Is There Any Difference Between Credit Cards?
 

I seem to be the last person on earth who doesn't get miles/special treatment/gifts, etc. from my main credit card. United and City keep sending me inviting offers but all the fine print just confuses me (and I am a lawyer for goodness sakes!) I really would like to get extra miles and upgrades when flying. Any advice out there?

I really like the Delta Sky Miles Amex card. Our family of 6 has been to Hawaii 4 times on frequent flyer miles. This particular cards gives double miles for groceries, gas, home improvement stores as well as various double and triple mile promotions or mileage bonuses through the year.

Here goes. If you have a favorite airline that goes where you want to go then get a credit card affilitated with the airline. Like Citibanck and AA, or Chase and Continental, etc. Expect to pay for the privilege with a yearly fee and high APR. If you pay it off every month then the cost is very little. If a favorite brand of hotel then do likewise. There are some good deals out there for opening an account to new customers. The trick as always is carrying no balance if at all possible. Be very wary of deals with "no black out dates" , "any airline" ,etc. You may find out they are worth very little when you go to book. Read the fine print on these very carefully.

First determine how you use your card

Anyone using a PERSONAL credit card for the sole purpose of accumulating miles, while carrying a balance is crazy.

First determine how you use your card.

If you carry a balance, then find the lowest possible rate that you can obtain given your credit rating.

The interest savings alone, could easily pay for the upgrade to a first class ticket every few months. CC rates vary WIDELY from 8% to 18% with the same credit score.

That should be your greatest concern if you carry a balance.

If you pay off your cards every month, then find a card that aligns with the airline you fly most frequently on...check out the blackout periods and such.

Many cards will offer cash back as well, which you could liquidate to purchase a ticket.

As a banker, I cannot tell you often I have seen people carrying 15k+ balances on 18% cards.....just because the card accumulated great miles!

Yesterdays release of the US Commerce Report showing Americans last year had a -1% savings rate, says just how well these CC companies marketing gimicks (ie. miles) are working....BE CAREFUL.

Hope this helps.

Some good advice above. Also, if picking an airline-affiliated card, get one that flies where you go and preferably also where you want to go for leisure travel.

If you travel on business it is almost like getting a double hit at miles. For example, we have a USAir Visa card. Husband charges $2,000-$6,000 per month on the card plus we are allowed to charge our son's tuition and college fees - that adds up to a lot of miles per year - enough to fly him home from college free several times/year. We pay off in full each month.

These type of cards often have a fee attached that can sometimes be waived if you call them up and ask.

Gail makes a good point...never ever be afraid to make a call and ask that they waive a fee.

If you are a good customer...they will NOT think twice about waiving an over the limit or late fee...so long as it doesn't happen often.

Same for payment over the phone....many are now charging $15 bucks for that stupidity....ask them to waive it....don't worry most often or not they will...they want your payment!

Even though I am in finance....in my opinion cc companies are the incarnation of evil.

Never have loyalty to them...ever...and if you carry a balance and have a good credit score....turn the tables on them and transfer your balance to a 0% card for the period (sometimes up to one year), and then when that is up, transfer that balance to another card with 0%...but DONT forget to CLOSE the other card!!!

If you are smart with your finances, it is vary easy to turn the tables on them.

There are differences but how much they matter depends on how you use the CC. Rates differ, as does the "grace period" before interest accrues on purchases. Some have started applying what they call penalty rates - miss/ be late with a payment and your interest rate increases - sometimes precipitously. I pay off my balance monthly so avoid interest. IMHO, not doing that is financially dumb. If you really need to buy something and spread the payments out over several months, get a lower interest loan - even signature loans typically carry lower rates than most CC's.
In terms of racking up FF points, just about all the major airlines have a loyalty card. Continental just came out with a new Presidential Master Card that has a hefty annual fee, but it also includes a free membership to their Presidents Club, and you get 5% off airfares purchased with the card plus extra FF miles, so it's a pretty good deal. Of course, that is attractive only if you are a CO OnePass FF program member.

Check out the options at Capital One.

