Thinking about buying HHonors points for 0.56 cents each? Read this first.

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I couldn't help but notice as I recently skimmed my RSS subscriptions that Hilton HHonors is running a promotion offering an 80% bonus on purchased HHonors points until 11:59 pm, Eastern time, on February 8, 2016.

That means you can buy 80,000 HHonors points for the normal $800 purchase fee, while receiving an additional 64,000 bonus points (there doesn't seem to be an excise fee charged on these transactions, unlike airline mile purchases). That brings your total cost per point to 0.56 cents each.

There are two ways of looking at a purchase opportunity like this.

How much are HHonors points worth?

The first, and most conventional, way of judging a purchase opportunity like this is to judge the out-of-pocket cost of the points against their potential or actual redemption value. A randomly selected June night at the Conrad Maldives Rangali Island costs 95,000 HHonors points or $883.80 after taxes and fees. Purchasing the same 95,000 HHonors points for $528.20 during this promotion is, strictly speaking, a 40% discount off the retail price of the property.

Taking advantage of the fifth-night-free benefit for HHonors elites amplifies the discount further: 5 random nights at the Conrad Maldives Rangali Island in June cost 380,000 HHonors points, while the same 5 nights would cost $4,419 in cash. Getting 1.16 cents per point in value makes this purchase opportunity a full 52.2% discount off the retail cost of the same nights.

How much do HHonors points cost?

The problem with the elegant picture I've painted above is that it uses the price Hilton is willing to sell HHonors points at as a fixed input.

But in fact, HHonors points have a range of prices, and that range doesn't depend on Hilton at all — it depends on your own circumstances and the best alternatives you have to purchasing HHonors points outright.

That's because when you manufacture spend on a Hilton HHonors co-branded credit card, you're passing up the opportunity to manufacture the same spend on a cashback-earning credit card. If you pay more in foregone cash back than you would to Points.com directly, then you're overpaying for your stay. If Points.com is charging less than you would pay in foregone cash back, they're offering a true discount.

Unbonused spend

We have brothers and sisters out there who only have access to unbonused categories of manufactured spend. For those who don't have access to gas station or grocery store manufactured spend, a single HHonors point costs 0.66 or 0.7 cents each.

The logic here is simple: the best cash back credit cards for unbonused spend earn 2.105% or 2% in cash back, and Hilton HHonors co-branded credit cards earn just 3 HHonors points per dollar spent in unbonused spend categories. If the same dollar in manufactured spend can produce either 2.105 cents in cash or 3 HHonors points, you're paying 0.7 in foregone cents per HHonors point you manufacture.

If you have a high-value HHonors redemption in the works, and manufacturing spend on a HHonors co-branded credit card will cost you more than 0.56 cents per HHonors point, you'll be better off purchasing the points from Hilton during this promotion.

Bonused spend

Of course there's scant reason anyone would manufacture HHonors points in unbonused spend categories, which means the true tradeoff is between earning 6 HHonors points per dollar spent at gas stations and grocery stores and earning another bonused rewards currency.

What we really want to know is whether we're better off earning cash back or cash equivalents – and simply buying the points we need – or earning the HHonors points we need for a redemption directly through a co-branded Hilton HHonors credit card. 

Here's a rundown of 3 possible scenarios to illustrate the idea. Is it cheaper to manufacture cash and buy points, or manufacture points directly?

  • 5% cash back (American Express "old" Blue Cash, capped at $50,000 in spend per cardmember year, or other time-limited promotional offers). Opportunity cost: 0.83 cents per HHonors point. Result: manufacture cash back and buy HHonors points.
  • 4% cash back (US Bank Flexperks Travel Rewards card, points worth "up to" 2 cents each when redeemed for paid airfare). Opportunity cost: 0.67 cents per HHonors point. Result: manufacture spend for airfare, use cash savings to buy HHonors points.
  • 3% cash back (US Bank Flexperks Travel Rewards card, points worth "up to" 1.5 cents each when redeemed for hotel stays). Opportunity cost: 0.5 cents per HHonors point. Result: manufacture HHonors points on co-branded credit card instead.

