Berlin: First Movements

First Post in Berlin Series

First things first. When you get out of a train and enter the main station area, do not, I repeat Do Not sign any kind of petition that is offered to you. I know it talks about helping the disabled of Europe, but it's absolutely fake. The same piece of paper is used by theft rings around Europe. I have seen it in seven cities so far. Don't sign it, you're in serious risk pickpocketing if you do.

Now that that's clear you can start to navigate public transport to your place of residence while you're in Berlin. The first line of defense for navigating Berlin is the BVG App. iOS Android Google Maps works, but is not quite as good as BVG Fahrinfo.

A fair understanding of the Schnellbahnnetz is also a good to have. It's really rather simple as one can see.

2008 version of the Berlin rapid transit system. The 2016 one is available here.

This map includes SBahn (City light rail), UBahn (Subway), and RE/RB (Regional trains). The oblong oval shape is a continuous line known as the Ringbahn and is number S41 and S42. The rest of the lines snake through the city's various Bezirke (Boroughs) until their termini.

UBahn stations come in many forms. This one is on the U2.

The city is divided into three different fare zones: A, B, and C. Tickets are sold for AB, BC, or ABC. Single use extension tickets are also available to add one zone of validity to a ticket for two hours. Single tickets are valid for two hours within their fare zones for one direction of travel and cost EUR 2.70. The ticket must be validated at a machine in the UBahn station, on an SBahn platform, or in a a bus or tram. They are small yellow or red boxes with a slot that the ticket must be inserted into. It is then stamped with a date and station code.

Illuminated signs in English and German show when the next bus
for each route are coming at busy stops. This one is at S-Bahnhof Heerstraße.

Tickets valid for a longer period of time are also commonly used. There are day, two day, three day, four day, five day, six day, week, and monthly tickets. For tourists, a selection of tickets that include museum entrances and other benefits are available. For longer term visitors there for three weeks or more, month tickets make more fiscal sense. They are known as Monatskarten. One month of an unreduced VBB Umweltskarte which is valid on all BVG forms of transportation costs EUR 81.00 per month for zones AB. If you are a student studying in Berlin on a study abroad program and have a valid Berlin issued photo ID you may be able to use the Monatskarte Azubi/Schüler for EUR 57.00 for zones AB. If at a German university, there should also be an office to purchase semester-long tickets at for further reduced prices. An ID from BVG is required to use the reduced tickets.

Tickets are most commonly purchased from yellow machines at train stations, and single tickets are sold on buses. The machines take cash, EC cards (A unique German kind of charge card), and some debit cards. Many convenience stores also sell tickets. One way to save a small amount of money is to buy four tickets at the same time in a 4-Fahrten-Karte configuration. Each ticket must be individually validated when it is used.

Now you have everything you need to make it to your accommodations without problem.

Next: Berlin: The Basic Tour

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Mitfahren mit der Deutschen Bahn: The German Train System

Intercity train leaving Spandau

The German train network is one of the best in Europe. You can get to almost anywhere in Germany by train with enough time and determination. Deutsche Bahn (DB) is the largest passenger train company in Germany. It is a private company, but is wholly owned by the German government.

The rail network includes a wide variety of train types.

ICE

• Inter-City Express
• Fastest rail service in Germany
• Costs more than other train services for a full-flexible ticket
• Nicest cars by far

IC

• Intercity
• Second fastest service
• Usually connects major cities within Germany
• Has a more extensive network of stops than ICE

EC

• Eurocity
• Same speed as IC
• Connects major German cities to major foreign cities with fewer stops in-between than IC

CNL

• City Night Line
• Connects major cities that are distant
• Stops infrequently
• Runs overnight and aims to arrive early in the morning
• Sleeper cabins available, but rather pricey
• Common routes include Hamburg-Munich and Munich-Venice

IRE

• Inter-Regio-Express
• Connects regions to one another
• Usually has fewer stops than RE that run the same routes
• Route from Berlin to Hamburg on IRE is only EUR 29,99 roundtrip

RE

• Regio-Express
• Regional train
• Connects larger and mid-size cities within a region
• Stops less frequently than RB
• Each state usually has it's own RE system
• Berlin and Brandenburg have formed an alliance under the VBB to make it easier to travel around the Berlin-Brandenburg area

