What to do When Annual Fees Post

Many credit cards with annual fees waive the annual fee the first twelve months. Twelve months have passed since I got my first credit cards with an annual fees (AFs) so my twelve months of waived annual fees have ended. This means I have to decide what to do with these cards.

My three options are:

  1. Cancel the card and not pay the annual fee;
  2. Keep the card and pay the annual fee; or
  3. Keep the card, but product change the card to a no-AF version

Keeping a budget for the entire year has meant I budgeted enough money each month to be able to pay any annual fees (AF) once it came time to pay up. However, a year of use has helped me learn more about my spending habits, and how much I value each of the cards I have acquired.

So what am I doing with these cards?

The biggest reason I’m okay with signing up for credit cards is knowing I am building credit history, so I prioritize options 2 and 3 from above.

Now, I could cancel all of my cards and the accounts would continue to increase my Age of Credit History for 10 years until they fall off my credit report (10 years from now), but I’d rather keep them forever and have 30+ year old accounts. Plus, keeping as many accounts open helps me build a relationship with banks.

Product Changing

I wrote about flying to Hawaii using points from the United MileagePlus Explorer card and flying to the east coast to visit family using American Airlines miles from the Citi AAdvantage Platinum card last year. And I decided to product change these two cards instead of canceling or paying the AFs.

By product changing (PCing) these cards within 30 days of the AF posting, the $95 annual fees were refunded to my accounts. If the cards did not have fee-free versions, I would have canceled the cards and still been refunded the annual fees.


Another card mentioned in the post about flying to Hawaii was the American Express Premier Rewards Gold card. I am still unsure of what to do with this card because it offers good category bonuses, but I’m not sure if I would benefit from earning Membership Reward points since I don’t spend enough to accumulate enough for a full trip. Fortunately, I have a couple more months to decide whether I will cancel the card or pay the AF.

A third card I used during my Hawaii trip was the Barclaycard ArrivalPlus. This card allowed me to redeem points to zero out the cost of the GoCity Card I bought to hit all the tourist attractions. These points are very flexible, but the ArrivalPlus requires a minimum of 10,000 points ($100) to redeem against a travel expense. I could have changed the card to the no-AF version, but I had too much trouble with the card so I ended up canceling it.

Keeping and Paying the Annual Fee

At the other end of the spectrum, I am planning to keep the Hyatt and IHG credit cards from Chase and pay the annual fees because I get a free 1-night stay from each card every anniversary. The Hyatt certificate restricts use to category 1-4 hotels. However, the IHG annual certificate has no restrictions on hotel categories, so I could spend the night in Times Square for the $49 annual fee on the card.

How to Use Citi ThankYou Points (TYP)

Citibank has several cards which earn their flexible reward points called ThankYou Points (TYP). I talked about these cards in my post about TYP earning cards which you can read here.

These points are similar to Ultimate Rewards points from Chase and Membership Rewards points from American Express by having multiple options for redemption.

TYP have a lot of uses: paying student loans or mortgages, redeeming for gift cards or statement credits for select expenses, transferring to airline and hotel partners, or redeeming the points through the TYP portal for flights based on cash prices.

For this post, I’ll focus on the redemptions giving each point a value of at least 1 cent. That is, 100 points = $1.00 or more.

The “better” methods:

  • Loan payments (might have devalued recently)
  • Gift cards
  • ThankYou Point travel portal
  • Transfer to Hotels or Airlines

Other uses for TYP:

  • Statement credit
  • Cash back (bad value)
  • Shop with TYP (bad value)
  • Shop with TYP at Amazon (bad value)

From the list of “Other Uses”, statement credits are the best option at a value of 0.75 cents per points (cpp) while cash back has a value of 0.5 cpp. These two redemptions are essentially the same (redeeming points for straight money) but different methods.

To give you an idea of what these values mean: 100 points can be redeemed for either $0.75 as a statement credit, or the same 100 points can be redeemed for $0.50 cash back (going directly into a bank account).

If you have a couple hundred points that you want to use up, redeeming those points for a statement credit could save you the money from a meal or two.

