- advertisement -

Frequent-flier credit cards -- You can fly high or crash and burn

It's easier than ever to earn frequent-flier miles -- just whip out the old plastic. But are they a good deal?

It seems there are frequent-flier deals just about everywhere you turn. There are so many ways to accumulate frequent-flier miles, including paying for hotel rooms, rental cars and long distance phone calls, that you can potentially earn a free trip without ever taking a flight.

One of the most popular ways to earn miles is with credit card "affinity marketing." Typically, a credit card company has an agreement with a certain airline that lets you earn a mile for every dollar that you charge on the card.

Atlanta-based Delta Airlines offers its customers three different American Express cards that earn miles specifically on Delta. Every dollar charged on the card for anything -- flights, hotels, dining, gas or even your new pet gold fish -- earns a mile on the airline.

Purchases made for Delta flights on the right credit cards earn additional mileage. Once you have 25,000 points, you've got enough miles to fly off on a free dream vacation.

Fee for all

This sounds like a good plan, but there are a couple of sticking points. Laura Powell, a freelance travel expert in Washington for CNN and The Washington Post, points out that most frequent-flier credit cards, whether they're tied to Delta, American, United or wing-and-a-prayer airlines, have annual fees ranging from $40 to more than $100.

Not everyone is happy paying such fees. Shel Horowitz of Northampton, Mass., a writer who has taken three trips using miles cashed in from frequent-flier credit cards, explains that he shops around for miles programs that don't charge an annual fee. He frets that the card he used for years no longer offers a freebie deal. He's currently searching for a new card.

"I can't see the point of having to pay a fee to carry a credit card," says Horowitz, the author of "Penny Pinching Hedonist."

Another big consideration is interest. Delta's American Express card levels a walloping prime plus 9.99 percent interest charge on unpaid balances. And they aren't the only ones.

"I think that frequent-flier credit cards are terrific if you charge a lot to the card and pay off your balance in full each month," Powell says. "Most of these cards have high interest rates, and it's not worth it if you're paying interest on a credit card balance."

Freedom of choice

Dean Headley, associate professor of marketing at Wichita State University in Kansas, recommends that consumers find a deal that gives them options for all airlines instead of affiliating with a card that ties you to one airline.

- advertisement -

"Pure and simple, it's a game," Headley says.

Deals such as the Diners Club plan are good offers, he says. For an annual fee of $80 (and $35 for each additional cardholder), charges on Diners Club can be cashed in with any airline through the credit card's rewards program.

Having recently cashed in my own Diners' points for a free trip to Hawaii, I can suggest the following words of caution: Diners Club is not accepted everywhere. Many restaurants and gas stations don't accept it.

However, all the airlines, rental car agencies and hotels do. So when I travel, I make all my charges to my Diners to get several sources of frequent-flier points: one from the airline for the flight, another from the hotel and rental card companies and third from the transferring my points charged to my card over to the airline.

Ride off into the next town

If you choose a specific airline's affinity card, the experts recommend that you select an airline that does business near your hometown. That way, when you travel, it's easier to accumulate miles and to take the free trip once you accumulate the required minimum to fly free.

Horowitz suggests that if you've built up enough miles in your account to fly to paradise and back, it's time to think vacation. "People need to watch their individual accounts. If you're running up into the 50,000 mile range and not using your miles, it's time to make a trip."

Finally, many airlines have expiration dates on frequent-flier miles, although some are eliminating this requirement. Still, most require one trip or a charge on their affinity card with one of their travel partners every three years to prevent expiration.

If you're coming up on the deadline and you want to buy some time, Horowitz suggests cashing in your miles for an airline voucher good for one year.

That's a better choice than seeing your miles vanishing into the airline's thin air.

Credit card air mile details
Credit cards offering air miles
Airline
Issuer
Telephone
Card Type APR
Grace Period
Annual Fee
Rebate
Alaska Airlines
Bank of America
Phoenix, AZ
800-552-7302
MasterCard
Standard or
Visa Classic
17.74%V
20 billing
$45
One mile for every dollar in purchases
MasterCard Gold
or Visa Gold
16.24%V
20 billing
$45
One mile for every dollar in purchases
Visa Platinum 15.24%V
20 billing
$75
One mile for every dollar in purchases double miles ticket/vacation package purchases through Alaska Airlines
Aloha AirAwards
First Hawaiian Bank
Honolulu, HI
800-342-2778
MasterCard
Standard
16.50%F
25 transaction
$25

One credit=$275 purchase

10 credits=inter island one-way; 20 credits=inter island roundtrip; 80 credits=one round trip to west coast on United Airlines. Additional travel awards available. Standard and gold

