stragic

okay, I've done my homework but I still need you guys to help me with a question about credit cards and FF miles. Let me preface this with I've never had a credit card. <BR>If you have a credit card and charge something, will you have to pay interest on those purchases if you immediately pay off your debt? I know some cards don't have an interest rate (at least for awhile) but I wanted to know-if you use a credit card, is there anyway to avoid paying interest on charges? If not, is it still worth it to you to pay interest and earn FF miles? I'm debating about getting my first credit card and want to know if it will be worth it to earn FF miles. I know this is totally naive but I'm afraid of debt so I haven't got a credit card yet. I only use a debit card now but a card to earn FF benefits sounds great! Any help will be much appreciated! Thanks!

jody

I use only my credit card....but I treat it as a debit card. when I purchase something, I immeadiately deduct that amount from my checking account and keep a record of it till the bill comes in. At that time I add the total amount back into the checking account and then pay the bill. <BR><BR>There is no interest if the entire balance is paid off.

NorthSideSue

If you pay your bill in full by the due date, there will be no interest charged.

Cicerone

Read your credit card application and agreement very carefully; they differ as to when interest rates start accruing. In some very rare cases, interest starts accruing from the date on which a purchase is made. Most cards start accruing interest on payments only if they are over 30 days late, in other words if you pay off in full each month then you won't pay any interest. However, read the application carefully for other charges which they may charge you. The credit card agreement should clearly indicate when interest will start to accrue and at what rate, and whether additional interest rate charges will apply to very late payments, partial payments, etc.<BR><BR>It is not a good idea to incur credit card interest debt in order to &quot;earn&quot; frequent flyer miles. The miles are not free in this case, they cost whatever your interest payments are. Interest charges add up very quickly, and you can easily get into debt. The best way to avoid them is to pay your credit card bill in full every month.<BR><BR>Some cards like American Express do not charge any interest, however you must pay in full each month and cannot carry a balance from month to month. This may be the best for you to avoid incurring interest charges and credit card debt. You also earn points with each use of the card, and you can transfer these points to many airline and hotel frequent guest programs. (Amex also offers a traditional credit card which charges interest on late payments.)

china_cat

what you want to look for, in the credit card application's fine print, is a &quot;grace period&quot;. This is how long you have till the interest charges start accruing. Usually this is about a month. Most cards have one. NEVER get a card that charges interest if you pay in full when billed. You should not get a credit card with no grace period.

Patrick

I've been putting every purchase I make over $20 (sometimes I lower my limit to $10) for about 12 years now. All earn me a mile per dollar spent on my Citibank American Airlines Aadvantage Card. I have never paid a penny in interest as I always pay my bill in full before the next bill comes. Once my check was lost in the mail (no, really!) and although they first added interest for non-payment, when I called them they removed the interest charges based on my past record. Just make sure also that you never use your card to withdraw cash from an ATM because that will be like borrowing money and they will charge you interest for that from the day you withdraw the money. Use a special bank's ATM card for doing that -- withdrawing money from your own checking account that is.

jmw

Hi. My cc doesn't do ff miles, but here's my question: Each card that does has a designated airline? No shopping for best deal? Thanks, J.

jody

Most cards will be for a specific airline..citibank- American<BR>First USA - British Air , delta Skymiles- American express.<BR>There are some, American express , etc. that accrue miles and these miles can be used on almost any airlines.

jody

I should have put that a different way..most Airlines use a specific Bank or credit card company.

Patrick

jmw, I just posted a response to your question on the other FF thread, but in terms of &quot;shopping&quot; for the best deal, I've already done that and that's why I chose American as my &quot;permanent&quot; FF mile partner. They enable me to upgrade to business from the lowest coach fare, something which most airlines don't do. They also have lots of partners that accept the miles so I can continue on to destinations for free that are not covered by American itself. And although I have to plan my reward trips about 11 months in advance, I've never been told that there were no seats available (or at least not more than having to delay for one or two days from my original plan). They also offer lots of bonus plans for earning miles. The latest ones are getting up to 1000 extra miles just for booking any flight on their website, and now getting 500 to 1000 miles for &quot;preboarding&quot; or getting my boarding pass from their website on the day of the flight, rather than standing in line. Those kinds of bonuses really add up.

stragic

Thanks everyone-you're all the best!<BR>I can see now I must get a credit card , pay in full every month, and start earning FF miles. This will also help me establish a credit history which I know will be important later on if I want to buy a house, car, etc. Thanks Again!