As for the “better” methods, loan payments and gift cards are exactly 1 cpp. Transferring points gives a value which varies on which airline or hotel you transfer to and what you’re booking with that hotel or airline.

Hilton seems to be the only hotel transfer partner where 1000 TYP convert into 1500 Hilton points.

Airline partners TYP can be transferred to included:

  • JetBlue
  • Virgin Atlantic
  • Cathay Pacific (Asia Miles)
  • EVA Air
  • Etihad
  • Air France and KLM (Flying Blue)
  • Garuda Indonesia
  • Malaysia
  • Qantas
  • Qatar
  • Singapore Airlines
  • Thai Airways

Booking travel through the TYP portal gives either 1, 1.25, 1.33, or 1.6 cpp depending on which card you have, what you’re booking, and how long you’ve had your card.

TYP have the following values through the travel portal if you have:

  • Citi Prestige
    • 1.6 cents/point (cpp) for American Airline flights
    • 1.33 cpp for other airlines (1.25 cpp starting July 23, 2017)
    • 1 cpp for car rentals, hotels, and cruises
  • Citi Premier
    • 1.33 cpp for American Airlines flights
    • 1.25 cpp for all other airlines, car rentals, hotels, and cruises

The good redemptions tend to be either booking American Airline flights with the Citi Prestige before the end of July this year, flights on any airline with either card, or transferring points to other airlines where the cents/point value is strictly dependent on the flight booked.

However, this means you need large amounts of points except for short flights like from SFO to LAX or LAX to PHX. This is where many people might consider using their low balance of TYP for a statement credit against a meal they enjoyed.

Citi Credit Cards That Earn ThankYou Points (TYP)

Citibank offers 4 credit cards which earn their flexible rewards points, similar to Chase’s UR and Amex’s MR, called ThankYou Points (TYP). These cards are called Citi ThankYou –

  • Preferred Card;
  • Preferred Card For College Students;
  • Premier Card; and
  • Prestige Card

Another similarity between the Chase, Amex, and Citi cards which earn flexible rewards is the annual fee structure. The annual fee (AF) can tell someone which cards are competing with each other.

The Preferred cards have no annual fee (AF), similar to the Amex Everyday and Chase Freedom cards. The Premier has the same $95 AF the Chase Sapphire Preferred and Amex Everyday Preferred or Premier Rewards Gold card (after taking into account the airline fee credit) have. And the Prestige competes with Amex’s longtime Platinum charge card and Chase’s new Sapphire Reserve card.

The Cards

The ThankYou Preferred Card and ThankYou Preferred Card For College Students are essentially the same with the only differences being the sign-up bonus and the introductory interest rate period of 0%. Let me list the points earning structure, annual fees, and other perks for the three/four cards:

  • Preferred Card – No Annual Fee
    • 3x – No bonus categories; cannot earn 3x points on purchases
    • 2x – Dinning out and Entertainment
      • Restaurants;
      • Movies;
      • Sports events; etc.
    • 1x – Everything else
  • Premier Card – $95 Annual Fee
    • 3x – Travel
      • Gas;
      • Airfare;
      • Hotels;
      • Cruises; etc.
    • 2x – Dining out and entertainment
      • Restaurants;
      • Movies;
      • Sports events; etc.
    • 1x – Everything else
    • No foreign transaction fees
    • Baggage Delay, Trip Delay, and Lost Baggage Protections
  • Prestige Card – $450 Annual Fee
    • 3x – Air travel and hotels
    • 2x – Dining out and entertainment
    • 1x – Everything else
    • No foreign transaction fees
    • Baggage Delay, Trip Delay, and Lost Baggage Protections
    • Medical evacuation
    • $250 Air travel statement credit (not just for fees)
    • 4th night hotel benefit
    • Complimentary Priority Pass Select membership (same as the Amex Platinum but 2 guests enter with you for free)
    • $100 Global Entry application fee credit

Which Card for What Reason(s)?

If you do not want a card with an annual fee but you want to earn ThankYou Points I’m sure you are looking at the ThankYou Preferred card. However, I would advise you to look at the Premier card.

