Mac Envy?

Yesterday I dropped by a Costco. Yeah, that's not blog-worthy news normally, but this is a newly opened store in the area that's been in the news for having some wild things for sale, like $3,699 bottles of wine. Well, I didn't see the super rare wine (honestly I didn't even look as I'm not in the market to pay that much) but I did see something on sale that turned my head: MacBook Air models on sale. Specifically, the 15" MacBook Air.

I bought a 13.6" Air in August 2022. It's been an awesome computer. All the things I liked about it after 10 days of using it are still true— and more. But looking at the 15" model side by side on the table gave me size envy. I've never felt my 13.6" Air is too small.... elegantly compact, absolutely; but not small. Except side-by-side with the larger model it looked absolutely tiny. I had to touch it with both hands to be sure. "Is this tiny thing really what I use every day?" I asked myself. 😨

Even more shocking was that the 15" model was cheaper. Costco had a sale on it. Between a regular retail price $50 lower than what Apple is selling them for on their website right now and a $150 sale discount, the closest spec to what I'd buy if I were buying today has the 15" pricing out $50 cheaper than the 13.6". 😳

Well, look, I'm not going to replace my computer right now. It's not even 1.5 years old yet. I stretched my previous one 6.5 years and I'm expecting to get at least 4 years of good use out of this one. If anything it's intriguing to know that when the time does come to replace it I may be able to go slightly larger without going to a significantly higher price point.

One IHG Card Checks Out, One Stays On

For the past year I've owned not one but two credit cards affiliated with Intercontinental Hotels Group (IHG), the parent company of brands like Holiday Inn and Crowne Plaza. One of these cards is an oldie-but-goodie. Late last year was my 5th anniversary with it. Now I've held it 6 years. The other card recently hit its first anniversary. As I do with each of my cards every year, it's time to check the score— both to see how I did from playing the credit card game over the past 12 months as well as to decide if the cards are worth keeping another 12 months.

Doin' Business with Chase IHG

I'll start with the newer of my two cards, the IHG Rewards Premier Business card from Chase. I opened this account with a bonus offer of 140,000 points after $3,000 spend in 3 months. It took me only 2 months to cinch the offer. I went on to charge about $7,700 over the course of 12 months. I earned about 180,000 points total.

I value IHG points at 0.7 cents per point. That may be optimistic nowadays; I might need to revise my value down to 0.6. But going with the 0.7 value, the points I earned are worth $1,260. That's quite a haul! But that's the gross value. I need to make a few subtractions for the net value.

The first subtraction is the $99 annual fee. That brings the net to $1,161. Then there's the opportunity cost of using this card versus a 2% cashback, no-fee card. That's another $154 (2% of $7,700). But I can also add back $5 in miscellaneous cash bonuses this card paid. That brings the net to $1,012.

Oops, I almost forgot, there's another plus. Every year at renewal this card provides a free-night certificate. Lately I've been able to make these certs worth an average of $200. The cert is nominally for renewing my card account (and paying the annual fee) but it's already sitting in my account, and Chase rarely if ever does claw-backs when people cancel. That brings the win on this card to over $1,200.

Over $1,200... that's quite a haul!

Earning a big haul in the first 12 months doesn't necessarily make the card worth keeping, though. Whether to keep it is a question of what it'll be worth over the next 12 months. With that juicy 140,000 point bonus in the rear view mirror all I've got going forward are the basic points rates on spend. The bonus categories like dining and gas do earn better than 2% but not enough to outpace that $99 annual fee due upfront. The cert I'd earn in another 12 months would swing me into the black— the cert alone is worth about double the annual fee— but it's not enough of a win to be worth pursuing. I've closed the account.

A Low-Key Card Stays On

While I charged several thousand dollars to the IHG Business Premier card this past year, my other IHG card has seen little action. I've cycled just a bit over $100 of charges through it in 12 months. Most months my statement balance was zero. Despite that I earned a surprising 16,500 points from this card.

Where did all those points come from? Most were from one of the card's fringe benefits, a 10% rebate on points redeemed. That's half the reason I've keep this card, with its $49 annual fee, for now 6 years— way longer than I've kept any other airline/hotel points card.

The other half of the reason I keep this card is that it also provides a free-night certificate every year. Earlier this year I made that award worth about $200 in avoided cost.

Combining these factors together— 16,500 points worth $115 at the 0.7 rate, minus $49 for the annual fee, minus $22 for the 2% opportunity cost, plus $200 for the free night cert, and plus $2 for a random little bonus— yields a net of $246.

A net of nearly $250 on a card in its out-years is great. I'm keeping this little card for another year.

They Don't Make 'Em Like This Anymore

After I closed the card that earned over $1,200 you might wonder why I'm keeping the card that netted only $246. It's two things.

First, and I'm saying this again, the keep-or-close decision is always about the value over the next 12 months, not the win from the past year. This card returns a handsome little value even when I don't actively use it for a year. It's a low-key winner.

Second, it's a question of "What other card can I open if I close this one?" Having closed the Business Premier card I plan to open a personal premier card with all the same benefits— and another 140k bonus offer! This basic Rewards Club card, though, isn't offered anymore. It's a legacy product. Once I close it I can't get another like it. At some point the bank may forcibly close it on me— or more likely convert it to a card with fewer benefits and a higher annual fee— but until then this low-key winner stays on.