Posted in Budget, Flying on Miles, Hotel, Travel

Survey on American travel credit cards

Travel credit cards are rewards cards that help users earn free travel, achieve elite member status with hotels and airlines and enjoy many other travel-related perks. Although travel credit cards can often be used for cash back too, consumers receive better value when using them to collect and redeem points for travel.

Travel credit cards fall into one of three types: airline cards, hotel cards and general travel cards. A co-branded airline or hotel credit card enters you into a specific brand’s loyalty membership club and rewards all types of spending, however the points you earn can only be redeemed toward that single brand and its partners. General travel cards also reward all types of spending, at a lower, flat rate, but the points you earn can be redeemed with a variety of airline and hotel loyalty programs, based on the partnerships secured by the card issuer.

2017 Survey: More Than Half of Travel Rewards Cardholders Carry a Monthly Balance

U.S. News surveyed 1,278 travel credit card users to understand the benefits and drawbacks of owning one. While the vast majority of respondents have redeemed lucrative rewards in the last year, many cardholders are not aware of their annual fee or how to take advantage of their card benefits. Additionally, more than half of travel credit card users have carried a balance on their card in the last year, potentially negating the rewards they have earned.  Thirty-three percent of respondents earned more than $500 in rewards in the last year.  The most popular redemption options included free domestic flights, followed by cash back, followed by free nights at a hotel. Free international flights were the least commonly redeemed. More than half of travel credit cardholders surveyed carried a monthly balance in the last year.

Since travel rewards credit cards tend to have higher-than-average interest rates on purchases, carrying a balance has the potential to cost you more than any rewards you earn. Travel credit card expert Daraius Dubash of millionmilesecrets.com recommends that people carrying credit card debt should probably opt instead for a zero percent APR card and focus on eliminating their credit debt before trying to earn travel rewards.

Sign-up bonuses are one way that cardholders end up carrying a balance, says Joe Cortez, senior writer for frugaltravelguy.com. “In a way [a sign-up bonus] is almost a trap to try to get you to put a balance on the card up-front.” Forty-three percent of consumers surveyed said they qualified for their card’s sign-up bonus.

 

It’s also critical that consumers be aware of annual fees. Most respondents knew what their card’s annual fee was, while 17 percent of respondents didn’t know.

Nearly half of travel rewards cardholders don’t take advantage of cardholder benefits.  Ninety-six percent of respondents redeemed at least some rewards in the last year, but 48 percent of respondents did not take advantage of common cardholders benefits such as airport lounge access, trip cancellation/delay insurance, free checked bags when flying, auto rental insurance and priority boarding when flying.

How Travel Credit Cards Work

Travel rewards cards help users save money on travel expenses, like on airfare, hotel and transportation spending. Travel credit cards benefit repeat customers, because the more you spend, the more savings (or benefits) you receive.

Travel rewards cards offer higher earning rates for travel spending in particular, and may can be cashed in for highly discounted or free flights and hotel stays, free or reduced baggage fees, priority boarding and other perks. Some cards may not even require any points at all to take advantage of those perks, but they may carry an annual fee to offset those costs to the issuer.

Travel credit cards often come with lucrative sign-up bonuses with the best cards offering as many as 100,000 points to new members who hit a minimum spending amount within the first few months.

Like other premium rewards cards, travel cards are generally known to carry more restrictions and fees than the average credit card. For this reason, travel cards are not as beneficial for the occasional traveler.

There are three basic types of travel credit cards: airline, hotel and general travel.

 

Airline credit cards

Airlines partner with credit card companies to offer co-branded travel rewards credit cards that earn the most miles when used for flights on that particular airline and spending with affiliate partners, typically double or triple the miles. Cardholders still earn miles for day-to-day purchases (with a few exceptions like cash advances and purchases of prepaid cards), only at a lower rate, typically one point per dollar. You can redeem earned miles with that airline or its affiliates.

Benefits: Perks and spending rewards

Airline cards can deliver a cheaper, more comfortable flying experience. Benefits often include free or reduced baggage fees, priority boarding, complimentary or discounted access to the airport lounge and discounts on in-flight purchases.

But airline cards can also save you money by offering sizable sign-up bonuses, waived foreign transaction fees and double or triple miles earned on airline and affiliate purchases.

 

Hotel credit cards

Hotel credit cards are most valuable when used to book accommodations with that particular hotel chain. Unlike airline cards, it’s not uncommon to earn five points per dollar spent with that brand, with other travel purchases earning fewer points and all other purchases earning the least. Points have to be redeemed through that brand or its partners.

Benefits: Free nights and special status

Hotel credit cards work best for loyal guests of one particular hotel chain or group. Free nights are the most valuable benefit, and most hotel cards provide users with an easier path toward elite status, which delivers perks like guaranteed room availability, membership discounts, priority check-in, and complimentary upgrades. As with airline credit cards, one-time sign-up bonuses are common if you spend a minimum amount within the first few months.