The inflection point between 3% and 4% cash back is the result of the fixed 0.56 cent per point price established by Hilton during the current promotion. Whenever manufacturing spend on a co-branded credit card costs you more than 0.56 cents per HHonors point, you should simply manufacture cash and buy the discounted points.

On the other hand, when the same dollar in manufactured spend could earn either 6 HHonors points or 3% cash back, you are buying HHonors points for just 0.5 cents each — even cheaper than Hilton is currently selling them.

Conclusion

The thrust of this post is simple: the price you should be willing to pay airline and hotel loyalty programs for their miles and points should not depend on their value. Instead, every purchase decision should depend on whether the total number of miles or points received is more cheaply earned through manufacturing cash back (used to purchase cheap miles or points) or through manufacturing those points directly.

The more lucrative your bonused gas station and grocery store manufactured spend is in cash back terms, the more willing you should be to simply buy miles and points where necessary, rather than forego lucrative cash back opportunities in favor of airline and hotel loyalty currencies.

The 5.5 cards I'll use to manufacture spend in 2016

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Happy New Year's Eve to all my readers (and especially to my beloved subscribers)!

2016 is almost upon us, so I thought it might be interesting to share my manufactured spend strategy for the first half of next year.

Here are the five cards I'll be doing virtually all my manufactured spend on for the next 6 months, plus a bonus card to fill in the remaining gaps.

Wells Fargo Rewards

I applied for this card back in March while opening my Wells Fargo checking account, but was declined for income verification reasons. When I received a pre-approval offer in the mail, I jumped on it and was approved with a $10,000 credit limit.

This card earns 5 Wells Fargo Rewards points per dollar spent at gas stations, grocery stores, and drug stores for the first 6 months, making it my manufactured spend workhorse until June, 2016.

Chase Ink Plus

Although gas station manufactured spend is no longer available in my area, I will continue to order $300 Visa gift cards from Staples and earn 1,545 flexible Ultimate Rewards points for $8.95 — about 0.58 cents each.

As a Hyatt Diamond in 2016, I plan to make a lot of Points + Cash reservations, which both earn elite qualifying stays and are eligible for Diamond suite upgrades. For those reservations, I'll be transferring in a lot of Hyatt Gold Passport points from Ultimate rewards.

US Bank Flexperks Travel Rewards

This card earns "up to" 4% at grocery stores when you redeem your Flexpoints for air travel. That's less valuable and less flexible than my Wells Fargo Rewards card, but when that card's credit limit isn't available, Flexperks Travel Rewards will be my backup card at grocery stores.

American Express Platinum Delta SkyMiles Business

Even less valuable than Flexperks, I'll spend $50,000 on this card in order to earn 70,000 redeemable SkyMiles and 20,000 Medallion Qualification Miles, enough to secure Silver Medallion status for 2017. Then I'll call American Express to ask for either a retention bonus or a product change to a more valuable card.

American Express Hilton HHonors Surpass

Thanks to my Hyatt Diamond status in 2016, I won't be staying with Hilton as consistently as I did in 2015. But I still plan to spend $40,000 on the Surpass in 2016 in order to both secure Diamond status for another year and earn another 240,000 HHonors points, which I'll redeem when Hyatt properties aren't available or are too expensive.

Bonus card: Barclaycard Arrival+

I won't be using Arrival+ nearly as much in 2016 as I did in 2015, but there are a few ideal use cases where I'll continue to generate some spend: funding Nationwide Visa Buxx cards, opening bank accounts, and my actual expenses outside of the Wells Fargo Rewards bonus categories.

Conclusion

As you can see, I keep my manufactured spend practice pretty simple: start with the most valuable cards I have available, set realistic goals, and work my way down from there. That has the additional benefit of giving me the clarity to see immediately which cards would see reduced spend if my ability to manufacture spend suddenly contracted.

