Which card? So many options..

[slodki]

Hi everyone,

Please excuse the long post!

A bit of background. I’m working full time earning around 50K, but also have a ‘hobby business’ where I import from the USA/Asia and re-sell online. Most of my suppliers take paypal as their form of payment.

All of the money goes through my CBA low-rate MasterCard, with no points earned. This is my first credit card, as I am still young.

I would be purchasing around $3-5K per month through these cards. I would also put my every day charges to the card to help build up points. I would be travelling infrequently. Perhaps once every 1-2 years, perhaps earlier, I’m not sure. I would be travelling to visit family in USA/Europe. Occasional trip to Asia would be nice.

I would like to apply for a new credit card that will earn me points. I’ve done some research, but have some questions as a result.

• Initially I came to the conclusion that an Amex Gold Credit card with the $80 fee for the Ascent Program would be the best bet. I would be earning 1 MR = $1. However, there may be a problem accepting these cards. As mentioned, paypal is the main form of payment I use. They no longer accept Amex. However, I’m looking into the option of perhaps setting up an account in a friends name/address in the USA and adding my Aussie Amex.

A problem with this will be being charged a paypal fee by my supplier (to cover their costs) and also a currency conversion/transaction fee by Amex, since it will be charged in US currency.

I’m currently working with my main supplier (most money spent) supplier to see if they can setup a merchant account with reasonable fees for accepting the Amex.

The reason I was looking at the Amex, was the Ascent program. I like the idea of holding my points and transferring when needed to a number of airlines. Some quick research shows that Singapore airlines is rated better than Qantas, both in terms of award seat availability and burn rates.

• The other option is to find a Visa/MasterCard with a decent earn rate. I would like to have an option similar to Amex Rewards, in that I could hold points in my account and transfer as needed to a number of airlines.

I believe I came across a Citi card that allowed transfers to a number of airlines, including Singapore, but I can’t remember the earn rate. I also came across the Westpac Krisflyer card – which seemed quite good with their earn rates, particularly the Visa (or was it MasterCard?) 1pt = $1. However I understand they will be lowering the earn rates to 0.5 pts per $1. Nothing fancy about that.

Also, is the Westpac a direct sweep card, or can I keep points in Westpac and transfer to Singapore as needed? I don’t want to automatically transfer points as they will eventually expire in 3 years.



So that is my dilemma:

• Are there any online merchants that offer reasonable Amex rates?
• Can I use my aussie issues Amex with a US paypal address? I assume I’ll be charged double rates. A paypal fee from my supplier and a currency conversion fee my the card
• If Amex is not an option, what is the next best Visa/MasterCard option that has a similar program to Amex Ascent?
• A quick search shows that Singapore airlines provide better burn rates and availability compared to Qantas for eg. Is this the way to go? Which card can I use to maximise my points to Singapore if this is the case?

Cheers,
Jack

 

[Moopere]

Hi Jack,

Some of the long standing members of this forum will hopefully chime in shortly as they are an absolute wealth of knowledge. Having recently asked essentially the same question I hope I can add something worthwhile based upon other friendly users feedback to me:

Initially I came to the conclusion that an Amex Gold Credit card with the $80 fee for the Ascent Program would be the best bet. I would be earning 1 MR = $1. However, there may be a problem accepting these cards. As mentioned, paypal is the main form of payment I use. They no longer accept Amex. However, I’m looking into the option of perhaps setting up an account in a friends name/address in the USA and adding my Aussie Amex.

Mmm. Do Paypal transactions count as credit card purchases or cash advances? I've not got a lot of experience with Paypal. If they count as a cash advance then I don't think any card will give you any points.

Sounds like a lot of effort to go to to set up a Paypal account in a foreign country under a friends name. I'd hate to run my business this way, sounds iffy, not to mention that the Tax Office might think this is a bit weird too (I've no idea to be honest though).