Some hotel cards charge an annual fee that’s waived during the first year, but those that do typically don’t charge foreign transaction fees. Many hotel cards provide various forms of travel insurance, like lost baggage protection, trip delay reimbursement, emergency assistance and car rental insurance coverage. Some hotel rewards programs let you transfer your points to their airline partners.

 

General travel credit cards

General travel credit cards are not tied to any particular travel brand and offer the flexibility to redeem through their own travel portals or transfer points to partners to redeem for cruises, hotel packages, rental cars and cruises, among other options. Purchases typically carry a flat reward rate, but points can be redeemed from a broad selection of travel brands and sometimes for nontravel rewards.

Benefits: Flexibility and value

General travel cards are inherently more flexible than airline or hotel credit cards, which is a big plus for travelers who aren’t loyal to any particular brand or who travel to destinations with fewer options for hotels or airports. Cardholders can worry less about blackout dates or travel restrictions because they’re not tied to a sole provider.

Points can sometimes be transferred to other loyalty programs. However, points don’t transfer equally with all partners and the exchange rates do vary; in some cases you get get the best redemption value by transferring points to partners. It’s important to review your card’s reward charts to better calculate the value of transferring your points with partners.

The ability to also redeem general travel card points toward statement credits or cash back makes this type of card particularly attractive to users who prioritize flexibility.

Benefits and Drawbacks of Travel Rewards Credit Cards

For the right consumer, travel credit cards can make a lot of financial sense, but it’s important to understand the pros and cons.

Benefits

Better point valuations and redemptions: Travel-related spending with travel credit cards accrues points and miles faster than general rewards credit cards, and when those miles are redeemed for travel, they have potential to deliver better ratios than other rewards like cash back or statement credits. Points can be used to book free nights at hotels or for free flights.

Travel perks: Many travel credit cards also offer perks like free checked bags, priority boarding, concierge services and travel protection and assistance.

No foreign transaction fees: A foreign transaction fee is a surcharge on every purchase made on a credit card outside the U.S. If your itinerary takes you overseas, a travel credit card that carries no foreign transaction fees helps you avoid that added cost, which is typically 3 percent of the purchase price.

Drawbacks

High costs: Travel cards’ purchase interest rates (APRs) fall on the higher end of the scale for all credit cards, and the credit score needed to secure them starts in the upper 600s. Qualifying credit scores on the lower end of the spectrum will, in turn, result in higher APRs.

Top travel cards charge annual fees that require high amounts of travel or other spending to offset them via rewards. Similarly, sign-up bonuses may encourage you to spend more just to qualify for them.

“I think that many consumers are very excited about the points without considering how much they’re going to spend in actual interest at the end of the day,” Cortez says. To avoid running a high balance on the card, Cortez explains that a savvy consumer will look at his or her budget in light of the required minimum spending amount to qualify for a sign-up bonus and determine a plan to earn the points in a way that complements their lifestyle.

Restrictions: Travel credit cards can also cost you time. Some cards require lots of planning or working with customer service to navigate blackout dates, limited seat availability or confusing terms and conditions. Depending on the card, there can also be restrictions on earning miles, including caps and expiration dates. And, of course, bonus points from airline and hotel cards are restricted to redemption only with that brand or qualifying partners.

Emily Jablon, co-founder at Million Mile Secrets, points out that for an expensive or long-distance trip, it may be worth the added cost to enlist the help of an award-booking service. For a fee ranging from $75 to $250 per traveler, services like Cranky Concierge and AwardAdvocate can help you find and book the lowest fares for award travel and answer any questions you may have about your trip.

Choosing the Best Travel Credit Card

Is a travel credit card right for you?

Make sure you meet these requirements before signing up for a travel rewards credit card.

  • You travel frequently. If you don’t consistently spend on airfare, hotels or other travel expenses, consider a cash back credit card instead. They have fewer limitations on redemption and might save you the cost of an annual fee.
  • You have a good credit score. You have the best chances of being approved for a travel credit card if you have a FICO score of at least 700.
  • You pay off your balance each month. Because travel credit cards have higher-than-average APRs, you should only get a travel card if you can pay off your balance each month.

To find a travel card that meets your needs, evaluate each card using the following criteria:

  1. Pick the right rewards program for you.
  2. Calculate earning potential.
  3. Factor in sign-up bonuses.
  4. Calculate redemption value.
  5. Subtract annual fees.
  6. Understand travel benefits.
  7. Avoid foreign transaction fees.

1. Pick the right rewards program for you.

Your travel credit card will work either in conjunction with the loyalty program of an airline or hotel chain or with the rewards program of the bank or credit card company that backs it. Each program has its benefits as well as unique terms and conditions for earning, redeeming and transferring points.

