Creative credit card purchases to build air miles
The Washington Post has a great article by Keith L. Alexander about frequent flyer programs, and how people are using credit cards to build up miles to earn trips. Charging funeral expenses, new cars, and -- Fidelity Observer has a friend who did this -- kids' college tuition costs are all some of the tactics that people use on frequent flyer credit cards. From the article:
Thanks to airline-branded cards, paying for home improvements can lead to get-away-from-home vacations. Carol Lane, a West End advertising writer, recently took out a home-equity line of credit to remodel her bathroom. But instead of paying for the new bathroom fixtures with the line, she used her United Airlines credit card and received 40,000 award miles. She then used her line of credit to pay off the credit card bill.But there's a hitch, that millions of people have found out when they've tried to cash in their loyalty program miles:
The rush to accumulate miles comes at a time when it is harder than ever to use them. Some airlines have raised the number of miles needed for trips and have reduced the number of U.S. destinations and are flying smaller planes.Anyone have tales of creative credit card purchases to fund air travel? Or difficulties redeeming frequent flyer points?Frequent-flier guru Randy Petersen, publisher of Inside Flyer magazine, said travelers often have to book from six to 10 months ahead to get an available seat to popular destinations such as Paris.
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I gave up on Frequent Flyer cards a long time ago and switched to pure cash. Even the "No Hassle, No restrictions" cards have catches.
Right now I'm in the process of writing a check to myself from a credit card company for $25,000. It's a 0% offer for 6 months, I'll take the 25k and deposit it into a 5+% saving account. I'll make roughly $625 in interest over the next 6 months. Pay it back at the end from the same funds.
I've done similar large purchases for friends and family to accumulating points. They get the added protection of the automatic one-year extended warranty and price protection offered by MBNA and I get the points for cash and airline redemption.
One downside in redemption is that with the WorldPoints program if your selected flight itinerary exceeds a 'maximum dollar value' of $400 for domestic travel or $800 for flights to Europe, the difference must be paid by charging to the card or paid off in 5,000 point increments for every $50 dollars.
This is of course your travel meets the requirements they specify, make a reservation that meets any of these stipulations, "less than 21 days advance notice, no Saturday night stay, stopping in multiple cities, selecting a specific airline, an international stay lasting less than 7 or longer than 30 days, or similar special requests" and the award travel max dollar value drops by half for the same amount of points leaving more ground to cover financially.
Interesting strategies, gang! GV's comments about the conditions are a good reminder of the pitfalls of these cards -- always check out the fine print, as there's lots of ways these companies can weasel out of the marketing promises that make these cards seem so great.
My folks were early adopters to these (back in the early 80s they got United's Skymiles card). They charged everything from a gallon of milk to a boat, cars, college tuition. I don't think they ever paid a finance charge over all those years.