Things US Bank told me about Flexperks Travel Rewards

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It's difficult to know how to frame information you receive from US Bank over the phone. For example, a US Bank representative once told me I could product change my Club Carlson Business Rewards card to a Business Edge Cash Rewards card. I couldn't.

But after someone on Twitter reached out to me with a question about some language in the Flexperks Travel Rewards terms and conditions, I decided against my better judgment to call and ask what the heck they meant.

The $120,000 cap on Flexperks Travel Rewards earning

If you visit the website of the US Bank Flexperks Travel Rewards credit card, you'll find the following description of the card's rewards structure:

"Yearly Award Level: For Net Purchases less than or equal to $120,000, earn one FlexPoint for every $1. If during the calendar year, Net Purchases exceed $120,000, all FlexPoints for the remainder of the calendar year are earned at a rate of one FlexPoint for every $2. Exemption: FlexPerks Travel Rewards Visa Signature AutoPay Cardmembers who select the full payment option on the first available payment date after their statement date."

I've mentioned before the $120,000 calendar year purchase limit on FlexPoint earning, but never noticed the "exemption" for people with AutoPay set up. So I decided to call.

My representative had no idea what he was talking about

This is pretty much par for the course when calling US Bank, so I wasn't terribly surprised. But I kept asking for clarification, so he put me on hold and talked to someone who had worked at US Bank for all of 2 years(!), and who gave him the "complete" picture.

My representative's (secondhand) information was that if you have autopay set up to pay your bill in full, then there's no limit on Flexpoint earning. If you don't have autopay set up, then you have to make your payment on the first available payment date after your statement closes.

That sounds like nonsense, and strikes me as vanishingly unlikely to be correct.

A quick aside on base points and bonus points

There's some important credit card terminology that's relevant here. Typically, a credit card will earn some number of "base" miles or points on purchases everywhere. The American Express Hilton HHonors Surpass earns 3 "base" HHonors points everywhere, the Chase Sapphire Preferred earns 1 "base" Ultimate Rewards point everywhere, etc.

Then in certain spend categories, a credit card will earn "bonus" points. The HHonors Surpass card earns 9 "bonus" HHonors points for purchases made at Hilton properties, for example, and the Sapphire Preferred earns 1 "bonus" Ultimate Rewards point at restaurants and on most travel purchases.

That's not how the Flexperks Travel Rewards terms and conditions are framed

The language I quoted above was from the second clause of the rewards structure. The third clause reads:

"FlexPerks Travel Rewards Visa cardmembers may earn additional FlexPoints for purchases at merchant locations in the following categories: airline, gas or grocery (each, a "Category"). You will earn FlexPoints at a rate of two FlexPoints for every $1 in the one Category in any given monthly billing cycle that has the highest total of Net Purchases charged to your Account (the "Highest Category")...FlexPerks Travel Rewards Visa Signature cardmembers will be awarded FlexPoints at the rate of two FlexPoints for every $1 in Net Purchases during the current month's billing cycle for any merchant location that classifies itself as having telecommunication services/products."

There is no language about "base" FlexPoints and "bonus" FlexPoints: these are simply given as the earning rates for a variety of purchases. The same is true of charitable contributions, in the fourth clause:

"FlexPerks Travel Rewards Visa Signature cardmembers will earn FlexPoints at a rate of three (3) FlexPoints per every $1 in Net Purchases during the current month's billing cycle for any merchant location that classifies itself as a Charitable and Social Service Organization."

But that is how FlexPoints are actually earned

Here's a screenshot from one of my US Bank Flexperks Travel Rewards statements:

As you can see, US Bank is actually following the usual practice of awarding "base" and "bonus" points separately on each statement.