Loyalty airline programs

For some travelers, their loyalty to any particular airline lasts only as long as that airline offers the cheapest flights. But frequent flyers are often willing to forgo initial cost savings in exchange for benefits down the road. Which airline’s program works best for you will depend on several factors regarding the loyalty program and the airline itself.

Popular airline programs:

Loyalty hotel programs

When you look for a hotel, do you prioritize value or luxury? The answer will help you determine which hotel rewards program is right for you. As with airline loyalty programs, your earned points may only be eligible for redemption with one hotel chain and its affiliate partners. Some hotel rewards programs have partnerships with other brands, such as Marriott Rewards, which allows members to redeem and earn points with The Ritz-Carlton Rewards program.

Popular hotel rewards programs:

General points program

Using a general travel credit card enters you into the rewards program for the bank or credit card company that backs it. While you will have access to the broader redemption platform for that provider’s network of credit cards, you’ll still receive the best value by redeeming for travel through the platform or using the platform to receive statement credits for travel purchases made on the card.

Maximizing your rewards means matching your goals and habits with the appropriate type of travel rewards program. If you want deluxe benefits that come with elite membership status, an airline or hotel card is the way to go.

However, if you don’t travel as often and want maximum flexibility when you do, as well as a broader range of earnings categories, a general travel card is usually the smartest choice for your first travel card. Frequent flyers often find that adding a second, co-branded loyalty card to their wallet makes sense once they’ve established a favorite airline or hotel chain.

 

2. Calculate earning potential.

Travel cards earn rewards at different rates for spending in different categories, so you have to analyze your spending habits to determine which card will help you maximize your points. A good travel card will have a range of purchases that qualify as travel spending. These purchases can include:

  • flights
  • stays at hotels, motels, timeshares and campgrounds
  • car rentals
  • cruises
  • trains
  • buses, taxis, limousines and ride-hailing companies like Uber and Lyft
  • parking lots and garages
  • bridge and highway tolls
  • meals and other non-lodging expenses at hotels

Depending on the type of card, these purchases can earn between 1.5 and seven points. The highest points tend to come with hotel cards, while airline cards typically award double to triple miles for flight purchases. All other purchases, often referred to as everyday spending, typically earn between one and two points per dollar spent.

 

3. Factor in sign-up bonuses.

The most lucrative travel cards offer bonus points to those who meet a certain level of spending by a specified date, usually within three to six months. These bonuses can be worth hundreds of dollars. For example, the Southwest Airlines Rapid Rewards card offers 50,000 points when you spend $2,000 in the first three months, and the BankAmericard Travel Rewards card offers 20,000 points when you spend $1,000 in the first three months.

 

4. Calculate redemption value.

Every travel card carries a rate at which points or miles are awarded. However, what those points are worth to you depends on the value you derive from redeeming them, as well as your preferences and priorities.

For general travel cards, point valuation is simple math: your number of points multiplied by the redemption rate, often a rate of 1 cent to 1 point. On the surface, award travel with airlines or hotels is also straightforward: The typical cost of a flight or room is divided by the number of miles you need to book an award flight or stay.

But airlines and hotels frequently adjust the price of award travel based on award level, award availability, time, destination/location, fare/hotel class, demand and other factors. All of these changes will affect the value of your miles, making valuation for airlines in particular “extremely complicated,” according to Dubash. “You’ll see estimates all over the place.” He and Cortez both cite 2 cents per mile as a general standard for miles with the major airlines, while the value of miles with smaller airlines like Southwest and JetBlue may fluctuate higher or lower than 2 cents.

Other factors that affect the value of your rewards program include:

  • whether there are fees for checked bags, foreign transactions, etc.
  • whether your points can be transferred to another loyalty program and at what ratio
  • how easy it is accrue and redeem points and whether you face blackout dates, seat restrictions or other limitations
  • the quality of perks available to you once you reach top-tier elite status

5. Subtract annual fees.

Credit card companies entice new users by waiving the annual fee for the first year, which typically ranges from $40 to $95, although it can go as high as $450 per year. Once the fee kicks in, be sure you’re earning enough rewards or enjoying the other card benefits to compensate for it. For example, the Barclaycard Arrival Plus World Elite MasterCard’s $89 annual fee activates in the second year, but you might easily save that amount through the card’s discounts on car rentals, vacation packages, charter flights or flights with one of its airline partners.

There are also excellent cards on the market that don’t carry an annual fee. For example, the Discover it Miles card is a no-fee card that doubles users’ rewards at the end of the first year of use, has no foreign transaction fees and offers a flat 1.5 percent rewards rate on all purchases, including nontravel expenses.