$5K a month at 1:1 earn is 5000 MR points with a rough value of 1c a point = AU$50 of accrued points value as a rule of thumb. Of course its possible by astute management to gain 3-4 or even 5c of value per point = $250 (for 5c)

One thing to be careful of is that of course its never a good idea to pay CC surcharges just to gain points. If, on average, one FF point = 1c of value and you are paying 2% surcharge to get that 1 point then you can see the problem.

Having said that, depending on how your business operates, CC charges are probably tax deductible, which can change this part of the game a little bit.

Anyway, I'm not familiar with the Amex Gold. I am looking at the Amex Plat Edge myself, $149/year, free ascent membership, free domestic DJ return flight, OS and Dom travel insurance and 3:2:1 points earning (3 at supermarkets, 2 at petrol and 1 everywhere else) and 20K points after first paid statement (at the moment).

The reason I was looking at the Amex, was the Ascent program. I like the idea of holding my points and transferring when needed to a number of airlines.

Yep, I understand. I'm the same. I don't have enough cashflow to really do much if I spread my spend in all directions with different FF programs. Your discovery above makes sense to me too. Keep MR points with Amex and then choose the FF program to transfer to only when a flight is actually going to be made.

The only killer for me is that Ascent does not transfer to QFF, so, no QF rewards flights...sob sob.

Some quick research shows that Singapore airlines is rated better than Qantas, both in terms of award seat availability and burn rates.

Singapore Airlines, yes, seems like their burn rate is reasonable by all accounts offering a 15% discount if you do your booking online. Be wary of transferring points to Krisflyer earlier than you need to though as they expire in 3 years and you have mentioned not flying that all that often. I wouldn't go to a direct sweep Krisflyer card for this reason

Are there any online merchants that offer reasonable Amex rates?

Sorry, I don't know what you mean. You mean no or low surcharges for Amex transactions?

Can I use my aussie issues Amex with a US paypal address? I assume I’ll be charged double rates. A paypal fee from my supplier and a currency conversion fee my the card

Umm. I didn't think you could even open a USA paypal address, but I'm really out of the loop paypal wise, someone else will know.

If Amex is not an option, what is the next best Visa/MasterCard option that has a similar program to Amex Ascent?

So far as I've been able to tell, Amex offers the best of all the rewards programs. They seem to offer better earn -and- better burn rates than anyone else I've been able to find so far. No doubt they can offer this because they charge merchants more .. thus the often seen 2-3% additional surcharge these same merchants ask for accepting Amex

There is talk of a Citi based CC that allows transfer to Velocity, QFF or Krisflyer ... not sure if this this the one you already looked at. If so, 0.5:1 earn rate is not very enticing.

Whatever you decide CC wise, I'd go grab a Woolies Everyday rewards account, its free and offers 1x QFF point for many purchases at Woolies and associated petrol and liquor, **** smith etc. Its not a credit card, just a direct sweep to QFF 'rewards' card. Presumably, if you grabbed an Amex at 3:2:1 points earn, bought 100$ of supermarket goodies with it + your EDR card you'd get 300 MR points + 70 QFF points (EDR points only earned after first 30$ spend on any transaction)


For mine, I'm looking at these:

Amex Plat Edge as previously mentioned. $149/yr, +20K points, free DJ return flight, travel insurance, Ascent program. Probably transfer points to DJ via velocity and SQ via Krisflyer

Woolies Everyday Rewards Mastercard (as opposed to the EDR rewards only card below which is not a CC), $89/yr, 16K points. Direct sweep card to QFF program with 1:1 points earn for most stuff. I'll prolly only use this if Amex is not accepted. In conjunction with the EDR rewards card (below) maybe get enough QFF points for the odd domestic freebie flight or possibly a subsidised QF flight to SIN then on from there to the world via MR points reward flights with SQ.

Woolies Everyday rewards card (not a CC), 1:1 for over $30 purchase at Woolies or associated petrol, BWS, **** smith, BigW, etc. Also gets you a free membership to the QFF program, normally worth $82.50.

 

[yohy?!]

If your supplier is working towards accepting Amex this would be best if you could bypass paypal altogether. However bear in mind that overseas transactions will attract a 3% currency conversion fee on the Amex (as with just about all points earning credit cards).