Rewards Cards
 

I have a Master Card Travel Rewards card. There is no charge the first year but a subsequent yearly fee of $25 is incurred. Also, points will start to expire after 5 yrs and no free miles for starting up. However, I figure before the fifth year has ended I will upgrade to another rewards card with no penalty of expiring points. Is this a good plan?

I know that my father has Travel Rewards card that is totally free, from some financial insitution. I can't remember.

I'm not sure any miles or travel rewards card is a good plan. Given the uncertainty and arbitrary value of miles and points, I made a conscious decision after 9/11 last year to discontinue using any points or miles-based credit card and switching to a cash back card. There's nothing stopping a carrier from releasing fewer or no reward seats, or arbitrarily increasing the number of "miles" or "points" required for an award. While getting 1% cash back on my credit card may be less valuable than tens of thousands of miles per year right now, the value of cash is fixed (and once I earn it, it's mine in the bank), while the value of miles are arbitrary and are determined by the airline. Miles can be devalued if they change reward availability, terminate or reduce service to a particular destination, change the redemption scheme, or if the airline goes belly up.

Cash is cash, and I'd rather have something certain now than some "miles" or "points" based currency arbitrarily controlled by an airline or credit card company.

[This message has been edited by channa (edited 10-11-2002).]

I choose the Travel Rewards Card over the Cash Back Card because there was a time in my life when I called friends on the phone and their answer was "Where are you?" I rarely travel and I figure if I am rewarded with a free trip I would be compelled to exercise that option.

Ah! to be young again!!

"However, I figure before the fifth year has ended I will upgrade to another rewards card with no penalty of expiring points. Is this a good plan? "

You suggest that you are going to be able to somehow roll your "travel rewards" over from one card to another by signing up for another card. As far as I know, each of these travel rewards cards operates independently, and the rewards points or whatever are not fungible--that is, the Banc One rewards points can't be converted into First USA reward points (if there is such a thing). So, once you have begun earning travel reward points in one bank's particular system (and not an airline's points or a particular hotel's points, for example), you are stuck with that credit card and that bank until you can claim a reward. Otherwise, I am pretty sure most of them provide that you lose the points if you close the credit card account.

The expiration of the bank-related programs (and the ability to merge credit card charging points with points earned while flying, staying in hotels, and renting cars, among other things) are two of the big reasons to get a card which funnels points into an airline or hotel's programs.

Djlawman

If you don't think you're going to be able to earn enough points for a domestic award within a 5-year period, I think that perhaps an awards card is not the right product for you. I especially wouldn't want to pay even a $25 annual fee for several years if the only benefit was that I might earn enough for a domestic ticket, or not. Especially not in an environment where the likes of Southwest offers $198 coast-to-coast specials from time to time.

Steve made a very good point. If the five years is going to be a problem, you might be better off with a no-fee card. I have friends who only charge a few thousand dollars a year to their $135 Delta AmEx card. This simply does not make economical sense. Go for a cash rebate card instead. There are a number of 1% cards on the market, but Amoco has a 2% card through First USA. The only catch is that the rebate must be used to purchase Amoco gasoline. Another thought might be the two Hilton cards--the AmEx and the Citi. Although HHonors points are not worth what Starwood points are, the two application bonuses alone will beef up a HHonors account. They too do not carry a fee.

The Rewards Card that I have is a Chase MasterCard. According to their website, there is no problem to upgrade to a card with a higher interest rate. There is no problem reaching the first upgrade at 5000 points, and the 15,000 with in five years.

However, from all the feed back I will have to evaluate owning a travel card.

I also changed from Mileage Card to Cash back card the American Express 5% Rebate Card.

I took another look at the brochure and you can redeem the annual fee after 3500 points. This essentually makes my MasterCard FREE!! It's been half a year since I've had my Rewards Card but I will make the call and post the results.

Amex converted my Optima card to the said 5% rebate card. However, the 5% is a bit misleading. It varies from 1.5 % to 3%, and you have to carry a balance to get the additional 2%. In addition, you are capped at $50k of spending. Not a very good deal, in my book. I'd rather use Discover or my UA MP Visa.

But i won't be spending over $50k http://www.flyertalk.com/forum/smile.gif

Also, Discover won't even give you 1.5%, only on selected online merchants do they give you 2%.

I would happily trade in my mileage cards if there was a no-fee 1% rebate card that involved NO NONSENSE. As far as I can tell, they all involve me jumping through hoops to get the 1 percent.

I don't want to make phone calls to get the 1%, I don't want to have to spend a bazillion dollars to get the 1%, and I don't want to have to pay full retail at a high-priced gas station to get the 1%. I also don't want to have to redeem my earnings at an Amoco where gas in $1.59/gallon when the discount station across the street is $1.49/gallon.

Basically, if I spend a hundred dollars this month, I want to be able to click on my monthly bill and see $99.

And, of course, I don't want to pay an annual fee or be tied into using other bank services besides the credit card (which is worse than an annual fee).

Does such a card exist?

Citibank's Dividend has no annul fee. and Amex's 5% cash back has none either.

Citi

Amex

Citi Dividend Card: Close, but no cigar. You get $100 every time you spend $10,000 in a calendar year, up to $300 per calendar year. I can't find the fine print that says what happens if, say, I spend $9900 in 1 calendar year and then the final $100 on January 2.

(Actually, this card is currently in the mail on its way to me. I picked it up because I need a place to park a balance transfer. This card has 0% through Jan '04. On Jan 1, 2003, I will decide whether I want to chase the 1% cash back carrot.)

Amex: I can't find the fine print on the website. I did, however, find the words "up to" everywhere and a phrase something like "paid at the end of the year" as well. Looks like a lot of fine print with this one. Having said that, this card looks like it has promise. If, say, you were making large Home Depot purchases late in a calendar year, you could potentially realize a nice rebate in near-real-time.

The AMEX card does look interesting but I agree, the "up to" wording is not clearly explained. It does state that to get the 5% rebate you have to carry a balance. Does anyone have this card? What are the restrictions for "up to" 3% for supermarkets, drugstores, etc., and "up to" 1.5% on all other purchases?