Well if you're an attorney I'm assuming that you don;t carry a balance on your credit cards. (If you do - that's a whole other question.)

In that case just use an AMEX card. There's no interest and for a green card the fee is minimal given all the benefits. And the points you accumulate can be transferred into many different airline and hotel prorams, as well as to "buy" gift certificates and merchandise. (I just got a digital camera and IPOD - together worth over $600 - for extra miles that were just hanging around.)

Is it true that AMEX does not offer the same protections as most credit cards because it is not actually a _credit_ card?

For example, with regard to disputing charges.

We have had AMEX for years and never had a problem disputing charges. Thankfully, that has only happened a couple times, but they have been great about it.

I've had an United Mileage Plus card for years and have no complaints. I put everything on the card and pay it off each month. It has been pretty easy redeeming free flights, but I think it helps that I live in a city where United has a major hub.

I don't think you can go wrong with their current offer - 1st year fee waived and 21,000 bonus miles. A free domestic coach ticket on United starts at 25,000 miles and Hawaii for 35,000 miles. Check out United's website.

I knew this would be the place to go for some answers! Thank you. And no, I don't carry over a balance on my credit card, I just feel like a sucker for not getting any advantage at all for being a "good" customer. I think at this point that I will take United up on their current offer and go from there. I really appreciate your comments and suggestions.

If you do international travelling, check out the CC's currency conversion surcharge. Many are as high as 3%, most Amex's are 2% and some are 1% (my Captial One , for example.)

This is in response to Swaying Palms question above: Not only does American Express offer all the benefits of the other cards, IMHO they are usually easier to deal with if you have to dispute a travel charge. For that reason, we use only Amex when we travel. I sound like an Amex commercial . . .

BarryK, a number of others here are insisting that Capital One does not even charge that 1% on foreign charges. Why does yours?

No - AmEx offers dispute protection better than regular credit cards. At least every dispute I;ve had has been settled in my favor with no problems. They remove any questioned charge as soon as you ask, send you a confirmatory letter, investigate, then send letter telling you the resolution. And they don;t take the merchant's word for everything - but really require proof.

The only time I had a dispute on a Visa card they were useless (the charge was a clearly bogus one) and I ended up cancelling the card to avoid paying the charge.

Separately, when someone managed to get my card # and use it they removed all questioned charges permanently at once and Fed Exed me a new card the same day.

The other benefit is that unlike most credit cards there is no limit - I've charged over $50,000 (business expenses) in one month on my personal green card - no questions asked.

Thanks for the replies.

I wonder, then, where that idea came from.

nytraveler, your descriptions for AMEX match mine for Citibank MasterCard and Visa. We once disputed a no show hotel bill when we had a double booking -- seems when I had called to check our reservation, the hotel said we didn't have one, so I made another. We went, stayed, and later got a bill for a no show. Seems they had booked the first reservation under my first name as my last name which is why they couldn't find it, yet still they billed my CC for one night as a no show for that reservation when we were there. Calls to them did nothing. They insisted we'd have to pay it. I contacted Citibank and they took care of the entire thing and credited me for it. I had a couple other disputes they handled equally efficiently. And when we've had credit card "number theft" three times, each time they've issued new cards immediately and credited all false charges with no questions asked.

Also when I screwed up a payment to Citibank (by mailing the wrong check on the wrong date) a call them cleared all the late charges and interest. They couldn't have been nicer. When my check to American Express got lost in the mail (or lost in their office which I'd believe first), they refused to credit me for the $50 penalty for not making a "minimum payment" on my statement which was a total that month of $38.

NeoPatrick - I don't know the answer to that. Perhaps because it's a rewards card? Or, perhaps they haven't travelled internationally recently. As I recall, until a few years ago, there was a law prohibitng CCs from charging a fee on currency exchange.

We used to have a free Amex card that awarded Delta skymiles. However, we got rid of it because of Delta's precarious position and because it is so hard to use our miles. We decided we would rather just get cash back to use towards tickets. Chase and Citibank both have cards that give back 5% on grocery, gas, and pharmacy putchases and 1% back on everything else.

