would only use any acquired points for business class classic rewards, or upgrade to business (assuming I can )
Grateful for thoughts please!

 

[encryptededdy]

Personally I wouldn't

 

[sap1l]

A relatively straightforward awards redemption (that regularly has award seats) of SYD-MEL in Economy costs 8000 points + ~$45 taxes or ~$145 in cash. So your lowest value point conversion is 8000 points for $100, or 1.25 cents per point.

This means that 0.5 points per dollar has a minimal value of 0.5 * 1.25 = 0.625 cents per dollar (i.e. a 0.625% return). This means that at a cost of 0.95% per dollar, you are losing money.

Now, your returns are obviously a lot better if you save up for a Business classic reward. You can do the math yourself in the same way I did the Economy example, but bear in mind that it's much harder to secure Business rewards seats, especially internationally. Additionally, you need a lot more points.

To break even on your service fees, you need to redeem points at a value of 1.9 cents per dollar (0.5 * 1.9 = 0.95). So, if you think you can redeem your points at this value, then it isn't a bad idea to use payall.

I will lean towards agreeing with @encryptededdy though - 0.5 points per dollar on a 0.95% surcharge is not worth it overall, IMO.

 

[MELso]

Citi PayAll was good when free.

With a 0.95% service fee, it doesn't really make sense for pure points-chasing (there are other cheaper points through credit card churning and wine). It depends on what sort of return you can get on the $800 between when the rent's due and when you have to pay the money back.

(BELATED EDIT - on $800, a 0.95% fee is $7.60. You get 400 points and assigning a notional value of 1cpp, that's $4. Assuming you can get 5.5% in a HISA, over 30 days (on average, noting there's a 55 day interest free period), you could earn about $3.62 in interest BUT you need to pay tax on that - let's say $1.20 (33%)-$1.80 (50%) - so you're unlikely to break even on this unless you can get at least 1.5cpp value out of the points.)

 

[pottsy]

A relatively straightforward awards redemption (that regularly has award seats) of SYD-MEL in Economy costs 8000 points + ~$45 taxes or ~$145 in cash. So your lowest value point conversion is 8000 points for $100, or 1.25 cents per point.

This means that 0.5 points per dollar has a minimal value of 0.5 * 1.25 = 0.625 cents per dollar (i.e. a 0.625% return). This means that at a cost of 0.95% per dollar, you are losing money.

Now, your returns are obviously a lot better if you save up for a Business classic reward. You can do the math yourself in the same way I did the Economy example, but bear in mind that it's much harder to secure Business rewards seats, especially internationally. Additionally, you need a lot more points.

To break even on your service fees, you need to redeem points at a value of 1.9 cents per dollar (0.5 * 1.9 = 0.95). So, if you think you can redeem your points at this value, then it isn't a bad idea to use payall.

I will lean towards agreeing with @encryptededdy though - 0.5 points per dollar on a 0.95% surcharge is not worth it overall, IMO.

Thankyou, very helpful.

Post automatically merged: Mar 6, 2024

Citi PayAll was good when free.

With a 0.95% service fee, it doesn't really make sense for pure points-chasing (there are other cheaper points through credit card churning and wine). It depends on what sort of return you can get on the $800 between when the rent's due and when you have to pay the money back.

(BELATED EDIT - on $800, a 0.95% fee is $7.60. You get 400 points and assigning a notional value of 1cpp, that's $4. Assuming you can get 5.5% in a HISA, over 30 days (on average, noting there's a 55 day interest free period), you could earn about $3.62 in interest BUT you need to pay tax on that - let's say $1.20 (33%)-$1.80 (50%) - so you're unlikely to break even on this unless you can get at least 1.5cpp value out of the points.)

Thankyou, very helpful.

 

[pottsy]

Personally I wouldn't

Thankyou, appreciated.