Why? Because the annual fee might be waived for the first year and the sign-up bonus for the Preferred card is much less than the sign-up bonus on the Premier. Plus, you have 3x Travel instead of only the 2x Dining and entertainment categories.

Preferred vs. Premier

If your monthly spending is less than $3000 in 3 months but at least $1000 in 3 months then the Preferred would be better. If your monthly spending allows for you to meet the $3000 in 3 months spending requirement then your choice would be split between the Premier and Prestige assuming you are okay with an annual fee.

Premier vs. Prestige

Basing the decision on the points earning structure of the cards, I would go with the Premier because the 2x categories are the same for both cards but the Premier has a more general 3x category (travel; more than air fare and hotels) compared to the specific 3x categories of the Prestige (Air fare and hotels only).

Another thing to consider about points between all three cards is the Preferred cannot transfer points, and the Premier and Prestige have bonus point values when using the TYP to book hotels and flights and other travel through the TYP portal. New applicants get the following bonuses when using their ThankYou Points through the TYP portal:

  • Premier
    • 1.33 cents per point for American Airline (AA) Flight (7,518 pts for a $100 AA/US Ticket)
    • 1.25 cents per point for other airlines (8,000 pts for a $100 Southwest ticket)
    • 1.25 cents per point for Car Rental
    • 1.25 cents per point for Hotels
    • 1.25 cents per point for Cruises
  • Prestige
    • 1.6 cents per point for AA Flight (6,250 pts for a $100 AA/US Ticket)
    • 1.33 cents per point for other airlines (7,518 pts for a $100 Southwest ticket)
    • 1.00 cents per point for Car Rental
    • 1.00 cents per point for Hotels
    • 1.00 cents per point for Cruises

Looking at the annual fees, the Premier should be a clear winner but not quite. For someone already planning some travel, specifically flights, they could effectively reduce the annual fee from $450 down to only $100 via the $100 Global Entry and $250 airfare credits. This puts the effective annual fee of the Prestige only $5 higher than the Premier.

Again, this is an effective decrease and not exactly a true decrease. A real way to reduce the annual fee from $450 down to $350 is by being having a Citi Gold bank account, but that is another topic.

Now, with all of this information, the decision as to which card to get is up to each person and their personal situation. I say which card rather than which card first because Citi recently implemented a limit to sign-up bonuses. If you get the sign-up bonus on a card you can’t get a bonus of the same type of points for another 24 months.

If you get the Preferred and earn the sign-up bonus, you have to wait 2 full years to be eligible for the sign-up bonus for the Premier or Prestige, or the Preferred again. This is why I recommend the Premier over the Preferred given the sign-up bonus and earning structure.

Paying off Credit Card Debt

Total credit card debt in the USA was up to $712 billion as of 2015, so it’s fairly easy to say someone reading this blog either has credit card debt or knows someone with credit card debt. If you think you don’t, then you might fall into the “technically you do” category since you “technically” have debt if there’s a balance on your card(s), even if you’re like me and will pay the entire balance when the statement closes. Needless to say, there are options to reducing your credit card debt and reducing the amount you owe.

First and foremost is getting a hold of your cash flow: figure out how much money you bring in each month (if it changes month to month figure out a safe average amount), figure out how much you need to survive (food, housing, etc.). Once you have that amount see if you have any money left over. Hopefully you have some left over so you are not going further into debt (if you are, I’m very sorry but this next portion probably isn’t for you at this point in time).

Now, having extra money is necessary for paying down debt, but if you’re paying interest because your credit cards have interest rates (likely no less than 15%) then you’re probably making very little progress in eliminating that debt. One simple solution to paying off your credit card debt faster is to open a new card with 0% interest (and hopefully balance transfer fees) for a certain number of months. Most cards have at least a 12 month 0% time frame. Others have 15 months or 18 months, and a couple have even 21 months. These 21 month 0% APR cards are the Citi Simplicity and Citi Diamond Preferred cards.

Citi has an unofficial rule not to accept a second application less than a week after the first application and no more than 2 applications in a little more than 2 months. If you plan to get those Citi cards for the maximum time with 0% interest then make sure to wait at least a week between applying for each.

