Credit Cards – Page 2

How You Can Go To Europe For $89 Roundtrip

December 20, 2014December 22, 2014 TProphet0 comment

I have never posted about a credit card on Seat 31B. I suppose there is a first time for everything. Don’t worry, I haven’t sold out and become a credit card salesman.

US Airways was acquired earlier this year by American Airlines, and has been slowly absorbed into American Airlines ever since. Its mileage program, Dividend Miles, is still a stand-alone program, although it will be merged with the American Airlines Aadvantage program early in 2015. So, if you have US Airways Dividend Miles, they will become American Airlines Aadvantage miles and the Aadvantage program rules will then apply.

It is all but a foregone conclusion that the Barclays US Airways MasterCard is going away when the programs merge, because Citi is the preferred card partner for American Airlines. However, it’s still available and Barclays is running a special referral promotion. If you are referred by an existing cardholder, you can receive 50,000 miles on your first purchase. This is enough for a round-trip winter ticket to Europe in Seat 31B with miles left over. It will also get you two roundtrip tickets within North America, or a ticket to Hawaii or South America with miles left over. There is an $89 annual fee that is not waived. This is much better than the usual offer of 40,000 miles after spending $3,000.

$89 plus the cost of a pack of gum definitely isn’t a bad price for a round-trip economy class ticket to Europe. So, I’m comfortable recommending this deal. It doesn’t come with the pitfalls common to most other credit card offers, which are rife with tricks and traps. You get a few other perks for your $89 annual fee, including a companion fare certificate good on US Airways flights, a free checked bag on US Airways, and priority boarding on US Airways. I’m not sure what will happen to these benefits when US Airways disappears as a brand, so I’m not assigning a whole lot of value to them. If you plan to use the companion fare, I recommend that you book it as soon as you receive the certificate.

Overall this isn’t a bad credit card, except for the annual fee (you won’t want to keep it for more than the first year) and the very high APR. The general Flyertalk consensus over Barclays customer service is that it is terrible, but I deal with them exclusively online and haven’t had any problems. The trouble seems to come from calling them; telephone customer service is rated inconsistent at best.

If you want the card, I will be happy to send you a referral link. Just contact me from the email address where you’d like the link sent, or leave a comment below with your email address (note I moderate all comments and won’t publish these requests, so your email will remain private). My email address is tprophet [at] seat31b.com. In the interest of full disclosure, I will receive 5,000 bonus miles if you sign up for the card through my link. So, if you want to share this offer with friends, please don’t forward the email but have them contact me directly so I also get the bonus for referring them.

Unlike the links you’ll find on other blogs (which pay bloggers actual money rather than a paltry few extra bonus miles), this is–to my knowledge–the best currently available offer for this card. It’s also a (relatively) quick and easy way to earn enough miles for a trip to Europe for less than $100, giving it the Seat 31B seal of approval.

This offer expires January 18, 2015.

HOT: Save At Least 20% On All Flights Right Now

December 16, 2014December 17, 2014 TProphet5 Comments

As you have probably heard, the Russian ruble has effectively collapsed. This has created a tremendous arbitrage opportunity, but only if you take immediate action to leverage it.

The ruble effectively collapsed today

Airline tickets are quoted and priced in GDS systems, and currency conversions aren’t adjusted real-time. With the rapid collapse of the ruble, this means that you can effectively get a discount of 20% or more by paying in rubles versus dollars.

So, let’s look at a nice peak season flight from Los Angeles to Costa Rica on anywayanyday, a Russian travel agency:

A typical peak season flight price to Costa Rica

As you can see, it’s $792 in US dollars. This is a typical non-sale fare price to Costa Rica during the peak season. Wouldn’t it be nice to turn this into a good peak season sale fare instead?

If you change your currency selection on this menu from USD to RUB, you can pay in the Ruble currency. Note that it’s a good idea to call your bank before you do this, because there is a slight possibility that they might consider it unusual that you are paying for things in rubles on a Russian travel site. By this, I meant that they will panic and block your card, which will cause you an endless amount of hassle. Why use a Russian travel site in the first place? It’ll be very hard for anyone involved to argue later that you shouldn’t be able to pay for things in Russia using rubles.

Now, let’s see what happens after you change the currency:

Yikes, that’s a big number!

The price becomes 41,638 rubles. So, let’s see how much that is worth in dollar terms:

Well, that’s interesting, isn’t it? It’s $196 cheaper to pay in rubles.

Folks, this sort of arbitrage opportunity almost never happens and it will not last. Take advantage while you can!

UPDATE: Many airlines are starting to correct this by repricing their tickets in the GDS systems. With British Airways, it is actually less expensive to book in dollars or euros now. Double-check the conversion before you book!

