You heard the news about the guy that sued El Al…

Our readers may recall how frustrated many consumers were when El Al suddenly and without notice announced they were no longer honoring HAS points from HAS credit card holders even though thousands of consumers had spent years amassing HAS points for the sole purpose of earning tickets to fly to Israel on their airline.

We had pointed to this as but just one example of why holding onto airline miles and credit card points are a bad idea and bad investment as the airlines and credit card companies constantly were devaluing miles and points by increasing how many miles and points were required for airline tickets. However, no one was really sure what exactly had occurred between El Al and HAS as to why they were discounting the relationship. That was until recently however…

Roughly two weeks ago, an article appeared in Arutz Sheva announcing that a legal suit had been filed by HAS founder HAS founder Zev Dobuler stating that El Al’s “brutal behavior intentionally caused a successful business to collapse, the loss of millions of dollars of investment capital, and the loss of tens of millions of dollars of potential future revenue.” Dobuler’s claim is that once El Al saw how successful a credit card earning El Al tickets could be, it decided to create its own credit card and cancelled its arrangement with HAS, knowing that doing so would result in the collapse of the HAS credit card.  In it’s initial response, El Al claims that HAS owed El Al $2 million and it was for that reason they discontinued the relationship and that alone.

What makes this lawsuit particularly notable is that it is being backed by First Libra Fund, an investment company that finances legal claims. And although the subject of whether investment funds should be allowed to finance legal proceedings is still very much in question it appears that both sides are gearing up for battle and that an amicable solution between parties is unlikely. We will be monitoring the situation closely and will be sure to keep our friends and clients updated.

For consumers wishing to take advantage of some great credit card travel offers, we suggest checking out all the new Citi credit cards and offers as Citi credit cards are the new ‘IT’ cards for free vacations, flights and hotel stays.

 

Why Holding on to your Airline Miles and Credit Card Points is a Bad Idea and Bad Investment

In a previous newsletter we highlighted 5 Things NOT TO DO with your Credit Card Miles & Points and included the aspect of not holding on to your credit card miles for too long. Before we explain why you shouldn’t do this, it’s important to understand the relationship between airline miles and credit card points. Equally important is understanding the rewards industry is becoming increasingly more competitive, bringing with it new opportunities to make money and travel the world (whatever your preference for earning miles and points) but also bringing with it new challenges as well.

We will first explain the relationship between the credit card points like American Express, and Airline Miles like American Airlines Advantage Miles, and the association between the two.

The airlines offer frequent flyers the opportunity to earn miles based on the number of miles flown or the price of the airline ticket. They also sell these miles to partners like credit card companies, e-commerce sites, florists and rental car companies among others. Credit card companies in turn, buy these miles from the airlines so that they can incentivize the public to use their specific credit card. And as we know, credit card companies make money by charging vendors a percentage of every sale. Why this is relevant is understanding that the airlines who sell miles are also the ones who control how the public uses their miles (and in turn how many credit card points are needed for tickets), which makes the rewards industry a very profitable enterprise for them.

Imagine if you were in the manufacturing business and your product was manufacturing shoes, and not only do you manufacture shoes and sell them to retail shoe vendors (in our example airlines selling miles to the credit card companies) and individuals (in our example frequent flyers) but as part of your terms and conditions when selling your shoes, you leave yourself the ability to determine what and when they could be used for. And that if later down the road you decide you hadn’t made enough money when you sold the shoes originally, you can change the price of the shoes so that it affects people retroactively, (in our case, changing how many miles are required for a certain tickets, after people have already accrued those miles).

If this isn’t a sweet business model, we don’t know what is.

In fact, a study by IdeaWorks, a company that analyzes the airline industry, estimates that more than %55 of airlines revenues results from the sale of frequent flyer miles. So the airlines make the bulk of their money just from selling the miles and make even more money by restricting how they can be used, including limiting how many seats can be purchased with miles, leaving themselves blackout dates for using miles, and charging fees for mileage tickets. Additionally, what this means for the consumer is that since it’s in the best interest for the airlines to control and limit the value value frequent flyer holders receive when they redeem their airline miles, the redemption process the airlines make you go through to redeem miles for travel is quite difficult for the average consumer, thereby eliminating a large percentage of people who would otherwise use their miles for flights.

Let’s take some examples, including one that hits close to home.

El Al Airlines had two great partnerships that the Jewish consumers enjoyed including their partnership with the HAS Advantage credit card, so that cardholders could earn points for tickets redeemable on El Al. Additionally, customers who wished to fly ELAL could do so using American Airlines miles. In October of last year, the partnership with AA ended suddenly. And due to a dispute with HAS, customers who earned HAS points for the sole purpose of transferring them into flights on ELAL were suddenly left unable to do so. That dispute is ongoing but in the interim, El Al increased the number of miles and points needed for tickets, in some cases requiring %30 more points to book tickets from NY and Toronto to Tel Aviv (besides for the $350 in fuel charges they charge as well).

Another example highlighting consumer frustration is British Airways (BA) partnership with other airlines, which offered flyers the option to travel in the domestic US using BA miles, and which required far less miles than other airlines. And BA offered a credit card with a bonus promotion of 50,000 miles which many people signed up for.

But early this year, BA implemented drastic changes to the new British Airways redemption program, increasing mileage ticket prices by as much as 150% on flights from New York to Los Angeles and London, with tickets from Miami and Berlin increasing significantly as well.

