UnThreaded | Threaded | Whole Thread (10) | Ignore Thread Prev Thread | Prev | Next | Next Thread
Author: BeavisNbutthead One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 308483  
Subject: FF miles vs Cash back? Date: 12/31/1997 11:44 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
First off, let me admit that I am a FF junkie. I do everything to get more FF miles - renting cars from the right people, staying in the right hotels, ordering flowers, switching long-distance carriers, well, you get the picture.

Recently, while sitting in terminals with 3-hour layovers waiting for connections, I started to rethink the vaue of the whole FF thing. As a new carrier of the Amex/Delta FF card (see earlier post), I decided that at least for the next year to make the majority of my purchases using this card, rather than the Discover I had been using. Industry analysts say that airlines value each 100 FF miles as $1 (take my word on this one - or not, it's your decision but I couldn't find the cite to back me up), or basically 1 FF mile as 1 cent. On the cards which give 1 FF mile for each $ charged, this is essentially a 1% rebate. This would be similar to the cash back offered by Discover, with a few exceptions:

1) Discover has no annual fee - airline cards seem to run around $60 (Delta SkyMiles gold = $75).

2) Discover's rebate is paid in cash, while airline rebates are paid in *airline currency*. While I can do anything I want with cash - including buying airline tickets - it would be difficult to go to Kroger's and try to buy milk and bread with FF miles. In that way the airlines have you trapped.

3) FF miles are getting harder to spend all the time. Load factors have steadily increased, reducing the number of FF seats available per flight. I have heard that some airlines on some flights provide as few as *2* seats per flight for FF awards. Blackout periods and other inconveniences also make it tough to even spend the currency the airlines give you.

Digression - I just love (large amounts of sarcasm) the airline programs that allow you to donate your miles to charity - such as the AA commercial that flies the girl to Boston for cancer tests with donated FF miles (no tax deduction here either). The airlines don't need someone to donate FF miles to put a child on a plane - just sit the kid in an empty seat and the incremental cost is maybe $10 worth of fuel, luggage handling, and peanuts and a soda. In the meantime the airline looks like this great charitable entity - what a bunch of crap.

So, in the end with all other things held constant (interest rates and/or paid off each month, convenience, etc.), does a FF-bearing card really make more sense than a cash-back card? I hope this starts a lovely discussion.

Huh huh huh,
BnB
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (10) | Ignore Thread Prev Thread | Prev | Next | Next Thread

Announcements

TMF Credit Center
The Motley Fool Credit Center arms you with real tools and simple messages, that will help you in every credit situation.
Post of the Day:
TMFDeej's CAPS Blog

Name of the Game: Tax Avoidance
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement