Experiment: Reward & Benefit Comparison (Google)

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Spunky
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Experiment: Reward & Benefit Comparison (Google)

Postby Spunky » Wed Apr 02, 2014 10:07 am

When I jumped into learning the credit card game, I built a little comparative analysis tool in a Google Spreadsheet. I'm surprised there aren't more readily available (and transparent) tools around to do this kind of thing. I thought I'd share my experiment.

This is actually openly editable, I invite people to tweak my reward formulas, update signup bonuses or fees, and even add additional products for comparison:

Link to product comparison spreadsheet

Sheet 1 (Rewards)

  1. Granular breakdown of rewards by spend type (emphasis added to bonus categories), annual bonuses with conditional logic, and signup bonuses.
  2. Projected earned rewards earned each year, annual fees, and any secondary benefits with real cash value (not figuring insurances).
  3. Calculation of both initial and subsequent year returns, factoring annual fees.
  4. A couple interesting metrics include the cost/return "efficiency" as an effective rate of return, and the "value retention" or how well the product performs after the first year
  5. Long term totals given a prospective number of years

Sheet 2 (Benefits)

This is an attempt to capture in one place a comparison of non-rewards perks and benefits, including specific insurance limits and timeframes, travel programs, etc. I found it interesting to see where some issuers have differentiators, such as the $1M travel accident insurance on the USAA, included primary rental car coverage on United Presidential Plus, and a 5 year maximum to extended warranties through Amex. It is also a decent reminder of how good the Platinum still holds up in features over its alternatives.

Terms on paper aside, these would be tremendously more valuable to consumers with anecdotal experiences with the respective underwriters and travel programs. How does World Elite MasterCard really hold up to Amex?

Sheet 3 (Spend)

You can play with actual spend numbers here. These are just dummy figures. I may not have categories down completely but it's decently broken out. I've also set up fields to adjust the valuation on different program points.

Have fun.
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djrez4
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Postby djrez4 » Wed Apr 02, 2014 11:48 am

Pretty neat stuff. Did you tie the spend figures on Sheet 3 to the points estimates on Sheet 1?

I think your conservative points values may be a bit optimistic. It may be better to set the conservative figures at the cash value of the points and add a category for nominal point value. 2 cents per point for UR or MR is not conservative at all.
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daniel2304
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Postby daniel2304 » Wed Apr 02, 2014 12:02 pm

This is AMAZINGGGGGGGGGGGG!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
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linuxmachine
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Postby linuxmachine » Wed Apr 02, 2014 12:37 pm

djrez4 wrote:Pretty neat stuff. Did you tie the spend figures on Sheet 3 to the points estimates on Sheet 1?

I think your conservative points values may be a bit optimistic. It may be better to set the conservative figures at the cash value of the points and add a category for nominal point value. 2 cents per point for UR or MR is not conservative at all.


yea... point valuation is a tricky thing because people use them in different ways. MR is very cost inefficient if you don't fly, and or even if you fly off peak. But if you fly first class international at peak, they can be worth even up to 10 cents per point. There is no baseline 'conservative' value of a point that applies to everyone, but you could certainly categorize different demographics, and they can have a general range of value for a given point. To create this kind of spreadsheet/app, though, you need to be level 10 black belt master in converting points to miles/rewards. And this doesn't include all the things you can buy with points that are not travel related. :P

Spunky
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Postby Spunky » Wed Apr 02, 2014 2:26 pm

djrez4 wrote:Pretty neat stuff. Did you tie the spend figures on Sheet 3 to the points estimates on Sheet 1?

I think your conservative points values may be a bit optimistic. It may be better to set the conservative figures at the cash value of the points and add a category for nominal point value. 2 cents per point for UR or MR is not conservative at all.


Yep, all the point and cash rewards reference Sheet 3. You should be able to open two instances of the spreadsheet, one to the "Spend" sheet, and see things update.

Good point about the valuation, those two were pretty arbitrary here--I'd plugged in $.02 as my baseline because in my research I was strictly looking at economy cross-country and international airfare, which actually has been more like $.03-.04 for my trips.You'd have to put in your own figures based on your intentions. If you're not a traveler and want to compare cash back only, or you don't really have a specific strategy, you'd need to consider a much wider spread.

I just realized after posting that this might be more relevant in the general Rewards section... anyway to move it?
MB Amex Platinum | Amex Premier Gold | Amex Everyday Preferred 25k | Citi Executive 22.5k | Barclay Arrival 12.5k | USAA Amex 10.5k | WF Platinum Visa 5k | Chase Visa | GECRB Visa

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