RB

• Regional Bahn
• The shortest distance mainline rail service
• Services small cities as well as medium and large
• Stops frequently
• Often takes a significant amount of time more than other regional trains to go the same route
• Before using it, one should check that an RE is not available that is faster

S-Bahn

• Stadtschnellbahn
• A subsidiary of Deutsche Bahn, usually in a partnership with a regional transit authority such as BVG (Regional transportation authority for Berlin)
• Light rail system in major cities that connects parts of the city to each other
• Berlin is known for its Ringbahn, a large circular SBahn route that runs continuously

U-Bahn

• Untergrundbahn, literally underground train
• Managed wholly by the regional transit authority, not DBahn
• Has the shortest distance between stops of any train system
• Stops are concentrated in the city center, and usually fan out from there
• Berlin has many transfer stations where UBahn lines overlap

ICE cabin.

Booking a Ticket

When booking a ticket, the train type, time before departure, ticket class, ticket flexibility, and ticket demand must all be taken into account. A full price ticket allows one to take any train running that particular route of the same class of train. For example if a full-fare ticket is booked from Frankfurt am Main to Stuttgart on an IC train and you miss the scheduled train, you must take another train that is also IC from Frankfurt to Stuttgart even if an ICE is leaving sooner on the same route.

Full-fare tickets are also rather cost-prohibitive. Sparpreis is an excellent option for booking train tickets far below their book-value. There is one major difference between the two tickets. Sparpreis tickets are not flexible. If a train is missed, or even one connection is missed and DBahn is not on strike, a new ticket must be purchased. Sparpreis is usually the lowest price possible for a certain route without the use of additional price reduction cards. 

You have five main options by which you can book a ticket on DBahn. The first is through the use of their website. It has an English language version that makes most tasks easily accomplishable. 

The second is through the DBahn App which is available for iOS and Android. It recently gained the ability to purchase a wider variety of tickets than it could before. 

The third is to call DBahn and then receive the tickets through mail. Don't do this. Really. Just don't. It's like dealing with Delta customer service and USPS at the same time.

The fourth option is to walk into a train station and find a DBahn ticket office. The people there can usually help you find harder to custom routes well in advance of travel. You should really only use it if you need it though.

The final option is the ticket kiosks that are in nearly every train station in Germany. They are red and white and accept credit and debit cards as well as cash. They are easy to use and have multiple language options. I highly recommend them. 

Ticket Types

DBahn offers a wide variety of ticket types beyond normal point-to-point route tickets. Each ticket type allows one to accomplish a different set of goals. Before choosing one, be sure that you really need it and cannot do the same cheaper with point-to-point tickets.

Länder-Ticket

• Allow you to travel with up to five people an unlimited amount of times within a certain state
• Can only use RE, RB, SBahn, and usually UBahn and local transport in major cities
• Some states have other train services also available for use with the tickets
• Valid on weekdays from 9:00 AM to 3:00 AM the following day, midnight on holidays and weekends
• Available for booking on the DB app with the exception of the Hessen-Ticket
• Usually cost EUR 23 for one person, and EUR 5 additional for each person
• Particularly useful in Bavaria if coming from outside Munich as it is also valid on MVV and all Meridian trains

Schönes-Wochenende-Ticket

• Allows unlimited travel for one day from midnight until 3:00 AM the following day
• Available for Saturday or Sunday
• Valid across all of Germany on regional train services; IRE, RE, RB, SBahn; also includes some local rail services
• Costs EUR 40 plus EUR 4 per person, up to five people
• Also valid in some parts of Poland, Switzerland, Austria, the Netherlands, and Denmark

Quer-durchs-Land-Ticket

• Same concept as the Schönes-Wochenende-Ticket, except it is valid on weekdays
• Costs EUR 44 plus EUR 8  per additional person, up to five total
• Valid from 9:00 AM until 3:00 AM the following day
• Valid across Germany including some local rail services

Ostsee-Ticket

• Allows a traveler to depart from a selection of cities in the North of Germany, (Berlin included) and travel to a limited list of destination cities on the Baltic Sea
• Includes cities in Poland and Germany
• Valid on nearly every train type
• Both trips must be selected before the Ostsee-Ticket is shown as an option
• The price changes throughout the seasons from EUR 34 to EUR 44
• The departure and return must be within fifteen days of one another