 

6. Understand travel benefits.

Travel benefits can be practical tools, discounted pricing or luxe perks. Common benefits include no foreign transaction fees, access to 24/7 concierge or customer service lines, free baggage and travel insurance. For example, the Chase Sapphire Preferred card comes with trip cancellation/interruption insurance, lost luggage reimbursement, car rental theft and collision coverage, baggage delay insurance, trip delay reimbursement, 24/7 customer service and more.

The Southwest Airlines Rapid Rewards Premier credit card and Business credit card provide A-list status users with priority check-in and boarding, free same-day standby and dedicated customer service. Members of the top two tiers can get free in-flight Wi-Fi and free flights for a friend every time they fly.

The Marriott Rewards Premier credit card comes with zero foreign transaction fees and a free night stay every year after your account anniversary. Members at the introductory level get free in-room internet, while the upper tiers promise lounge access and breakfast, free room upgrades, guaranteed room availability, late checkout, elite customer service lines and arrival gifts.

 

7. Avoid foreign transaction fees.

The best travel cards don’t charge a foreign transaction fee, which is typically 2 to 3 percent on every purchase. Since these fees can be greater than any rewards you earn, frequent overseas travelers will want to make this card feature a top priority.

 

Strategies to Maximize Travel Rewards

Pick the right first travel card.

When you’re first starting out with travel cards, select one with a general miles program that gives you the flexibility to earn rewards for all spending and redeem with the largest variety of brands. Unless you spend large amounts on travel expenses with a particular brand, airline and hotel cards offer less flexibility and savings.

Combine a general travel card with a cobranded or loyalty card.

Used in tandem with a general travel card, an airline or hotel card makes sense for frequent travelers who are comfortable committing to one particular travel brand. This combination allows you to use the cobranded card to earn bonus points on the cobranded airline/hotel spending and use the general travel card to still earn bonus points in non-travel spending categories. You want to make sure your general travel card is allowed to transfer points to the cobranded card, for maximum value.

For example, Chase Sapphire Preferred works well with the Southwest Airlines Rapid Rewards program. You can earn Chase Ultimate Rewards by spending with the Chase Sapphire Preferred card and transfer them to Southwest to either book with miles, or earn double miles by booking with your Southwest Rapid Rewards card. Cortez says he’s a fan of this card combination particularly for casual travelers, as Southwest offers 100 percent award seating availability and doesn’t charge a fixed amount of miles for flights, allowing travelers to find some good bargains on their tickets.

For a general travel/hotel combo, the Hyatt Credit Card also works well with the Chase Sapphire Preferred card. You can earn points with either card and also transfer your Ultimate Rewards into the World of Hyatt rewards program.

Maximizing Your Card Benefits Abroad

Knowing how your travel credit card works and what benefits and protections it offers (or doesn’t offer) can help you solve some of the problems that may arise when you’re abroad.

Avoid foreign transaction fees.

If you’re not sure if your card has foreign transaction fees, check with your bank when you notify them of your upcoming trip. You can also verify with them that your card has EMV smart chip technology, which is the most compatible with foreign merchants and provides the best security.

Avoid dynamic currency conversion.

Many foreign merchants let you choose to be charged in local currency or to pay with dollars through dynamic currency conversion. You should always opt for local currency, as the exchange rate will likely be poor and/or have a fee tacked on top. It’s always good to have cash on-hand regardless in case a store or restaurant won’t accept your card.

Know who to contact in an emergency.

Signature Visa cardholders have free access to a 24/7 benefits administrator who can provide medical referrals, contact loved ones and arrange for payments. Likewise, Citibank cardmembers can receive round-the-clock referrals and other help with medical and legal emergencies.

Some programs, like Visa Signature and World Elite MasterCard, provide 24/7 global services for card-related needs and expedited card replacement, and Visa gives an emergency cash advance or Western Union wire transfer within two hours of approval by your bank.

For common travel medical emergencies, an officer from the nearest U.S. embassy or consulate can help connect you with treatment services, inform loved ones and facilitate the transfer of funds, if necessary. All medical expenses will be your responsibility, however.

Take advantage of travel insurance.

MasterCard and Visa both include travel protections through their cards, as well as travel insurance for an additional cost. World Elite MasterCard offers members international travel accident and medical expenses coverage up to $1 million each, plus trip inconvenience protection and luggage protection.

Visa Signature’s plan offers cardholders and their immediate family members Common Carrier Travel Accident Insurance (for accidents involving your airline, train or cruise ship) up to $500,000 and 24-Hour Travel Accident Insurance for injury, dismemberment or loss of life up to $100,000.

Only 15 percent of credit cards offer travel cancellation insurance, and due to the lack of medical coverage and routine exceptions to Common Carrier protection, the benefits are limited. You may want to opt for third-party travel insurance for fuller coverage.

Protect your rental car.

Your personal car insurance policy probably will not cover foreign travel, so you’ll need to purchase auto insurance in your destination country, preferably at an equivalent level of coverage to what you carry at home.

