Airline Credit Cards

Most credit cards from major issuers are automatically tied to a rewards program.  Rewards, after all, encourage more frequent use of the card, apart from giving the cardholder a little something back in exchange for using it.  Considering that credit cards represent a huge profit source from many banks and lenders, do rewards really benefit you more?  Or are they just another ploy to entice you, without any long-term benefits?

Should you really go for a rewards credit card or just apply for a card with a local bank?

1. Spending More

In order to earn more rewards, you’ll need to spend more.  If you’re buying stuff on credit and not settling your balance month to month, any amount you gain in rewards will likely be eroded by the premium you’re paying for the debt.  That’s a recipe for disaster.

2. Regular Consumer Spending Doesn’t Maximize Rewards

With the stingy points and earnings from rewards cards, it’s impossible to derive any considerable benefit if you only use it for regular consumer expenses.  Groceries and utilities will only represent a small amount of points earnings every month. Unless you can use it for business expenses (e.g. online advertising, travel), any points you earn before the expiry date will be paltry at best.

3. Higher Fees

Because rewards credit cards supposedly offer you more, they usually come with higher fees, interest rates and approval requirements.  If you’re not earning too many cash back or points based on moderate use, those extra costs are essentially paid for no added value whatsoever.

Worth The Hassle?

While rewards credit cards may look attractive on the surface, they’re not the best card for everyone.  Unless you use your card to spend a considerable lot (that’s way beyond your typical monthly expenses), the benefits you’ll derive from them are hardly all that enticing.

Do you own a Northwest WorldPerks Visa card?  With Northwest Airlines now owned by Delta Air, there are a couple of changes on the way that you might find important.

Anytime this month, the U.S. Bank-issued WorldPerks card will be converted to an unaffiliated travel rewards card (called the  U.S. Bank FlexPerks Travel Rewards Visa), with American Express taking over Northwest’s rewards program.  Since it’s no longer connected with the airline, you’ll no longer be earning miles from using the card.

Delta and Northwest are combining its frequent flier program under the SkyMiles moniker, with Amex issuing the official card for the combined airline.  Both Amex and U.S. Bank appear to be fighting over the same consumer base of WorldPerks credit card holders, trying to get them to switch with their own respective offerings.

Trying to decide what to do?  Here are a few facts to help you along.

Fees. The new FlexPerks Travel Rewards card will come with annual fees between $49 and 55, while the Amex-issued Delta-branded alternative should features fees anywhere between $55 to $450 (wide range, I know, but that’s the fees Amex currently charges on Delta-branded cards now).

Rewards. Worldperks Visa card owners who make the switch to Amex will get a good amount of bonus miles as an incentive.  Depending on the card you go for, you can get a variety of other perks including free flights for a companion and VIP lounge access.

Do note that Northwest (Delta) is currently suing U.S. Bank for offering the card to its customers.  The company claims U.S. Bank is contractually obligated to maintain the WorldPerks credit card without marketing to its consumers until the contract expires in August of this year.

When you travel frequently, hotel use will be one of your regular expenses.  As such, you want to find a rewards card that will try to get you a bit more benefits for your stay.

1. Find a card that features hotels suited for your travel needs

Figure out where you normally travel and what hotels will be the ones you’ll most likely stay at.  Based on that, find a credit card with rewards programs especially for those establishments.  If you’ll most likely be staying at the Hilton, there’s no point in getting a card with Starwood rewards specials.

2. Make sure it offers rewards in a currency that you like

Many credit cards allow you to accrue your points in a number of different ways, including rebates, miles, redeemable points or a combination of sorts.  If you prefer one over the other, choose your credit card accordingly.

When using your rewards cards on hotels, the following things should ensure you get the most for them:

1. Earn loyalty rewards

Even if your card offers rewards benefits for different hotels, it still makes sense to stay loyal with one.  Many of the large hotel chains offer loyalty programs, the gains you can derive from which can add up to more than what you earn across different establishments.

2. Be aware of blackout policies

Always check the blackout policies of the hotels you plan to cash in your rewards on.  As of the moment, most hotels implement some form of blackout policy (even thought they claim otherwise) that will bar you from getting a room with your points for one reason or another.  The Hilton and Starwood both have the most flexible policies in this area.

