Time to rethink mile-earning credit cards?

The value of ff miles is getting to look more and more like the value of the Zimbabwe dollar. DL and US are leading the charge to trash ff programs and there is a real danger of other airlines following suit. Some already are to a limited degree.

For years, I have used mile-earning credit cards to top up ff accounts, but the two cards I have had, DL Amex and NW Visa, I have recently notified the card issuers not to renew. There are too many cash-back cards out there which give you real money, not miles, whose value is going the way of the Zimbabwe dollar.

Of course some airline miles will depreciate quicker than others, but the danger is there for all programs.

The problem with cash back cards is that I'd use the cash to pay everyday bills. I like accruing miles towards fabulous, frivolous vacations.

The main thing that I like about my two airline cards (United Premiere Visa and Delta Gold SkyMiles AMEX) is their double miles categories -- gasoline, groceries, and even dining for the former. I haven't found a lot of cards that offer that and I accumulate a LOT of miles just with these categories.

If I'm not able or willing to book an award ticket with Delta, I can still use the miles to knock off $ towards the price of a ticket with their "Pay with Miles" option. I could have brought down the price of my ticket to St. John in January from $650 to $350 using 30k miles. (I chose not to because I had enough miles to get one Saver ticket and wanted to accumulate the miles on the second ticket.)

I'm not focusing on what I USED to be able to get with my miles, but rather what I can STILL get with my miles and the fact that I do nothing but buy the stuff I'd buy anyway and charge it. That, to me, makes the airline cards still worth their while.

I've only looked at the airline miles cards as a way to keep otherwise dormant FF miles accounts active. They are not, nor have they ever been, used for my most frequent purchases.

Indeed, I'm starting to rethink.

It looks like Alaska Airlines will change its award levels in November, but will honor any award reservations made prior to that date. So I'm thinking about booking whatever I can for next spring/summer before November and then switching to a cash back card at that time. ???

I think of the ff award tickets as a way to hedge inflation. They just take off the edge off the cost of vacation. Might not be able to use them on all trips but one trip a year ff tickets will work out for me.

Thats why timesharing is such a nice way to go. It takes the bite off of lodging. For my 2 weeks in Canada I spent $1350 for my two timeshares. B & B go for about $200+ per night. What does that mean for me. Yeah... I could spend $650 in gas.

I just wish I could get a SW cc, but they won't issue them to people outside the US. I just traded some Choice Hotel points to top up what we needed for 2 SW flight awards. We have never had one before. Are they as difficult to book as other ff plans (ie. Delta, USAir, etc.)?

Dori

SWA FF tickets are easy to book. Its been a while since Ive had an award ticket, they have some black out dates but it used to be if there was a seat available "You got it".

I have a friend that gives me standby tickets, we kind of trade. Stand by tickets put you at the bottom of the pecking order. When I call to see what the availability for certain days/flights are the employees are so sweet and helpful. They go out of thier way for me.

I LOVE SWA.

Me too! I have found they are so easy to deal with and so very helpful. We drive from Toronto to Buffalo just so we can fly with them. They are a very efficient and well-run airline, in MHO.

Dori

with the price of everything we purchase on a daily basis i think it is crazy not to use the ff cc's. i have over 550000 miles from using those cards and did NOT spend that much money.

i shop on all the airline malls. i eat out at the idine restaurants. i buy flowers for people on the sites. basically i do not buy something that i don't get a point for.

i have a lot of ff cards and i use them to get the most from our hard earned buck.

on the average i get about 5-7 miles per $ for all my purchases.

i had 5 first class tickets this year, 4 jetblue flights to the bahamas, and 4 swa flights all from knowing how to use those wonderful credit cards.

i already have 4 jetblue flights for next year and 3 swa flights waitng to be used plus the 550000 ff miles.

i have it down to a science and it works for us.

but it can only work if you pay off the entire credit card every month, otherwise it is not a fun game.

pointsjunkie said:

with the price of everything we purchase on a daily basis i think it is crazy not to use the ff cc's. i have over 550000 miles from using those cards and did NOT spend that much money.

i shop on all the airline malls. i eat out at the idine restaurants. i buy flowers for people on the sites. basically i do not buy something that i don't get a point for.

i have a lot of ff cards and i use them to get the most from our hard earned buck.

on the average i get about 5-7 miles per $ for all my purchases.

i had 5 first class tickets this year, 4 jetblue flights to the bahamas, and 4 swa flights all from knowing how to use those wonderful credit cards.

i already have 4 jetblue flights for next year and 3 swa flights waitng to be used plus the 550000 ff miles.

i have it down to a science and it works for us.

but it can only work if you pay off the entire credit card every month, otherwise it is not a fun game.