Conclusion: I have no idea what's going on at US Bank

I've never bumped up against the $120,000 limit calendar year limit, so I don't know how it's implemented in practice. But it seems to me there are three possibilities:

  • Earning is actually capped at $120,000 in total purchases, and all spend beyond that earns one FlexPoint per $2 spent, unless you set up AutoPay and pay your entire statement balance on the first available date after your statement closes. If you do, your earning is uncapped. This would be the simplest reading of the terms and conditions as written.
  • The above, except bonused spend at gas stations, grocery stores, air travel, and charitable contributions is completely uncapped, whether or not you set up AutoPay. This would be another literal reading of the terms and conditions, but would conflict with the above — only one of the two can be true.
  • A hybrid, based on how FlexPoints are actually awarded, whereby "base" points are earned at one FlexPoint per $2 spent above $120,000 but "bonus" point are uncapped. This would mean charitable contributions continued to earn 2.5 FlexPoints per dollar, which would still be a fairly strong choice for making Kiva loans.

Of course it's theoretically possible that the version I was told by my US Bank representative is actually correct: that if you have AutoPay set up at all, then you're not subject to any limits on FlexPoint earning. Possible, but unlikely.

So I'm turning it over to my readers who do even more Flexperks Travel Rewards volume than I do: what's your experience earning base and bonus FlexPoints once you've reached the $120,000 calendar year cap?

Kiva loan duration and repayment schedules

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I don't write about making Kiva loans very much anymore, mainly because I don't make Kiva loans anymore! But Kiva loans are a still-working technique to manufacture an uncapped amount of spend in a potentially lucrative bonus category.

I say "uncapped" and not "unlimited," because Kiva loans are very much limited — they're just limited by your ability to find loans that fit within your risk tolerance, not by Kiva's online loan system.

Even if you're just interested in using manufactured spend as a part of your overall savings portfolio, Kiva loans are a strong choice: earning 3% cash back on 6-month loans generates "something like" 6% APY — and you get paid your interest up front (or at least when your next statement closes).

Kiva loan repayment schedules are rarely uniform

At the most recent Travel Con Matt from Saverocity made an important and I think overlooked point about Kiva loans: a loan's repayment schedule is rarely uniform. In other words, a 6 month loan will almost never be repaid in 6 equal installments. Instead, it's more common to see a repayment schedule like this:

If you make a loan to Eliza today, despite the loan having a "7-month" repayment term, you'll get 64.7% of your money back by April 1 — just 108 days from now.

Why it matters (and why it might not)

I take saving seriously, despite not doing enough of it myself. That's one reason why I get upset at so-called "robo-advisors" claiming to do things they cannot do.

If you do want to include "alternative" investments in your savings portfolio, it's important to evaluate them critically; it's just as easy to make mistakes valuing a high-interest savings or checking account as it is when picking a mutual fund.

Fortunately, in the case of Kiva repayment schedules, you have a big advantage: you get to pick the loans with the repayment schedules that best suit your needs! By picking "front-loaded" repayment schedules, you have access to more of your money faster, letting you put it back to work and increasing your actual APY above the 6% a simple "6-month loan" model would suggest.

That's the good news. The bad news is that Kiva isn't enthusiastic about people cycling money in and out of their accounts rapidly. After doing so for a few months, I was told that I could no longer make online withdrawals, but would instead have to request paper checks. They did not, in fact, enforce that restriction (I was still allowed to request withdrawals online), but as a general rule it's not ideal to use techniques with manual oversight as aggressively as we do techniques that are largely or entirely automated.

In other words, while Kiva loans are a great and still-working technique to manufacture uncapped amounts of spend, you probably can't replace your entire savings portfolio with short-term, high-quality loans.

I just bricked my Bluebird account (for the next 28 days)

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Today I'm going to share a very simple, very stupid mistake I made. In fact it's so simple, and so stupid, that it's unlikely to help any of my readers. But sharing is still caring, so here we go.

Background

I manage 3 full-service prepaid American Express cards: one Bluebird account (in my name), one Serve account and one Target Prepaid REDcard account (I haven't moved that one to Serve yet).