rhkkmk

each card is slightly different...read the disclosure very carefully...some cards accrue interest immediately, but that is a very limited number of cards...diners club lets you choose the airline to send points to...<BR><BR>most cards with ff miles have a heafty annual fee, say $50...this may or may not work for you....i have northwest and delta and pay for each but find it to be worthwhile...i chage all of our grocieries on amex with delta miles and make an entry in my checkbook for the amount and once per month pay the bill totally, so as not to let it get ahead of me....with american express there are several kinds of card....affinity (with ff miles) and just regular....my regular card which i have had for 25+ years had no credit limit and is payable in full monthly....if you do not pay in full i think they switch the balance to an interest accruing feature...or maybe it is interest free and they send you a letter telling you to pay in full immediately...i have forgotten....that card has a $55. annual fee.....some people dislike fees but i sometimes find the fee worth the extra expense for what it gives me in return....<BR><BR>

TimS

As indicated above, American Express may have the most flexible card since you can transfer miles to several FF plans. I have a CapitalOne MasterCard which earns me miles on every dollar spent and can be used on any recognized commercial airline. There is a dollar limit on tickets corresponding to geographic zones, but I can choose to pay the difference (if any) so long as I have have enough miles to qualify for the zones in question. I can also redeem miles for cash if I wish. However, I *cannot* transfer miles to an airline FF plan.

nickn

&quot;grace period&quot; is not a uniform thing between banks.<BR><BR>I once had a card with so called 25 day grace period, sound reasonable? Not the way this bank handled the grace period!<BR><BR>It took me 12 days to get the bill after the closing date. Then after I mail in the bill, it took them 10 days to credit my account. So how many days I had to send in the bill? 25-12-10=3 days! Of course, if the mail got delayed by holidays, I had to send in the payment on the day I receive the bill to avoid the interest charge.<BR><BR>So much for the 25 day grace period!<BR><BR>So what did the customer service recommended me to do? Use the automatic bank payment. Speak of rewarding the incompetence.

uhoh_busted

I use American Express and Diners Club. Points can be taken as miles or points in hotel programs, so the flexibility is super. The AmEX is a Hilton card, and also &quot;just&quot; a blue -- so you can carry a balance (but it's better not to do so, since that does cost you!) I have ff accounts with USAirways and American and British Air (altho I've never used that...just joined the year before we planned a trip to England, as I didn't know where we'd get a better deal on flights &amp; wanted to be able to earn miles on whomever we took. I belong to Marriott, and Starwood hotel programs, as well -- but the only times we stay in those hotels are in the States, or when on business.

FainaAgain

If you make a purchase in a store and pay off the balance on your statement by the due date you don't pay interest. If you get cash using your credit card the bank will start charging interest from the day of the transaction. So try not to get cash, only buy things.<BR><BR>There is another thing - annual fee. In my bank it's $15 a year, small amount, but why would you want to pay? It varies by banks, from what I know $10-20. This fee is waved if you met the annual requirement, in my bank it's if you make purchases during the year for over $1,500 they don't charge this annual fee.

kathcoll

Capital one has a card that you can use your FF miles on any airline. Capital one also has the advantage of charging only the 1% mastercard organization fee to exchange foreign currency - others charge up to 3%, - like the citibank AAdvantage card...that's a total of 4% exchange fee for every transaction with foreign currency!
Personally when I'm travelling out of the country, I use the Capital one card (no fee for this one - you can get the card and just keep it with your passport to use when overseas!)

Patrick

I've looked at the information about Capital One's mileage giving Visa and if I understand it right, it is its own program. In other words you can't transfer miles earned there to your own FF program with a specific airline. In addition they don't even offer business class upgrade awards only coach tickets which have to be earned totally with the miles earned by using their credit card. In other words with American I could get a 50,000 mile free coach ticket to Europe redeemed from my credit card miles, special purchases, dining program, and miles earned on flights. But with Capital One I'd have to charge 75,000 dollars on their card alone to get the same ticket. Is this a good deal????

Patrick

By the way, Kathcoll, my Citibank Aadvantage card only charges 2% over the 1% on foreign transactions, that's a total of 3%, not 4%. And that's only on the foreign transactions. In the course of a year I put a lot more US charges on the card all earning mileage without any fees, so the 3% on only my foreign purchases seems a small price to pay for the benefits I get from my AA FF program. As I've stated many times, I recently cashed in 90,000 miles to get a ticket worth over $7000. Probably 5,000 of those dollar/miles was done by foreign purchases, so that means my $7000 ticket may have cost me a total of $100 for those foreign transaction fees. I don't think I'll lose any sleep over my $7000 ticket costing me $100.

MGB

We have capital one. From mainland US to Europe, it is 55,000 miles. From Hawaii or Alaska it is 75,000. There are ticket dollar limits, to Europe for the 55,000 it is $1,000.

It is good on any airline. Granted for example, NWA is better, since I think it is on 47,500 if you book online. However, I think we pay $40 for our capital one per year, whereas our NWA we use to have was up to $80 per year when we terminated it. If you are paying $40 more per year, you start adding up the dollars.

It use to be different when we charged our daughter's tuition to high school and collage, it really racked up the miles quickly and NWA was a better deal (Europe use to be a lot cheaper miles wise especially with fly rights)