MasterCard Gold 14.75%V
25 transaction
$55
America West
Flight Fund
Bank of America
Phoenix, AZ
800-928-AWFF
Visa Classic 16.74%V
20 billing
$45
One mile for every dollar in purchases
Visa Platinum 15.24%V
20 billing
$75
One mile for every dollar in purchases 2 miles for every dollar spent on America West ticket purchases
American Airlines
Citibank AAdvantage
Citibank,
Sioux Falls, SD
800-950-5114
MasterCard
Standard or
Visa Classic
17.65%V
20 transaction
$50
One mile for every dollar in purchases
MasterCard Gold
or Visa Gold
17.65%V
20 transaction
$85
One mile for every dollar in purchases
MasterCard Platinum
or Visa Platinum
17.65%V
20 transaction $125
One mile for every dollar in purchases
British Airways
First USA Bank
Wilmington, DE
800-859-3758
Visa Classic 16.99%F
20 billing
$50
One mile for every dollar in purchases. Other rewards and partners. Optional enrollment Executive Club Dining program. Classic and platinum
Visa Platinum 16.99%F
20 billing
$65 (waive
first year)
Continental Airlines
OnePass Miles
Chase Manhattan
Bank USA
Wilmington, DE
800-377-0601
MasterCard Standard
or Visa Classic
17.65%V
22 billing
$45
One mile for every dollar in purchases
MasterCard Platinum
or Visa Platinum
16.65%V
22 billing
$65
One mile for every dollar in purchases
Delta Airlines
SkyMiles
American Express
Centurion Bank
Salt Lake City, UT
800-SKYMILE
American Express
Standard
18.24%V
20 billing
$55
One mile for every dollar in purchases
American Express
Gold
18.24%V
20 billing
$85
One mile for every dollar in purchases
American Express
Platinum
18.24%V
20 billing
$135
One mile for every dollar in purchases
Northwest Airlines
World Perks
U.S. Bank
Minneapolis, MN
800-360-2900
Visa Classic 18.00%V
20 billing
$55
One mile for every dollar in purchases up to $10,000 in one month and then one mile for every $2 over $10,000. Standard and gold
Visa Gold 18.00%V
20 billing
$90
Southwest
Rapid Rewards
First USA Bank
Wilmington, DE
800-792-8472
Visa Classic 16.90%V
20 billing
$29

One reward dollar=$1 purchases

1000 reward dollars=1 flight credit

16 flight credits within one year=1 round trip ticket. Standard and platinum

Visa Platinum 16.90%V
20 billing
$49
TWA Aviator Miles
MBNA America
Wilmington, DE
800-383-6472
MasterCard Standard
or Visa Classic
18.15%V
25 billing
$50
One mile for every dollar in purchases
MasterCard Platinum
or Visa Platinum
17.15%V
25 billing
$75
One mile for every dollar in purchases
United Airlines
Mileage Plus
First USA Bank
Wilmington, DE
800-537-7783
Visa Classic 18.15%V
20 billing
$60
One mile for every dollar in purchases
Visa Platinum 18.15%V
20 billing
$60
One mile for every dollar in purchases
USAirways
Dividend Miles
Bank of America
Wilmington, DE
800-341-7568
Visa Classic 18.15%V
20 billing
$50
One mile for every dollar in purchases
Visa Gold 18.15%V
20 billing
$70
One mile for every dollar in purchases
Visa Platinum 18.15%V
20 billing
$125
1.2 miles for every dollar in purchases
Card holder selects airline
AFBA Industrial Bank
Colorado Springs, CO
800-776-2265
MasterCard Gold
or Visa Gold
11.40%V
25 billing
$0
5 percent automatic ticket rebate using AFBA IB travel services. Gold and platinum
Visa Platinum 10.25%V
25 billing
$0
Capital One Bank
MilesOne
Richmond, Va.
800-553-2194
Visa Platinum 9.90%F
25 billing
$19
One mile for every dollar in purchases
First Union
Charlotte, N.C.
800-704-0883
Visa Classic
Business Card
Fun Miles
15.25%V
25 billing
$20 + Option
$39.95 each
card
Fun Miles optional program. One mile for every dollar in purchases. Redeem for airline ticket or for discount on card
First Union
AirMiles
Charlotte, N.C.
800-377-3404
Visa Classic 16.15%V
25 billing
$50
One mile for every dollar in purchases
First Union
AirMiles Plus
Charlotte, NC
800-377-3404
Visa Classic 14.15%V
25 billing
$75
1.2 miles for every dollar in purchases
First Union
Travel & More
Charlotte, N.C.
800-377-3404
Visa Classic 13.15%V
25 billing
$49
Ten miles for every $100 in purchases if balance is carried
First USA/Bank One
Travel Plus
Wilmington, DE
800-945-2023
Visa Classic 17.54%V
20 billing
$25
One point for every dollar in purchases when revolve balance One point every $3 new purchase paid monthly Other rewards, partners. Classic and gold
Visa Gold 17.54%V
20 billing
$55
Huntington National
Bank
Columbus, OH
800-480-2265
MasterCard
Standard or
Visa Classic
9.25%V
25 billing
$39 + $35
Option

Optional program One point for every dollar in purchases 25,000 points earn ticket $500 maximum

10,000 points max per month. Standard, gold and platinum. Travel program also includes cruises, upgrades and other options

MasterCard Gold
or Visa Gold
9.25%V
25 billing
$49 + $35
Option
Visa Platinum 8.25%V
25 billing
$75+$35
Option
MasterCard
Standard or
Visa Classic
16.15%V
25 billing
$0+$35
Option
MasterCard
Gold or
Visa Gold
13.15%V
25 billing
$0+$35
Option
Visa Platinum 12.74%V
25 billing
$0+$35
Option
Information applies to purchases only. Cash advances frequently are charged interest from the date of transaction. Additional fees may be charged such as for exceeding a credit line, making a payment late, obtaining a cash advance, making an ATM transaction, or if a check is returned.
Source: Bankrate.com, October 1999

-- Posted: Sept. 21, 1999

 

top of page
Print  
 

30 yr fixed mtg 4.32%
48 month new car loan 2.91%
1 yr CD 0.68%
Alerts


Mortgage calculator
See your FICO Score Range -- Free
How much money can you save in your 401(k) plan?
Which is better -- a rebate or special dealer financing?
VIEW MORE CALCULATORS

BASICS SERIES
Begin with personal finance fundamentals:
Auto Loans
Checking
Credit Cards
Debt Consolidation
Insurance
Investing
Home Equity
Mortgages
Student Loans
Taxes
Retirement

MORE ON BANKRATE
Ask the experts  
Frugal $ense contest  
Quizzes  
Form Letters


- advertisement -

 
- advertisement -