(1/n) Rupee Value of ER vs HDFC RPs vs Amex MRs vs Stan Chart Rewards 360

[CC_Fire]

New member here looking to build a proper CC portfolio of super premium cards. Consideration set is HDFC Infinia, Axis Magnus, Amex Plat Charge, SC Ultimate. Since they all have different RPs, it may be beneficial to work out a Rs value to then allow better comparison across the cards

1. HDFC Infinia => 1RP = ₹1 (Since its quite easy to redeem these for flights & hotels before they expire)

2. SC 360 Rewards=> 1RP = ₹1 (Since again quite easy to redeem these 1:1 for a wide range of vouchers from uber/big basket/etc)

Now we come to the more complicated ones

3. Axis Edge rewards ("ER") => 1ER = ₹0.66

Value of ERs will vary for different people.

For me, these extract the most value when redeemed for air/hotel partners. It may not be the same for everyone but we can agree that this establishes a ceiling for ER values

1. 1ER = 0.8 MB (Marriott Bonvoy points)
   • range in value from ₹0.4 (for domestic hotels) to ₹2 (for international hotels).
   • Assuming a 5:1 ratio of domestic to international usage over the long term => Value for MB points = ₹0.65.
   • This sounds fair since TPG also values this at $0.8 per point
2. 1ER = 0.8 CV (Club Vistara points)
   • range in value from ₹0.8 (for domestic flights) to ₹2 (for international flights).
     • CV DEL->BOM return economy = 10000CV points and is usually 8000Rs (CV = Rs0.8)
     • CV DEL->BLR return economy = 15000CV and is usually 11000-12000Rs (CV= Rs0.75)
     • CV Del -> LON return economy = 60000CV and is usually 1-1.5L (CV = 1.6 - 2.5)
   • Assuming a 10:1 ratio of domestic to international usage over the long term => Value for CV points = ₹0.9

Assuming my ER redemptions are 70% flights and 30% hotels = 0.8*(70%*0.9+30%*0.65) = 0.66

4. Amex Membership Rewards ("AMR") = 1AMR = ₹0.55

AMRs are similar to ERs in that the best redemptions also seem to be flight and hotel partners. Infact, in this case best to get MBs only since flight redemptions are only at 50% of AMRs

So essentially 1AMR = 1MB

But due to lack of many choices and that all your travel cannot always be with marriott hotels in mind, we should apply a subjective discount to the value (say 15%).
So Value of 1AMR = 0.85MB = 0.55 (which is close to what you can get with 24k rewards in terms of Taj vouchers also)

So to summarise

1 HDFC RP ("HRP") = ₹1
1 SC 360 Rewards 360 ("SRP") = ₹1
1 Axis Edge Reward ("ER") = ₹0.66
1 Amex Membership reward ("ER") = ₹0.55

In subsequent posts, we can analyse the best reward structure for different spends (Rent, insurance, Fuel, utilities, Amazon shopping etc etc).

 

[TheMentalist]

Apart from Stan Chart redemption fee of 99 + GST, are there any other cost of redemptions for the others?

I meant for the domestic/intl return trips, you have just mentioned CV points required, without quoting the additional taxes that need to be paid along with it, which ranges from around 1k-3k for domestic and much more for intl return trips. That's why I asked have you included them in your calculation somewhere?

 

[CC_Fire]

You are correct. It will reduce the value of the CV / flight rewards. Not sure of how much tax generally in these redemption tickets since not booked one.

 

[Copycat]

It strikes me that you're looking at just one side of the equation when you consider the value of 1 reward unit. Shouldn't you also be considering how easy it is to get the reward unit?
e.g You get 12 ERs per 200 v/s 7 SC points per 210 (sorry, I don't have SC, so I may be slightly wrong here)

If you want to do a proper comparison shouldn't you be doing it this way. Take 30000 rupees.
So the various options should be:
a) If I spend 30K using Magnus I will get x ER which is equal to a1) x1 rupees as an Amazon voucher a2) x2 rupees as MB points a3) x3 rupees as air miles
b) If I spend 30K using SC Ultimate I will get y reward units which is equal to b1) y1 rupees if I buy voucher 1 b2) y2 rupees if I buy voucher 2
c) If I spend 30K using Infinia ....

And that's not all. As others have pointed out you will have to take the "actual value" of a voucher. You also have to take into account the card fees
And last of all my favourite: "opportunity cost" which btw drives me crazy when I try to calculate it

 

[Wealth is my birth right!]

It strikes me that you're looking at just one side of the equation when you consider the value of 1 reward unit. Shouldn't you also be considering how easy it is to get the reward unit?
e.g You get 12 ERs per 200 v/s 7 SC points per 210 (sorry, I don't have SC, so I may be slightly wrong here)

If you want to do a proper comparison shouldn't you be doing it this way. Take 30000 rupees.
So the various options should be:
a) If I spend 30K using Magnus I will get x ER which is equal to a1) x1 rupees as an Amazon voucher a2) x2 rupees as MB points a3) x3 rupees as air miles
b) If I spend 30K using SC Ultimate I will get y reward units which is equal to b1) y1 rupees if I buy voucher 1 b2) y2 rupees if I buy voucher 2
c) If I spend 30K using Infinia ....

