I don’t use credit cards, but a have an AAdvantage debit card. I don’t mind paying the annual fee (its worth it to me). When I go out to restaurants, I check American Airlines’ iDine page to get the 3mi/$1 for restaurants (after 12 dines in a calendar year, its 5mi/$1) on top of my AA card. I am in the DFW area, and paired my Tom Thumb store card with AA so I get 1mi/$1 I spend there (in 250 mile chunks) on top of the debit card.

If I do any online shopping, I usually use ebates, but I’ll try to see if I can do the hack listed here.

I said I don’t mind paying the annual fee, because to me paying $65/year is worth it to get to visit a friend of mine who is traveling abroad to teach English as a foriegn language. While she’s in Mexico, I’ll pay for the tickets ($350/ea after taxes, and I get the miles – I purposely do a layover, too. It doesn’t cost more but doubles the miles on the trip – and I don’t mind reading in a terminal), but when she goes to Japan or Korea or eastern Europe, I get to save the $1000-$1500 on the round-trip and just pay taxes and fees.

I’m really flexible with my travel plans, too – I can book really far in advance and I don’t mind taking less desirable flights or having connections – as I said before, I don’t mind reading in terminals.

Since its a debit card, I can’t go crazy in debt, and I don’t change my spending habits because I can’t. I only put a set amount in the account that card is attached to (bills are paid from a different account, savings in another), so its just my allowance money (gas, groceries, weekly spending money) – I just decided I wanted to get miles for it.

I just made a purchase using this method, so I’ll let you know if they’ve blocked you from getting AA and Ebates credit, though it may take awhile to know if I’m going to be credited.

One of my best friends, though, expects to be able to use her miles to take last minute trips to see her boyfriend on the east coast and gets very frustrated with the miles programs. For her, it doesn’t make sense.

Figure out what you are trying to get out of the program. For a lot of people, the cash back makes more sense. But if you are a long-distance traveller whose vacation plans are somewhat flexible, that once-in-a-lifetime trip can become a reality pretty quickly with a miles card.

All that said, there is one downside to using a CC over cash even if you pay it off every month that you didn’t consider. It has proven that the majority of people over spend (by 25%+) when they use a CC vs cash. I guess it has something to do with the psychology of pulling actual money out of the wallet instead of plastic.

So as long as you can pay off your cards EVERY month AND not overspend this airmiles/rewards concept is a great one.

If I didn’t have a handle on my spending, I wouldn’t be four glorious months from paying off my mortgage on a home in a rather pricey area…and I’m 29 on a single income, albeit a respectable income.

And sometimes indulging the occasional want is okay. There’s no point in amassing wealth if I’m going to be miserable. There needs to be a reason for being frugal and making money beyond simply watching your net worth increase, although I do a get a little thrill out of that as well.

I forgo Starbucks, brand name clothes, and the like so I can indulge my love for comic books, treat my sisters to restaurants they love but can’t afford, help my parents out when the washer and dryer break down. I work hard at the day job so I can pay off the mortgage and establish a nest egg because one day I want to write full time without having to worry about making ends meet. I’m practical enough to know starving for my art would get old pretty fast.

As for reward miles, we have been redeeming the miles once or twice a year since 2002 (usually a roundtrip to Europe at the end of summer and a trip to California for New Year celebration with friends) and while it’s not always easy to get the exact dates with minimum layover time, it is certainly not impossible.

Usually we are successful getting desired dates (or close enough) with direct flights if airline offers them. Some airlines require fewer miles (Virgin used to require only 35K miles for round trip to London, and this summer they were running a promotion requiring only 25K for roundtrip, with plenty of summer dates open. Their taxes and fees are another matter, however).

We used to charge *everything* on our Amex Green and Blue cards, collecting Membership Rewards points. We now switched to Starwood and just last week I cashed in some of the points for a hotel in Stockholm (paying cash for air this time since Icelandair had a really good deal).

So it’s certainly possible for average folks without advance stratagems to accumulate enough miles for at least one annual trip. We happen to travel a lot, therefore for us, the value of miles is higher if we can redeem them for high season air tickets, as opposed to straight cash back. When that changes, we will switch to cash back card instead.

i use my cc for the 1-2.5% discounts, but again you really have to watch spending behavior so it is actually needs rather than turning into wants just because your mind is saying you are getting cash back or rewards or miles towards that vacation you think you’ve earned.