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If you received 5 miles per dollar spent, you would still have to spend $110,000 to get 550,000 miles. I wouldn't put that much on my credit cards in 3 years. To get 550,000 FF miles at $1 per mile would take me 20 years. I don't know how it is possible to amass 550,000 miles in a year unless you fly constantly for work on the employer's bill.

i didn't say i earned it in 1 year. i accumulate and i use them over the last 4 years.

and do not have a business that i travel for or spend a lot of money on products for my business to boost my total.

i get 10 miles per $ for dining out. magazines=22 miles per dollar, drugstore. = 4 miles per dollar. flowers=20-25 miles per dollar. circuit city .com=3 miles per dollar and it goes on from there.

for dining out we have 130000 miles and actually spent less than $9000 for those miles.

i just took an average of 5 miles per dollar it is actually much higher when i stop to think about it.
and you get a lump for getting the cc.

My hat is off to you, you do know how to work the system. The best I can seem to do is get 20,000 to 25,000 miles when I get a new credit card. I could get a round trip for 2 every year or 2 in the past with the lower FF mile requirements. Now it will take me 3 to 4 years or longer to get 2 round trip tickets to the Caribbean or Hawaii.

Yoda, I know nothing but you are a wise one you are.

Playing the double miles game with DL Amex helps, for purchases at drug stores, gas stations, etc. But then that puts miles on an airline that is one of the worst at depreciating the value of miles, if not the very worst.

The alternative is not giving up cards that give you a bonus, merely moving to a bonus that is more stable - cards that give you cash back. You can then use the cash to buy your tickets.

Many people on Flyer Talk are seeming to figure out that cash back bonuses on credit cards are now preferable to mile earning cards, because the value of miles, especially in certain programs, is becoming illusory.

pointsjunkie said:

i didn't say i earned it in 1 year. i accumulate and i use them over the last 4 years.

and do not have a business that i travel for or spend a lot of money on products for my business to boost my total.

i get 10 miles per $ for dining out. magazines=22 miles per dollar, drugstore. = 4 miles per dollar. flowers=20-25 miles per dollar. circuit city .com=3 miles per dollar and it goes on from there.

for dining out we have 130000 miles and actually spent less than $9000 for those miles.

i just took an average of 5 miles per dollar it is actually much higher when i stop to think about it.
and you get a lump for getting the cc.

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I'll keep my Alaska card for the $50 companion fare. That is a much more valuable perk than miles for us. We don't travel a lot, one "big" trip a year where we fly and we don't have all the opportunities that Americans do to earn miles. But we'll keep using the Alaska card, since we pay it off every month and use the companion fare.

Thanks for pointing this out, Carolinian. Have the people on Flyer Talk figured out which particular cash back cards are most advantageous?

Diane

We have one cash back card (Citi) and recently looked at a second that was being pushed on us (BankAmerca). Most have either a fixed cap of about $300 / yr or a sliding scale of benefits that compress the cash back value at higher usage which effectively maxes out at about $300 for the same level of spending. We like the cash back better than the miles, especially since, unlike the miles cards, these cash back cards are free; that's also cash back.

Are there any non-free cards with higher cash back limits or better sliding scales?

Werner said:

Are there any non-free cards with higher cash back limits or better sliding scales?

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I like the Costco business Amex, at least for gas purchases which earn a 5% rebate.

No extra fee above your costco membership fee. The business card equates to the executive level membership, which pays for itself if you earn $60 in rebates a year just from having the exec level membership. (not including the credit card rebates.)