US Bank LifeMiles Visa Bonus: Read The Fine Print

June 10, 2014June 10, 2014 TProphet3 Comments

A few months ago, US Bank ran a 40,000 mile signup bonus for the Avianca LifeMiles visa card. The Avianca program is one of the most generous in the StarAlliance for booking partner awards, if its limitations are acceptable to you. These limitations are substantial. The program doesn’t allow stopovers, you can only book what is available online even if other award space is available elsewhere, and the call centers are in El Salvador and Colombia (it’s best if you speak Spanish). However, there are some real advantages; award rates are reasonable and there are no close-in booking fees.

There’s always a catch.

I pulled the trigger and signed up. 40,000 miles is double the usual bonus offered for this card. As advertised, the deal was for 20,000 miles after the first purchase, and 20,000 miles after spending more than $3,000 within the first 120 days. Well, that seemed easy enough to achieve, and it was. I put the card at the top of my wallet and made the $3,000 minimum spend in the first month. A month later, 20,000 miles showed up in my Avianca account.

Wait a minute. Only 20,000 miles? I emailed US Bank, who explained that the bonus miles are delivered separately and I would receive them within 6-8 weeks. I was definitely not happy with the delay; frequent flier programs devalue very rapidly (often without prior notice) so 20,000 miles today could be worth the same as 10,000 miles tomorrow. However, I was also traveling on a complicated round-the-world itinerary and didn’t really have time to argue across multiple time zones so I just gritted my teeth and hoped that a devaluation wouldn’t happen in the interim.

8 weeks later, there were still no bonus miles! I emailed US Bank again. What I found out (and which their Twitter team confirmed) is shocking. The 8 week clock starts after the first 120 days! Yes, it takes a full six months after completing the minimum spend to receive your bonus miles. And you will not receive the additional 20,000 miles if you close the card before then! This is something that I have never seen before with credit card bonus miles, and it’s a very disturbing trend.

A lot can happen in frequent flier programs in 6 months. I have not only missed the entire summer travel season (and I was counting on using this promotion for a flight this summer), but I would not be surprised to see a massive devaluation strike before my bonus miles are deposited. Avianca has devalued their LifeMiles program overnight in the past, and I expect they may do so in the future amid across-the-board devaluations in nearly all other frequent flier programs this year.

This definitely changes the game with credit card miles and points. For most people, collecting airline miles and points is a bad way to earn free flights. Hotel and other loyalty programs (such as American Express Membership Rewards) are starting to look a lot better.

Will An App-O-Rama Clobber Your Credit Score?

May 19, 2014May 21, 2014 TProphet0 comment

In February, I did an App-O-Rama and applied for several credit cards in order to secure bonus miles to use for upcoming travel:

Citi Aadvantage Visa: 50,000 mile bonus, annual fee waived the first year.
BofA Alaska Airlines Visa: 50,000 mile bonus, annual fee not waived.
Chase Marriott Rewards Visa: 60,000 point bonus, annual fee waived the first year.
US Bank Avianca Visa, 40,000 mile bonus, annual fee waived the first year.
Delta American Express, 100,000 mile bonus, annual fee waived the first year.

Note that all of the above offers were exceptionally good ones. One was only available for 2 weeks, and none of these offers are now available.

This is the first time I applied for so many credit cards in such a short time, and I expected an impact to my credit score. I considered carefully whether I should really do this, but given that I don’t really need credit for anything (I have no debt except for my mortgage and I don’t need any), I decided that it didn’t really matter. I was approved for all of the cards, and didn’t have to call any reconsideration lines or anything crazy like that. Citi didn’t approve me “on the wire,” but after a day they approved my application manually and I received the card a couple of weeks later. I have properly received all of the bonuses except for the US Bank Avianca Visa, which posts 8 weeks after the final statement in which the minimum spend is met.

So, the impact to my credit score? After opening the new accounts, it dropped from 820 to 794. This was a pretty substantial hit, although it’s still in roughly the 95th percentile of American credit scores. The more interesting thing is what happened 3 months later after using all of the cards to meet minimum spend requirements and paying off the balances. My credit score went up to 830! I was pretty surprised to see this, and my credit score is now in the top 1% of American households.

The key takeaway? If my experience is any guide, don’t worry too much about the long-term impact to your credit score from opening a bunch of accounts to earn the signup bonus. In my case, there was actually a positive impact from signing up for a bunch of credit cards and going on what amounted to a massive shopping spree. I’m not sure that this is how things should work, but in my case, it’s how they actually did work.