I currently use a USAA credit card that allows me cash back, gas discounts, food discounts, and a bunch of other discounts (mostly travel related) for using the card. For the past three years, I’ve been able to get $300 cash back per year, which adds up! I encourage anyone looking for a rewards card to do so as there are some good deals to be had.

For a lot of people, “too good to pass up deals” like this are what landed them in a debt trap.

We don’t have an airlines credit card and instead opt for a rewards one. This one enabled us to pay off a considerable about of my students loans. We have a Citibank card, and they will cut checks directly to your loan provider. This was a great way to use our points. Now that we don’t have loans anymore (hurray!), we plan to use them at whatever major vendor gives the best deal (Amazon, Kohls, etc).

I think it’s a great idea to pay tuition on a reward credit card. When I was in college, I don’t believe my parents had that option, but I wish they had, considering I went to an overpriced private school.

Great topic!

My “no hassle” Capital One rewards card couldn’t have been easier to use. I bought the ticket for my son on line using expedia and then charging it using my NoHassle card. Then, I waited a day or two for it to show up on my c/c listing. I clicked on my c/c site where it says ‘redeem rewards’ and it gave me the option for both of the tickets I had purchased lately. I told them I wanted to use up 74000 for the $740 ticket from FL to AK for my son and it was that easy. They subtracted the points and added a credit to my c/c as if I had paid $740. It was soo easy.

Don’t dismiss something til you’ve tried it.

My sis bought me a ticket to fly to the states using her Am. Ex. points that she had earned. I had to work it through their c/c site and it was a bit more complicated, but I managed to find a decent connection using her points. I don’t think it cost her anything. Using the No Hassle card was easier, but the AE wasn’t difficult.

At the same time as she bought mine, she bought another friend another ticket so we could all meet at a college reunion. It wasn’t difficult at all.

I think it’s like so many reviews. Many times it’s only the disgruntleds who bother to write it up. The ones who are happy just go on their way. Unfortunately it makes those on the outside think that something was really wrong with that hotel/restaurant/place of entertainment when it might have just been the reviewer or a fluke.

Why by skipping using c/c and using only cash and not getting any benefit, are you “smarter”? The only way you are smarter is if you actually spend less money. Does spending cash help you spend less money? If the stores actually raised your prices by 3% if you used c/c, then I could understand it. BUT THEY DON’T. If I use my c/c and you use your cash, we pay the same price for that bottle of shampoo at Walmart.

You aren’t paying for it. The C/C company only gets 2% profit from your purchase instead of 3% if they are giving 1% back to you. Why is that bad? That seems only SMART.

I’m not sure why so many of you think that the c/c companies only make money when people don’t pay off their bills every month. They make a percentage of each sale. Don’t you understand that even if all their customers paid off their bills in full every month (like we do), they would still exist, because they are convenient and make money?

All of you who contend that using c/c cost us money–your point is silly unless you are telling us to avoid stores that allow you to pay with c/c and telling us only to shop at venders that accept only cash because they have lower prices. If your point is that stores that accept c/c are cheaper, then, make THAT point. BUT, that definitely isn’t true 100% of the time for people who are “smart shoppers” and know how to find deals and use coupons at the name brand stores.

For me, I see nothing wrong with using my credit cards for 99.9% of my purchases to earn the cash back. I have to eat, clothe, and shelter myself. Might as well get a little something back for all the money I spend on food, gas, clothing, incidentals, tax-deductible business expenses, etc. These are not frivolous wants.
(The PS3 Slim I’ll be buying is a frivolous want, but I consider it cheaper entertainment than going out to the bar every night like most people my age do.)

don’t forget that you still have to pay tax on the miles ticket, so include that into the calculation.

also, the psychology of the whole cash back or earn rewards card should be tempered. buying crap you don’t need in order to get cash back or rewards or miles, ends up costing you more in the end. this whole article read like, if you want free tickets, then spend, spend, spend, sign up for this, sign up for that, etc., etc. Not something that people in these tough times or any time should freely be doing.

lastly, the more crap you sign up for, the more mailing lists you get on, the more your information is shared, sold, and passed around, and the more offers for this, that, and the other you will get.

I will have to check out earning the miles, because I would like to have them to upgrade to business when I do fly. The only problem is, I can’t be loyal to one airline so if I understand correctly, I need to look for a program that lets me choose the airline.

That trip across the Atlantic gets really long in coach.

