It seems one of the most frequent reactions I get from advising people try this out, other than fearing the great gods of credit scoring, is that this little hobby takes too much time and effort.  So I will dispel that with a beginner calculation here of whether this hobby is worth pursuing.  I may later make a more advanced version of this calculation, for someone like myself who gets large sign up bonuses far less frequently, simply because I have exhausted all of the options available.  So let’s calculate this out for a newbie.

Based on the UA/AA engine, a round trip, saver availability, refundable, ticket from American Airlines to Europe right now costs 60,000 points for economy, and 100,000 points for business class.  Assume a start from 0 points, and looking at current card offers and using those with annual fees waived the first year only, this is an obtainable amount of points with only two cards.

For the sake of calculating this, I am going to assume the reader has already read some of the other articles from the Beginner’s Guide and/or in the Advice or Credit Cards categories.

The first card is the Platinum Select AAdvantage card.  Currently 50,000 AA points after $3,000 spend after 3 months.  The second is the SPG card – business or personal.  25,000 after $5,000 in spend within 6 months.

Spend the money as per the other articles suggest – on your everyday items, bills, and so on, including rent or mortgage as noted.  Someone experienced could literally take care of the spend requirement in as little as one day, but we’ll be more reasonable and say it is done over multiple trips and errands and is done on real world spending, leveraging primarily the Bluebird account to pay for a $1000/mo mortgage.  A potential amount of time and effort could then be summed up as follows:

Using the above, we would have paid online bills but with activation fees, paid $9.90 x 6 = $59.40 above and beyond what normally would have been paid for bills.  Assuming this took 6 visits to CVS to buy a pair of gift cards at half an hour each (which is really a stop on the way by and a 5 minute transaction) and assuming it took another 30 minutes for each load to Bluebird at Walmart (another stop by and 10 minute transaction, at most) then we’ve met minimum spending requirements of $8000, spending 6 hours of time and $59.40 of cash to do it.  What did we get?  53,000 AA miles and 30,000 SPG points, all in with bonus + 1 point per $1 spent.

SPG points transfer 1:1 to AA; but at 20k increments, a 25% bonus is given.  Transferring 20,000 to AA and receiving a 5,000 bonus, we end up with 88,000 AA miles and 10,000 SPG points.  What kind of saver ticket can we book to Europe with this?  My search is done today, 3/8/2014.

I’m going to be lazy and not look at all for the best deal, which is not going to be Europe 4 months away during a prime travel season anyway.  I don’t need to get the best deal possible to prove this point since it will be proved out regardless.  I’m merely going to look for going to Berlin from Chicago O’Hare.  My lazy look with a stop each way itinerary and routing through England (more fees) is 60,000 points + $159 + 46 hours travel time (lazy, like I said.)  Using ITA Matrix (which you can pretend is a super searcher) and simply looking for cheapest possible similar, I found a Turkish Airlines flight with a fare I couldn’t actually reproduce on TA’s site.  Next best that I actually could was SAS (Scandinavian) also with 1-stops but shorter flight/airport time.  Cost of $1249.69 and 26 hours.

So, our economy ticket vs. the purchased ticket is ($1249.69 – 159 – 59.40) / (6 + 46 – 26) = $39.67/hr.  So in this lazy case, our “work” to go to Europe in 4 months, with a lazy search, during a peak travel time, with little effort put into finding the optimal points route, was worth $39.67/hr.  I’ve worked many hours in my life for much less.  Let’s note some other major things here:

1. The points flight is refundable.  In all likelihood this SAS trip will cost an extra $300 to $500 to be.
2. Via an AA trick, another one-way to anywhere in the North American region (defined down to even some of Central America) can be done for free.

An illustration of the second trick is noted below – a one-way for FREE that inherits the class of service of the prior leg.

There was lots of availability for business saaver class on the way back from Berlin – and note we have 88,000 miles.  Hey, we have 10,000 SPG too… no bonus but lets convert them over.  Now 98,000 AA miles.  Let’s assume we run another $2k through the card – ding ding, we’re at 100,000 miles; time to get down to bidness.  Not only is the ticket refundable, but now 2 checked bags are included.  Plus the seats look like this, and a 5-course meal is provided, and as much booze as you want.

100,000 points, $119.50 and 29 hours in flight/airports for business.  The best I could do was United, $5,754.90 and 27 hours.

What are we at now?  ($5754.90 – 119.50 – 59.40 – 9.90 – 9.90) / (6 + 29 – 27) = $694.53/hr

For fun let’s add a one-way business to Honolulu ($800); now we’re at $794.53/hr.

So is this worth doing?