Which Citibank card still gives 5% back on grocery/gas/pharmacy? Their Platinum Dividend card no longer does (as of late last year). Since then, I switched all of those purchases back to Amex.

Just a side note: somebody advised to check if my bank in the US has an affiliated bank in Mexico (will be there in April) so I won't get charged for using the ATM card.

Well, the affiliated bank is BAN AMEX :)) (something like Banamex) LOL

2 things after all this advice. The AMEX are good people to deal with but are affiliated with a limited number of airlines. Capital One is one of those cards you should read the fine print(I settled for Home Depot Certificates rather than the impossibility of getting a real ticket of value). Citi and AA have been great as long as you pay on time. Chase and Marriott is another good deal.

As alluded to by others, Capital One is NOT a traditional miles accumulating card. Be darn sure you understand what you are signing up for if you go with Capital One.

None of the advise is appropriate if one lives outside the US and uses ATM and CCs abroad.
M

Amex offers Pay with Points, which allows you to redeem membership rewards points on any airline.

Be aware that the points you earn from some airline related credit cards are far different from earning "points" on cards that let you "use any airline".

The Business class ticket I get for free on American Airlines to Europe with two stopovers costs me 90,000 AA points. But getting the exact same ticket with Capital One points would cost me about 700,000 points. I don't know about you, but it's a lot easier to rack up 90,000 worth of dollars spent on a credit card (if that is the only way you're earning miles) than it is to spend $700,000 on a credit card. A LOT EASIER. Meanwhile the airline credit cards let you combine your credit card miles earned with various other forms of miles earned. Capital One and others don't!

I've had a Citibank American Airlines card for 7 years and have been nothing but pleased with it EXCEPT for the fact that overseas purcahses carry a 3% charge. So, I use a Capitalone overseas.

If you don't carry a balance I suggest the AMEX Platinum card. The fee is $395/year, but if you travel you receive many times that back in services. Just a few of my favorite amenities of the card are entry into the airline clubs, upgrades based upon avail. at hundreds of hotels in their program (we usually get either a size upgrade or prefered view), breakfast for 2 daily and an extra gift from the hotel (ie, a round of golf or lunch for 2 once during your stay). The other great benefit is what NeoPatrick mentioned, the ability to get better conversion of points for air tickets. I just cashed in only 35,000 points to get a $485 rt ticket on Continental (this is $1.39/ point). Not only will I still get OnePass miles on the trip, but there were no reward seats availible with my Continental miles.

I have to put a plug in for AM EX too. My wife and I both travel, entertain and shop with AM EX Gold and Plat. I am a really fussy person, so it takes a lot to impress me!

American Express has been an absolute godsend through the years. Whenever I do business with a company or service where something is telling me "watch out" I ALWAYS use Am EX. I have disputed at least 8 or more charges ranging from 50$ to charges over a thousand dollars. ALL the settlements were in our favor!

Best yet, in the last 3 years, you can do the dispute RIGHT ON LINE by a click of a box, and filling out a pull down and comment form...and that is it! Weeks later you get a letter in the mail indicating the status...but they remove the charge IMMEDIATELY UPON YOUR DISPUTE!

My experience with other cards has not been as positive.

On the AM EX Gold and Plat and Green cards the points can be transferred to a whole host of companies or services, gift certificates, airlines, or even cash.

However, someone above noted the ease of large purchases... yes that is true, but that is a "trust" that is built up over time by your payment history, and credit score which they pull each year.

If you have a BIG purchase and you just got your card, it is a good idea to call them up and tell them what you are planning on doing, that way you avoid the embarrassment.

The WORSE card I have ever had, has been Chase....these people really have issues.. their service is inconsistent, and they will cancel your card without giving you any notice, without any reason, and then reissue it to you 4 months later again out of the blue.

This has got to be related somehow with some strange algorithm in their system looking at fluctuating credit scores....happened to me 3 times after some large real-estate transactions.

That is a cc company you DONT want to rely on!

