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Airline miles card?

July 28, 2008

I think I’m going to open up a miles credit card. The area I’m from has just two major airlines, and I have been a member of the frequent flier club of one of them for years. I have about 20k miles, which is a one way ticket, but I haven’t earned miles in at least a year. (I lived within driving distance for some time.)

I could open a card directly through this airline. Opening a card (and spending $500) will give me 20,000 bonus miles. The annual fee is waived for the first year. After the first year (or sooner), I can cancel the card (unless they agree to waive the fee).

The impact to my credit score will be minor, and doesn’t matter since I’m not getting a mortgage anytime soon.

This is good as a short term solution, because I’m close to a ticket. It is a bit of a hassle to get a new card, but when I realized I was considering staying overnight in the Vegas airport in order to pay about $385 roundtrip to get back to the Midwest (savings of $125), I thought I should explore more sane options. In the near term, this will allow me to cash out on my years of flying on this airline and will get me home for the holidays “free” rather than for another $500+.

I realized I can use 12,500 of my rewards and book a ticket at $271 to go home for the birthday. That is so much more reasonable than $507!!! I just need to confirm the dates, but I will probably do this, whether or not I get the new card. That made my stress level go way down!!! I still plan on going home for christmas, but I should have more flexibility and be able to fly into a major city and make my parents collect me.

As a long term solution, a card not tied to an airline would be better, but are they better than plain old cash bacK? I really can only handle two credit cards at a time. I have a gas card (5%) and a Chase Freedom Visa, which gives 3% on my top three “categories”. Technically, I own a Citi Visa card, but I haven’t used it. I can’t juggle 3 cards. I’d have to retire one of these cards in order to get a new one.

The main point of getting this airline card would be to redeem the free 20,000 miles. I’d spend 500 on it, pay it off, then probably not use it much, except for to buy tickets. If 12,500 miles can save me $230 on a ticket, that is not a bad deal at all.

What do you think? Do you have a miles card?

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13 Comments leave one →
  1. July 28, 2008 2:52 pm

    I have a miles card but I barely use it. I use my grocery points card a lot more – I don’t tend to fly often..

  2. July 28, 2008 3:11 pm

    I have an Alaska mileage card and I love it.

    True – there is a $75 annual fee, but they give you 20,000 miles when you sign up and a $50 companion fare (which, after taxes, ends up being more like $100, but my boyfriend and I used it to go to Mexico for thanksgiving last year and without it, the trip would not have been affordable)

    When you fly, you get miles for the miles, and for the money spent on the ticket, plus another 1000 miles for buying it online.

    They partner with a lot of airlines, and I’ve never had an issue with using my award travel. My roommate has a different airline card and has had nothing but issues with it.

    I suppose if you don’t fly often, it might not be worth it in the long run for the annual fee – but, in the short to get home under budget.

  3. July 28, 2008 3:54 pm

    I am a huge fan of getting miles/Citi cards just for the bonus miles. It topped off my AA and United miles two years ago when I was very close to an award flight, but wasn’t going to be flying their airlines soon enough to keep the points fresh. I would use the card for a one (or few) time charge of something big like auto insurance. Then again, I pay for family insurance, so that’s a whole lot more than yours is likely to be, but think of larger charges/purchases you might have coming up so that you can knock out the spending limit sooner rather than later.

  4. July 28, 2008 4:34 pm

    I applied, but they couldn’t make an immediate decision. :(

    My credit score is good, so that surprises me. They said I will know the result in 10 days

  5. Julianne permalink
    July 29, 2008 5:14 am

    If you decide to cancel a credit card when this one is approved, DO NOT cancel the credit card you’ve had the longest, even if it is the one you use least. When crediters calculate your score, the length of time you’ve had credit with a company matters!

  6. July 29, 2008 7:27 am

    I haven’t had an airlines card, but I don’t fly very often. However, I’m going to be flying a lot more!

  7. July 29, 2008 7:27 am

    …I would consider a mileage card, but I worry that I would forget to cancel the card and have to pay the annual fee (not in my grad school budget).

  8. July 29, 2008 9:12 am

    I prefer points/cash back rather than strictly air miles. I feel like it gives me more flexibility in the benefits I receive for the spending I do on my M/C.

    Chase has a nice freedom M/C and Visa that lets you switch back and forth between points and cash.

    If you really want to rack up the rewards, I think you need to make the decision to go to 100% credit card spending. By that I mean, pay everything with your CC.

    I automate all my utilities and other recurring monthly bills (car insurance, you name it) to be paid by my CC. My wife buys groceries, we fill up the cars, we go to Wal-Mart…all with the CC. At the end of the month I do a little electronic transfer to pay off the CC in full and life’s good. Heck, if I could figure out how to pay my mortgage with my CC, I would so I could increase the rewards points. I can’t remember the last time I licked a stamp or wrote a check. Well I did lick stamps for my Christmas cards, but I think you get my point. My life is a bit simpler as a result.

    Going to 100% CC is a big step. I remember the discussions and trepidations my wife and I had in the Fall of 2003 when we made this decision. Looking back over five years of experience, I can safely say it was the right move for us. Simpler monthly bill paying, the ability to schedule payments in advance (and not be late) plus all the rewards cash has been great. The rewards roll in pretty quickly when you spend in excess of $40K / year on the card.

    Good Luck
    -Jeff
    I’m Minding My Own Business, are you minding yours?

  9. July 29, 2008 9:52 am

    @FB – I have been flying at least 2-3 times a year, and I don’t expect it to stop. but on a daily basis, i use gas/grocery as well

    @e – I’m wary of annual fees, but you make a good case

    @Revanche – I do think my auto insurance is coming due soon, and that is about $400

    @saving diva – I’m sure I won’t forget. I’d probably cancel once I used up all the free miles.

    @julianne – thanks for the tip! I knew that and that is one reason I’ll always keep my discover card, no matter what

    @Jeff – I do pay pretty much everything with CC, except my rent (and I would, if I could). I write one check a month (rent) and rarely use cash. But I don’t think I’m spending 40k/year!!

  10. sfordinarygirl permalink
    July 29, 2008 11:30 am

    I’m not sure which card requires you to spend $500 – that’s a big chunk to know you’ll hit. The rules are getting stricter for redeeming miles – fees to redeem and higher mileage accurals. It may not be worth it unless you’re positive you’ll hit $500 and other possible fees.

    I had the Alaska, United and American cards last year but downgraded to a basic airline card without fees. United had the best deal, no minimum to spend and no fees. Alaska had a fee of $75 but for a $200 something free roundtrip ticket, it was worth the savings. Southwest offers the best deal at this point of all the airlines, FYI.

  11. July 29, 2008 11:57 am

    @sfordinarygirl – Really? I think I can hit 500 within a month or two. A month if my car insurance is due soon (i think it is).

    Southwest, unfortunately, does not fly to the Midwest. Or at least not to where I need to go. My choices are very limited.

    Since it is fee-free for 1 year, i think it should be useful through the holidays.

  12. July 30, 2008 7:34 pm

    I used to have an Alaska debit card but I fly so infrequently (2-3x per year) that I’m not sure if it’s worth it to get an airline card or something I use for daily purchases… But good luck!! :)

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