BahnCard

BahnCards make train travel in Germany much cheaper if you travel often. Most only make sense to purchase if you will be in Germany for more than three months. The number that follows the BahnCard is the percentage discount that a cardholder receives on each ticket purchased using the BahnCard. For example the BahnCard 25 gives the holder 25 percent off each ticket price, both full-fare and Sparpreis. The normal BahnCard 50 does not include any discount on Sparpreis. If you are under 18, the JugendBahnCard 25 is the optimal purchase. It only costs EUR 10. For those under 27, the best option is the My BahnCard 50. It costs only EUR 69, and includes a 25 percent discount on Sparpreis. For those older, and who don't ride trains enough to justify the steep price of the Bahncard 100, the Bahncard 50 is the optimal choice if a discount on Sparpreis is not important.

Safe travels, and good luck mit der Deutschen Bahn!

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Berlin: Making it There

Berlin Cathedral (Berliner Dom)

The next whistle-stop on the Minerva rotation is Berlin. It happens to be a city that I have a fair amount of experience in. I lived there for about eight months during my exchange year. It is a city unlike any other that I have been to. It is much grittier than other major German cities. It isn't spotless. The subways aren't exactly timely, the entire city isn't an utterly safe playground for the unprepared. All of that gives Berlin a unique personality. 

Berlin was first chartered in 1237. Over the years it has grown and expanded, eventually surpassing the city that first gave it life. Its land area is divided into twelve Bezirke. Each Bezirk acts very similarly to a small city. They are governed by an elected council and a mayor. The Bezirksamt is subordinate to the Senat von Berlin. Berlin's population totals 3.5 million people. Berlin still bears many scars from the events of the 20th Century. Many of the landmarks from World War II no longer stand. Marks of the Cold War are still evident in the center and east of the city. 

Before you get to exploring the city itself, you must first make it there.

German Parliament (Reichstagsgebäude)

Berlin is also unique in the sense that it is rather isolated in comparison to other major European cities. But one must remember that this is relative. It really isn't very far away from anything if you are used to American-sized distances. 

When booking flights you should remember this. The two airports servicing Berlin are rather small. Oftentimes, flights in and out of Tegel and Schönefeld are rather costly. You should look at flights into Frankfurt am Main, Düsseldorf, Prague, Amsterdam Schiphol, and Munich before booking a flight into Berlin. Specials that can save you large amounts are common going into these airport depending on what your city of origin is.  All of these airports have easy access to trains to Berlin. The cost of the train must be factored into the airport decision. Trains can be easily booked ahead of time with Deutsche Bahn. See this post about the German train system for information about booking train tickets in Germany. Train tickets should be airport of choice to Berlin Hauptbahnhof (Hbf) or Ostbahnhof if staying in the East.

• Frankfurt am Main (FRA) - Berlin Hbf ~ 4:30
• Düsseldorf (DUS) - Berlin Hbf ~ 4:10
• Munich (MUC) - Berlin Hbf ~ 7:00
• Prague (PRG) - Berlin Hbf ~ 5:35
• Amsterdam Schiphol (AMS) - Berlin Hbf ~ 6:35

Beauty is everywhere in Berlin, even in the Altspandau U-Bahn station.

Buses are another option, but it should be kept in mind that a bus to Berlin is not as comfortable as the train, as fast as the train, and large luggage makes it unwieldy to get to many of the bus stations in the first place. Bus pricing is also usually fairly similar to the lowest train fare class. 

Next: Berlin: First Movements

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Why Blog?

A blog in its infancy can be many things. Some are meant only for the eyes of people who personally know the author. That’s how my first started. It later evolved into something meant for those in the CBYX (Congress-Bundestag Youth Exchange; a student exchange program to Germany funded by the Department of State) and student-exchange circle as some kind of repayment for all the help I had gleaned from the much better kept blogs of those who had come before me. Its demise came from a change of heart. As the honeymoon period of the exchange ended, I began to feel that the experience itself was far more of a personal, private journey than something to be broadcast for the world to (have the slight chance) to read. This one, however, feels different. I am intending on writing to a much wider audience than before. It therefore necessitates a different style of writing. One less entrenched in metaphor and grand prose, and more focused on actionability and clarity.

