Eddie's Code Shop

This is my first post on my new home away from Medium.com! And continuing with the shaking-up of things, this post is about some stuff I’ve never written about before, but which are very important parts of my life… personal finance and spreadsheets!

I have had the Chase Sapphire Reserve card for a few years now. While I have booked some flights via their travel portal, I don’t think I’ve ever rented a car from there. So having finally remembered about it, I decided to give it a look for an upcoming trip.

Some background

The travel portal is where you can get the biggest bang for your points (bucks by proxy) because they are worth 1.5 times more when redeemed for travel expenses. So, say you have 10,000 points racked up. This is equal to $100, which if you were to redeem for travel expenses would be equal to $150.

To obtain these points, you have to spend on travel and dining. When you do, you are rewarded with 3 points for every dollar spent. Renting a car classifies as a travel expense. So say you rent a car for a total price of $500, you’d get 1,500 points in return.

The travel portal tries to sweeten this pot by offering an additional 7 points for every dollar spent on a car rental. So that means 10 points for every dollar spent. For the same $500 dollars you’d instead get 5,000 points in return.

Decisions, decisions

I asked myself, would it actually be worth it for me to rent from the travel portal, compared to the prices I’m seeing from sites like Kayak and Expedia? At what point does it make sense to go with one over the other.

It wasn’t immediately clear to me which would be the better option. I felt like there were many factors to consider. For example, if the prices are higher on Chase’s portal, would that be offset by the higher amount of points I’m earning? Or is it ultimately better to go with a lower price outside the portal, and thereby a lower point earning potential?

Being the spreadsheet loving person that I am, I decided I needed to plot the different factors down and start playing with some numbers. This Google Sheet is the result.

Below is a snapshot from the sheet of some prices that I saw. In this particular case, the Chase rental is more expensive. For this rental I would be receiving 3,923 additional points when compared to the 3rd party option. These additional points would equate to $52.10 for the regular dollar value (DV), and $78.15 for the bonus dollar value (BDV). Both of these dollar values are less than the price difference between the two rental options though ($92), so I’d be saving more money by going with the 3rd party rental in this case.

Let’s say for argument’s sake that the Chase rental price was cheaper, but still above the 3rd party rental’s price, like indicated in the chart below. At a glance you might instinctively still go with the 3rd party rental. However, look at the price difference between the two rentals, $21. In this case, this is less than both the DV and BDV for the Chase rental. As a result, if you were to consider that you were able to immediately deduct those dollar amounts from the rental, you would see that the “final” price for the Chase rental would be less than the 3rd party rental in all instances (Rental Total, Rental – DV, and Rental – BDV).

Thanks to that Google Spreadsheet allowing me to quickly compare prices, I was able to clearly see that if prices were the same across the board, then using Chase’s portal would make sense because I’d get 7 times more points. The answer would also be the same if Chase’s portal had cheaper prices than what is available elsewhere because I’d be spending less money and earning more points.

I also learned that it’s usually better to go with the cheaper prices I see outside of the portal. But there is a small price zone where it might make sense in the long run to go with Chase’s portal if my goal is to accumulate points for use down the road.

I hope you found this post helpful, and that it leads to good financial decision making habits!