Last Reviewed: 8/16/2011

If you like flying Delta, or otherwise want to “double down” on earning Delta award tickets and other perks, then you may want to consider a Delta credit card. The only problem at this point is figuring out which of the 3 personal cards they offer (Delta Gold, Delta Platinum, and Delta Reserve) would best suit you. 

That’s where PlasticIQ comes in handy. We’re like the advisor Goldilocks never had–helping you to decide between the 3 airline loyalty cards. Also, we always recommend making use of the PIQ Ranking Engine (found right from our homepage), which enables a more precise set of credit card recommendations based on your personal spending profile (Goldilocks certainly never had this cool tool!)

Overview of Delta Gold, Platinum and Reserve Credit Cards

The table below provides a nice side-by-side comparison of the 3 Delta loyalty cards along the key dimensions of earnings, redemptins and fees.  If tables bore you, go ahead and skip it and just read some of our takeaways further down the page.

So Which Delta Credit Card is Right For Me?

While the answer to this question definitely depends on your spending and flying habits, we can provide some pretty solid guidance to help you make the right choice. We’ll take a closer look at the 3 main sources of value for these cards:

• Sign up bonuses
• Spend range bonuses
• Other perks

Since annual fees are also quite large for these cards, we’ll also take these into account.

A Closer Look At Sign Up Bonuses

Interestingly, although you pay a whopping $450 annual fee for the Delta Reserve card, you don’t actually receive any bonus Skymiles on sign-up, whereas with both the Gold card you receive 30K Skymiles after spending $500 in 90 days of account opening (worth ~$300 in PIQ’s estimation) and with Platinum you get 20K Skymiles right out of the gate (worth ~$200). However, with the Reserve card, you do receive 10K Medallion Qualification Miles (you need 25K MQMs to reach Silver status). While PlasticIQ hasn’t (yet!) figured out a way to quantify the value of MQMs, we’re working on it, and we’ll crack that nut soon. Also, the Platinum card grants you 5K MQMs in addition to the 20K Skymiles, so in some sense it’s a nice middle-ground card.

Delta Reserve Kicks in the Turbo Booster on Spend Range Bonuses

While the Reserve Card may not offer an impressive sign-up bonus, it offers some very generous Skymiles (and MQM!) bonuses when you hit certain spend targets throughout the calendar year. Specifically, when you hit $30K of spend in a given calendar year, you’ll get a bonus 15K Skymiles and 15K MQMs; you earn another identical bonus if you hit $60K of spend in a given calendar year. The Platinum Delta Skymiles card also treats you well, with 10K Skymiles + 10K MQM bonuses when you hit $25K in calendar year spend (and again at $50K of spend). The Delta Gold card is silent here.

Delta Sky Club: The Reserve Card Gets You To The Front Of The Line

So if you’re wondering where the Delta Reserve Card gets the nerve to charge a $450 annual fee, you’ve found the reason. If you were just an ordinary Joe looking to buy an annual membership to the Sky Club, you would pay $450 for an individual membership, or $650 for a joint membership (since the Reserve card allows you to bring 2 friends along, the best estimate of value is the $650 joint membership).

And the Winner Is…

So, here’s the deal. There are basically 2 situations in which the Delta Reserve Card makes the most sense to get–otherwise, you should go for the Platinum card almost always.

• Situation 1: If you plan on spending $60K or more per year on your Delta credit card, then the Reserve Card overtakes the Platinum Card from an economic value point of view. On some quick runs on the PIQ Ranking Engine, the Reserve Card basically ties with the Delta Platinum Card, without including the value of the free Sky Club membership and without including the value of the incremental MQMs.
• Situation 2: If you would otherwise have purchased a Delta Sky Club membership (or at least are willing to value it at the $650 it would have cost you to purchase outright). In fact, we created a separate instance of the Delta Reserve Card within the PIQ Ranking Engine where we have added this value in, and in this case the Reserve Card ranks pretty near the top of all Airline Loyalty cards. If you also happen to spend $60K or more on the Reserve Card, it becomes even more formidable.

