Frequent flyer or 1% Cash back on Credit Cards?

[Pengwuino]

So I've been looking to get another credit card and I have been wondering what everyone's opinions are on credit cards that offer the more common rewards such as frequent flyer points and cash back. The cards I'm interested in seem to come down to being either free (no annual fee), 1% cash back kinda cards or a credit card linked to American Airlines (I expect I will be traveling with them often as it seems like they have the cheapest flights in Atlanta). The card with AA has a $50/$95 annual fee but they get you extra frequent flyer miles and offer free checked baggage and a couple other goodies.

What's everyone's opinions on these kinds of cards?

DISCUSS!

 

[lisab]

I have an Alaska Airlines credit card. I never run a balance, and it has a $45 annual fee. If I traveled a lot it would be great. But since I don't travel as much as I once thought I would it was probably a bad choice for me. But if you're *sure* you're going to be flying a lot, it's a great deal.

Why Atlanta? I thought you were in Fresno...?

 

[turbo]

Unless you plan on charging a lot of stuff, the cash back is negligible. Greg seems to have a ball using his air-miles, so maybe he'll weigh in.

My wife and I each have a no-annual-fee card that we use for day-to-day expenses, and they get paid off promptly every month. She uses one and I use the other, so we can each quickly scan our statements and verify the charges before paying them. It has worked well for a long time, and we never pay any interest. NEVER carry a balance! The interest would negate any benefit that you might get from the card. We operate on a cash basis and use the cards only for convenience and safety. I'd rather not have her opening a wallet full of bills to pay for stocking up at the supermarket when the person in back of her in line might be a sleaze.

 

[Pengwuino]

I have an Alaska Airlines credit card. I never run a balance, and it has a $45 annual fee. If I traveled a lot it would be great. But since I don't travel as much as I once thought I would it was probably a bad choice for me. But if you're *sure* you're going to be flying a lot, it's a great deal.

Why Atlanta? I thought you were in Fresno...?

Yeah I'm wondering how much I actually plan on flying. I think I'll be traveling cross country once or twice a year during my PhD and can imagine I'd fly at least once a year beyond that. I'm concerned about saddling myself to 1 airline, though.

And stop stalking me! :P Actually, I'm moving to Atlanta in July. I'm going to be doing my phd at Georgia Tech.

Unless you plan on charging a lot of stuff, the cash back is negligible. Greg seems to have a ball using his air-miles, so maybe he'll weigh in.

I plan on charging a lot, but never plan on running a balance. Based off what I've seen after a few glimpses to AA's program, my estimated expenses per year would save me a couple of hundred in flying expenses. On the contrary, 1% cash back would save me maybe $100 or so. I definitely need some more opinions on this.

 

[Greg Bernhardt]

I've got about 6-7 cards right now all for miles bonuses. I haven't paid for an international flight in two years! :)

The best right now is Chase Sapphire. They have a 40,000 point sign up bonus if you spend $3000 within 3 months. 40k is enough for an international flight! No international transaction fee and free for the first year. The card is also heavy and metallic, I get lots of compliments :)

After the first year before it renews you can cancel the card. On a few occasions I've been able to get another free year if I threaten to cancel. Sometimes they also throw in some more miles!

https://creditcards.chase.com/sapphire/preferred/

I have the AA card. I wouldn't get it because they often come out with really good deals and right now there is no deal. Only 30k bonus miles. I got my AA card last year with 100k! AA does have a good FF program, so keep checking back.

https://creditcards.citi.com/credit-cards/citi-platinum-select-aadvantage-visa-signature-card/

British Airways is also good because it has 1.25 per $1 bonus and it can link up with AA.
http://www9.chasecreditcards.com/ba...2&jp_cmp=cc/05BRBritishAirExact/sea/na/BACard

 

[Pengwuino]

I'm not sure I would want to be canceling cards. That can't be good for a credit score...

 

[Greg Bernhardt]

I'm not sure I would want to be canceling cards. That can't be good for a credit score...

