Originally Posted by
Laniss85
Hello everyone,
I've been wanting to get a credit card that has a miles/points system for a while now, coincidentally I came across this website a couple months ago, but at the time nothing materialized. I also have no idea how these programs work.
First off, I don't fly that much, not for work, not for anything, so frequent flyer miles won't really do anything for me. Instead I'd be looking for something that gives you points/miles based on credit card purchases and the like (though I really don't use my credit card that often, only when I have to). I've decided that since I'll be finishing up at college within the next year or two, that I would like to travel a little, so I figure I might as well get something out of credit card usage (it seems as if alot of people I know have programs with their card(s) but I don't have anything
).
Other things to consider: I live in Chicago, but I may be moving to the Pacific Northwest region or to Colorado (extended family in those areas). So I'm not too sure how these programs work, whether I have to be associated with a specific airline or something from a specific area? (I really have no idea).
I've browsed around considerably on this site and people seem to have alot of information and suggestions, so I would really appreciate any help anybody can give, thanks in advance.
A key question is where you want to travel and in what part of the plane.
If you only want (for the near future) to travel in the regular "coach" section of the plane on domestic 48/49-state flights (ie, not counting Hawaii), then a 1% cashback card is going to do about as well as any sorts of miles or points to most destinations. (A few less-common destinations like Jackson Hole might be an exception, where paid flights are much more expensive than to big cities but airline mile redemption costs no more.)
People who've told you there are only miles cards and "fake mile" cards are wrong. There are at least 4 types of cards:
1. Cards that directly earn real airline miles. The ones that earn 1 mile per $ spent have annual fees, typically $50 to $85. You need to be earning quite a few miles (basically using that one card everywhere you can use it to pay) to justify the annual fee (in the value of the miles you earn).
2. Charge cards (not true credit cards, because you "have" to pay the bill in full every month) that have their own points systems but are redeemable for a variety of real airline miles and/or real hotel points. There are two groups of these: One is DIners Club, the other is the Membership Rewards cards (such as Gold) from American Express (but not all American Express cards use Membership Rewards). Neither cards lets you transfer to any airline, and they are partly mutually exclusive: Diners supports AA but Amex MR doesn't, while Amex MR supports Continental but Diners doesn't. Neither supports United, btw.
3. Hotel cards that earn real hotel points, at hotels where the points can be transferred to a variety of airline miles. These include the Starwood AMEX that has already been mentioned, as well as Visa or MC cards for hotel programs such as Hilton HHonors, Priority Club (Holiday Inn, etc), and Choice Priveleges (Comfort Inn, etc). Some have annual fees but most don't. Most (except Starwood AMEX) don't earn as many miles per dollar spent (after conversion from hotel points to miles) as the real miles, Diners Club, and Amex MR cards do, but that's the price you pay for no annual fee. (If you decide a better goal for you is hotel night awards than airline ticket awards tho, a hotel card with no annual fee might work better for you, if you don't want to start paying for
everything possible with the credit card.)
4. "Fake miles" or "fake points" cards from a number of banks, including Capital One, Citibank "Thank You" points, etc, etc, etc. These are cards which earn points which cnanot be combined with anything else. If you don't ever charge $25,000 on that card, you may never get to a single award! (As opposed to the other card types above, the points or miles you earn from the card can be combined with what you earn from actual flights and/or actual hotel stays and/or eating at certain restaurants and/or filing out surveys!)
The "fake miles" and "fake points" cards are to be avoided, because they never give you a better value than about 1% cashback. Even if you decide none of the first 3 options are for you, your alternate choice should be a simple no-annual-fee 1% cashback card rather than a "fake miles" or "fake points" card.
Finally, and this is extremely important:
Do not carry a balance, ever, on these cards! The interest you pay on carrying even a small amount for one month will completley
wipe out the value of the earnings you get from using the card! Similarly, be very careful to never pay the card late or go overlimit, because again, those fees from just one such occurrence will
wipe out the value of any miles/points/cashback you have earned for a long long time.
(If you
must carry a balance, do it on a separate card, via balance transfers, to a card which earnis nothing but gives you the very lowest interest rate possible.)
Oh, one more thing: If you don't spend a lot (on stuff than can charged to a card), the bonus you get for singing up for the card (which can be almost enough for a free flight in some cases!) may be much more signficant than what you'll earn in the next couple years just using the card "normally". But those bonuses only apply to the first three types of cards, and the amount and specific terms of the bonus vary a lot.