Travel cards with Visa Signature and World Elite MasterCard benefits offer auto rental collision damage waivers that provide reimbursement over and above any primary insurance you have for towing, loss of use, theft and/or damage to the car up to the full cash value of most rental vehicles booked using that card.

There are restrictions, however, including the country of travel, type of vehicle, age of the vehicle and length of the rental period. And you’ll be required to refuse the collision damage waiver at the car rental counter. Third-party liability, personal accident and personal property coverage will not be included with your card’s coverage, which is why TripAdvisor Travel Advocate Wendy Perrin advises carefully considering which of your credit cards will give you the best coverage (and not result in an increase in your insurance premium).

Be sure to file your claim as soon as possible because time limits are strictly enforced, and have as much documentation as you can. This includes copies of the accident report, rental agreement and receipt, repair estimate, police report and plenty of photos.

Additionally, in some countries, you will need an International Driving Permit. An IDP can be purchased from AAA or the American Automobile Touring Alliance for a $20 fee with a valid driver’s license, two passport pictures and a completed application.

 

Get help with your lost luggage.

Many travel rewards credit cards offer benefits to help you deal with lost luggage. The Lost Luggage Locator Service of Visa Signature can assist with the airline’s claim process or arrange for replacement items to be shipped to you. Both Visa Signature and World Elite MasterCard guarantee users reimbursement for lost or delayed baggage of $100 a day for three days.

 

Airline liability can be complicated for international travel. Your rights are laid out in either the Warsaw Convention or the Montreal Convention, depending on which country you’re traveling to. Frommer’s has a good breakdown of what to do in the event of lost luggage under either scenario, plus best practices for avoiding lost bags in the first place.

 

Contact: Anna Gonzales – Outreach Associate working with U.S. News & World Report

 

 

Posted in Flying on Miles, Travel

Redeeming Miles

Bravo, you have enough miles for a free air ticket, now it is time to redeem it. What do you do and how do you choose from the many options on the website? Is there any trick?

Let’s take a look at what I have on both of my airline accounts, let’s do it together: As of today my American Airlines account only shows 12,194 miles, which is not enough for popcorn right now, let’s leave it alone. Actually, not too bad considering that I just got 2 free air tickets to Madrid.

After logging into my United Airlines account, it shows 60,965 miles so technically I have enough points for one free ticket to either Europe or Latin-America, so I just have to make my mind about where and when to travel.

On United.com under MileagePlus click on Use Award Miles (on American Airlines it is called Book an Award Ticket) and fill in the grids the same way as if you were to search for a regular airplane ticket. Based on your departure date, you will get a long list of flights.  You will notice that some of these free flights are crappy with long layovers or are connecting in cities which are out of way.

I don’t mind long layovers, as a matter of fact, I’m actually fishing for those because it gives me an opportunity to visit another city at no additional cost, furthermore, I don’t mind spending a night there so I can discover more.

What I do mind is the following:

  • If I am arriving between midnight and 6 AM.  After an overnight flight I’m very tired and perhaps even jet lagged; I can’t check into my hotel until at least noon (in best case scenario); I am wasting time. I hate to stick around airports and coffee houses with no sleep, I don’t have energy to do much even if I leave my luggage at the front desk of my hotel.  Nothing worse than starting a road trip dead tired.  Last November I flew to Dubai and Turkish Airlines landed at 2 AM. The flight was so rough that I almost got sick on the plane, I decided to buy an extra night at the hotel (for the previous night) so that I can check in, go to bed and sleep it off.
  • If the connecting airport is out of way: I only take this kind of flights when there is nothing else, when I can’t pick another date.  In August of 2007 I flew from Washington, D.C. to Alaska connecting in Dallas, Texas, which was insane but there wasn’t any better connection during peak season for a free flight, however on the way back it was much better connecting in Portland, Oregon. I just toughed it out, a little more wine helped 😉
  • If redeeming the miles costs too much money. Please note that there is a small fee associated with the redeeming the miles but those are disclosed prior to the purchase. United  Airlines shows this fees next to the mile needed for the flight, American Airlines shows it on the check-out page.  I have a limitation for this, willing to pay up to $50 per person one way, over that I rather choose another airline with perhaps a bad connection but as long as I can save.

Beware of British Airways for free flights! I like the airline with their customer service, in-flight entertainment, food, even the connecting airport in London but when it comes to free flights, they are notorious.  British Airways is affiliated with American Airlines; technically I would only need 50,000 miles for a free round trip ticket between the continental USA and Europe.  This European airline has the nerve to charge over $300 just to redeem miles one way, which comes to over $600 for a round trip ticket. For the love of God, for $600 you can already (or almost) buy your own round trip ticket to Europe so there is no reason to give away your hard earned miles for basically nothing and pay an additional $600!!!