Let me show some math to exemplify the power of a 0% interest rate credit card:

  • Starting balance and interest rate: $10,000 and 15%
  • Balance transfer fee: 3% (from your current card, 0% to the new card)
  • Monthly payment to payoff in 21 months
    • 15% card: $544.37/month
    • 0% card: $490.48/month
  • Savings from 0% card over 21 months
    • Each month: $53.89
    • Total: $1,131.69

While saving $53.89 a month might not be much, it can really add up. And you can also transfer the balance to a new card near the end of the 21st month to a new card that offers 15 or 18 months so you can make smaller payments each month. I did the math for this situation, original balance of $10,000 with a balance transfer at month 0 and 21 with a 3% transfer fee and paid in full in 39 months.

  • Minimum payment for 21 + 18 month: $267.70/month
  • Over 39 months:
    • $57.84/month less
    • $3212.40 total
    • 12 months sooner

Paying 0% interest over 39 months means you will end up paying $57.84 a month less than if you were paying 15% interest, but you will still be paying over $3,000 less over those 39 months with minimum payments more manageable than the 21 month goal.

Individual cases will be different so if your balance and interest rates are lower then your savings will be less, if your interest rate and balances are higher your savings will be more, if one is higher and the other is lower then your situation is not so straight forward.

Nonetheless, if you find yourself paying off credit card debt you should first look at your money flow and set up a budget. Next, don’t be afraid to open a new credit card to take advantage of a long 0% interest rate period. But don’t spend more with either of the card, at least not more than what you can pay back at the end of the month.

Flying American Airlines SFO – DCA: Part 2, the Departure

This is a continuation of Flying American Airlines SFO – DCA Part 1: The Arrival

Going back to DCA from Baltimore was smooth but stressful because I was cutting things close on time. I hopped on a MARC train, caught the Metro Red Line, transfered to the Yellow Line, and arrived at DCA with about an hour to get to my terminal before boarding began.

Flying Away from DCA towards Miami

I hurried to security because of feeling rushed which lead me to standing in the security line for the Gates 25-34 line when I was leaving from Gate 40. Neither security line were too long, but I wished I had TSA PreCheck or Global Entry so I could have gone through the much shorter security line.

Gate 40 was around the corner from the food shop and the number was not visible from the walkway to the Gates. A good idea is to check terminal maps either before or at the airport so you have an idea of where your gate is like I did to prevent worrying you missed your gate along the way.

Like my previous flights, Group 1 boarding was more like Group 5. I was in row 13 and the front of the plane was rather empty. Each row probably averaged 2 people where the middle of the plane had maybe 2.5 people/row.

As for the seats, there was a cushion on the back rest that made me lean forward more than I already was with the seat upright. The cushion went up to my upper back right around the middle of my shoulder blades so the seats are probably uncomfortable for anyone above 5′ 8″. Reclining my chair helped me be a little more comfortable but only made the leg room less comfortable, because the seat slides forward while reclining the back.

American Airlines 737 seat back cushion

Leg room could have been better because I always felt the bottom of the chair in front of me when I extended my legs even a little. My row was in front of the first exit row which only had one person. I could have moved back a row but decided not to since this was a short flight.

Being in row 13 meant I had a closer view of the 1st class cabin which made me curious to try business or first class on a domestic flight. For this flight, the flight attendants were not too busy so I was able to get a few waters to hydrate. Anyways, I will be sticking with Economy for now.

Flying into MIA was smooth, we even arrived an hour early, but our gate (D12) was busy so we had to wait 35 minutes to finish our arrival. Once I was off the plane I headed to the gate next door for the elevator up to the MIA Centurion Lounge.

Centurion Lounge in Miami

Mixed pretzels and soft drinks were the only free food options during the 3 hour flight to Miami so I was fairly hungry upon landing. After finding a seat in the Centurion Lounge I made a drink with the espresso machine (no mocha option so my 1st drink was a latte) then I grabbed a salad, a banana, and a chocolate chip cookie.

