Many of you may already know this, but Yahoo maintains a fairly comprehensive credit card optimization engine. You provide your credit card usage habits (spending levels, how often you pay the bill in full, etc.) and it spits out the "perfect" card for you. It has the potential to be a great tool, it appears to be unbiased (except for Goldpoints - see below), and it has made me aware of a lot of cards from smaller banks, although I haven't acted on any of the suggestions (yet).

However, there is one problem with the engine: it predetermines the value of the reward associated with each card, and it won't let you alter the Yahoo-determined value.

For example, I place a higher value on 1 AA mile than I do on, say, a Northwest mile. The reason is that I earn and redeem AA miles frequently, whereas a Northwest mile would sit in my account for years losing value - and I'm also in the final stretches of a Million Miler run on AA. Unfortunately, I can't customize this in Yahoo.

Anyway, here are some of Yahoo's valuations. They vary by airline, and they follow a wierd algorithm that seems to assume that people sell their FF awards in the newspaper for $260 per ticket. It's too wierd to explain - read the fine print on the website.

American, Delta, United: 1.04 cents
Continental, Northwest: 1.116 cents
Alaska, America West, Hawaiian: 1.13 cents
Southwest: 1.63 cents (1 segment = $16.30)
US Airways wasn't on the list.

Hotels:

Marriott: .37 cents/point
HHonors: .31 cents/point
Priority Club: .39 cents/point
Starwood wasn't on the list.

And here's the most bizarre part of all: Goldpoints are valued at 2.7 cents per point. No matter what numbers I use for my spending habits, Yahoo tells me I could save hundreds of dollars a year by switching to the Goldpoints Visa. I had to look at this about three times to confirm that the decimal point was really where it was! My problem with this is that this appears to be severely biased, even though the rest of the site seems not to be. According to Yahoo, Goldpoints Visa is the greatest credit card product ever created in the history of mankind, yielding a 7% discount on every purchase you make!

The link:
https://biz.yahoo.com/d/c/step1.cgi