I use igive.com as my shopping portal. It gives a percentage of your shopping to the non-profit group or charity of your choice. This is particularly helpful for me. I work at a non-profit and for a variety of reasons am very limited to how I can use our CC. Shopping through igive.com gives us back a little something when we buy office supplies and other items and we can still put them on account and get our invoice/bill sent to us the same as usual, but we also get a check sent to us two or three times a year.

That still means that the term “miles” is skewed and doesn’t actually reflect a literal travelling “mile” that you earned. It’s referring to money you spent (that’s depressing for someone pining to recieve something for “free”) and if each airline gets to set up its’ own definition of how many miles it takes to travel somewhere, it sounds like an outright deceptive practice. The ticket then really isn’t free after all, is it? Is it just me, or does post #77 read more like an advertisement by an online ad campaign than an opinion?

My perception of the site (being called “Get Rich Slowly” and all!) is that it’s about the slow, sensible approach to money. Not about money hacks and crazy stuff you can do that, if done just right, will save money/get free stuff. This sort of idea is the absolute WORST thing someone could do if they have problems handling their money. It’s the sort of thing that for every person that does it successfully, you probably have 4 more that end up losing because they fall into the credit card traps. It’s anathema to my conservative approach to personal finance and the things I enjoy about this website.

Just my two cents… I liked her first article, but this one not so much.

I agree with the poster above who said do ***not*** diversify. The best way to get the most out of frequent flier programs is to pick the one airline that serves your city best and stick with that.

Yes, it can be complicated — even Byzantine — to try to redeem points for free travel. Your best bet is always to plan very far in advance (award seats are usually made available 330 days before the day of flight) and to be flexible on dates. My partner and I put most of our wedding expenses on a Chase United Mileage Plus Visa and got two round-trip business class tickets to Europe and back for around $70 (that was the “taxes and fees” component). My parents went from NY to New Zealand and back on award tickets — they use their American Airlines credit card for everything. I’m also flying cross-country to visit my mom next month on a reduced-award ticket on United (they were having an award fare sale, so it only took 20K points to fly Calif. to NYC and back). My partner and I also flew from Calif. to the Caribbean and back for a friend’s wedding on miles (50,000k points total for two round-trip tickets) on American a couple years ago. So yes, it is possible, and people do redeem points for free tickets all the time.

To clear one thing up — calling what you build up in your frequent-flier account “miles” is accurate, b/c it reflects the miles you have flown (or the dollars you have spent on a related credit card) in the ***past****. Each airline then sets up its own rule for how many “miles” you need in your account to be able to redeem them for a free ticket. It’s generally 25,000 miles for a domestic round trip for a “Saver” award, and 50,000 miles for an anytime award. Unfortunately, most of the US airlines just increased the requirements for all travel beyond the continental US.

I don’t know too much about my credit rating, but the last time I was in the bank to get a loan on a new rental property, the banker was a little astounded by my score. So, a $1000 limit on a single credit card won’t hurt you if you have a slew of other credit cards with high limits and you pay off the balance every month.

Nope, the term ‘Airmile’ here is better seen as a metaphor lol. You’re right, they usually claim it takes a set amount of miles to reach one destination, when in fact, it really isn’t that far. (Ironically in Canada — we don’t even measure distances in miles, we use kilometers, so you can already see the method used to trick naiive average joes.)
I think these cards (in Canada at least) are great for those who love the Big Box stores with Big Brand Names , as well as those who aren’t exactly looking to live VERY frugally, and would rather outsource the responsibility of saving towards a trip to someone else. With some self-control and ALOT of determination and saving, and I feel ANYONE can take a vacation regardless of your income, or if you have a points card.
PS: I gotta confess I’m a little jealous of JD heading to France — it’s always been a dream destination of mine — however, paying off my debt first is more important and will be even more satisfying. Hope you enjoy that trip, JD. You earned it!

No, you just don’t see a cost. Not every merchant is available on those shopping portals. Merchants pay a fee to be included on sites like that. And how do they cover the fees to be included? By increasing their prices.

That was my reference to the herd. The issue is that as soon as enough of the herd jump on the bandwagon they’re punishing the rest of the herd. So now I’m in a position where I’m being punished for not having a rewards card. I’m paying that higher price that was caused by the rewards card junkies but not enjoying any of the benefits.

When has a business ever given up something for free? And why would they? Everything costs something. You just might not see those costs broken out on your bill.

Nothing personal, but I don’t think this was a very well researched view into rewards cards. It would be very interesting to see something about what rewards cards actually cost the consumer.