And that's not all. As others have pointed out you will have to take the "actual value" of a voucher. You also have to take into account the card fees
And last of all my favourite: "opportunity cost" which btw drives me crazy when I try to calculate it

Adding two more hidden items like minus redemption cost for scb 118/- and plus card rotating interest for 30days 30k (not everyone’s cup of tea)

 

[CC_Fire]

It strikes me that you're looking at just one side of the equation when you consider the value of 1 reward unit. Shouldn't you also be considering how easy it is to get the reward unit?

So the idea behind the analysis is once you establish the Rs value of these points. Create a basket of you annual spends in each category and calculate the points you will earn. So then the capping of points, category exclusions etc will be captured there

You can then see on your annual spend, what % are you able to get back on each card

The idea is also to use this to not only choose one of these cards but see if a "portfolio" gives higher rewards than a single card. You can extend this to other cards also but i am currently only focussed on the above 4.

If you want to do a proper comparison shouldn't you be doing it this way. Take 30000 rupees.
So the various options should be:
a) If I spend 30K using Magnus I will get x ER which is equal to a1) x1 rupees as an Amazon voucher a2) x2 rupees as MB points a3) x3 rupees as air miles
b) If I spend 30K using SC Ultimate I will get y reward units which is equal to b1) y1 rupees if I buy voucher 1 b2) y2 rupees if I buy voucher 2
c) If I spend 30K using Infinia

So instead of saying 30000rupees flat, break it into rent/utilities/fuel/shopping/school fees/travel etc and then model the exact RPs under each card. Then from the total Rs value of rewards, you should reduce the relevant annual / joining fees to arrive at net earn rate.

 

[CC_Fire]

It might be individual preference, but I do not consider return rate over cash, rather consider similar card in that price and its benefits / online or offline benefits then only net reward rate will be determine.

Sure. Agree it is an individual preference.

Let me give an example why %age return rate is a bit misleading to getting cash values. For ex; someone spending 30k on rent will earn zero on most cards (amex, magnus) but will earn something on infinia/ultimate even after the devaluations. However overall %age reward rate for magnus is better overall

So at a particular level of rent, it may pay-off to own magnus + infinia/ultimate.

Lets say we get 1.6% on ultimate (2% earn minus redgiraffe fees of 0.4%) on rent after the devaluation and we value it at say Rs0.90. To cover the 900 GST + 500 annual fee (90% of annual fee back in terms of rewards), anyone who has a rental more than Rs8000 per month will make a profit.

When you calculate Rs value of each spend, you may reach a conclusion that Magnus + Ultimate may be better than Magnus only. This is despite MAgnus having undoubtedly a better earn rate than Ultimate/others

 

[asimkumar]

New member here looking to build a proper CC portfolio of super premium cards. Consideration set is HDFC Infinia, Axis Magnus, Amex Plat Charge, SC Ultimate. Since they all have different RPs, it may be beneficial to work out a Rs value to then allow better comparison across the cards

1. HDFC Infinia => 1RP = ₹1 (Since its quite easy to redeem these for flights & hotels before they expire)

2. SC 360 Rewards=> 1RP = ₹1 (Since again quite easy to redeem these 1:1 for a wide range of vouchers from uber/big basket/etc)

Now we come to the more complicated ones

3. Axis Edge rewards ("ER") => 1ER = ₹0.66

Value of ERs will vary for different people.

For me, these extract the most value when redeemed for air/hotel partners. It may not be the same for everyone but we can agree that this establishes a ceiling for ER values

1. 1ER = 0.8 MB (Marriott Bonvoy points)
   • range in value from ₹0.4 (for domestic hotels) to ₹2 (for international hotels).
   • Assuming a 5:1 ratio of domestic to international usage over the long term => Value for MB points = ₹0.65.
   • This sounds fair since TPG also values this at $0.8 per point
2. 1ER = 0.8 CV (Club Vistara points)
   • range in value from ₹0.8 (for domestic flights) to ₹2 (for international flights).
     • CV DEL->BOM return economy = 10000CV points and is usually 8000Rs (CV = Rs0.8)
     • CV DEL->BLR return economy = 15000CV and is usually 11000-12000Rs (CV= Rs0.75)
     • CV Del -> LON return economy = 60000CV and is usually 1-1.5L (CV = 1.6 - 2.5)
   • Assuming a 10:1 ratio of domestic to international usage over the long term => Value for CV points = ₹0.9

Assuming my ER redemptions are 70% flights and 30% hotels = 0.8*(70%*0.9+30%*0.65) = 0.66

4. Amex Membership Rewards ("AMR") = 1AMR = ₹0.55

AMRs are similar to ERs in that the best redemptions also seem to be flight and hotel partners. Infact, in this case best to get MBs only since flight redemptions are only at 50% of AMRs

So essentially 1AMR = 1MB

But due to lack of many choices and that all your travel cannot always be with marriott hotels in mind, we should apply a subjective discount to the value (say 15%).
So Value of 1AMR = 0.85MB = 0.55 (which is close to what you can get with 24k rewards in terms of Taj vouchers also)

So to summarise

1 HDFC RP ("HRP") = ₹1
1 SC 360 Rewards 360 ("SRP") = ₹1
1 Axis Edge Reward ("ER") = ₹0.66
1 Amex Membership reward ("ER") = ₹0.55

In subsequent posts, we can analyse the best reward structure for different spends (Rent, insurance, Fuel, utilities, Amazon shopping etc etc).

Thanks a lot