Although I have for many years used airline affinity cards to earn frequent flier miles, it seems to me that they have become a very poor choice. Not only do the rewards they offer seem inferior to other options, they are expensive. In the particular case of the NWA Visa Card (US Bank) they can also be dangerous to your financial health.

Let me start with describing my experience with the NWA Visa, which I have held for many years, and used without any problems for most of those years. Some 4-5 years ago the issuer, US Bank was acquired by First Bank (for this information I am indebted to socrates) which adopted the name US Bank. There was a general deterioration of service after that. I particularly remember the time my credit cards were stolen in Spain. I notified all card issuers by collect call, quickly and without a problem. All, that is, but US Bank, whose "collect" telephone number did not produce a human voice, but only a series of menu options which no AT&T or other operator was willing to maneuver through. I ended up having to pay about $25 for the call myself.

Much more important was their recent refusal to protect me after a credit card purchase of a defective item. Two years ago we bought a snowblower. The snowblower turned out to have a massive gasoline leak which rendered it unusable, so we returned it immediately to the dealer. It spent the next four months, the entire snow season, at the dealer, while we paid several hundred dollars for snow removal at our home. We tried to cancel the purchase and charge it back, so that we could buy another blower, but US Bank adamantly refused. I contacted several other Visa and other credit card issuers, and they all concurred that US Bank was acting improperly. And I forwarded to US Bank Section1666i of Title 15 of the U.S. Code, which states that "…the card issuer is subject to all claims and defenses arising out of any transaction…. If the obligor has made a good faith effort to obtain satisfactory resolution…".Obviously my defense was that the blower was unfit for the purpose for which I bought it. None of this had any effect, and US Bank refused to make any change in their decision.

So much for US law. Since it was obviously impractical to sue US Bank, our only recourse was to drop their card. In my experience of about 10 instances, this is the first time that a credit card issuer has refused to honor Title 15.

As a result of this experience I began to rethink the whole issue of airline affinity cards. My starting premise is that airline miles are currently worth only 1-1.5 cents each, instead of the 2 cents formerly estimated. This is based on the steadily increasing number of miles required for trips and upgrades, and the increasing difficulty of actually converting miles into trips.

Furthermore, these cards have annual fees, e.g. $55-$80 for the NWA Visa. They also impose increasingly large fees on foreign transactions, 3% in the case of NWA Visa. Lastly, whereas some of them offer rental car collision coverage, the coverage is usually secondary in the US, which means your auto insurance company gets involved and may raise your premiums.

I believe there are a number of cards which offer better terms in one area or another. For example, my Diners card offers primary US rental car coverage, and allows me to transfer miles to virtually any airline frequent flyer program when I need them. They also offer periodic specials, such as 2 British Airways miles per dollar spent. Their annual fee is $95 however, and while they are accepted more widely than before, many retail stores still do not accept them.

The American Express Cash Back Card offers 1.5-3% cash back beyond a certain threshold of expenditures ($6000/year). Cash seems much more certain than miles to me, and even1.5% is more than competitive with the current value of airline miles. Most stores now accept Amex, and a special benefit is the ability to cash personal checks at Amex offices abroad for holders of Amex cards. However, the fee on foreign exchange is 2%, and they offer no rental car insurance coverage.

For the occasional store that accepts neither we use our REI Gold Visa, 1% cash back, no fee. Unfortunately, this card is issued by US Bank.

Finally, for travel abroad (excluding car rentals) we use our credit union Master Card. No annual fee, and 0% on foreign exchange.

This is my collection of cards. In the US I use Diners when accepted (although I may soon switch more to Amex), and I use Diners for all car rentals, here and abroad. Otherwise I use Amex in this country, and the credit union Master Card abroad. And when Amex is not accepted I occasionally use my REI Visa.

These are my thoughts. I would be interested in other opinions.