For the first year or so of managing the Serve card, the bill pay function simply didn't work. I assume this was a version of the e-mail address bug that afflicted quite a few people, but I didn't worry about it, for two reasons. First, since the bill pay function on my Bluebird account has always worked, I could simply send $2,500 per month to that account and pay my credit card bills from there. Second, I also control the external checking account linked to the Serve account, so could simply withdraw the remaining $3,500 monthly and pay my bills from that account.

When a Prepaid REDcard came under my control, I followed the same pattern, except the card wasn't linked to an external checking account, so I only manufactured $4,500 in spend per month with the card: I sent $2,500 to my Bluebird account and withdrew $2,000 per month from free ATM's, the respective limits on each kind of transaction.

Bluebird has a $100,000 limit across all Spend Money transactions

There are six activities that American Express categorizes as "Spend Money" transactions:

  • Merchant Transactions
  • Pay Bills
  • ATM Withdrawals
  • Send Money Transactions
  • Transfers back to the linked Bank Account

It should be nearly impossible to reach that $100,000 spend limit: you can only add $5,000 per calendar month in cash and $1,000 from a linked debit card, which if maxed out would only come to $72,000 per calendar year.

But I was sending myself $4,500 per month from the Serve and REDcard accounts under my control!

Bluebird customer service is surprisingly helpful

When I attempted to make a bill payment this morning, the error message simply said the transaction couldn't be completed and to call customer service. Fearing the worst, I called in immediately. Unfortunately, the frontline representative couldn't pull up my account because their system was undergoing "routine maintenance," but she did offer to transfer me to the technical team.

The representative in the technical department took just a few minutes to look up my total amount spent so far this year, which was just over $96,000, and told me I had just under $4,000 left to spend this calendar year. While I had him on the line, I made a bill payment for the exact amount he specified, and the payment went through as usual, leaving me with a stranded $900 balance until January 1, 2016.

Conclusion

I only fell into this situation because I thought I was being clever: by pooling as much money as possible in my Bluebird account, I wouldn't have to add each of my credit cards to each of the American Express prepaid accounts I controlled. That turns out to have been too clever by half.

So learn from my stupid mistake: take the time to add your payees to each account you control, and you'll never come close to hitting the $100,000 calendar year limit on Spend Money transactions.

Towards a theory of hotel points and cash redemptions

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Introduction

Regular readers know that I use the concept of "imputed redemption values" to calculate the relative value of manufactured spend on co-branded hotel credit cards. I've also written about the difficulty of thinking about "points and cash" redemptions conceptually.

Today I want to make a preliminary attempt at reconciling the concept of imputed redemption values and points and cash redemptions, something I've never seen attempted before in a comprehensive way.

I looked at five hotel loyalty programs that offer points and cash redemptions:

  • Marriott Rewards
  • Hyatt Gold Passport
  • Starwood Preferred Guest
  • Wyndham Rewards
  • Hilton HHonors

For each program, I used the following assumptions:

  • For Ultimate Rewards transfer partners (Marriott and Hyatt), I used a value of one cent per point (the value of the corresponding Ultimate Rewards points when redeemed for cash);
  • For the other programs, I compared each card's earning rate on spend to a 2% cash back card. The Starwood Preferred Guest American Express earns one Starpoint per dollar spent everywhere (2 cents per point), the $69-annual-fee Barclaycard Wyndham Rewards Visa earns 2 Wyndham Rewards points per dollar spent everywhere (1 cent per point), and the Hilton HHonors Surpass American Express earns 6 HHonors points per dollar spent at gas stations and grocery stores (0.33 cents per point).

I used these assumptions to investigate two questions:

  1. When do points and cash redemptions make sense compared to award nights?
  2. When do points and cash redemptions make sense compared to cash nights?

Marriott Rewards

Starting in "early 2016," Marriott Rewards will allow cash and points redemptions based on the following chart:

I used those values to calculate under what circumstances it would be worth making a cash and points redemptions, instead of a points redemption or paid stay:

This chart illustrates two points:

  • if your primary source of Marriott Rewards points is Ultimate Rewards transfers, cash and points stays are cheaper for all Category 3-8 properties, when compared to a points-only award stay;
  • but cash and points stays, just like points-only award stays, are extremely expensive, so unless your Category 8 stay costs more than $390, you're still better off paying with cash than transferring Ultimate Rewards points to Marriott Rewards.