AAxed: Aadvantage Award Change Flexibility

April 12, 2014June 6, 2014 TProphet0 comment

Business and first class award tickets are a great use of miles, but it’s almost impossible to actually redeem these awards. Don’t believe all of the stories you read online about being able to effortlessly redeem your miles for a luxury experience. It is sometimes possible if you really work the system, but the time and effort involved is why I have always focused on using my miles to take me to faraway and interesting places in economy class (it’s all economy seats to Ushuaia, Argentina and Adak, Alaska anyway). Unfortunately, one of the most useful options for grabbing business class award seats is, for some customers, now gone in the American Airlines Aadvantage program.

One of the particularly nice historical Aadvantage program features is the lack of change fees and the ability to make “mixed class” bookings. So, for example, if you are booking a long trip that you’d like to take in business class, but one segment is only available in economy, you can book the missing segment in economy class (while paying the business class award price) and call in later to upgrade that segment to business class if an award seat opens up. The same goes for changing award classes. If you book an award in economy class because (as is usually the case) it’s the only thing available, and you find business class space available later, you could call in, upgrade and pay only the mileage difference between the award classes. This is what I planned to do when booking an award from Kunming to Hong Kong to Los Angeles to Vancouver to New York. The difference in cost is only 20,000 miles for this itinerary, and it’s well worth it for business class on Cathay Pacific.

This has all changed if, as I do, you have an existing booking that includes a stopover in the North American gateway city. Even if you don’t change anything except the class of service, the award has to be reissued at the new mileage rates and under the new rules. This is yet another change that Aadvantage has suddenly made without prior notice or even any “grandfathering” provision for award tickets issued prior to the change. So, the precedent has now been set.

You’d have to be crazy to book a “mixed class” award now. If American changes the award chart or rules again, you will have to “buy up” to the then-current price and be subject to the then-current rules. Given that it is routinely necessary to book business class award seats 330 days in advance, booking a “mixed class” itinerary is a very risky bet.

The situation could be even worse than I have already been able to confirm. American Airlines has always been flexible with changes to dates and flights in the Aadvantage program, and charges are free as long as the origin and destination cities remain the same. It is possible in the future that changing the dates on an itinerary would also require “buying up” to the then-current price. The trigger seems to be whether the ticket is reissued or not. Changing dates while keeping everything else exactly the same does not always require reissuing the ticket. Making more substantive changes (such as switching a flight with a connection for a nonstop) may, and could cause the itinerary to re-price. It is also worth noting that US Airways, unlike American, charges $150 for every change to an award ticket and no changes are allowed once the itinerary has begun (except due to schedule changes or irregular operations). It is probably a safe bet that change fees will be introduced to Aadvantage soon, potentially creating a double whammy of increased prices and new, high change fees.

American Airlines has always had the right to change or devalue the Aadvantage program. Other airlines have also devalued their programs, but until recently, only Avianca (a Colombian airline) had suddenly devalued their LifeMiles program overnight, apparently following the example of Hugo Chavez devaluing the Venezuelan bolivar. Maybe American Airlines has been spending too much time in South America and the culture has rubbed off, but you can now add Aadvantage miles to the list of untrustworthy currencies. I personally recommend that you view the recent devaluation as a “warning shot” and empty your Aadvantage account now.

Higher Costs and Fewer Opportunities for AAward Travel

April 8, 2014April 8, 2014 TProphet0 comment

I woke up this morning to the news that American Airlines has devalued their Aadvantage program overnight with no prior notice, and in tandem with this, US Airways has also done the same. It is rare for a devaluation to occur with no prior notice, in a similar fashion to overnight devaluations of Argentine pesos and Venezuelan bolivars. These devaluations are actually worse, though. They hurt because they not only raise the number of miles required for award travel, but they also have introduced restrictions that can make miles even harder to use.

One of the biggest historical advantages of American Airlines award tickets was the ability to use a stopover on a one-way award. While this could be used to obtain a “free one-way” trip wherein your final destination is a different city than you originally intended, it could also be used for short stopovers which are helpful if you could not find a continuing flight from the gateway within 24 hours. If American had wished to close the “free one-way” loophole, introducing a maximum length of stopover (allowing for short stopovers only) would have been a fairer way to do it. Unfortunately now, if an award flight to your final destination isn’t available from the gateway city within 24 hours, you’re out of luck. You’ll either have to book a paid onward itinerary or try to find availability on another date.