Final Thoughts On the Riddle of the 3 Delta Cards

By now, hopefully a few things are clear. If you’re a big spender (more than $60K per year on your Delta Card), then Delta Reserve is the one for you. Also, if you’re really scrounging for every MQM you can get your hands on, the Delta Reserve will help you the most here too. Finally, if you value the Delta Sky Club perk at or near full face value, again the Reserve Card is a stand-out. If none of the above hold true, then the Delta Skymiles Platinum is probably your next best bet. The Gold Skymiles card will usually place last.

And our last word of advice: while we can give you directional advice in this post, go ahead and make use of the PlasticIQ Ranking Engine if you really want to see which of these 3 cards is best for you, based on your own unique spending profile! You can get to the tool right from our homepage.

Amex Delta Skymiles Gold Card	Amex Delta Skymiles Platinum Card	Amex Delta Reserve Card
BONUS MILES: 20K with your first purchase, 5K when you add two Additional Card members to your account. That’s 25K miles, redeemable for a flight! $0 intro annual fee for the first year, then $95 Check your first bag FREE — for up to 9 people on your reservation — on every Delta flight Earn DOUBLE miles on qualifying flights — 1 mile per eligible dollar on everything else NEW — Priority Boarding and 20% In-Flight Savings	Get 20,000 bonus miles upon your first purchase with the Card (5,000 of which are Medallion Qualification Miles) Get 5,000 bonus miles when you sign up for two Additional Cards Check your first bag for free on every Delta flight Receive Zone 2 priority boarding on Delta flights Receive 20% In-Flight Savings on food and entertainment Complimentary companion coach ticket each year upon renewal	Get 10,000 Medallion Qualification Miles (MQM) upon your first purchase with the Card Unparalleled Miles BoostSM – get up to 30,000 MQMs and 30,000 Bonus Miles Enjoy Delta Sky ClubTM access Check your first bag for free on every Delta flight Complimentary First-Class companion certificate each year upon renewal Access to Concierge services Receive 20% In-Flight Savings on food and entertainment

Last Reviewed: 8/14/2010

PlasticIQ has some serious issues it would like to levy against these evil denizens of the consumer ecosystem. Since PIQ is in the business of helping people maximize the value of the rewards, of which redemption of points for gift cards is a common option, it’s vital that we educate our readership.

Here are the 5 pitfalls of gift cards (there are probably a bunch more, but these will do for starters)

• Spillage: it should come as no surprise that a portion of gift cards are either lost, expire, or simply go unused (or partially unused). What *might* be a surprise is the magnitude of spillage. An analysis by the Tower Group estimates that roughly $5 billion per year in gift card value disappears due to spillage—enough to make even BP green with envy. We’d rather not have our readership contributing to this travesty. In its 2008-2009 fiscal year, Best Buy pocketed $38M in spillage.
• Fees: cards that have been inactive for more than a year can be assessed fees, which rapidly eat into the value of the card. If you had just given your niece cash, you wouldn’t have to worry about this ridiculousness.
• Bankruptcy risk: it’s nothing new, companies go out of business. An article by the New York Times noted that roughly $100M worth of gift cards was compromised in 2008, when both Sharper Image and Linen ‘n Things collapsed.
• Funds lock-in: A store gift card obviously requires the bearer to purchase goods and services only at that store. This can lead to sup-optimal purchases. For example, if you want a specific TV, and store A has it for $600, but store B, where you have your gift card, has it for $650, you may end up actually buying the more expensive one simply because you have this gift card.
• Lameness: Lastly, gift cards are just a lame gift. Put some thought into your gifts, and get screwed less in the process. If you simply are too hopeless, then just send cash.

If you do find yourself stuck with a gift card, you have some options. You can sell or trade it at sites like Plastic Jungle, GiftCardRescue, and Swapagift. You can also sell them on Ebay. In my experience, gift cards on Ebay tend to sell for somewhere between 85% to 95% of their face value, depending on the desirability of the card. This is why PlasticIQ discounts the value of gift cards by 5% when calculating their worth.