The first topical post was a test in this writing style. It maintains a narrative while also providing my best attempt at a fairly balanced overview of my time at Minerva and the events that brought me there. At the moment, it’s been viewed 143 times. That’s better than most posts on my previous blog. It does have a much wider possible audience. Minerva (Minerva Schools at KGI; I am a member of its first graduating class) had around 16,000 applicants this year while AFS CBYX is roughly estimated at around 700. (Very rough number) The post was shared on my Newsfeed and was seen by many, if not a majority of current Minerva students. Debate about the school is a popular pastime, everyone has their own opinion about the goings-on.

The second post took a sharply divergent tack from the first. Instead of discussing more higher-education issues it addresses credit cards. Why? That post is also an experiment. I have read much on credit cards lately, as I have been playing bonus games in order to allow me to travel for Minerva on a much smaller cost-basis than expected. At my current age and earning power, it makes sense to go to seemingly ridiculous lengths to save relatively small sums ($200 — $700). The topic at hand also intersects my career interests. I love finance dearly. When macro-trends affect first-hand decisions and benefits I can’t help but be interested. When this intersection intersects with my other passion, traveling; I double-down on it.

My interest in disparate subjects was also the impetus for changing the way the front page of the blog is structured. The top menu options are tag searches so if someone is only interested in travel, they don’t have to read about college admissions battlefield and vice-versa. I want one blog that addresses many fields of interest as opposed to the segmented blogs and blogs-cum-media-properties that have become so salient in various niches the world over. That is certainly not to say that there is anything wrong with that segmentation.

That said, writing to a blog is like shouting into the wind. Nay, it’s really like sending out Voyager and expecting extraterrestrials to find it and respond. There is simply too much information produced each day. The odds of anyone finding their way here without ad spend and serious back-linking are infinitesimally small. Why write it in the first place, then? I guess, it’s practice for the future. Practice distilling a multitude of resources into one brief, cohesive piece and taking a position on whatever subject it is. It’s also deeper research into my own interests that I wouldn’t do otherwise. Trying to write an evidence-based post on any subject leads you down roads, and to conclusions that you would have never come to if you weren’t writing.

Hope is there too. I have hope that someday, someone will come across this blog while searching and find something that helps them. If it’s my high tolerance of fine print that finds a trap that others missed and I can save some random person a penalty, then it is worth it. If it is adding a valuable insight into one of the most important decisions of a young person’s life, then all the effort has paid off. A blog in its earliest form really is like an infant. It can become anything. It still has that genuine naïve sense of hope before the weight of the world comes crushing down upon it. Its potential is unlimited so long as it’s cared for. 

So, 

Dear,

That one, pseudo-random person who can possibly be helped by something I have written, come. I’m waiting for you. You’re the real reason I write.

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The TSA, PreCheck, and Global Entry in the World Today

Let's be honest here, the TSA has never been much appreciated. Nor has it ever really given travelers a reason to have any warm feelings towards them. Long lines, mild-to-extensive groping, draconian 3.7 oz liquid rules, and a general feeling of disdain towards travelers has not endeared them to the traveling public. Recent reports about their inefficacy have only added to this. Some have even posited that the TSA is nothing more than a $7 billion anxiety therapist.

Whether or not this is true, TSA lines are worse than ever. Chicago O'Hare, Dulles, and Atlanta Hartsfield have all moved their recommended arrival times to north of three hours. Missed flights and customer dissatisfaction must have gotten so egregious that the legacy airlines felt they had to step in in order to shore up the screening system. This most likely came more from pure self interest than any kind of compassion. Ticket prices have been knocked down by terrorism fears from the lost Egyptair flight in addition to the downed Metro jet flight originating in Egypt. Massive additional hassles could be the tipping point for many in their decisions whether to travel or not this summer. Airlines can't let fares or passenger levels sink much lower even with current fuel prices. They need to help the TSA make security lines less terrible or they risk losing even more revenue.