And if you think all of the above is unfair and unethical and perhaps illegal, a FL congressman agrees with you, and has placed the airlines habit of devaluing miles under investigation.

This leads us to our final point, eloquently summarized by one savvy travel blogger. Whichever kind of card you have, “redeem early and redeem often…at least once a year.” “Minimize the amount of miles you have sitting around.”

Because holding on to your airline miles and credit card points are a bad idea and bad investment!

Eli Schreiber is a partner and director of marketing at Get PEYD and PEYD Travel llc

Why Citi Credit Cards are the New ‘IT’ Cards for Free Vacations, Flights and Hotel Stays

It’s expensive to live nowadays and if you are like us, chances are you spending anywhere from one to three thousand dollars per month on your children’s tuition, grocery bills, gas and insurance, rent, utilities and other miscellaneous expenses.

What if you could take that everyday spending and turn it into free hotels and vacations and extra cash? Wouldn’t it make the burden easier? Too good to be true you say, well, there are literally tens of thousands of people doing just that, and they are doing so by taking advantage of the numerous credit card bonus offers available when you sign up for new credit cards (otherwise known as credit card churning) and then turn those extra bonus rewards into cash or free vacations.

And by now, if you follow our blog and social media accounts, you are probably aware of all this.

A brief synopsis for newcomers: Credit card churning is the ‘art’ of applying for and receiving multiple credit card approvals for their hefty sign-up bonuses for the purpose of earning miles and points towards upcoming personal, business or family vacations and trips.

Recently however, both American Express and Chase have restricted how many credit cards you can sign up for at any given period which has reduced the opportunity to earn free miles and points and subsequently reduced the value of both of their rewards programs.

But there is good news for consumers as CitiBank has recently entered the rewards game partnering with a number of airlines and hotel chains so that Citi Thank You Points are now transferable into eleven airlines and hotel programs including the Hilton, Virgin America and Virgin Atlantic. And although CitiBank restricts how many credit cards consumers can apply for over a specific time period (You can only apply for one Citi personal card every 8 days, you can apply for no more than two Citi personal cards every 65 days and you can apply for one Citi business card every 95 days) Citi does not have a limit on the amount of credit cards you can hold with them. Unlike American Express and Chase, you can have as many Citi credit cards as they’ll approve you for, thus making Citi ThankYou Points and other CitiBank airline rewards cards the new IT cards for vacation seekers or those who want to earn some extra pocket cash.

ThankYou Rewards Credit Card ? Citi® Premier Card

Two great Citi offers currently available are the Citi ThankYou Premier Card, where you can earn 50,000 ThankYou Points after making $3,000 in purchases within the first 3 months of account opening and the Citi® / AAdvantage® Platinum Select® MasterCard® where you can earn 50,000 American Airlines bonus miles* after making $3,000 in purchases within the first 3 months of account opening. *bonus offer not available if you’ve had the same card (open or closed) within the past 18 months.

Citi / AAdvantage Platinum Select Card

For a full list of credit card offers and additional information about how you can use your turn everyday spending into extra cash, free airfare, hotels and vacations please visit. WWW.GETPEYD.COM

Small Business Saturday is Back! For Some…..

AMEX Small Business Saturday Credits Are Back (for Some)!

It was quite disappointing when we learned that American Express was discontinuing their statement credit program for their Small Business Saturday promotion. However, we just learned that for a select group of AMEX Business Card holders, AMEX is running a similar promotion, offering either a one-time $20 statement credit for spending $100 on Small Business Saturday or a $10 credit when spending $10 on select cards. This is a targeted offer, and you need to  check your American Express account to determine if you are eligible.

We would love to hear how many of our clients and friends received this targeted offer. Let us know if you are one of the lucky few by commenting on our blog, Facebook Page or Twitter account!

The details:

Shop Small in November
Get a one-time $10 statement credit by using your enrolled Card to make a single purchase of $10 or more in-store at a qualifying small business on the Shop Small Map by 11/28/2015.
Use Your Business Card to Shop Small – Spend $100 or more, get $20 back – Expires: 11/28/2015
Terms & Conditions
Enrollment is limited. Valid in-store only. Valid at any qualifying small business location that appears on the Shop Small® Map, available at shopsmallnow.americanexpress.com. Offer is non-transferable.  Limit 1 statement credit per American Express® Card across all American Express offer channels. Must add offer to Card and use same Card to make the qualifying purchase. Statement credit will appear on your billing statement within 90 days after 11/28/2015.

In the past, American Express had offered statement credits to everyone with an AMEX card when they made purchases at local stores on Small Business Saturday.  But they’re NOT offering the credits this year.

IT’S YOUR DAY, MAKE IT SPECIAL

Make the day eventful, from hosting an in-store event to decorating your shop on the day. Get started by applying below for free marketing materials that will help you get the most out of your Small Business Saturday. Be sure you apply by Nov 16.

1. PLAN EARLY

Take advantage of free Event Guides and other
marketing materials to help you make the most of
your Small Business Saturday.

Plan Early
Build Buzz Before the Day

2. BUILD BUZZ BEFORE THE DAY

Download social and digital materials to
help drive awareness for your event and
bring customers through your door.

3. MAKE YOUR SHOP IRRESISTIBLE

Plan an in-store event and order Shop Small
Merchandise to help attract more customers on
the day.

Make your Shop Irresistible