In my experience it doesn't hurt as long as you keep one or two primary cards for long term. The only reason it hurts your score is because you lose some history and your average credit term length decreases. If you kill a bunch of 1 year cards it doesn't hurt much. My score is 732 and I have an account with Transunion.

 

[Pengwuino]

Okay I'm thinking of getting the AA credit card. I still don't understand the rewards that come with, for example, that chase Sapphire card. With the AA card, the rewards are fairly clear, frequent flyer miles. With other cards, it seems like the rewards are just random things.

Any other opinions and info for all of this? I also don't get why one would have multiple credit cards if they don't keep balances. For example, if I got the AA card, I figure I'd just charge everything to that card. Is it because certain cards have really good features in some instances and not others? Is it good to just have multiple credit cards for the sake of a credit score? Not that I imagine I will need a good credit score in at least 5 years (unless my car starts becoming a major problem).

 

[turbo]

I also don't get why one would have multiple credit cards if they don't keep balances. For example, if I got the AA card, I figure I'd just charge everything to that card. Is it because certain cards have really good features in some instances and not others? Is it good to just have multiple credit cards for the sake of a credit score? Not that I imagine I will need a good credit score in at least 5 years (unless my car starts becoming a major problem).

That's my philosophy (don't ban me, Evo!) too. I have one card with no annual fees, and so does my wife. (Different card.) No need for extra cards. People who shuffle debt around from one card to another and carry balances are walking a financial minefield. If you can stay on a cash-only basis and only use the cards for the convenience of walking around with very little cash, ordering on-line, etc, you'll be all set.

Because of the fees that cards impose on vendors, I never ask friends to accept them. Firewood guy, barber (I've been going to her for decades), plumber, furnace guy, auto mechanic, all get paid with cash, not credit. We keep the transaction traffic modest, so it's easy to scan the bills before paying. I smartened up after I used a couple of different cards to pay for meals, lodging, etc on a consulting trip to KY, and found out that somebody had maxed out one of my cards at a marina in the great lakes, buying hardware, rope, etc.

Back to your OP, though. Do you really expect to travel by air a lot? If so, have you researched cards affiliated with Delta? Atlanta/Hartsfield is a major Delta hub, so you might end up with more flexibility for your travel if you can get Delta air-miles. Black-out dates and other restrictions might reduce the value of such air-miles, though. Lots of research needed.

 

[jtbell]

I keep two cards in my own name for personal purchases. One is for on-site purchases, the other is for online purchases. That way if one of them becomes compromised and I have to replace it, I know whether it was because of an online or on-site purchase, and I can focus on a small number of possibilities.

My wife and I also have a joint account, with a card for each of us. We use these when we're eating out or traveling together, or buying something for the house, etc.

All three cards are no-fee cards, and we always pay off the balances each month. We fly so seldom that an airline card isn't worth it to us.

 

[rhody]

Okay I'm thinking of getting the AA credit card. I still don't understand the rewards that come with...

Peng,

If you try top keep track of the mileage rewards, what they can be used for, when, special rates, transfers, when they expire, trust me on this, you will drive yourself nuts. Some cards will accept transfers from other airline cards some won't. When my Mom passed it was tons of fun trying to sort out which miles to use and which we could transfer. In the end, Amex supported the most airlines. I know their yearly fee sucks, but if you ever have a problem with a purchase, you can have it investigated, and while doing so they will credit your account the contested amount. No other card I know of will do that, period.

Since you may be flying in and out of the Atlanta area likely candidates are the major airlines that have their hub in Atlanta. That will give you the best access to flights and flyer miles. The airlines weave a tangled web I am afraid, left to you to sort out. It can be done, with time, perserverance, and patience.

Rhody...

 

[AlephZero]

You know AMR (the parent company of American Airlines) filed for Chapter 11 bankruptcy at the end of 2011, yes?

They are currently trying to get the US courts to tear up all their existing employee contracts, in an effort to save about $1bn a year (which would improve their profits from very negative to about zero).