The TSA Precheck lanes have also been raised as a solution to the line problems. The problem is, though, that too few people are utilizing it. The TSA is wont to blame the passengers for not signing up for the program. This seems a bit inaccurate. The fees are high for many who don't play often. $85 per person? That only really makes sense to frequent flyers or people on the higher end of the income spectrum. People who fly once a year can't justify it. To make that even worse, it takes an inordinate amount of time to get Precheck. The appointments often are often fully booked for months. This is a huge deterrent to all but the most determined to get Precheck. Additionally, the TSA is not fully utilizing the existing infrastructure for Precheck. Oftentimes, the dedicated lanes are closed for unknown reasons, or dedicated lanes don't exist, even at the largest airports in the country. For example, in the security screening area after customs at Atlanta Hartsfield, there is not a dedicated lane at all. Instead, they just give Global Entry members a piece of paper that is sometimes completely ignored by the agents working there. It's not even consistently enforced in the same lane. I was reprimanded for not taking my shoes off by one agent, and for taking my shoes off by the next. Perhaps the TSA should look inwards before throwing stones at the traveling public. 

Another trusted traveler program that is heavily underutilized is Global Entry. It allows one to go through passport control only using a dedicated kiosk, and then proceed through customs without the hindrance of the main line. Precheck is included in the $100 dollar application fee. Wider use of it could greatly reduce the time and trouble required to travel abroad. The problem is though, the waitIng times for interviews are also greatly limited. I had to wait almost five months for my interview. The barrier to entry is also marginally higher. I must say, though, my experience was greatly improved through it. Customs and Border Patrol need to expand the interviewing pool to make it more attainable to wider range of people beyond the most frequent and motivated of travelers. 

A solution certainly exists for the current problems we face flying today. Private contractors may or may not be the right answer. But there are a few things that must certainly be included in the next iteration of airport security screening. The screening must serve a demonstrable purpose beyond mere reassurance. A $7 billion expenditure must show results and efficacy. Efficiency must be greatly improved. A three hour line is simply unreasonable. It is a drain on the economy in lost working hours. Trusted traveler programs must be expanded to the point where it is not only feasible, but easy to receive the benefits of the program. Once admittance has been expanded, lanes must actually be open and exist for its use. That alone could greatly streamline the arduous process of airport screening. Finally, the agency as a whole must take a more human centered view in its execution of its mandate. I'm not sure how it does anyone any good to treat the public badly, make them feel violated on a regular basis, and continue to enforce rules that are no longer relevant. (Congress is to blame for the banned item list) Travelers aren't merely customers in this exchange, they are taxpayers, the effective employers of every TSA agent in the country. We as a citizenry, should not have to accept the state of affairs as it exists today. The calls for widespread change are correct. But now, we just have to wait and see if the waiting time chaos that has occurred so far this year will be the straw the breaks the camel's back.

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Travel Rewards Cards Market Players

First Post in the Series 

The travel rewards market is one of the most crowded in the entirety of the credit card industry. Constantly changing signup bonus offers, rewards redemption systems, and reward unites also make it one of the most opaque. Those partaking in the market are nearly all chasing new revenue streams and co-branded cards are doubly used to retain customers.

The first layer of the card nexus is the credit card network. The major American and international networks include Visa, Mastercard, American Express, and Discover. The networks act as a system by which money flows from consumer to issuer, issuer to acquirer, and finally, acquirer to merchant. 

Although Discover and Amex started out differently than Visa and Mastercard by having no issuing banks, they have evolved with time and are now more similar in their offerings. Amex does, however, issue their own cards in addition to separate issuing banks.

Issuing banks are the financial institutions that issue cards to cardholders. They are the ones that support the line of credit, decide on fees, interest rates, and penalties. They also handle the actual loan for each purchase.

Acquiring banks are the financial institutions through which merchants receive the funds for credit and charge card purchases. They send a batch of requests usually each day to the acquiring bank. The acquiring bank then goes through the card network to the issuing banks to request the funds. The card network clears the request between the issuing bank and the acquiring bank. After the acquiring bank receives the funds from the issuing bank, a payment, less fees is then issued to the merchant's account.

Now for the fun part. The following is a short-form description of the major players in each network. Business cards are excluded from this list.

Network: Visa

Issuing Bank: Chase

Cobrand: None

Cards: Freedom, Sapphire Preferred, Sapphire Reserve

These two cards are not cobranded and allow the holder to earn a proprietary Chase currency called Ultimate Reward points. These transfer at a 1:1 ratio to seven frequent flyer programs and four hotel rewards programs. Most of the programs are upper-scale although the inclusion of Southwest offers cardholders a slightly more cost effective option for using points. Chase also offers a shopping portal to earn points and an online booking platform. Optimal use of Chase Ultimate Rewards points has been deeply discussed and debated here, and here. Ultimate Rewards points are likely the highest and most flexible rewards currency available.

The Sapphire Preferred card has an annual fee of $95 that is waived for the first year. A 50,000 (current) point bonus comes into play after $4,000 of spend in the first three months. There is APR it inception.

If you decide to apply to Sapphire Preferred, please use this link. It gives me a referral bonus and helps keep this blog going.

*Note that the Freedom card only transfers into Ultimate Rewards points if the cardholder also has another Chase card that earns those points.

Network: Visa

Issuing Bank: Chase

Cobrand: Various Airlines

Cards: Southwest Rapid Rewards Premier, United MileagePlus Explorer, United MileagePlus Club, British Airways Visa Signature

Each co-branded card earns miles in their respective frequent flyer programs. The bonuses differ between them, as do the fees and perks for the airlines. For example, the Explorer card offers a free checked bag, while the British Airways card offers three Avios per dollar spent on British Airways. These cards are mainly aimed either at frequent flyers, in order to compel them to spend more, or at those looking to become frequent flyers. The points are not nearly as flexible as Ultimate Rewards, but do provide some of the benefits of being a frequent flyer without the requisite flying.

Free checked bag and other common airline credit card perks. Many of the cards have fees around $95 per year. Most waive that fee for the first year. All have APR at introduction, currently.

Network: Visa
Issuing Bank: Bank of America
Cobrand: None
Cards: Bankamericard Travel Rewards

The Bankamericard is Bank of America's (BofA) unbranded line of credit cards. The Travel Rewards card works differently than most travel rewards systems. Cardholders earn points which are redeemable for travel credit at a rate of 1.5 points per dollar spent with a (current) bonus of 20,000 points after $1,000 in spend within the first 90 days. Travel credit is redeemed directly on the credit card statement itself. The points transfer at one cent to one point. 20,000 points is required to pay a $200 travel expense.

The card has no annual fee, and currently has no APR on purchases for 12 months. It should be noted, though that revolving debts hurts your credit score.

Network: Mastercard

Issuing Bank: Bank of America

Cobrand: Various Airlines

Cards: Spirit Airlines, Amtrak Guest Rewards World Mastercard, Virgin Atlantic

Points are put directly into the frequent flyer accounts just like the Chase cobranded cards. The bonuses also vary widely, although none are as high as the Chase Cards. This could point to a difference in competitive strategy in the credit card division.

Network: Mastercard

Issuing Bank: Citi

Cobrand: American Airlines and non-cobranded available

Cards: Citi ThankYou Preferred, Citi ThankYou Premier, Citi ThankYou Prestige, AAdvantage Gold Mastercard, AAdvantage Platinum Select Mastercard, AAdvantage Platinum Select World Mastercard, AAdvantage Executive World Elite Mastercard

Citi's ThankYou rewards program operates very similarly to the Chase Ultimate Rewards model. There are transfer partners where points are transferred at a 1:1 ratio into their respective loyalty programs. Citi also offers a shopping portal as well as optional experience packages depending on the level of the card. The three Citi ThankYou cards represent the first three tranches of credit cards in terms of fees. $0, $95, and $450. The same is true with the AAdvantage cards with the Gold card occupying the lowest tier at a $50 annual fee. Citi has heavily partnered with American Airlines in terms of cobranding and transfer opportunities. 

Network: American Express

Issuing Bank: American Express

Cobrand: Extensive cobranding with Delta in addition to a full line of unbranded cards

Cards: Platinum Card (Charge), Amex Everyday Credit Card, Everyday Preferred Credit Card, Premier Rewards Gold, Green Card, Gold Delta SkyMiles, Platinum Delta SkyMiles, Delta Reserve

The American Express ecosystem now includes both charge and credit cards. The Platinum card is still a charge card, and does not allow for revolving debt. The rewards system is called Membership Rewards. This takes a slightly different tact than the other major issuers rewards system as the "membership" aspect of the card makes it at least seem more exclusive. This was the original target market of American Express from its inception. They have, however, also moved downmarket. They have an additional pricing tier between $95 and $495 at $195 for the Premier Rewards Gold card. Interest rates are roughly the same as Chase at inception. Membership Rewards points also work very similarly to Chase Ultimate Rewards points. They can be transferred into other loyalty programs, and travel can be booked through their portal.  The deep cobranding with Delta finishes out the remainder of the American legacy carries. The Delta cards reward through Delta SkyMiles.

