Should you MS on your AMEX Hilton Surpass or a 3% cash back card

TL;DR – You are almost ALWAYS better off using your 3% card instead of Surpass at grocery stores.

Introduction

Since I’ve booked my flights to the Seychelles later this year and now needing a lot of Hilton points for the hotels there, I wound up getting an AMEX Hilton Surpass card for 6X at groceries.  I’ve talked about why you shouldn’t MS on the AMEX Surpass in the past, but now that AGC, Buxx loads, and Serve are gone, I went ahead and updated the Hilton Honors MS calculator.

 

Link to spreadsheet

https://goo.gl/ehIzCr.  You may want to bookmark the link or this page for future reference.

 

Let’s look at the Hilton Seychelles

hhseychelles

Let’s just assume 1 night to make things easier, and we’ll talk about the 5th night free option later.  So this Hilton will cost $330 including taxes or 70,000 HH per night.  If I were to use the Surpass at grocery stores and earn 6X HH per dollar, I’d need to charge $11,667 to get me the 70,000 HH points.  Let’s see this cost:

hhsey1

Seems easy enough.  It would cost me $145 to generate 70K points to get the free night stay worth $333.  This sounds like a SLAM DUNK!

 

What if you had used a 3% cashback card instead?

Let’s say you had the Discover Miles card or another 3% cashback card and you used that card instead at the grocery store instead of your Surpass card.  DEM Flyers had a great post on it.  How does that math work out?

hhsey2

Apologies for the readability of that image, but if you click through it, you’ll get a clearer view.  I’ll explain further though.  Let’s say instead of charging $11,667 on your Surpass card, you’ll charge it on a 3% cb card instead.  This would net you a rebate of $350.  You would then take that $350 and pay the room rate of $333, leaving you with $17 left to spend on the minibar.  And by paying cash, you’ll qualify for a portal rebate of 6% currently.  You’ll also then amass 11.5K of HH points if you paid with your Surpass card and were Diamond, which is worth around $55 in rebates.  To sum it up, you’ll still pay the $145 in fees but now you save $17 on the cb card, $20 in portal rebates, and $55 worth of points for a total cost of $54 for the stay.

 

What if you only have a 2% cb card?

If you only have a 2% card, you’ll be paying $170 for the stay instead of $145.  I won’t show you a picture; just trust me.  That means if you don’t have a 3% card, then the Surpass card should be better than a 2% card.  Feel free to stop reading.  Or go get you a 3% cb card.

 

How about 5th Night Free?

hhsey3

If I stay 5 nights at the hotel, which I plan on doing, it would cost me either $1,665 in cash or instead of 350K points, only 280K points.  For me to MS 280K points using Surpass, it would cost me $581 for the stay.  If I used a 3% cb card, due to the portal rebate and HH points earned for paying in cash, it would only cost me $404 for the stay.  Yes, the 3% cb card beats the Surpass/5th night fee combo.

 

When to use the Surpass and when to use a 3% card?

Initially, my math showed that if you were getting 0.5c of value for a HH, then it’s better to use the Surpass instead of a 3% cb card.  However, that’s before I factored in the 1) portal rebate and 2) value of points earned by paying cash.  When you factor all of those in, then you’d need to get a whopping 0.7c of value per HH point, which is like finding a unicorn.  That means if that Seychelles hotel was $500+ a night or 70K points, then it makes sense to MS the points instead of using the 3% cb card.

 

Bandwidth issues

A friend brought this up – what if you don’t have the CL to run through $100K a month on your 3% card?  That’s a valid argument.  This post assumes you have the capacity on your 3% card and/or your Surpass card.  This is why it’s best to give yourself enough time to MS the points or cashback for your trip.  If you have capacity on both cards, pick the 3% card first before the Surpass, but if you’ve maxed out the 3% card’s capacity, pick the Surpass.

 

Yeah, but I get Diamond with the Surpass if I spend $40K

Yes, that’s true.  I’ve written a post on that already here although AGC is now gone.  I’m not going to re-do that post.  I’ll let you figure out for yourself if it’s worth it to get Diamond or not.  My only thought here is – an argument could be made that a Gold member paying a cash rate COULD have a higher chance of a room upgrade than a Diamond on a points stay.  I don’t think any blogger has done that analysis, but I think it would be great info.

 

So when should you MS on the Surpass?

Well there are occasions when you should MS on the Surpass.  Let’s say you wanted to use the 5th night free and you’re 40K points short, then by all means, MS on the Surpass.

 

So how should I accumulate HH points?

Well the easiest way would be with cc signup bonuses.  The 2nd way would be with actual stays.  You are getting at least 15X per $ on paid stays.  Then use the Surpass to ‘top-up’ your points.

 

If I’m MS’ing on the 3% card, should I even MS at grocery stores?

Great question.  The answer is not really.  If you have a Simon mall or you can liquidate drugstore gift cards, then your fees will be lower.