Another great thing about AM EX is that it is NOT considered revolving credit therefore it is not counted against you in your credit score. OK Except if you end up transferring large ticket items onto your Flex Pay option. YOU HAVE to be very careful about that....I noticed last week that some large ticket items on my wife's plat card were defaulted onto flex pay, and she had been paying the card off, but NOT the flex pay portion. I was SHOCKED to find out they were charging 18.6% interest on the balance!!!!

You better believe I went online right then and there and paid off the balance...so watch out for this...it appears to be a new default they put into the Plat cards.

Now a negative....last year I got a DIscover card because of a 0% promotion for one year.....I cannot tell you how many times I have not been able to use that card because businesses do not accept it.

It is surely a card that you don't want to carry without backup.

The best bank in the USA according to Money Magazine as well as me is USAA FEDERAL SAVINGS BANK in San Antonio, Texas.
Phone 1 (800) 531-2265

THEY DO NOT CHARGE ANYTHING ON MASTERCARD EXCEPT A ONE PERCENT CONVERSION FEE IF YOU PURCHASE ABROAD.

IF YOU REQUEST THEIR AMERICAN EXPRESS CARD, THE CONVERSION FEE GOES DOWN TO 1/2 of a percent just like their USAA debt card.

These people have their act together. I have used this bank for 22 years and I would never change.
Free ATM's, free deposit slips, and fabulous customer service world wide. On top of that, they are actually helpful and curteous.

I have the Hilton Honors AMEX and Visa cards. Neither has an annual fee. The free nights at hotels rack up quickly and are usable at any of the multiple Hilton brands.

I will always maintain that the most expensive part of a vacation is the hotels as opposed to the airfare (unless you stay at dumps). Plus, the blackouts and reward limits on the airlines almost always preclude using the "free tickets" when you want to.

Here is our strategy which I have developed after many years of financial/accounting/legal research (I am an attorney, too).

We have a Delta AMEX as our main card and those miles certainly add up --- it paid for one ticket to Ireland last year and will pay for one ticket to Italy this year. I ONLY recommend this card if you fly a lot and utilize your miles wisely --- my father had a Delta AMEX card but he doesn't do a good job using his Skymiles, so his miles just sat there --- he is far happier with a CashBack card.

However, many many places do not take AMEX (especially abroad) so make sure you have a Visa/Mastercard as a backup. Relatedly, I think it is a good idea to have a bank credit card (i.e. if you bank with Wachovia, get a Wachovia credit card) --- mainly, I like this for emergency issues; if we are out traveling and an ATM card gets eaten, I at least have a credit card we can stick in the ATM and then can call my bank and have them waive fees, etc.
However, most bank credit cards give you no benefits, so it is a good idea to have a secondary back up which can give you benefits and you can use for traveling.

We like the Capital One No Hassle Miles card for the reason people have said above --- no conversion fee, etc. But, as rhmuir said, we only use the card when we travel and we use the "miles" to get gift certificates, etc. because it is too difficult to try and actually get a plane ticket from them.

My husband and I had used USAir credit cards for 10+ years. We took several family trips with no problems using the FF miles. However, trying to use points this year was a joke. They claim it's 25K points per person to fly between Canada and US, but I could not actually GET a flight for that- everything available was 50K points. Plus they cancelled the points my children had been accumulating because the accounts were inactive for a year. We cut up the USAir cards and went with Capitol One.

Patty, I have a Citi Dividend Platinum Select Card, and it still pays 5%.

One strategy to rack up miles is to use your card for everything.

I have gained thousands of miles by putting cars and college tuition on my UAL card..along with any household or remodeling expenses.

Like Patrick...I don't like the "points on any airline" cards"I just booked two biz class tickets to Argentina worth $9500 each for 80,000 miles each. no way cold I have done that on the other kind of card.

Sure you could have, Dick. I think, if my math's right, you could have purchased those tickets with Capital One miles and you'd have only had to spend 1.9 million dollars on the card to get that many points. Right?

Digbydog,
I have the same card, but the 5% rebate was phased out back in October. Apparently, they didn't change the rebate terms on everyone's card. Mine is definitely gone now :(