Low-purchaser needs advice!
 

Hi all,

Could really use some advice in regards to getting a credit card to earn miles/points. I don't spend a lot of money every month and I don't have a regular destination I fly to (though eventually I'm hoping to fly outside of the U.S.). I guess, I really need a card that can be super flexible and not charge me a lot of fees. I only put what I can afford on my cards and have a good credit rating.

Been considering:

Blue Sky from AMEX
Chase Sapphire

Thanks for any help. I've been Internet searching for a good card for a while and usually end up overwhelmed with the options and nervous about making the plunge.

Best,
Lauren

With your situation you might want to consider a cash back card; since you don't spend a lot on your card it will take you a long time to accumulate enough points for a reward. As for Chase Sapphire or AMEX Blue Sky, do you currently have a Visa/MC? If your looking for a single card option 2 things to keep in mind AMEX isn't accepted everywhere; also with Sapphire it has no preset spending limit so that might cause issues with your credit utilization and hurt your credit score.

Since you mentioned you want to travel outside the US you might want to look at Capital One with a Cash Back card; They currently don't have a FOREX fee for purchases abroad.

I'm also a "low purchaser" compared to most on this board, but you'd be surprised how quickly your everyday purchases like groceries and gas add up.

Between the sign-up bonuses for new cards, 2-3 flights per year at a normal fare, and everyday purchases, I can easily meet my goal of getting a free flight for my yearly vacation. ^

As many others will tell you, the StarWood AmEx is a good idea. So it having a Visa/MC for places that don't take AmEx. Otherwise, just sign up for new cards when you see great offers... as long as you have the restraint to not carry a balance!

Welcome to FT. One of the keys to gaining a return on your credit card use is to combine disciplined monthly pay offs with dedicated maximum usage. In other words, put everything possible on the card, including all monthly recurring bills that will accept auto-CC payments, while paying off the balance religously, every month. I have found that my cable, internet, phone, gym, and netfix will all accept CC payments without any extra fee. This varies by location, so check all of your creditors.

Some counties will even let you pay property taxes via credit card without a fee. Just don't add new expenses because of the card/miles.

I do agree with the posts about cash back cards - If you're not sure about earning enough points to overcome the annual fee then cash back may be better for you. Personally, I use the SPG AMEX.

If you only want one card, I probably would not go with an AMEX since its not accepted everywhere.

If you dont mind carrying two cards, the SPG Amex is a great choice.

Depending on your spending habits, you might want to check out the PenFed Visa Cash back card...

5% on gas (regardless of what gas station!)
2% on groceries
1% everything else

Not everyone qualifies as its a credit union and has some stringent requirements, but its a great card.

No annual fee, and the cash back is automatically credited to your account monthly, very hassle-free.

Distinguish between acquiring a card and doing the minimum spend to get a mega bonus, and actually using the card for everyday spending. The initial bonuses are huge, and the minimum spends to get them are easy - just buy coins from the U.S. Mint. But for actual everyday spending, the cash back cards are usually better.

• Find the mega bonus offers in the Credit Card section of my website below.
• Read the Value of Miles section of that website to compare using a miles card for everyday purchases vs. using a cash back card for these.

If you don't spend a lot of money on the card, the value of your rewards might be less than the annual fee for the card, and you would lose money overall.

In terms of flexibility, some of the American Express charge cards allow you to transfer points to a selection of different airline mile programs. You won't get a big point bonus for signing up, though. The Starwood Amex can also transfer points to a bunch of different airline and hotel programs.

If you really want to rack up the miles, see if you can pay your rent/mortgage with the card. If you pay the card off right away, you will be getting free miles for money that you have to spend anyway.

I recommend using a cash back card if your spend is low. There are plenty of no-fee cash back cards that give their full % back almost from the start.

Capital One No Hassle Rewards (US) may be useful for a traveler for whom an airline or hotel specific rewards card does not make sense.

no annual fee, grace period
1% back on most things, 2% on groceries or motor fuel
cash rewards can be set to automatically credit against your bill every time you reach a $25 threshold
no surcharge for international or foreign currency transactions (unlike the usual 3% or so)

YEa, that would largely depend on how much money you are planning to spend with that card.

Or anyone who travels internationally. If you use any of the "normal" mileage cards, you're effectively paying $.04 per mile.

Thanks for the help!
 

Wow, thanks all for the advice. Sounds like the Capital One card may make the most sense.

I officially love this website.^

...or how about a debit card?
 

Lost in the mix here is the potential to earn miles--big miles--on just a debit card. Chase and Continental have a checking accont promo which lasts till 6/30/10, and offers 25,000 miles after a small spend. Then it's 1 point per $ spent after that (2 points per $ on Continental's website). You don't even need to go into a Chase branch to do this; frugaltravelguy.com has a phone number you can call, and directions on this whole deal.

Just something else to throw into the mix.

Jim

You didn't specify what range your annual spending might reach. If you would reach $15,000 total spending for a year you might consider the Virgin Atlantic American Express card from Bank of America. You get 1.5 miles per dollar spent on all purchases, and if you reach $15,000 spending in a year you get 7,500 bonus miles. So for $15,000 a year spending you would receive 30,000 miles. While in theory you can use the miles on Continental and US Airways, I think the best use of the miles would be in flying to London on Virgin Atlantic. There is a special on flights from New York to London at this time for 29,500 miles (round trip coach). However, Virgin Atlantic has very high fees for mileage travel. So you could get a round trip for about one years spending plus $300-$350 dollars. The annual fee is $90.00. You will have to pay the next years annual fee to get the 7,500 bonus miles.