Blogs > Your Money

Dave Patterson and Erin Preston, a father-daughter team of Certified Financial Planner® licensees, provide thoughts and suggestions on a broad collection of personal finance topics.  Information provided in this BLOG is intended to be of a general nature and may not be appropriate for all situations.  Readers should consult with their own financial advisors before relying on any information contained herein.

Sunday, December 19, 2010

You May Want to Consider a New Credit Card

If you are like many Americans who like to earn points towards purchases or air travel, it may behoove you to take a look at some other credit cards. While the Capital One ads on TV annoy many people, they recently caught my attention with their double miles offer. I had intended on checking it out in more detail when I came across an article in the Wall Street Journal just this week that addresses the issue.

Titled “More Ways to Earn Miles Using Plastic” by Scott McCartney (Thursday December 16, 2010), the article points out that competition and changes in promotional partnerships due to airline mergers have resulted in better benefits than previously.

The article points out that there are basically two kinds of reward programs. Those tied to the airline’s frequent flier program typically pay one mile for every dollar charged. Usually, a $400 ticket can be earned with 25,000 miles flown. There are usually blackout dates and other restrictions. The other programs offered by credit card companies award miles usually varying from one to two miles per dollar charged and often have no blackout dates or airline restrictions. A $400 ticket for those programs often costs as much as 40,000 miles.

Some new programs (mainly bank-issued cards), according to the article, are offering perks such as baggage fees, change fees, pet fees, access to airport lounges, on-board food and special early boarding or security-line access. These types of cards, according to the article, are good for elite-level frequent fliers who get lots of free tickets but don’t have those types of awards.

The article includes a table of eight different credit card offerings, comparing the features. Two cards (Escape by Discover and Capital One Venture Rewards) offer double miles with a domestic flight awarded for $20,000 of charges (i.e. 40,000 miles) with no blackout dates or airline restrictions. The Capital One Venture card also charges no foreign currency transaction fees.

With competition stiff, many companies are offering big sign-up bonuses to attract customers. American Express Platinum, for example offers 50,000 bonus points with $1,000 spent in the first three months. But watch out because the platinum card costs $450 a year!

At the least, it may pay you to do a detailed comparison of the cards you use to the others that are available. If you travel a lot, it may very well be worthwhile.


Post a Comment

Subscribe to Post Comments [Atom]

<< Home