-David

i was also thinking of the cash back cards but then i figured out how much the 5 free first class tickets were if i paid cash and all the other free flights, cashback doesn't even come close. so i will stick to my 5 ff cc and keep on flying for free.

These types of discussions have come up on Tug several times before and it seems to me that there is no one method that is best for all people. If you like the hunt and can manage several cards at once, then point cards can be wonderful as PointsJunkie has illustrated. If, however, you are like me then it isn't worth the hassle. I don't want to spend my time managing all that and then have to corral the points into some sort of award with ever changing rules. Some people find that satisfying (even invigorating) and some don't. There was a time when I did enjoy that sort of activity but not anymore. I think once one got over the learning curve, it would be much easier but investing in the learning curve isn't how I want to spend my time in this part of my life. Of course, I say that because I fly on my DH's ff miles that he accrues with business flights. If my situation were different, I might be singing a different tune.

For me a simple cash-back Visa with my credit union is easily manageable. No fees, pay it off each month and get cash back once a year. I get paid to spend money. Visa is accepted in more places than Amex even though Amex had a better cash back tier. I can pay it off easily on-line at 5:30 in the morning in my pajamas at home by simply transferring money from checking to the Visa. Ease of use is more important to me at this stage of my life than the extra rewards I could get if I juggled 5 cards, etc.

What is right for one may not be for another. I think it depends on how much time and effort you want to invest in the payoff.

The ones with fees I'm getting rid of. And I agree that DL and NWA cards are getting ridiculous when it comes to miles required for flts...if any seats are available at all. AA is still good, but it's only a matter of time before they slide down the same slippery slope...and consumers lose out big-time. :annoyed:

try getting bumped

Based on spending substantial parts of the last two weekends at airports, I'd say forget cc points and volunteer early for bumping opportunities! On guy got two free round trips based on one leg. I got one . I wish I had volunteered on the beginning end of the trip but had to get to a meeting. So instead of a voucher, I got a "free" night in an airport hotel, a $15 food voucher and still misssed much of the meeting when I stayed on a flight that was cancelled anyway.

We use no-fee Citibank Aadvantage cards for everything - auto-bill pay for utilities, phones, etc, charge everything, and always pay off at the end of the month. We have earned RT flights to Cancun for the four of us at least 3-4 times over the years. It does lock us in to American, but at least that makes it easier to choose our flights!

Occasionally they offer us specials - like right now if we use it 20 times we get an extra 2K miles, another time we could get 5x miles for several months, up to 20K extra miles. It seems to work out to about 2-3cents per dollar. There may be higher percent cards or cash back ones, but if we got cash back, the cash would dribble away.

Carol C said:

The ones with fees I'm getting rid of. And I agree that DL and NWA cards are getting ridiculous when it comes to miles required for flts...if any seats are available at all. AA is still good, but it's only a matter of time before they slide down the same slippery slope...and consumers lose out big-time. :annoyed:

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I agree with Bev. Even though Alaska Airlines charges a fee for their card, it is worth it for their $50.00 companion fare, which I was able to use for a flight to Hawaii this fall. Now I just booked a flight to Paris through Alaska Air. They don't fly there, but AA is their partner, so I was able to get a flight with them on my Alaska miles. I am a happy camper.

pjrose said:

- auto-bill pay for utilities,

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Haven't found using a cc helps with my utilities as the utilities charge a service fee for using a credit card that is in excess of any benefit I might get from the card. Sure wish I could use it to pay the mortgage but that doesn't work, either, as I was told it would come up as a cash advance with all those nasty cash advance fees. I do use my cash-back card for just about everything else.

Rose Pink said:

Haven't found using a cc helps with my utilities as the utilities charge a service fee for using a credit card that is in excess of any benefit I might get from the card. Sure wish I could use it to pay the mortgage but that doesn't work, either, as I was told it would come up as a cash advance with all those nasty cash advance fees. I do use my cash-back card for just about everything else.

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Our electric company charges a fee so we don't use it for them. However, with no fee we use it for trash, water, cable, internet, land-line phone, and cell phones.