Last Updated: 8/8/2010

Capital One has a table on their website with guidelines for how they determine an individual’s credit worthiness—-which in turn impacts which card offers you are eligible for. Normally, PlasticIQ would just link to the table on the Capital One site and be done with it, but as it’s a non-linkable pop-up, for your convenience we’ve summed up the table below.  Note that CapitalOne doesn’t provide specific credit score ranges, but they may still use these in their final assessment.

Capital One also notes that the above are not the only factors used in determined your eligibility for specific credit card offers.

Last Reviewed: 7/26/2010

Important note: Around 3/31/10 Schwab stopped offering this card for new applicants (though current users of the card are grand-fathered in for the time-being). RIP Schwab.

If you’re in the market for a strong cash back card, I’d recommend you check out our review of the Amex Blue Cash Preferred Card or our review of the Discover Escape Card–both of which routinely at or near the top of the PlasticIQ Ranking Engine.

The Schwab Credit Card (officially known as the Schwab Invest First Visa) is truly one of the gems of the cash back credit card world—an all-purpose workhorse offering a no-holds-barred 2% cashback. It’s also one of the simplest credit cards to understand—there are no fancy rotating categories, sneaky cash back limits, points expiration games or other redemption tricks.

Note—there have been some persistent rumors that Schwab may pull the plug on the Schwab credit card and just grandfather in those who already have it. PlasticIQ will do some more digging on this, but in the meantime, you may want to consider getting it just to be on the safe side.

*Based on PlasticIQ’s standard spending profile for 3 years of card usage

As the table above shows, the Schwab credit card places 2nd out of the 33 cards that PlasticIQ currently has in its ranking engine (as of 7/17/2010). The only cashback card that beats it is the Discover Escape card, and then, just by a hair. For all intents and purposes, they offer the same upside.

Below is a screenshot of the PlasticIQ ranking engine, where you can see that the Schwab Credit Card places a very respectable 2nd place finish.

Schwab Credit Card Rewards

The Schwab credit card provides a 2% cashback bonus on *all* purchases—no exceptions, no limits, no gimmicks. The only requirement is that you also open up a Schwab One brokerage account, although you don’t need to fund it and there are no annual or other fees associated with it (in other words, it’s free).

Your cashback earnings are regularly swept into your brokerage account (see the screenshot below), at which point you can easily transfer the funds to your Schwab credit card. This structure is an obvious attempt to drive new account creation within their brokerage arm, and perhaps it is working for some percent of users who get the Schwab credit card.

Schwab Credit Card Expenses and Fees

The Schwab credit card has no annual fee. Furthermore, and worth noting, the Schwab credit card does not charge a foreign currency transaction fee. This is very unusual—most credit cards charge a 3% conversion fee. This is a great card if you plan to travel outside of the US!

PlasticIQ’s Final Assessment of the Schwab Credit Card

The Schwab credit card is a true workhorse. If you could only have 1 credit card in your wallet—this might be the one. In general, PlasticIQ would recommend using this card for all purchases where you don’t earn special rewards with a more specific credit card. For example, the Chase Freedom card earns you 5% cashback on very specific categories each quarter—so you should obviously use that first when appropriate.

Amex Blue Cash Preferred Credit Card	Escape by Discover
Apply for Amex Blue Cash Preferred	Apply for the Discover Escape Credit Card

Quite simply, in almost all cases, non-cash awards (such as store gift cards, frequent flyer miles, hotel points, etc) are not as valuable as the same cash-equivalent award. For example, would you rather have a $100 Amazon gift card, or $100 in cash. Aren’t they worth the same? The answer is a firm NO.

There are at least 5 issues related to non-cash awards that are generally not present (or present to a much smaller degree) with cash:

• Risk of expiration/loss
• Limitations on use (time/place e.g. blackout dates)
• Risk of change in terms of use, insolvency (complete loss)
• “Making you work for it” trap
• Time value of money

Risk of Expiration or Loss

Firstly, you could lose the gift card. Sound unlikely? The TowerGroup (a leading financial consulting firm) estimates that the unused value of gift cards (referred to as “breakage” in the industry) has a bigger financial impact on consumers than the combined value of both credit card and debit card fraud. While credit/debit fraud totals $3.5B annually, TowerGroup estimates nearly $8B is lost due to unredeemed, expired or lost gift cards. That’s a full 10% loss rate against the $80B of annual gift card sales. See the article “Unused Gift Card Values on the Rise” for more detailed information.