Do you remember when I said that I’m setting my budget for a European ticket for up to $600? Well, I really meant it in all aspects! 🙂

 

 

 

 

 

 

 

Posted in Flying on Miles, Travel

How to Decide: Buying Air Tickets versus Redeeming Miles for Free Tickets

This is how I decide but you can make your own decision, there is nothing written in stone. Please note that my reasons are based on my own personal preference; you can certainly save toward a free ticket to Africa, Asia or Australia but if you want to fly domestic, go ahead and fly domestic.

It “costs” 25,000 miles for a domestic air ticket to fly within the continental USA. I live in the USA and have already been to most US states, seen every national park and waterfalls, famous vineyards, beaches, lakes and major cities. I visited Alaska, every island of Hawaii, Puerto Rico and the US Virgin Islands. I doubt I left anything out so technically I can now cross out the great US of A with Canada and focus on other countries.  In addition to that I would hate to waste 25,000 miles on domestic tickets because if I were to travel locally, I could get good deals.  Additionally, I can physically drive to nearby states from Washington, D.C. to the Canadian border and Florida, stretching west to West Virginia, Tennessee and Kentucky.

It “cost” 50,000 miles to get a free ticket to Europe and I gladly choose Europe over anything, there is a lot of history there, metropolitan cities, good food and the Mediterranean Sea.  The countries are very close to each other, you drive a few hours in any direction and people are already speaking a different language.  There are a lot of European airlines to choose from and many of them are participating in reward programs so I’m pretty much covered from British Airways to Lufthansa, from Air France to Alitalia, from Iberia to SAS, etc. and I love free layovers in major cities.  By the way, 50,000 miles will take you to Latin-America too!

If I were to pay for a European air ticket out of pocket: I have set my limit to $600 but you can set your own limit to whatever amount. I’m very savvy and not willing to pay more than that.  What it means in my case is that if a ticket costs over $600, I rather wait until I have enough miles to fly for free.  European air tickets below $600 are very reasonable so no need to waste 50,000 miles. If I have 50,000 miles I rather save it for more expensive tickets.

Wow Air is one of the lowest cost carriers on the east coast so don’t be surprised to find airfares to Western European and Scandinavian countries for a few hundred dollars one way.  From Boston to Iceland fares start from $99 one way, from Baltimore to Iceland they start from $199! No wonder it is called WOW air! 🙂 I would never waste my miles to these cities, I rather pay for these and save my miles for something else I cannot afford!

Any questions? 🙂

Posted in Flying on Miles

The Value of a Mile

When you are earning miles, you certainly don’t know the value of it until you have to buy one.

When do you buy miles? When you need to redeem your points for a free ticket but you don’t have enough points.  You are a frequent flyer now, so go ahead and log in, make your selection for a free ticket and put it on hold without a credit card (only members can do that, American Airlines will hold your reservation for 5 days with no obligation to buy). The website will calculate how many miles you need for the free ticket and how many miles you are missing so you won’t need a calculator.  If you still haven’t purchased your ticket by midnight on the 5th day, the airline will cancel your reservation without penalty and release the seats for purchase.

When you don’t have enough miles for a free ticket you can purchase the missing miles from your airline, which are immediately deposited into your frequent flyer account after payment.  Miles are sold in batches and the more miles you buy the less they cost.  Also keep in mind that over a certain amount of miles you get free bonus miles so if let’s say you need 11,000 miles technically you only need to pay for 10,000 because you are getting 1,000 for free.  Over 25,000 miles you are getting 10,000 bonus miles for free!  When your purchased miles are deposited into your account, go ahead and “pay” for your reservation (which was now on hold) and your miles will be deducted from your frequent flyer account.

Here is an example of air mile costs:

1,000 miles cost $29.50

2,000 miles = $59

3,000 miles =  $88.50

4,000 miles = $118

Over 5,000 miles you will receive 1,000 bonus miles for free and pay $147.50

10,000 miles + 1,000 miles for free  = $295

Over 25,000 miles you will received 10,000 bonus miles for free and pay $737.50

40,000 miles +10,000 miles = you pay $1,180

So officinally, when you need 50,000 miles for a free European ticket from the continental USA; you had zero miles you would need to pay $1,180. Now you know, how important it is to earn miles and wait till you have enough for a free ticket. In my 25 years of traveling I only bought air miles once because I wanted us to fly together.

 

 

 

 

 

 

 

Posted in Flying on Miles, Travel

Cash-Back Credit Card versus Airline Credit Card

Here it goes folks, which one benefits you more? It is time to compare them!

Your cash-back and mile awards depend on your spending in both cases but there is a huge difference, and correct me if I’m wrong, you get your cash-back at the end of the year while you are earning the miles as you go, so you may have enough points for a free ticket before the end of the year.  The cash-back percentage is between 1%-2% of your total annual purchase, while airline credit cards deposit between 1-3 miles per dollar spent depending on the type of credit card (regular, business, gold, platinum, etc).

