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Hello all:

My first post to the Credit Card Boards pertains to those frequent flier Visa cards and how to determine whether or not to keep using them.

I received an offer from American Airlines about two years ago: sign up for their $50 Annual Fee Citibank Aadvantage card, and get one free companion round-trip ticket. I got the card: one round trip ticket (I went from DC-Dallas with a friend) cost about $300, so the split for my friend was about $150 and for me (including annual fee) was $200. Considering the varied cost of travel within the US, I considered that to be a decent to good deal.

I also like having a Visa card with a well-known bank name, such as Citibank; I recently had all my belongings stolen while travelling in LA, save my wallet and camera. I cancelled my Visa card nonetheless, as my card # was on my stolen travel itinerary, and Citibank was able to cancel, reissue and send me a new card the next day.

What I'm wondering is how should I determine whether or not to keep the card. I never carry a credit card balance, so interest rates to me aren't an issue. Most of my frequent flier miles are actually with Continental (I'm *this* close to getting an International round-trip based on bonus miles!) and unlike Continental miles, American miles expire. I'm also single and rent rather than own my home, so I'm not accumulating a ton of miles (eg spending) per month.

Hmm . . . it seems I've talked myself out of keeping a card with an annual fee. :) The other piece of information: in my previous three years out of college in different careers I travelled quite often on business, racking up mileage points, but now as a much happier Fool, I don't travel for work . . . at least not yet.

Any other comments or discussions about Frequent Flier visa cards or benefits/drawbacks to cards with annual fees? Thanks for the input!

Happy Holidays and soon to be Happy 1999!

TMF Dukie
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Figure out how much money you can reasonably expect to spend in a year. Convert that to miles. Then decide if the annual fee is worth the number of miles you accrue.

Personally, I don't think the $50 is worth it unless you can accrue substantially all of the miles needed for a round trip ticket. This would mean spending about $25,000 per year. A round trip ticket for $50! That's a good deal! But if you're only going to spend $10,000 per year, it will take 2-3 years to get that round trip ticket. Now it costs $150. Not a good deal, IMHO. Especially when you consider that frequent flyer cards normally charge higher interest rates than other cards. Even if you usually pay your balance off in full every month, if you're going to have access to credit, it may as well be at an attractive rate.

I am getting rid of my frequent flyer card, and going with one without an annual fee and with a lower interest rate.

FYI-if you decide to stay in the frequent flyer club, Continental has a card--Chase Manhattan Bank.
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I have a Continental visa card from Chase with a
$65 yearly fee. It's great for me because I charge $3000 to $4000 per month on business and I travel a lot on Continental.

You just have to do the math to see if it's worth it for you. Figure out how much you charge a month and how long it will take you to earn a free domestic ticket: 25,000 miles. For me, it's almost two free tickets per year, a great deal for $65. If you charge less than about $1000 a month it's probably not worth it.

If you travel mostly on Continental, you ought to consider getting the Continental card that way you can combine your credit card miles with your travel miles.

Trevor
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We just cancelled our Citibank Visa.

We managed to get the free ticket with no annual fee for the first year, so that worked out well. And they're still sending me offers for the same deal, so I'll probably go for that the next time we decide to head out to CA.

I prefer cards that offer cash. That's more versatile than miles.

It's good to have a Visa or Mastercard (I also have a Discover, but many merchants still don't accept Novus). Luckily my phone company (BellAtlantic) has started offering a rebate credit card. The rebate (1% of purchases) is only usuable on the phone bill, but that's a lot like cash...

For more information about rebate cards, check out:
<http://www.flur.com/cards/>

-Megan
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Greetings, all!

My wife and I became enamoured with AmEx's Membership Rewards program a few years ago (four, to be exact). I even upgraded to the "Rewards Plus" card in '97.

With all that, we've managed to accrue but 50,000 points in that time. I think I can get a free domestic Delta ticket (or a set of golf clubs), but look at the time it took PLUS all those annual fees (the Rewards Plus fee alone is $125/year...) That "free" ticket isn't so free now.

We've since converted over to pure cash rebate cards (AmEx and VISA). The logic for us is that miles/points are limited-application commodities; cash provides infinite application. Coupled with no annual fees and our current spending habits, I can buy a round-trip domestic Delta ticket with the rebate alone (and only if I want to...)

MrBigglesworth
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thanks to this discussion, it looks like i will soon be cutting up my FirstCard. I usually pay my card off each month in full, but a couple of months ago I let it lapse and they charged me a $29 late fee. When i called and asked, the rep said that even if the balance was $28 the late fee would still be the flat $29 fee. In a way I was happy to hear that 'cause it is making my decision easier to look for a lower interest, no fee card. I'll give up the miles since with the occasional airfare deals it may be cheaper to purchase a ticket at the time of travel.

even if I charged $10,000 worth of stuff this year it still would have cost me $29 + $50 (fee) + interest charges for the couple of times I did not pay the complete montly. A few dollars more, I could cash in on one of these $99 air deals.

Let me know if I am jumping ship too quickly.

Naive1
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What I'm wondering is how should I determine whether or not to keep the card.

Hey TMFDukie!

Welcome to the Credit Card board!

I also use the Citibank AA Visa, but I'd have to say that in your case, it's not a sensible card.

Since I almost exclusively use American when I fly (and NY to Aruba is expensive!), the $50 annual fee is more than worth it for me. But if you aren't able to benefit from the airmiles, then lose the card and save the money. There are plenty of cards out there with no annual fees and other types of perks.

In fact, if you would feel comfortable staying with Citibank, just give them a call and explain that this card isn't benefitting you and ask them what else they can offer. They have other cards without fees that you may find will be a much better value for you.

Good luck!

Tony
...but I still am...

Off2Aruba
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TMF

Actually American Airlines miles now don't expire too, as long as you earn or use a single mile in a 36 month window.

The good thing is if you don't earn many miles, now you have a longer time to use them. Plus, AA has Netsaver fares that give the option of using lower amounts of miles (like 6,000) and a cash payment of maybe $100 for award seats.

Scrunt

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TMF

Actually American Airlines miles now don't expire too, as long as you earn or use a single mile in a 36 month window.

The good thing is if you don't earn many miles, now you have a longer time to use them. Plus, AA has Netsaver fares that give the option of using lower amounts of miles (like 6,000) and a cash payment of maybe $100 for award seats.


Hi Scrunt!

Absolutely! These are just more reasons why I'm so pleased with my Citibank AA Visa. I really enjoy that the miles don't expire as they used to, and their plan for using miles and paying to upgrade has benefitted us greatly.

We had enough airmiles to get two free r/t ticket to Aruba for this coming July, and I paid the difference to upgrade the seats to 1st class. I'm looking forward to this flight. ;)

Tony
...but I still am...

Off2Aruba
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