For full current offer information on all of the cards mentioned go to The Points Guy. 

Read on to the next installment of the series: Importance and Utility of Cobranding

Disclosure: I currently hold three of the cards mentioned. Great effort was made to remove any traces of personal bias present.

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Low Rate Environment and the Macro Rewards Credit Card Marketplace

Money is cheap. Not just a few basis points off the five-year average kind of cheap, but rather extraordinarily cheap. Some European banks even hit negative rates on mortgages as seen in Denmark, Spain, and Portugal. The realized results have been mixed. Denmark has taken it far more positively than Spain or Portugal. In the United States, the Federal Reserve rates have not gone negative, but have been near zero for almost seven years. Banks have been making little profit off of loans because of this. Mortgage rates are lower, and early-payment of debt has also been increasing, further hurting the bottom lines of consumer banks.

In light of this challenging environment, other profit centers need to be expanded. One major area of expansion has been credit cards. Interest rates can be pushed lower while still making a large profit because of the low cost of money and the high interest rates in comparison to other lending products like student loans and mortgages. Travel awards programs were also able to be expanded for the same reasons.

Now that the opportunity and motivation were present to expand credit card issuance, the target audience and source of competitive advantage had to be addressed. The traditional marketing ploys that targeted some kinds of traps at poorer users had to be stopped because of the passage of the Credit CARD Act of 2009. The upper end of the spectrum is, and has been fairly card full. Additionally, the nature of the economy means that there are very few of them.

Credit cards are extremely useful. They allow one to greatly reduce the amount of cash carried, carry a small amount of debt manageably as a holdover for a few weeks to month, and often offer fringe convenience benefits in the form of perks and rewards. One intangible use may outweigh the more utilitarian uses of credit cards, however. Oftentimes, credit cards are status symbols. The Amex Centurion has long been a symbol of extreme wealth and success in popular culture. The J.P. Morgan Palladium is of the same vein, albeit lesser known. Offering newly formed "elite" cards to a lower income segment attracts those who want to taste the life of the Centurion user. Aspirational spending by the middle and lower upper classes can provide a fruitful stream of revolving credit users who still have the ability to pay off their balances eventually.

This sub-elite tier offers the some of the cachet of the truly elite cards while still being manageable for above average earners. This tier is further subdivided by fees. The highest level is populated by cards like the Amex Platinum, Visa Black, and Citi Prestige with fees in the neighborhood of $495 per year. The next level is perhaps the most crowded with most annual fees around $95 per year, (although many waive the fee for the first year). The final level is populated by no annual fee rewards cards.

Signup bonuses and continued spending rewards are the main tools used to drive cardholder growth. Minimum spend requirements ensure the user has rotated it into regular use by the end of the bonus period. Inertia and a relatively high effort threshold often keep cards in the wallets of consumers longer than planned, and importantly for the issuers, keep them paying fees. A great deal of vigilance is required to avoid many of the pitfalls the befall those trying to maximize bonus rewards. The rewards structure was also designed to appeal the aspirant/above average earning audience. 

Travel and premier shopping awards are something to offer the taste of being ultra wealthy those who aren't. Travel rewards are specifically a domain that is only worth anything to those with enough resources to travel in the first place. The main draw of travel rewards cards is to enable the cardholder to travel more than they otherwise would be able to.

Rising consumer sentiment and an incrementally improving job market have jointly worked to push an increasing number of people back into the range where they are comfortable spending money on non-essential items and comfortable maintaining a larger amount of revolving debt as opposed to the debt-avoidance that has been nearly constant since the start of the Great Recession. In fact, total credit card debt is currently approaching pre-crisis levels. Travel is now an affordable activity for many who reverted to the "staycation" during the deepest depths of the crisis. This means that travel rewards are now worth a great deal more to a much higher number of people.

The decrease of other profit lines and the enlarged available market have pushed a vast number of players into the field. Next in this series: Travel Rewards Cards Market Players

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