When you are a frequent flyer of an airline holding their credit card, you are not only earning miles from the credit card company but also from the online stores you shop at via the airline’s web portal, restaurants, hotels, rental cars and many other merchants, who are participating in the program with the airline, this is what I call “Double-Dipping”.  There many different ways of earning miles, which I have already explained in my previous blogs (How to Fly for Free 1-4).

Now, when you get cash-back after your annual purchases and let’s say you want to use that money for air tickets, you can simply buy that on your own from any website, BUT your money may not be enough!  You have x amount of money (cash-back) in your hand but your air ticket could cost 2x (depending on where and when you travel).

When you have miles you don’t worry about the cost of the ticket; this is how it works: There is an award chart showing the mile requirements for each zone.  Take my example: last year I went to Sardinia, Italy on miles; flew from Washington DC to Olbia.  Washington DC is in the continental USA and Italy is in the “Europe Zone” so a free round trip ticket between these two destinations “costs” 50,000 miles.  The continental USA means 48 states and the Europe Zone means a lot of countries in Europe from Portugal to Turkey, from Scandinavia to the Mediterranean.  With other words, it does not matter where in the continental USA I fly from to which European country (even if it is a small, remote island) as long as the airline (or their European partner airline) flies there, it still “costs” 50,000 miles round trip.

Now let’s break it down to the dollar value; I guarantee you gonna love this! Take my example again:  My ticket from Washington, D.C. to Sardinia, Italy “costs” 50,000 miles per person in the month of August, which is considered to be a peak season.  At the time of redeeming my miles the cheapest airfare was advertised for $1,980 per person on Expedia, then imagine how much it would have been with my airline! Since I took my husband with me I would have paid $3,960 for the 2 of us, which is insane for air tickets alone.  If I lived in Los Angeles (which is still in the continental USA), I would have paid approximately $2,300 per person to Sardinia, if I had purchased tickets from my own money but if I had used miles from Los Angles to Sardinia, Olbia, it still would have been 50,000! Capish?

Flying to Europe from the east coast does not always cost that much, it all depends on the season, country and the airline.  In April we are going to fly again on miles, from Washington, D.C. to Madrid, Spain.  April is pre-season and at the time of redeeming my miles the cheapest airfare was advertised for $960 per person for the same dates as mine and we are two people. Let’s translate this into miles: Washington, D.C .again is in the continental USA and Spain is in the “Europe Zone” so again, it “costs” 50,000 miles per person round trip.

Maybe you can see the difference now on REDEEMING MILES for air ticket versus BUYING an air ticket from your cash-back by your credit card company.

 

 

Posted in Flying on Miles, Travel

“Double Dipping” 101

“Double Dipping” is a faster way to earn miles while killing two birds with one stone.

  1. As a frequent flyer: Log into your account and purchase your airplane ticket, for your airline or it’s partner airlines.
  2. Use your credit card affiliated with the airline for the online transaction.
  3.  Take the flight and make sure your frequent flyer number appears on your boarding pass as well not just your on the reservation – you will be earning miles for the flight as well (depending on partner airline, your booking class and cabin type) but the airline will deposit miles into your account anywhere between 50-100% of the miles flown within two weeks from your trip.

PLEASE NOTE: YOU CAN BUY YOUR AIR TICKETS FROM ANY WEBSITE INCLUDING TRAVEL AGENCIES BUT YOU MAY NOT ALWAYS EARN MILES FOR THOSE FLIGHTS.

The way the system works is that certain booking classes do not qualify for award miles, so when you book outside of your airline’s webpage there are no guarantees that you are getting miles for those flights.  You will certainly get your tickets and fly wherever you need to go but you may not get the miles for it.  When you shop outside of your airline’s website you don’t know what class they will book you on and you certainly don’t have any control over it.  In those cases you will only know the booking details after purchase, which is when travel agencies email you the receipt and electronic tickets.  Rule of thumb: if your ticket was one of those super-duper deep-discounted fares most likely your flight won’t qualify for miles (buy hey, you got a good deal which also matters).

I don’t want to complicate this even more but it can also happen that you may get booked on a “higher” class on the first leg of your trip and on a “lower” class on the second leg of your trip (or vice versa), so in those cases you earn different percentage of miles for each leg of your trip (or none at all if one leg does not qualify).  It happens with super cheap tickets.

I have been fighting with Turkish Airlines since last November because they confirmed (“booked”) my E-ticket on “W” class after purchase; however my boarding pass shows a “Y” booking class for each leg of the trip.  This seems like an administrative error but it is worth the fight since there are thousand of miles at stake from Washington, D.C. to Istanbul, from Istanbul to Dubai and back to D.C. via Istanbul.