Ah, availability. Now there’s the rub. American Airlines has introduced a third tier for award travel, which likely means that award tickets at the “saver” level (which are really the only award levels that deliver good value for redemption) will be even further cut. It’s already difficult, if not impossible, to find award tickets at the “saver” level. This will become even more difficult when stopovers are no longer permitted. Even awards that cost more because of the numbers of stopovers they allow have been eliminated. Mileage-based Oneworld awards (which people on round-the-world or intra-European itineraries found particularly valuable because they allowed unlimited stopovers) are no longer redeemable.

Finally, some trips will now take more miles, assuming you can find availability in the first place. US Airways Dividend Miles business class awards to North Asia now require 110,000 miles, up from 90,000 miles. “Aanytime” awards redeemed during periods newly defined as “peak” will now cost 5,000 miles more. For some domestic travel, coach seats will cost up to 50,000 miles each way! The goal posts have moved yet again.

Overnight, the American Aadvantage and US Airways Dividend Miles programs just became a lot less valuable. The lack of prior notice is an abrupt reminder that miles (in any program) are best earned and spent immediately. They are a depreciating currency, so holding large numbers of them will only result in eventual losses and the devaluation cycles are becoming ever more rapid. Points programs and their promises that “your miles are secure” are not credible, so “earn and burn” as quickly as possible.

Update: American Airlines responded on Twitter to the flood of controversy. Here is their comment on what we can expect going forward:

I think this just about sums it up: you can probably expect that the least trustworthy and customer-friendly policies of both airlines will be combined in a headlong race to the bottom. It’s unfortunate to see this, but was hardly unexpected. If you have Aadvantage miles, I recommend using them now because this is likely not the only devaluation that will occur.

21,152 Miles Around The World For Under $1200

March 19, 2014April 13, 2014 TProphet0 comment

In an unusual departure from my usual Seat 31B, I am sitting in the British Airways lounge in Seattle waiting for a delayed flight. I am on my way to The Netherlands to participate in my graduation. On Friday, I’ll officially be an MBA!

Ordinarily, I don’t fly in business class. It’s almost impossible to book it at the “saver” or “low” award level, and even if you can, it’s not particularly good value. This is especially true on British Airways, which requires payment of a fuel surcharge ($331 in my case) which can sometimes approach the cost of a ticket. In this case, it was the best deal I could find. Paid tickets are incredibly expensive right now (a one-way in economy class is going for around $800 from Seattle, even on Icelandair) and no award space was available in economy class. Using my Aadvantage points, I was able to redeem at the “saver” award level in business class. On the bright side, I will be very well rested for graduation.

This time, I will be traveling around the world on a combination of British Airways, Aeroflot, Cathay Pacific and Alaska Airlines. This trip will be entirely in economy class except for SEA-LHR-AMS. I will also note that Russia just invaded and annexed Ukraine and I will be flying through Russia without a visa, which is going to make matters really interesting. The total cost of the trip was $1174 in paid fares, taxes, fuel surcharges and booking fees.

SEA-LHR-AMS: 50,000 Aadvantage miles (earned from a single Aadvantage Citi credit card signup, annual fee waived and $3,000 minimum spend) plus $331 in taxes and fuel surcharges. Club World business class

AMS-LGW+LHR-ZAG: $163 paid fare on British Airways. This fare is eligible to earn me 1,383 Alaska Airlines Mileage Plan miles.

ZAG-SVO-PEK: $530 paid fare on Aeroflot. This low fare, amazingly, earns 100% mileage credit on Delta SkyMiles. I will earn 4,773 miles. The only catch is that I have to transit Russia with no visa in the midst of a Crimean invasion, and also amid very frosty relations with both Europe and the United States. My mother isn’t thrilled I have chosen to do this.

PEK-KMG: I will transfer ICBC points earned through my American Express card to my Hong Kong Airlines account, and redeem them for a domestic intra-China ticket from Beijing to Kunming, Yunnan. This has to be done in person when I arrive in Beijing. The redemption fee, as best I can tell, is zero! Now that’s the kind of price I like.

KMG-HKG-LAX: 30,000 Aadvantage miles (earned for free by signing up for an Aadvantage Visa to join my Aadvantage MasterCard, annual fee waived with $3,000 minimum spending requirement) plus $71 in taxes and booking fees. Note that I won’t even be realizing the full value of the award on this trip, because I added a free one-way to New York later this summer on the same award.

LGB-SEA: $79 paid fare on Alaska Airlines. This will earn me 965 Alaska Airlines Mileage Plan miles.

I would have paid about $1200 for a round-trip ticket from Seattle to The Netherlands in economy class. By taking advantage of miles and points, I am flying all the way around the world for around the same price and 1/3 of the trip will be in British Airways Club World, one of the best business class services in the air. This is the beginning of an epic two month adventure, and it’s going to be amazing!