80/20 in 2020—Putting the Pareto Principle to Work for a Better Travel Credit Card Life

Get your priorities right: How Amex Membership Rewards can save you tons of time and hassle.

Covid has been a stark reminder for all of us that life is precious, which is why it’s so important to enjoy every single moment. We can’t hit rewind on our time on this planet. We only get one life.

Which brings me to the Pareto Principle, better known as the 80/20 Rule.

80/20. Priority Rules

The 80/20 Rule states that for many (if not most) events, 80% of the outcomes come from just 20% of the causes. So if you can identify those causes (or inputs) you can prioritize your efforts and maximize your results, saving you a whole lot of wasted time in the process.

 The 80/20 Rule Applied to Credit Cards

Life’s too short to be worrying about the minutiae of credit cards. That’s hard for me to say because I’m a minutiae man.

Do you have five, seven, or even 10+ credit cards to earn an extra bonus for every spend category (such as gas or groceries) just to squeeze out every possible point that you can earn?

Do you painstakingly collect points in many or all major points programs trying to access every possible redemption option?

If yes, how do you even have the time to read this report?!

That’s a lot of work, mental energy, and time, just to make sure you get 100% of the possible deals. And again, there are only so many minutes in an hour, hours in a day, and days in a week. Life is short.

There’s No Such Thing as Credit Card Perfection
(There, I Said It)

Credit cards can easily become all-consuming (which one exactly am I supposed to pull out of my wallet for this purchase?!) but not if you apply the 80/20 rule that says 80% of your results come from 20% of your efforts.

It means you could spend just 20% of your time and mental energy to get 80% of the potential return. That’s a great quid pro quo. It allows you to be happy with yourself and the results and move on to other important matters and opportunities in life.

Many of us seek perfection and I am guilty of that too. But over the last few months I’ve further adjusted my mindset. I think many aspects of my life have benefited from the 80/20 rule, otherwise, I’d be a slave to a never-ending list of things to do.

Squeeze an orange one time and you get about 80% of the juice. Now, of course, you can squeeze it four more times to get the remaining 20% of the juice, but each of those extra squeezes will require as much, if not more, effort than that first squeeze.

You’re now into diminishing returns. What’s the big deal with squeezing an orange a few more times, you ask? Tell that to the guy with a sore hand. As far as effort goes, I’d rather have five glasses of juice at 80% full, than one at 100%.

Elastic Plastic and the 80/20 Rule

The 80/20 Rule applies directly to “Elastic Plastic” credit cards that FCF has been recommending long before they became popular. Those are credit card programs that offer points that can be transferred to more than one airline. These include American Express Membership Rewards, Chase Ultimate Rewards, Citi ThankYou Rewards, Marriott Bonvoy points, and Capital One points.

While there’s no single best card for everyone, my equation for the best cards is simply the card’s earning potential multiplied by the card’s spending opportunities.

Do You Have a DIFFERENT Credit Card for Every Darn Little Thing?

Yes, you can collect and chase a few extra points in every spend category with a wallet full of cards to squeeze out every last point. But why not just earn points with an American Express Membership Rewards card and get 80% of the potential value with one credit card while putting in just 20% of the effort?

You will need a Visa or Mastercard for purchases from merchants that don’t accept Amex cards, and Chase is your backup for these.

Or, if you’re an elite-status seeker with one of the three major U.S airlines, you could get an airline co-branded card. Okay, this is an exception, and while chasing elite status isn’t my top recommendation, I understand it is important to many. So, use your elite-accelerator card till you hit that potential, then put it in your drawer for the rest of the year.

Do You Collect Points in Every Single Credit Card Points-To-Miles Transfer Program So You Can Have Access to Every Airline?

Gentlemen, let’s say you own five or ten great suits, but 80% of the time you grab your favorite one or two. Ladies, how many shoes do you own, and how often do you grab the same 20%? Yeah, about 80% of the time.

The same is true for all five major point-to-mile transfer programs, namely American Express Membership Rewards, Chase Ultimate Rewards, Citi ThankYou, Marriott Bonvoy points, and Capital One points.

Yes, you can collect and chase points in all five programs, but why do that when you can just earn points with Amex Rewards and have the most airline partners (by far) with just one credit card points program?

With Amex Rewards points, you can access 19 airlines plus their partners—and would you have guessed?—80% of the most popular ones! What are the chances you’ll need miles on airlines like Aeromexico, Aeroflot, Air China, or Hainan Airlines? Amex Rewards gives you about 80% of the results with about 20% of the effort, because with just that one points program you have access to 80%+ of the airlines you’ll need and 80%+ of the airlines that Chase, Citi, and Capital One cards have.

In other words, Amex Rewards gets you 80% of the pie with little effort. No having to think so hard every time you pull out your wallet or make an online purchase. That’s an easy 80%. Pareto would be proud. Or you can do it the hard way and chase 100%. Your call. There are other opportunities in life.

Choosing the Best American Express Credit Card for You

Here are the top four personal and three business cards from American Express based on their earning opportunities.

I like the Amex Platinum and Gold Card combo. With just those two, you can realize ~80% of the potential earning and redemption benefits. On the other hand, you could get countless cards in many other programs and tie yourself in knots, right?

Choosing a Chase Credit Card Backup

For the times you are making a purchase with a merchant that doesn’t take Amex, here are the top three cards from Chase based on their extra earning opportunities.

