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.

the_traveler

Welcome to FT Laniss85!
One place you might want to check is free frequent flyer miles to get an idea of the "best" credit card for you.

One thing I caution you about is the offer by some companies (like Capital One) that state that their "miles" allow you to get a free ticket with "just 25,000 miles" on "any airline"! (Hey, that's the same as other airlines!) But there is a BIG difference:

1) Those "miles" are not airline frequent flyer program miles - they are only good with that company! Just like I can say that I'll fly you cross country for 10,000 dogcats. (What are they? )

2) The company will buy a ticket for you with your "miles" - but they may have a low limit! (Maybe it will be something like $350.) If they can find a ticket for $300, they will buy it. But if those $300 tickets are sold out, but there is a $450 ticket available, you will be told there are no tickets available! (Because it is above their limit.)

curious_miles

I would suggest, for now, you open an amex starwood card and use it only. The annual fee is 45 dollars after the first year, but it's worth it, and it generates 2% reward easily. Read on this board and learn about other citi, chase, amex products in your leisure time and sooner or later, you will be able to do better than 2%.

gre

As stated above, there are essentially 2 types of cards.

First, those with a specific airline. With those ~25k miles will get you to anywhere in the US, ~50k miles will get you to Europe, etc.

Second, there are cards like the CapOne where you earn points with them and they buy you a ticket with any airline.

The big difference is that the airline miles will get you a ticket (subject to availability) regardless of the price of the ticket, e.g., a $200 ticket costs the same number of miles as a $500 ticket. Many of the second type of programs buy you a ticket and charges you miles based on price, i.e., the more expensive ticket costs more miles.

This is, of course, a gross oversimplification because many programs, like UA, offer both types of choices. I suggest considerable research and basing your choice on your specific needs. You might find that a cash rebate card might actually be your best bet until you settle down, start earning more, and most importantly, start spending more. I've found that the real value of credit card programs does not really kick in until one spends considerably more than the average college student is likely to.

By the way, welcome to FT!

the_traveler

FYI - Here's part of the T&C of the Capital One No Hassle credit card offer that I just received:

(Sorry it didn't post in columns. )

Remember an airline FFP requires 25,000 miles for a ticket (if you can find a "saver" award) or 50,000 miles for any available seat. With this card, you would probably need either 35,000 "miles" or 60,000 "miles" (or more! ) for the same seat!

allset2travel

One additional feature which I value greatly is the "no currency conversion surcharge". This is good for those who travel overseas and use credit card for purchases (who doesn't). Most other credit cards do charge a fee (some as much as 3% ) for currency conversion. In your case, it might not be as valuable since you don't do work related travel.

curious_miles

That's right. Before I see pgary's homepage, I was proud of getting mere 1.5% after 6500 dollars on amex costco for more than 5 years. Silly me.

thanks, pgary!

Efrem

If you don't fly all that much, consider getting a card that just gives you a cash rebate. You can always use the money to buy plane tickets - but you don't have to if you have a better use for it. Besides, that way you won't have some airline's yield management system telling you when you can fly, when you can't.

Stefan Daystrom

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.

beckduer

I'm surprised no one has posted this here yet.

Randy Peterson and Tim Winship answered your question (to a degree) in their online chat with Michelle Singletary (The Color of Money Book Club) at the Washington Post yesterday.

Here's the link:

http://www.washingtonpost.com/wp-dyn...111501035.html

That question comes up about 1/3 down the column