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Credit cards offer an easy way to earn free travel with few hassles. Travel credit cards can be divided into two classes, airline credit cards, sponsored by the airline with each purchase giving you frequent flyer miles, and non-airline credit cards which offer points redeemable for travel or even cash. Don't consider these credit cards if you cannot pay your bill on time, since great rewards come with sky-high interest rates. The two classes of cards are quite different and are covered in more detail in the book.
Airline Credit Cards
Airline credit cards offer frequent flyer miles, typically one mile for every dollar spent. Most cards are Visa or MasterCard, so they'll be accepted almost anywhere (Delta and JetBlue are two major exceptions, both are affiliated with AMEX). While this might sound terrific, most cards have hefty annual fees that subsidize the cost of the reward, and frequent flyer miles are becoming harder to redeem. Most major airlines have cards, and you can find links to apply for each card from each carrier’s home page. Airlines have been removing planes from their fleets, yet the number of passengers has been increasing, so with fuller planes, that leaves fewer seats left that can be redeemed with frequent flyer miles. Consequently, airline cards may allow you to earn plenty of miles, but if you can’t use them, the miles are useless.
Non-Airline Credit Cards
With frequent flyer miles becoming increasingly difficult to redeem, non-airline credit cards are picking up the slack. Most cards let passengers choose their flight and airline. This means that blackout dates on many cards are a thing of the past, as long as there is a seat available, it’s yours. However, almost all cards have limits that the card company will pay towards the amount of a ticket. For example, most cards have a limit of $400 for restricted, round-trip domestic tickets. Many cards offer one point or one penny as a reward for each dollar you spend, and many cards require you to spend $25,000 for a free domestic ticket. But, with a little strategy, you can do better.
But if you want to get your free ticket faster, you need to use multiple cards. Some cards, typically cash-back cards, offer up to 5% at grocery stores, drug stores, and gas stations. If you use a cash-back card with a 5% rebate at gas stations, you can save 15 cents off each gallon of $3.00 gas, not bad. If you use these cards in conjunction with other cards that use points instead of cash, then you can rack up enough for a free ticket faster. Use the cash-back cards at the places where they get 5% and points cards elsewhere, since points are worth a bit more than a penny.
Here are some cards you should consider with a little info about each one. Click the link to read more about each card and apply.
Discover Platinum Gas Card
Offers 5% cash back on first $1,200 in gas purchases per calendar year only and significantly less (.25%-1%) for other purchases, but allows you to increase your award by exchanging cash for credit at various partners, including Enterprise Rent-a-Car and Hyatt. After you get your $60+ in rewards, stop using the card for the year as it becomes a very bad deal.
Citi Diamond Preferred Rewards Card
Offers 5 Thank You points for every dollar spent on grocery store, drug store, and gas station purchases and 1 point per dollar spent elsewhere. The points are redeemable for travel, gift certificates and more, but can't be redeemed for cash. It also comes with a bonus of 5,000 points after your first purchase, enough for 1/5 of a domestic ticket or a $50 gift card.
The Diamond Preferred Rewards Card also offers price protection, a feature which most consumers never bother to use, but one that could save you hundreds. Price protection works like this: if you buy a $1000 computer with your credit card and two later the price drops $200 to $800, you might be annoyed. But, if you have price protection, you can call up the insurer that oversees the program and attempt to get the difference back, in this case $200.
Citi Dividend Platinum Select Card
Don't let the name throw you, this card offers cash back. Like the Diamond Preferred card, it offers 5% back at gas stations, grocery stores, and drug stores, but it doesn't offer Thank You points, it offers cash. Unfortunately, this card doesn't offer a bonus after your first purchase and has a ceiling of $300 cash back in a calendar year.
Chase Cash Plus Rewards
Chase's Cash Plus Rewards Card is very similar to the Diamond Preferred Rewards Card, in that it offers 5% back in points at grocery stores, drug stores, and gas stations and 1% elsewhere. However, unlike the Diamond, you can redeem those points for cash or gift certificates, and so effectively you earn up to 5% cash back just like you would if you had the Dividend Card. Like the Dividend Card, you can earn a maximum of $300 a calendar year in rewards, which makes this card a great suppliment to the Dividend Platinum if you plan on spending more than enough to get $300 back in a year. Since both cards have no annual fee, you can hold one in your wallet after you've maximized your reward for one year, and start spending with the other card. However, Chase has stopped offering this card on its Web site, but you can still apply for the card here.
American Express Starwood Preferred Guest Card
Instead of trying to get free airline tickets, why not save for hotel rooms? This card offers a convenient redemption grid with different classes of hotels allowing you to redeem points for whatever class hotel you want. You can earn either points to redeem at Starwood Hotels (such as Sharaton) or With room rates rising faster than ticket prices, no wonder the Starwood Preferred Guest Card is FlyerTalk’s top pick for a business traveler’s credit card. However, if you don't travel often enough to use the award, this might not be the right card for you.
MBNA WorldPoints Cards
MBNA offers its popular WorldPoints program for hundreds of MBNA cards. Most cards offer 1 point for each dollar spent, and a WorldPoints card is a great way to supplement cash-back cards. Many cards come without an annual fee, so you can use it however often you want without feeling that you need to use it in order to get your annual fee's worth. When combined with a cash-back credit card, these cards offer the best value for most consumers.
Not Recommended
- Capital One cards: While their ads may be funny, Capital One cards offer a poor value for most consumers trying to save for a ticket. Capital One offers two Visa cards, called Capital One No Hassle Miles that award a free ticket at 15,000 points if you buy a ticket less than $150. With the rate of accrual at 1.25 points per dollar spent for the card without an annual fee and 2 points per dollar with the $39 annual fee card, it sounds like a bargain. But beware, if you need to buy a ticket between $150 and $350, it will cost you 35,000 points, and since that encompasses most tickets these days, the Capital One redemption chart isn't friendly to most consumers. If you typically purchase cheap tickets on short flights, either the fee-free or the annual fee card might be the right card, otherwise, just stay away.
- Bank of America branded cards: Aside from the airline cards for Alaska and US Airways among other carriers that Bank of America issues cards for, Bank of America's non-airline variety just isn't very rewarding to most consumers. An exception noted above is that MBNA (now owned by BOA) cards offer a good value to many consumers. A perfect example is BOA's Financial Rewards Visa Platinum card. While it has the high APR and late fees that you might come to expect with reward cards, the card only offers 1% cash back with no bonuses for grocery store, drug store, or gas station purchases. Bank of America also issues some hotel-branded cards, such as the Choice Privileges Visa Platinum; it lacks the value of the AMEX Starwood card. Unless you want an MBNA card, your best bet is to stay away.