Other Reasons Amex Is an Easy Pick

TRANSFER BONUS: Amex Rewards often runs transfer bonus promotions, frequently offering up to a 40% bonus with British Airways, Iberia, and Virgin Atlantic. Chase Ultimate Rewards does not have any transfer bonus deals. This transfer bonus more or less makes up for any shortfall on spend-bonus I may miss with Chase or other cards.

YOU CAN BUY AMEX POINTS: You can buy up to 500,000 points annually at a cost of 2.5 cents each. Chase, on the other hand, doesn’t sell points; you can only acquire them through spending. That can make it hard to get your hands on points fast when you need them, and puts many of the most lucrative premium flight opportunities—80% or more of the best ones—out or reach.

AVAILABILITY OF FIRST CLASS: What good are United miles (MileagePlus cards are widely used and are a key Chase Ultimate Rewards partner) if you can’t even book First Class on many of United’s key partners, such as Lufthansa (only within 14 days of departure) and Singapore Airlines? But First Class on many airlines is much easier to attain through Amex Rewards, as you can transfer points directly into the mileage programs of All Nippon, Cathay Pacific, Emirates, Etihad, Qantas, and Singapore Airlines, and have much better mileage award access. ~80% of the top First Class options, with one credit card points program.

THE ULTIMATE AWARD TICKET WITH ALL NIPPON: You can transfer Amex Rewards points to All Nippon and fly around the world for 105,000 miles in Business Class or 160,000 miles in First Class.

Reminder: Chase does not have All Nippon as a transfer partner. We wrote about this amazing opportunity here. To give you an idea of its power, the best you could do for an around-the-world ticket with Chase is Singapore Airlines at 240,000 miles in Business Class and 360,000 miles in First Class. In other words, with Amex Rewards you can get two tickets for the price of one, and even save some miles. Think big.

ACCESS TO MORE AIRLINES TO ASIA: You can transfer Amex Rewards directly to All Nippon, Cathay Pacific, and Singapore for Business and First Class, while Chase is a transfer partner only with Singapore.

For example, Los Angeles/San Francisco to Tokyo is 75,000 miles round-trip in Business Class on All Nippon, and again, we often have All Nippon Sweet Redeems alerts showing routes and dates with award space. More on the deal here.

ACCESS TO LOWER AWARD TAXES ~80% OF THE TIME: You may have experienced the following frustration. You go to use your hard-earned miles or points for a trip, and then a maddening thing happens: The airline hits you with taxes and fuel surcharges.

Many Amex Rewards airline partners charge lower award taxes. For example, Avianca LifeMiles, a frequent flyer program that doesn’t add huge surcharges.

ACCESS TO ~80% OF THE BEST OPPORTUNITIES TO EUROPE:

With Oneworld: You can transfer Amex Rewards to Iberia and fly from the East Coast to Spain for 68,000 miles round-trip in Business Class. Other U.S. departures are a bit more. Most other programs will cost you 120,000 points.

With Star Alliance: You can transfer Amex Rewards to All Nippon and fly from the U.S. to Europe for 88,000 miles round-trip in Business Class on partner awards. Most other programs will cost you 120,000 points.

With SkyTeam: You can transfer Amex Rewards to Alitalia and fly North America to Italy for 80,000 miles round-trip in Business Class. Most other programs will cost you 120,000 points.

Or, you can transfer Amex Rewards to Virgin Atlantic and fly North America to Europe for 100,000 miles round-trip in Business Class, on Delta, while it will cost you 160,000 with Delta SkyMiles.

ACCESS TO ~80% OF MIDDLE EASTERN AND AFRICA DEALS: You can transfer Amex Rewards to Etihad Airways. Oh, by the way, again, it is not a transfer partner with Chase. Or transfer Amex Rewards to Emirates.

ACCESS TO ~80% OF SOUTH AMERICA DEALS:

With Oneworld: A round-trip Business Class flight from the U.S. to Southern South America is 100,000 Etihad Guest or Cathay Pacific miles. Again, you can’t transfer your Membership Rewards points to American, but you can to Etihad or Cathay, both of which are mileage partner airlines with AA. So this is a great option to snag AA award flights with your Amex Reward points. Starting to see why you don’t need 10 cards?!

With Star: You can transfer Amex Rewards to All Nippon and fly North America to Southern South America with partner airline United for 88,000 miles round-trip in Business Class. With Chase/United, the same ticket will cost you 120,000 points.

With SkyTeam: You can transfer Amex Rewards to Virgin Atlantic and fly North America to Southern South America with partner airline Delta for 90,000 miles round-trip in Business Class, instead of 265,000 Delta SkyMiles.

BUYER BEWARE

It’s important to note that FCF receives nothing from credit card providers. No kickbacks. No cash under the table. Our perspective is 100% independent. There are thousands upon thousands of credit card articles online, which will advise you to go out and get 10 or 20 or 30 cards, because they are paid $200 to $300 each time you sign up for one on their site from the banks issuing these cards. They make thousands of dollars on you per year.

How the Pareto Principle + Upgrade Mindset
Saves You From Diminishing Returns
and the Credit Card Black Hole

With Amex Rewards I get 80%+ of the pie, 80%+ of the destinations, 80%+ of First and Business Class airlines, 80%+ of low-cost awards, and 80%+ of low-tax awards, with only one points program. That is a very good return in my book.

Do I earn fewer points and have access to fewer airlines and transfer programs as a result? Well, yes, but not a lot fewer. And I am fine with losing 20% of those opportunities if it means I get to save 80% of my time and effort for other things. Less brain fog.

In baseball and other team sports, about 20% of the players are behind 80% of the wins. In short, Amex enables you to get a walk-off home run.