Limitations on Use

Another downside of many types of awards (gift cards included) is that they restrict you on where you can do your shopping. Running with the Amazon gift card analogy, you may find the same book cheaper elsewhere, and either have to buy it there or actually pay more for the product on Amazon just so you can use your gift card.  Many airlines have black-out dates and other restrictions preventing you from obtaining free flights with your miles when you most want them.  One exception we make:  AMEX-type cash card awards; these are cash cards that can be used anywhere that AMEX is accepted, so (at least in the eyes of PIQ) their limitation on use is so small as to be negligible.

Change in Terms or Insolvency

Another downside of all of these non-cash programs is that they can change the rules mid-game. For instance, at one point Citi’s ThankYou network had a very favorable redemption offer for airline miles which made their program quite attractive. However, for whatever reason (probably due to our economic woes) they decided to eliminate that redemption offer entirely. In a worst-case scenario, the company issuing the points could actually go bankrupt, and you could lose all your miles/points that you had been accumulating for months or years.

“Making you work for it” Trap

Not all awards are created equal. For example, AirTran Airways has an excellent dollar value per mile at first glance. However, a closer look reveals that many of their flights are not direct, so you end up spending many more hours in the air or in airports than you otherwise would have. You are basically paying for the free award by sacrificing your valuable time.  PlasticIQ tries to identify and appropriately discount these situations.

Time Value of Money

This is an economic concept which basically states that $1 today is worth more than $1 in some future period. This is because if I give you $1 today, you could stick it in a bank account and earn interest on it, so that at that future period it would be worth more than $1. Most cash-based (cash back) rewards programs tend to let you withdraw the cash fairly soon after you earn it. However, its not uncommon to have miles sitting in an account for 1 year, 2 years or even longer—especially if you don’t travel much on that airline. Those miles are just sitting there, not earning interest (and maybe at risk of expiration!).

Another interesting example of this are certain credit cards which actually give you cash-back rewards, but require you to wait a full calendar year before being able to cash them out.  In this case, we apply a smaller-than-usual cashback penalty, but clearly the program shouldn’t be valued the same as one where you can cash out each month or at lower thesholds, all else equal.

Concluding our Thoughts on The Non-Cash Penalty

While there is no scientific way to quanity the sum of the above risks, PlasticIQ typically penalizes non-cash programs in the range of 5% to 10% of our estimated value per point or mile. Non cash-card gift cards tend to get the highest out-of-the-gate penalty of 10% due to the outright risk of loss (which seems to happen quite a bit) as well as expiration issues and limitations on use. This is also consistent with the data that about 10% of gift card value is lost in one form or another, and also is consistent with an analysis PIQ did of completed sales of gift cards on Ebay. Typical sales occurred at 80 cents on the dollar. Airline and hotel programs are usually penalized at 5%, a modest penalty meant to capture some of the risks above.  However, there are other factors that PIQ takes into consideration which can drive that 5% significantly higher.

In certain cases, we will even move to higher penalty levels when unusual situations exist.  For example, for residents of the US, Virgin Atlantic’s Flying Club frequent flyer program is pretty much only useful for trips to London, so we apply an all-in 20% non-cash penalty to account for this very restrictive situation.

For cash-back rewards programs that allow withdrawals only once per year after 12 months, we tack on a 2% non-cash penalty, really just to reflect the time value of money.

The Citi Platinum Select Mastercard does not offer any sort of rewards program, so it’s not of much interest to PlasticIQ, except for potential balance transfers.

The Chase Freedom card comes in several different flavors of rewards programs. According to one of the more competent CSRs that I spoke to at Chase, the Ultimate Rewards program is the direction that Chase is moving in.

Key Details of the Chase Freedom Card with Ultimate Rewards

• Receive $50 in bonus rebates after your first purchase.
• Always earn 1% cashback on purchases (the usual exceptions: balance transfers, cash advances, travelers checks, foreign currency, money orders, etc). No maximum on what you can earn.
• Receive 3% cashback offers quarterly. Chase will select 3 categories per quarter for which you can earn 3% cashback. These categories rotate each quarter, and there is no limit to how much you can earn. See below for details on which categories are available.
• Up to 10% cashback when you shop online through Chase Rewards Plus. PlasticIQ tends to discount these captive shopping programs since you will often pay more for a given good/service than you would through an open market transaction.