Hyatt Gold Passport

Here's Hyatt's points-only and Points + Cash award chart:

And here's the same information, interpreted through a lens of Ultimate Rewards point transfers to Hyatt Gold Passport:

As this chart shows, there are no circumstances under which Cash + Points redemptions are cheaper, on a cash basis, than point-only redemptions (although you may still want to pay with cash in order to save your Ultimate Rewards points for other, higher-value redemptions).

Starwood Preferred Guest

Starwood produces the opposite situation. If you're earning 1 Starpoint per dollar spent on a Starwood Preferred Guest credit card, you will under virtually all circumstances save money using cash and points compared to a points-only redemption:

Wyndham Rewards

Wyndham Rewards is unique for having just one price point for points-only ("Go Free") stays: 15,000 Wyndham Rewards points per night.

For points and cash ("Go Faster") stays, all hotels in the chain cost 3,000 Wyndham Rewards points, plus a variable amount of cash.

Wyndham Rewards doesn't publish, as far as I can tell, a list of the variable cash amounts required by the hotels in their program, so this chart is based on my very extensive searching, but I can't promise it's totally comprehensive:

As you can see, at all but the most expensive properties (like the Wyndham Garden Long Island City Manhattan View), you'll pay less with a "Go Fast" cash and points stay, when available, compared to a "Go Free" points-only stay.

Hilton HHonors

Hilton HHonors, like Wyndham Rewards, doesn't publish a list of their points and cash award levels, so the following chart is based on my own extensive research, and its accuracy is not guaranteed:

This chart makes clear that if you're manufacturing spend on a Hilton HHonors Surpass American Express instead of a 2% cash back card, you'll come out ahead saving your HHonors points with cash and points redemptions at hotels priced in the 30,000-to-70,000-point range.

A note on the final column

The neatly highlighted calculations above are helpful, but I want to draw particular attention to the far right columns, showing the imputed redemption value of cash and points stays at each chain.

This column is relevant because in contrast to points-only award stays, which hotels are often required to offer as long as they have standard rooms available, cash and points stays are offered at the discretion of the property, and are generally made available only when rates are already unusually low.

The "Cash + Points" imputed redemption values I included for each chain is the price point above which cash and points redemptions become cheaper than cash-only stays, given the assumptions I outlined in the introduction. If you can find cash-only rooms at that price point or below, you're generally better off booking the cash rate rather than any cash and points or points-only rates available, unless you're particularly points rich and cash poor or have other extenuating circumstances.

Quick hit: in defense of Blue for Business

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Yesterday I dismissed the Blue for Business American Express credit card out of hand, writing that the "product earns 1 non-flexible Membership Rewards point everywhere, which isn't very interesting."

I was quickly corrected by reader Stvr, who commented, "Blue for Business is 1.3 MR per dollar."

What Stvr is referring to is the 30% bonus Membership Rewards points credited each year within 30 days of your account anniversary each year.

And Stvr is right! If you are willing to wait to receive 23% of your Membership Rewards points until the end of your cardmember year, you can think of the Blue for Business card as earning 1.3 points per dollar spent everywhere.

Does it matter?

The only situation in which I can imagine the Blue for Business card playing a useful role is if you also have a flexible Membership Rewards-earning credit card that isn't the EveryDay Preferred.

If you have a Business Platinum American Express, your Membership Rewards points are worth 1.43 cents each for paid airfare on a single airline you designate each year (the same airline you choose for your $200 statement credit). That makes your 1.3 Membership Rewards points per dollar spent on the Blue for Business worth 1.86 cents towards paid airfare. That's not great, but it's not terrible for a fee-free American Express card and it's 30% better than putting spend on the Business Platinum card itself, which earns just 1 Membership Rewards point per dollar spent everywhere.