Meal with salad and latte

After the light meal I wanted to see if anything else at the food bar looked appetizing. I found a small dish with a small piece of chicken on a yellow mushy substance, so I took a chance and tried the dish.

This was the best dish I have had in any of the lounges I have been to (all 4 of them) so I went back for seconds, and would have gone for a third serving but I needed to leave to get to my gate. Also, I was creative with making a mocha by combining a hot chocolate with a single espresso due to the lack of a mocha option.

Chicken dish from the Centurion Lounge in Miami

Before leaving I explored the rest of the lounge, and took some pictures along the way.

View from inside the lounge

The entrance had a hallway on either side, the right side only had two sections while the left side had about 6 areas including a second espresso/tea bar with chocolate chip cookies. Various seating types and arrangements were found on the left with mostly counter/bar type seating on the right of the entrance.


Making My Way to Terminal D, Gate 23

After taking the elevator from the 4th floor, where the Centurion Lounge is located, down to the 2nd floor, where all the gates are, I followed the signs towards Terminal D. I thought 15 minutes would be enough time to get from Terminal E to D but I underestimated by a long shot.

Walking out of the Gate 10/12 area I flew into I found signs directing me up two flights of stairs, to floor 4, where I took the AirTram from Location 1 to Location 3. At Location 3 I had the options to either take an elevator or stairs down from Floor 5 (yes, we apparently went up a floor without any change in elevation) to Floor 2. I elected for the elevator.

View of American Airlines planes from the first AirTram

Following the elevator ride down to Floor 2 I needed to walk through about 10 hallways until I found myself at another set of stairs which lead to a second AirTram. This tram went between Terminals D and E.

Wide view of Terminal D from the D/E tram

Arriving in Terminal D I no longer had to navigate stairs and elevators…until I got to my gate. Several more hallways later I arrived at my gate to find the entire flight had boarded and I had another escalator to descend before walking onto my plane.

I was glad to see some people still in the walkway into the airplane, but that also meant I would have a long wait to get to my seat towards the back of the plane.

Flying Away From Miami

This flight was mostly full but with enough seats still open that Flight Attendants were informing people in the middle and window seats there were plenty of aisle seats to move to later in the 6 hour flight if they liked to. I had an aisle seat, so I did not need to move. The charging outlet at my seat was not working so I ended up moving to one of the last rows in the back.

I had not been drinking much water the last day on the East Coast so I wanted to refill on water, however the Flight Attendants (FA) were not so happy about it. About 4 hours into the flight I had drank 2 full bottles of water, which happened to be about 1 L each. When I asked for another cup of water an FA came back and told me “You’ve drank two whole bottles already. We’re going to give you another bottle but this will be your last.”

Final Thoughts

With a rough start getting to the East Coast and DC, with some misadventures during my stay, I still enjoyed visiting my brother and family before starting back at school. With about 40,000 AAdvantage points left from the sign-up bonus, I certainly will not let them expire, and I want to make sure my departure from SFO was only a fluke in an otherwise functional airline (all the other segments of my trip went by without much trouble).

DoubleTree by Hilton Hotel Alana – Waikiki Beach

Earlier this year, American Express was offering record high sign-up bonus offers for a variety of their cards, most notably to me were the Hilton HHonors cards. The fee-free Hilton HHonors card was offered with 75,000 HHonors points and the Hilton Surpass had a bonus of 100,000 HHonors points. Citi also had an offer for their fee-free Hilton HHonors Visa Signature card for 75,000 HHonors points. I decided to go with the free versions of these cards to keep long-term without having to pay an annual fee.

American Express and Citi HHonors credit cards

After meeting the minimum spend and buying some groceries I had 160,000 HHonors points at my disposal. United sent out an email for discounted flights to Hawaii around the time I finished the minimum spend so I decided I would go to Hawaii for the first time.

I looked for Hilton properties and the DoubleTree – Waikiki Beach was 40,000 points per night. The Citi HHonors Visa gave complimentary HHonors Silver so I received the 5th night of a reward stay free, making the DoubleTree 160,000 points for a 4 night or 5 night stay.  I elected for the longer stay because it increased the value of the points from about .78 up to .97 cents/point (cpp).