The USAA credit card is one of the highest-rated rewards and cash back credit cards in the market.  If you qualify for it, getting one in your wallet is totally in your best interest.  Available in both Mastercard and American Express branding, you can apply for a USAA credit card if you fall in any of the following criteria:

1.  You are an active-duty officer and enlisted personnel in the US Armed Forces
2.  Your parents are eligible for a USAA card and have taken a USAA insurance product (either property or auto)
3.  You are a member of the National Guard or the Selected Reserve
4.  You are an officer candidate in a USAA-commissioning program (e.g. ROTC)
5.  You are a former member of the military in good standing

If you fall in any of the above slots, you may be qualified to get a USAA credit card and we highly recommend that you go after one instead of other current offerings in the market.  Both the Amex and Mastercard versions of the USAA card enrolls you in one of two programs.  You can either apply for it as a cash rebate card or as a rewards card.  Both cards have no annual fee and will net you as low as 7.75% APR.

Cash Rebates. If you opt for the cash rebates program, you get a tiered earnings system.  For the first $2000 you spend, you earn 0.35%.  For the next $2000, you get 0.75% in rebates.  For the next $11,000, it’s a full 1%.  Once you get past that, earnings jump up to 1.25% all throughout, with the money sent your way every January.

Rewards. If you opt for the rewards, you earn a straightforward one point for every dollar you spend.  Points can be exchanged for airline tickets, merchandise, gift cards, donated to charities or converted into cash.

More than the rewards and earnings, though, the USAA Credit Card continually boasts of the best customer service you can find.  In fact, more good things have probably been said about their helpful customer support than any current credit card in the market.

Most of the time, rewards credit cards feature higher APR and more expensive maintenance fees, all of which should be easily offset if you’re able to make use of the points you earn to grab those rewards.  That is, if you actually make use of them, unlike an overwhelming majority of credit card holders.

Even though cashing in those rewards cost nothing, many people simply seem to not care enough, ignoring their points till the last minute and even letting them expire.  You do know they expire, don’t you?  If you don’t know the constraints on your points, check the terms of your credit card agreement to verify.

Keeping It Alive

If your points are near expiry and you can’t find anything in the rewards network you’d like to exchange it for, call up customer support and inquire about possible ways to keep the points alive.  While some will require you to either use up the points before the end date or lose it forever, some credit card companies will offer a bit more options.

Many companies allow your points earnings to stay past due date if you make certain types of purchases.  Find out the cheapest thing you can get to keep those points alive and get it.  I’ve heard of some rewards network that allow a single 99 cent iTune download to let you keep those earnings active.

If there’s really no choice but to use them up, try requesting if the points can be converted into payment for some of your charges and fees.  That’s at least better than being forced to get another ugly toaster.

The Amex Platinum Card is, hands down, one of the best rewards cards currently on offer.  If you have good credit and are looking for a card with serious benefits, you may really want to consider choosing this one.

The concierge service and the “By Invitation Only” programs, alone, should make you love this card to pieces.  If you frequently book tours, packages, dinners or events for clients and other folks, you can’t get better help than this!  The “By Invitation Only” is particularly special, allowing you access to several very exclusive events.

Another useful feature for cardholders is the partnership Amex has with a surprisingly generous number of popular restaurants, who have Platinum-reserved seats so you can call up for a last-minute reservation and get instant seating.  It’s not the best seats - but you’re in!

Should you be a frequent traveler, you might even enjoy this more than a regular travel rewards card.  Check out these great travel privileges:

Optimal bookings. Basically, these guys will facilitate your entire booking, arranging it to make the best use of your rewards points.

Airport lounge access. Granted, most other travel and airline cards will probably get you lounge access but this card does it whiel offering so much more.

Hotel and villa benefits. Using the Amex Platinum gets you instant room upgrades, free late checkouts and special amenities at over 600 luxury hotels and a number of gorgeous villas.

Free complimentary ticket. With over two dozen international airlines, you can get a complimentary ticket (of same value) when you use the card to purchase a business class or first class ticket.

Gold Starwood membership. If you like staying at the Starwood, this card automatically gets you Preferred Guest membership at no cost!

Global assistance. Called the Premium Global Assist, this is a hotline Amex provides for all Platinum cardholders.  You can call them 24/7 anywhere in the world for emergency medical and legal assistance.

The card is pretty expensive to get and maintain but if you manage your balance well and make use of the benefits, the value you can get out of the Amex Platinum card is truly something else.

Credit cards have a time and place in our lives.  At one point, every credit card ceases to serve its intended function, making it a sensible idea to finally end the relationship.

Having a pretty decent credit record, I’ve been able to acquire a number of good rewards cards over the years.  Some were extremely attractive when they first came but lost their charm as my lifestyle changed with the times.  Others, however, continue to serve me well.