Similarly, if you use a Premier Rewards Gold (2 points per dollar spent at supermarkets) or Business Gold Rewards (3 points per dollar spent at gas stations) card to manufacture spend in their respective bonus categories in order to transfer those points to their airline partners like Air Canada's Aeroplan, Delta SkyMiles, or Singapore KrisFlyer, you might get so much value out of your airline transfers that 1.3 Membership Rewards points per dollar gives you more value than putting the same spend on a 2% cash back card.

Of course, if you have an Amex EveryDay Preferred, then you can already earn 1.5 flexible Membership Rewards points per dollar spent everywhere with the card, as long as you make 30 or more purchases per statement cycle, which makes that card strictly superior to the Blue for Business.

Replacing Hilton Surpass

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Introduction

I like the American Express Hilton HHonors Surpass card, which gives 6 HHonors points per dollar spent at gas stations and grocery stores, for the simple reason that with an earning rate that high, it's easy to get more value per dollar spent than you would using a 2% or 2.105% cash back credit card instead, a point I illustrated early this year with this chart:

This chart helpfully illustrates that whether or not it makes sense to manufacture spend on a mile- or point-earning credit card, instead of a cashback-earning credit card, depends entirely on what your next best alternative is. The worse your cashback alternative, the better a value loyalty programs potentially provide.

Hilton HHonors Surpass cannibalizes two of the most lucrative bonus categories

If you could earn an uncapped 6 HHonors points per dollar on spend everywhere, the above chart would suffice, since 2.105% and 2% are the currently-available options for "everywhere" manufactured spend.

Unfortunately, Surpass cards earn 6 points per dollar only at gas stations and grocery stores (and restaurants), and those are categories where it's easy to earn more than 2.105% cash back.

Replacing Surpass at grocery stores

If you have an "old" Blue Cash American Express card, you'll always do better earning 5% cash back at grocery stores and gas stations than you will manufacturing HHonors points; you'd have to value HHonors points consistently at more than 0.8 cents each to justify earning them instead. The same is true if you're earning 5% cash back during a Wells Fargo or TD Bank promotional period.

Once you've reached your limits with those cards, you can still earn 3% cash back at grocery stores with a card like the Consumers Credit Union Visa Signature Cash Rebate card (on up to $200,000 in annual spend).

Replacing Surpass at gas stations

Besides the "old" Blue Cash card, at gas stations you can earn 5% cash back with a card like the Fort Knox Federal Credit Union Visa Platinum card. Beyond that, there are also 3% cash back options like the Chase AARP credit card (uncapped) and the Bank of America Cash Rewards for Business MasterCard (on up to $250,000 in purchases).

Replacing Surpass everywhere

While it's only worth manufacturing spend on the Surpass card at gas stations and grocery stores, it's also possible to earn more than 2.105% cash back everywhere, including gas stations and grocery stores. Namely, the BankAmericard Travel Rewards credit card gives 1.5% cash back (when redeemed against travel purchases), which rises to 2.625% cash back when you have over $100,000 on deposit with Bank of America and Merrill Lynch through their Preferred Rewards program.

If your principle limitation is not purchase bandwidth, but rather liquidation bandwidth, you should look long and hard at whether manufacturing cheap spend at 2.625% is better than manufacturing potentially-expensive grocery store spend at 6 HHonors points per dollar.

Conclusion: running the numbers

As longtime readers know, the principle way I decide whether manufacturing spend on a co-branded credit card, instead of earning cash back, is worthwhile is through imputed redemption values like those I showed in the introduction. Here are those values for our newly-established points of comparison:

As you can see, for 50,000-to-70,000-point redemptions (which make up the bulk of my stays), with a 3%-cashback alternative Hilton properties go from $176-$246 (compared to using a post-devaluation 2.105% cashback Arrival+ card) to $250-$350.

Those values aren't outrageous, but would certainly require you to be much more diligent about pursuing the highest-value redemptions in order to make it worth manufacturing HHonors points instead of bonused cash back.