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By Mitch Lipka
March 12 When British Airways dangled
100,000 frequent flyer miles in front of customers signing up
for its branded Visa card last year, it appeared to people who
signed up that they would be getting a free trip or two to
Europe. But the deal came with a price.
Tickets purchased with the "free" miles came with charges --
often $500 or more per ticket in taxes, fuel surcharges and the
like. It was a lesson that more isn't always better and free is
"One of the great myths of airline travel is you can still
get a free flight," says Christopher Elliott, ombudsman for
National Geographic Traveler and author of the consumer advocacy
But the business of frequent flyer miles is a big game, he
says, an often complex puzzle that is intended not so much to
reward loyalty as to encourage it.
Being blindly loyal to one program in the process of
building your bank of points or miles can mean ending up with
more expensive flights and less convenient connections. That's
why some experts -- very frequent flyers, bargain hunters and
industry analysts -- have developed hedging strategies.
WORK THE SYSTEM
Savvy flyers are able to assemble a combination of points
from miles-generating credit cards along with their regular
flight credits. That involves some research and planning,
according to Michael Stanat, a global research executive with
SIS International Research. A frequent business traveler, he has
traveled to five continents in the past two months.
He works the system diligently through his frequent travel
and use of miles-building credit cards.
"I choose the airline programs that have terms that are
favorable to my needs, and which service (the places) where I
travel," Stanat says.
The reward has been getting nearly free airline travel (with
a small tax paid); and getting free hotel nights when the
airfare wasn't the best use of the points.
"I am committed to a miles-generating strategy," he says.
"This focus helps me to reward myself quicker and feel like I am
gaining from the strategy."
Stanat said he avoids programs with miles that expire and
likes those that he can combine with a credit card to accelerate
his race to rewards, such as a trip to Hawaii he earned.
RIGHT CARD, BIGGER BENEFITS
There's no shortage of websites recommending the best reward
credit cards. For example, NextAdvisor (Nextadvisor.com),
which rates cards based on the biggest reward return on money
spent, says Capital One Venture Rewards, Escape by Discover,
United's Mileage Plus from Chase and Southwest Airlines Rapid
Rewards from Chase are the most productive for earning miles.
On the other hand, Joshua Heckathorn, CEO of Creditnet (Creditnet.com)
names Capital One Venture Card, Citi ThankYou Premier Card and
the Chase Sapphire Preferred Card as top picks for travel
"All three offer attractive sign-up bonuses, no foreign
transaction fees; and annual fees are waived for the first year
of use," says Heckathorn.
In general, you should go for the go for the card with the
big sign-up bonus (being sure to read the terms of that bonus),
like the United card, for example, which is dangling 40,000
miles, a free checked bag and a waiver of the first year of the
$95 annual fee. Don't carry a balance on these cards or you'll
be paying dearly for your miles.
Next comes redemption. To maximize points, you must be
flexible enough to accept the routes and times that are
available, book early and therefore pay minimal redemption fees,
says Charles Tran, CEO of credit card evaluation site
"If your schedule doesn't permit flexibility, then miles
aren't worthwhile," says Tran. "There's no point accumulating
miles if you can't use them."
Adds Heckathorn of Creditnet, "Far too many consumers sit
back and accumulate miles for years and years without ever
redeeming them. The savviest card users will take the time to do
the research and understand exactly when and how to redeem their
miles in a way that maximizes value."
Most of all, says Elliott, act fast.
"Miles don't appreciate over time," says Elliott. "You don't
want to be sitting on these miles and you don't want to be
spending money for tickets that are supposed to be free. The
person who dies with the most miles doesn't win."
Some airline flyer programs are rife with fees, similar to
what travelers have found in air travel, where booking by phone
and bringing bags on board can result in added charges.
"The airline is dangling the reward in front of you that's
not the reward you think it is, in many cases," Elliott says.
Even the most frequent of frequent flyers will still find
themselves having to pay various taxes and surcharges, because
most airlines won't allow you to use your miles or points to
offset those charges.
The key to avoiding them, he says, is to take a step back
and evaluate what you're really getting for that loyalty and
whether all that was spent to get there was really worth it.
Some programs "reward" you by giving back what they had taken
away, such as a putting a bag onto a plane without a surcharge.
That being said, expense-account fliers who can keep
accumulated miles has much less to lose and a lot more to gain.
They mainly have to face the issues that all frequent flyers
must deal with: Is there going to be availability for an award
ticket when I want to travel?
For many travelers, the blind devotion to a particular
airline is a waste of time and money, Elliott says. If consumers
dispassionately added up all the extra time and money spent on
maximizing miles the might be surprised by what they would
The miles are just not worth it," he says. "It costs you."
Services, seminars and clubs have been set up to help
consumers win at the miles game. Frequent Flyer University, for
instance, not only offers lessons but also sells a $60 a year
service to help you monitor your miles, build them more
effectively and convert them into tickets.
Are you ready to play the game?
(Editing by Beth Gladstone and Andrea Evans)