Two different things prompted me to recently cut out a couple of my rewards credit cards.  The first, I ditched for the fact that I rarely use it anymore, making the annual fee a nuisance expense I don’t care to really bother with.  The second, I would have kept, if not for recent actions from the issuer that have basically left the rewards program less than what I signed up for.

I used to travel a lot and my miles rewards credit card proved a truly faithful companion during the time.  However, I’ve more or less settled both my business and my relationships in a single state now and rarely fly.  As a result, I had that card canceled as soon as renewal loomed.

With the current economic climate, many rewards cards have updated their terms in a way that render them pretty much useless.  Citi Bank is especially guilty of this one, essentially devaluing the points you can earn along with those you’ve already earned.  I’ve already parted ways with my Citi Card too.

Rewards are some of the most attractive features you can find in credit cards.  If you accumulate enough points, you can find yourself entitled to numerous perks, items and gifts.  Many credit card users, however, fail to keep track of their rewards points, often leaving it to expire.  As a result, they fail to reap the benefits that are among the main reasons why they got a rewards card in the first place.

Why People Lose Track

Many people lose track of their rewards points simply out of disinterest.  Points take time to mature enough so that you can trade it in for something attractive and many simply don’t have the patience for it.  The overwhelming reason, however, for most people’s inability to track rewards cards is that most every other card they have has a rewards program.

If you own two credit cards, for instance, one of them with a rewards program, it shouldn’t be too hard to keep tabs on its current status.  Once you start owning four or five rewards cards, however, things can get complicated really fast, with most people opting to just give up on keeping track of them.

Choosing Rewards Cards That You Can Easily Keep Track

The obvious solution is to choose rewards cards with points and systems that you can easily keep track of without much extra effort on your part.  Many rewards programs now have websites where credit card holders can check their existing points as well as what products they are eligible to use it for.  This way, all you need to do to keep abreast is log on to your account every once in a while.

Most consumers will have two general choices in the types of travel rewards credit cards they can opt for: either one that is attached to a specific airline brand or one attached to a card issuer’s travel rewards network. Which one should you opt for?

Like many issues that crop up when trying to find the best credit cards for your needs, it’s not that easy a question to answer. The best choice, more often than not, will be determined by factors other than what category of credit cards an offer falls in.

Miles Expiration

While some airlines will impose expiration dates on the miles you incur, most won’t. Obviously, you want to skip credit card offers which foster an expiry date on the rewards you earn and keep your pool of choices to those that don’t.

Dates Blackout

Some credit cards impose restrictions when using your miles during certain dates. Naturally, you want to stay away from these offers. Unless you often travel at a whim, most people will want to fly during the same seasons most others do - summers, holidays and special dates. Plenty of credit cards allow you to book any time so cut the ones that don’t off your list.

Seat Restrictions

Similar to blackout dates, some credit cards see it fit to impose restrictions on the kinds of seat you can take on the flight. With so many lucrative travel rewards offers out there, there’s no point even considering ones with this feature.

My Personal Choice

If you ask me, I’d say go with a generic travel rewards card attached to a network instead of a specific airline. While they’ll usually offer less miles for each purchase, you can at least enjoy the flexibility of being able to book with any airline of your choice. This can become especially important during peak travel seasons when flights are getting booked to the rafters!

If you regularly travel with a specific airline (like this one for Alaska Air), however, nothing beats a credit card issued by that company. You’ll definitely get better deals on tickets, along with many perks designed especially for loyal travelers and card holders. With airline credit cards, you’ll often be treated to such benefits as free concierge service, rental car discounts and airline business lounge accommodations.

If you want a reward card whose points you can use for enjoying Disney-related travel packages (theme parks, cruises and products), this card will prove a worthy choice. While a regular travel card may end up more attractive that one fixed towards a single offering (Disney, in this instance), this card offers a very attractive APR few rewards cards can lay claim to.

Rewards

Using the Disney Rewards Visa Card From Chase, you can earn one Disney Dream Reward Dollar for every $100 you use up in your credit. You can redeem the Disney Dream Reward Dollar for everything Disney, including hotel accommodations, theme park tickets, Disney vacation packages, DVDs, clothes and toys. If 1:100 seems an unattractive ratio - well, it is.

Fees

Fees are one of the strongest features of this card. If the rewards aren’t as sumptuous compared to others, maybe the comparatively low charges will.

The card has no annual fee and APR will be between 5.99% and 10.99%, very attractive for a rewards card. You also get 0% APR for select Disney travel packages for up to 6 months (lifetime offer) as well as on all purchases for the first 12 months.

Other Benefits

The card come with the standard list of package befitting of Platinum cards - concierge services, travel benefits, lounge access and more. The card comes without any hidden Mickeys.