Cool cars. Cool trips. Cool $150 shades. Summer is a great time to be rolling in cash — or at least stacked in airline miles.
So as many consumers are planning vacations, they may be tempted to say, “Hey, why not grab 30,000 or 40,000 free bonus miles and sign up for that airline credit card?”
Here’s why not: “Two years later, I haven’t been able to redeem those miles,” said Odysseas Papadimitriou, CEO of CardHub.com. “I do this for a living.”
Papadimitriou’s CardHub.com offers a search engine to help people find and compare credit card deals. But he admitted that he signed up for a British Airways credit card offer because the upfront miles were incredible and the offer looked too good to pass up. But he’s had a hard time finding the right flight to use those miles.
Papadimitriou said some solid offers exist for free air travel and free hotel rooms. He suggested that consumers consider their spending and travel habits, though, before opting for any card.
Some of the better upfront bonuses include:
» Chase Sapphire Preferred Card. Spend at least $3,000 during the first three months the account is open and you’d trigger a 40,000-point bonus that can be redeemed for a $400 statement credit or $500 in travel if booked through Chase’s Ultimate Rewards program. No annual fee the first year; $95 annual fee after that.
» Hilton HHonors Surpass Credit Card through American Express. Make just one purchase and receive 40,000 bonus points and another 20,000 points after charging $3,000 or more in the first three months of membership. The card has a $75 annual fee.
» Barclaycard Arrival World MasterCard. Spend $1,000 during the first 90 days to receive a 40,000-mile rewards bonus. That bonus is redeemable for a $400 statement credit attributable to travel-related charges. The $89 annual fee takes effect the second year.
But again, pick up a pattern here: While bonus miles are attractive, consumers need to follow some potentially tricky rules to qualify for bonus miles. For some consumers, it may be better to pick a travel-related credit card for an airline that they use regularly anyway, no matter the bonus.
“The number that gets everybody’s attention is the ability to earn 30,000 miles,” said Greg McBride, senior financial analyst for Bankrate.com.
But “typically there’s a spending requirement,” McBride said.
So you must spend $1,000 or $2,000 or $3,000 within a given window, typically the first few months, to qualify for the free miles.
But are you going to be able to pay off the $1,000 to $3,000 on that new balance? Or will you start owing interest on the new credit card debt?
McBride gave this example: Let’s say you get a card requiring that you spend $3,000 to earn the introductory bonus of 30,000 miles. But the card carries a $75 annual fee that isn’t waived and has an annual interest rate of 15 percent.
George Hobica, founder of AirfareWatchdog.com, said travel cards are good for bonus miles and perks, but typically only if the card waives the high-cost annual fee the first year. And many travelers would want to cancel the card after the first year, he said.
Of course, be sure to check whether you’d lose any miles or points before canceling a card.
Review the rules and the options. Or the big trip could involve running in circles to figure out how to take advantage of those bonus miles.
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