 

Yeah, but paying $333 in cash instead of using 70K points is painful

Hey, I’m 100% with you, but my answer to this is – GET OVER IT!  Here’s an idea – each time you get a cash rebate on your 3% card, put that money into a ‘travel’ fund and pay for your travels like that.  Think about it.  When you MS on a HH point, you are essentially putting it into a virtual bank.  Instead, MS on a cashback card and put it into a savings account instead.  And the best part – that fund won’t devalue over time if you don’t use it!

The question you have to ask yourself is – am I in this for the points or the cash?  Like most experienced people, I started this hobby for the points, but now I’ve switched to cashback.  And like most people, I just deposit that cash into my bank account and use it on whatever.  So that’s why it pains me to pay $333 from my bank account.  Now if I had a travel fund based on my cashback rebates, it wouldn’t be so painful to pay the $333 since I know that cash was a better alternative to amassing HH points.   I just have to ask myself (and you should too) – am I in this hobby for travel or spare spending money?  If it’s travel, then you SHOULD have a travel savings fund and not worry about paying the $333.  You can’t argue with math.

 

Conclusion

1. Accumulate HH points via cc signups or paid stays

2. Only MS on Surpass to top up your HH account

3. Get a 3% card if you don’t have one!

4. Start a travel fund to put your 3% cashback so you use it only on travel instead of Birkin bags

20 comments on “Should you MS on your AMEX Hilton Surpass or a 3% cash back card

  1. Ehh I don’t buy your argument. Most of the cheapest rates including this one that you’re using to compare are non-refundable rates. Points booking you can cancel almost anytime. A fairer comp would be the best refundable rate. At which point it’s not always a clear cut win for a 3% card. Definitely will always do better MS’ing points with 5th night free redemptions

    1. Well then book the award ahead of time. A week before, when your plans are locked, change it to a cash rate. Hilton points would have to be worth .5c to make it even with a 3% cb card. That’s not to mention the points you earn for paying in cash. Good luck finding high end properties that’ll get you .5c. Plus with 4th night free with Prestige, it rivals your 5th night free award.

  2. what about using the prestige for the hotel cash payment and getting the free night? Of course the rate may be different, and you would not get the portal cashback but you would get 3xTYP (3.9% or 4.8% on flights) in addition to the HHpoints for the stay.

    1. Randall, that’s a solid option as well. Just depends on what you value more – TYP or the portal cb + card points.

  3. On your spreadsheet, the calculation of HHonors points earned by paying the cash price of the hotel doesn’t make sense to me. Why are you multiplying the USD cost by 15?

      1. Ah thanks so much, that explains it! Now I did a quick search and the Hilton website says 10 points…is that a recent change that you haven’t changed in your spreadsheet or is there more to it?

        1. POINTS & POINTS (HHonors Base Points + HHonors Bonus Points)

          For the fastest way to a free night with Hilton HHonors™, choose this earning style. Earn 10 HHonors Base Points plus 5 Bonus Points per eligible US dollar spent on your room. (For stays at Home2 Suites by Hilton™ hotels, earn 5 HHonors Base Points plus 2.5 Bonus Points per eligible US dollar spent on your room.)

        1. Going to get it for the wife and go back and forth like that. This is assuming they’ll give me 3% on the 2nd go-round. I don’t think anyone has tried it yet, but I’ll give it a shot.

          1. Picking one up for your wife is a good idea, but I wouldn’t count on the double cb promo being available for new cards beyond this June (its 1-year anniversary) I’ve also been hunting for uncapped >2% grocery cards and its slim pickings.

  4. Great think piece.

    My family (with 2 toddlers) vacations twice a year at the Hilton Hawaiian Village from Seattle. The points redemption makes a little more sense for us because it also waived the $30 nightly resort fee. When you factor that into the equation the surpass comes out ahead.

    That said, I’ll MS on the Surpass just enough to get Diamond status and that fits in with my bandwidth capacity with my 5x cards.

    If you want to MS Hilton points, the best way is to use the easily churnable BofA Virgin Atlantic card. $12k spend nets you 135,000 Hilton points, or about double the value of $12k with a 3%.

    It counts as a credit pull though, unless you were already getting another Alaska Visa anyway. There’s also the $90 annual fee, but I’ve sucessfully earned and burned all the miles before it came due several times in the past.

    1. Josh, I ran this through my calculator. I picked a random date in July and it was $402 all in with resort fees for 60K points. The 3% cashback wins out for 3 nights or lower. At 4 nights, AXON wins and points is better. At 5 nights, 5th night free is betters, so yes, in your case, if you’re spending 4+ nights there, it makes sense to use the points.

      I used to churn the VA card in the past, but haven’t done so lately. It’s not fair to compare a signup bonus vs MS’ing though. I had forgotten about it though, so thanks for the reminder. I’ll have to get that card for my wife to help me rack up the HH points for the Seychelles.

  5. Interesting analysis. Just wondering how you go about
    liquidating $47k money orders without getting questioned? I haven’t tried this yet.

  6. I struggle with these exercises all the time. Travel funds would help with the pain of paying cash. But then for me the other struggle is that mentally I seem to value my time much more concerning CB where if I MS’ed for CB I might just not even bother making the effort.

    btw are you still paying citi w/debits via the pajama pts method

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