I always wondered how many booking classes are out there. Let me tell you, a lot! Imagine it like the ABC, first/business classes are beginning with “A”, “B” and “C”, economy classes are ending with “Y” and “W”, while “Y” still qualifies for miles but not “W”.

My advise is this: Buy your ticket directly from your airline whenever you can so that you have options to choose between different booking classes prior to purchasing the ticket. If there is a significant price difference between your airline and a travel agency, then go ahead and buy the cheaper one.  You never know, your cheaper ticket may still qualify for miles, just make sure to mention your frequent flyer number when you buy it and mention it again when you check-in at the airport.

 

 

Posted in Flying on Miles, Travel

How to Fly for Free – Part 4

Now that you have been using your airline’s credit card, learned to shop on the Eshopping web portals, are already familiar with “double dipping” so now let me share one more way to earn additional miles.

Do you ever send flowers or gift baskets? FTD will give you 20 miles per dollar spent, 1-800 Flowers will deposit 15 miles per dollar spent while Teleflora rewards you with 1,000 miles for each order. Not too bad and you will look like a hero for sending a gift! 🙂

Do you like wine? If you join Vinesse, a wine club in California, you will earn 2,000 miles just for signing up and 5 miles per dollar spent on your future orders.  I have tried this myself, they picked a great selection of domestic and international wines, both red and white in each shipment. Over a certain order amount they include a free gift as well; I got  a nice corkscrew.  Drink it up, buddy!

Do you ever go to theaters, opera or exhibitions? Guess what, from now on you can earn up to 2,200 miles per ticket purchased for participating Broadway shows! I live in Virginia so I don’t not have any luck here but perhaps folks in Washington, D.C., New York, Chicago or Las Vegas might benefit from this but check it out for sure!

Want to relax? Go get a massage or facial, use SpaFinder and earn 3 miles per dollar spent! I especially liked this!

Do you fill out surveys online? E-Rewards will give you up to 250 miles per survey so sign up on this website and start filling out surveys. Occasionally companies send you a product to test and you may even keep it while earning some miles! I tried it, not bad!

Do you ever rent a car from major agencies? If you do, start renting from Avis, Budget, Alamo, Payless, National, Dollar,  Hertz, Thrifty, Carmel, Europcar, Sixt, Groundlink and Supershuttle because each of them will earn you miles as long as you give them your frequent flyer number at the time of reservation or when you pick your car up. Depending on which car rental agency it is or and what your frequent flyer status is, you will earn anywhere between 500 and 1,250 miles per rental term (not days).  I have taken advantage of this many times.

Dine out in restaurants affiliated with the airline and earn miles while stuffing your face. I wish Pho places participated but I cannot have it all. In order for you to earn miles for dining you must open an account in the Dining Network and register your credit card otherwise you won’t earn miles from the restaurant just from your bank! Please see my blog on How to Fly for Free – Part 2 on this topic!

Do you stay in leading hotel chains? If you do, consider Hilton, Wyndham, Intercontinental, Choice, Starwood, Marriott, Shangri-La, Radisson, Hyatt, La Quinta, Best Western or many other smaller hotel chains? If you do, you will earn 250 miles for each stay (not per night).

Do you ever take cruises anywhere? If you do, check out all cruise liners, from small ships to mega boats because they all participate in frequent flyer programs, your earning potential is anywhere between 10,000 and 50,000 miles per cruise (depending on the cruise liner, destination, room category, etc) but this is another great way to kill two birds with one stone. Take me with you!

Do you ever park at airports? Try PreFlight Airport Parking and earn 1 mile per dollar spent. You will earn a free day for every 6 days you park with them! Hello!

Are you planning on buying or selling real estate? I got news for you! HomeMiles are giving you 2,000 miles for every $10,000 of the sale or purchase price; or 1,500 miles for every $10,000 when you refinance. You will earn an additional 5,000 miles if you move state-to-state with Allied, North American or Global Van Lines.

If you want to invest money, you can earn between 15,000 and 50,000 miles with Fidelity Investments after your deposits. Or try BankDirect who is also rewarding you miles on bank account deposits and opening CDs but there are a few more options for you in this category, I just picked two. LendingTree used to be an affiliate years ago but it now seems they broke up with the airlines.

You can now earn miles for signing up for DirectTV or switching your energy bills to any of these (in certain states): Energy Plus, Everything Energy, Gexa Energy, NRG Home Solar or Reliant. Range of miles is between 5,000 and 30,000 per subscription. At one time Netflix was an affiliate as well which I did sign up for but they are no longer available for this program.  At that time Netflix used to be $18 a month. Can you believe that? It is now $7!

Donate money to Susan G. Komen or the National Foundation for Cancer Research and earn 10 miles per dollar spent with both organizations. You may be able to write your donation off so everybody wins but you double dip! 😉

Stay tuned, there is more, the next blog will be about “triple dipping”!

Image: moneysavingexpert