Categories elibigle for 3% cashback

1. Beauty salons, spas
2. Cable, satellite, internet providers
3. Department stores
4. Dry cleaners
5. Drug stores
6. Fast food
7. Gas/convenient stores
8. Grocery stores
9. Gyms
10. Local commuting
11. Movie rentals
12. Movie theaters
13. Pet stores
14. Veterinary
15. Phone/cell
16. Utilities

Notably absent are restaurant and travel categories

Key Assumptions in determining the value of the Chase Freedom Credit Card with Ultimate Rewards

• Since it’s a straight-up cash-back card, we value each dollar spent at $0.01.
• As there is no way to predict which categories Chase Freedom will select each quarter (and we have heard that they may vary by individual), PlasticIQ has decided to apply the 3% cashback to your top 3 spend categories (excluding restaurants and wholesale clubs), and then apply a 30% discount to account for the fact that this is an aggressive estimate. If anyone has a better approach, please let us know!

The Citi Hilton HHonors Visa credit card offers points for everyday purchases, along with additional points for specific category purchases. Points can be redeemed for free nights at Hilton properties worldwide. There is no annual fee for this card.

Details of the Citi Hilton HHonors Rewards Program

While full details (including all the legal jargon) can be found at citibank’s website, PlasticIQ likes to call out the key details:

• 15,000 Hilton HHonors bonus points after making $150 in purchases within 2 months of opening your account.
• 6 HHonors bonus points per $1 spent at participating Hilton Family hotels.
• 3 points per $1 spent at supermarkets, drugstores, and gas stations.
• 2 points for all other purchases.

Key Assumptions

In ranking the value of each credit card, PIQ is often forced to make some assumptions about individual spending and usage patterns. Key assumptions for the Citi Hilton HHonors Visa are:

• PlasticIQ estimates the value of 1 Hilton HHonors point at approximately $0.005. Please see the post what is the value of Hilton HHonors Points for a detailed analysis of PIQ’s findings.
• 100% of hotel stays are at Hilton Family properties.

Well, we’re almost there. The site has been under development for almost 2 years (one of the pains of being able to work on it only nights and weekends!). But I think we’re close to an official launch. I’ve personally loaded the database with more than 100 credit cards, information which includes fee structures, interest rates/APRs, detailed reward program information and more. The algorithm for ranking the cards is humming along and good enough for prime time. Right now we’re just working on cleaning up some of the blog formatting, and finalizing some of the point value estimates for various credit card reward programs.

PIQ’s Assessment of the Discover Business Miles Rewards Card

• The 2 miles per dollar of spend on gas purchases is fairly unexceptional, especially with the travel/gas cap of $5,000 per year (after which point you only get 1 miles per dollar of spend).  There are at least a couple of cards that offer 5 cents per dollar of spend on gas.
• Additionally, the 2 miles per dollar of spend on travel related purchases is outdone by more focused, higher rewarding cards.

Discover Business Miles Rewards Basics

• Earn unlimited rewards on all purchases.  You earn 2 miles for every dollar you spend on your first $5,000 of combined gas and travel purchases each year.
• You also earn 1 mile on almost all other purchases, including gas and travel purchases above the $5,000 limit.
• Gas purchases are those made at merchants classified as gas stations (unclear if this includes auto repair or convenience stores built into gas stations–PIQ looking into it).
• Travel purchases include hotels, airfare, car rentals, cruises, travel packages, tour operators.
• Warehouse purchases (warehouse clubs, discount stores and their affiliates) earn only 0.25 miles per dollar spent.
• Miles don’t expire; however, if your account is closed, or you fail to make the minimum payment for 2 months in a row, or if your account is inactive for 18 months, you will forfeit your miles.

Discover Business Miles Basic Fees

• Annual fee: none
• Foreign fee: None
• Grace period: at least 20 days