I woudn't hang on to those air miles for long if I were you.

 

[Greg Bernhardt]

Any other opinions and info for all of this? I also don't get why one would have multiple credit cards if they don't keep balances. For example, if I got the AA card, I figure I'd just charge everything to that card.

The only reason to have multiple cards is to get that initial bonus. After that I don't care much. I don't keep the cards for more than a couple years besides the 2 that I use for long term.

Is it because certain cards have really good features in some instances and not others? Is it good to just have multiple credit cards for the sake of a credit score?

# of accounts does affect your score. Usually the higher the better if managed correctly.

 

[Pengwuino]

I was thinking of getting the Delta credit card, but AA had the cheapest flights leaving Hartsfield-jackson for some reason when I flew last week. Plus their hub is Dallas-Fort Worth, and I have friends there, so I have to take into the account that I get the chance to drop in on friends when I go coast-to-coast (what a great way to decide financial decisions, eh?) Maybe I need to investigate that further. I know AA is in serious financial troubles, but who isn't these days? :P

I'm not too hot on getting an American Express card because it seems like they still haven't fully penetrated the credit card retail market as VISA and MC have.

I think it might be best to wait on an AA card, investigate Delta's card, and get a second, normal Chase card as well. I'm still concerned I may not end up flying as often as I expect. So many uncertainties! Thanks for the opinions and thoughts everyone! Keep them coming, it gives me even more to think about :)

 

[AlephZero]

I know AA is in serious financial troubles, but who isn't these days? :P

Yeah, but AA is running a long way behind the pack. They were the only major US airline that DIDN'T go into Chapter 11 shortly after 9/11. All their competitors used that get-out-of-jail card to restructure themselves well before the current troubles, but AA missed out on that opportunity.

 

[cristo]

If you're thinking frequent flier miles, then not only do you need to look at how many miles you get per $ spend, but also consider how many miles get you the flight you want, and what the extra costs are.

One major extra is fuel surcharges, which make up the majority of the cost of most cheap economy tickets. Some airlines, like United do not charge fuel surcharges on redemption bookings, and others like US have no fuel charges whatsoever. So, for example, a one-way transatlantic business class ticket on US airways using my miles (from another star alliance carrier) cost me £3.50, while on another carrier cost £195.

You might also think about which airlines you fly the most. If you have a lot of paid flights then you might make some elite membership level, or accrue miles from flights which will help make the decision of which credit card to get. For example, I managed to hit top tier of my FF programme with several transatlantic flights plus a good few conference trips for work. Alas, my airline was bought out by another and, likely, the FF programme will lose its good points!

I know AA is in serious financial troubles, but who isn't these days? :P

From what I heard, they filed for protection but nothing too crazy happened. Also, aren't American the only US airline not to go bankrupt after 9/11?

I'm not too hot on getting an American Express card because it seems like they still haven't fully penetrated the credit card retail market as VISA and MC have.

I have an AMEX and even in the UK I can count on one hand the number of times it's not been accepted. Since AMEX charge the retailer more, they often mean more FF miles/cashback for the consumer.

 

[Highspeed]

As everyone said, use an airline card if you fly a lot - saves fees and fares. As for why more than 1 card if you pay it off monthly - several possible reasons. I use Discover 99% of the time, but there is a store I frequent that doesn't take it. I also use a separate card for business purchases. Taxes are much easier to do that way. In the age of computers, it's when, not if, somethings will fail...so when one of your accounts gets locked because the CC company has an issue, you have a back-up. It's easier to fight the CC battle on your timetable than fighting it while the entire store backs up behind you, or worse, the manager is showing you which dishes need washing because you're not leaving! You should also carry some cash btw. There are many highly unlikely scenarios that could be imagined also, but those won't happen unless you only have 1 card and no cash on you...DOH!

The best case - don't get a card at all; but life is a little more difficult that way. Second best, have a couple cards, spend within your means, and pay it off every month! Worst case - have it all, live grand, and panic every time someone mentions bills or layoffs.