Upon arriving at the DoubleTree I was met by a tiered entrance:  first the driveway for cars, then the valet desk (no personal parking) with escalators leading to the lobby floor, then the front desk. I had already checked in because I was emailed with an option to check in and select a room a day before arriving.

The person at the front desk welcomed me to the hotel, the city, island and state, showed me a ground map of the area (TheBus map) and highlighted Waikiki beach. I got a welcome bag of 2 water bottles and a cookie (yummy) because of my status (Silver and up get an extra complimentary water bottle) and then made my way up to my room. I think it was peculiar that numbered floors started at Floor 5 even though the floors went LL, L, M, 5…

Welcome gift of 2 water bottles and a chocolate chip cookie

I was surprised by how big my room was (double queen) and quickly snapped photos then went out to my lanai to see the view. Once I got situated I explored the hotel and found the ceilings to be rather low, mostly about 6.5 feet with some sections being a little taller (tall people beware of sprinkler heads).

2 queen beds for a solo traveler
Panoramic view from my lanai

This property offered a digital key so I was able to use my phone (with Bluetooth enabled) to unlock my room door and access the fitness center (thanks to being at least Silver) and pool areas without needing my room card. Having a smartwatch meant Bluetooth was always enabled on my phone so I never had to worry about remembering to enable it when trying to open my room door.

I used my Platinum status with IHG (from the IHG Rewards Club credit card) to be matched to Hilton HHonors Diamond, which offered me free continental breakfast or a $9 personalized omelet (with access to the continental still). Despite being a continental breakfast, the selection was vast with several meats and cheeses, different dry cereals, oatmeal, various juices, coffee and tea, and some other food items. The omelet normally costs $25 but it really is only worth the $9 it cost me when I tried the omelet on my last morning in Hawaii.

As an incentive for guests to help the hotel be more ecologically friendly, DoubleTree allowestheir occupants to hang a placard from their doorknob to refuse room service. In return, guests receive a $10 voucher to the hotel restaurant & bar during dinner hours. I received a total of 3 of these vouchers for $30 total because there was a maximum of 3 consecutive nights and not available on day of departure.  The vouchers reduced my battered fish and french fry dinner with a cookie sundae to only $5 one night, and then a cookie sundae for free another night. I wanted to try the chocolate torte but both days they were out.

Battered fish and french fry meal
Cookie sundae

The hotel was booked to capacity each night I stayed so asking for a late a checkout was a reach but I was allowed to checkout at 1PM (12 noon is normal). This allowed me to have a more relaxed morning. Additionally, the valet desk offering free luggage storage after checking out meant I did not have to haul my suitcase and backpack around with me during my final afternoon. I was being picked up by SpeediShuttle around 6 PM so I did not want to sit around the hotel valet desk for 5 hours after check out.

To get an idea of the value of my Diamond (and comparing Gold) status from being matched I looked at comparable pricing for the same type of room at the same DoubleTree but for a 5 night stay this month (off-season for this hotel is Jan-June, Sept-Nov). I found the following rates:

  • Best Available Rate: $229/night ($217 for HHonors discount)
  • Bed and Breakfast: $242/night
  • Breakfast and WiFi: $252/night
  • Family Fun Package: $249/night (same as Breakfast and WiFi but $3 cheaper for the different name)

These prices put the value of Gold and Diamond at $13-25/night because of the complimentary continental breakfast. Diamond has an added $7-10/night for free premium WiFi compared to standard WiFi for the other HHonors levels. Since this DoubleTree has a 13.96% fee, these values increase to roughly $15/night and $25/night.

Overall, booking a Best Available Rate (with the HHonors discount) for the 5 night stay would have cost about $1550 making my redemption of HHonors points valued at 0.97 cents/point (cpp).  If you look at other bloggers and travel experts they’ll value HHonors points at around 0.5 cpp at most, so I nearly doubled the value of HHonors points with a stay in Hawaii.


You can apply for the Hilton HHonors credit card from American Express and earn 50,000 HHonors points after spending $750 in the first 3 months of owning the card if you apply from this link.