Bad Credit Card Advice from Frommers

A new article up at Frommer’s discusses no-fee mileage earning credit cards.

Most airline credit cards come with an annual fee and earn one mile per dollar. Some airlines offer a no fee card that earns one mile for every two dollars spent. So it should be basic math – is the value of those extra miles worth more than the annual fee? That’s what this article discusses.

However, it gets several facts wrong.

    [T]he airlines charged the consumer from $45 to $65 per year to use these cards.

Umm, no, the banks charge the fee. The fee does not go to the airline marketing partner.

    Now for the all-important question, are the no-fee credit cards worth it? Depends on how much you fly. Typically, a holder of an annual fee airline frequent flyer awards-based credit card receives one mile per dollar spent. The no annual fee cards give the credit card user 1 mile for every $2 spent. That means if you fly 25,000 miles per year, the no-fee card gets you 12,500 miles. If you decide to pay the $45 to $65 dollar annual fee, you get all 25,000 miles. You can do the math based on how much you fly, but the no-fee card may not be the way to go.

Bizarre. Credit cards don’t award miles for your flying at all – they award miles for your spending.

So with these statements as a guide, it’s no surprise that the advice is poor. Instead of calculating whether it’s worth spending money on an annual fee to earn extra miles.. why not go for a no-fee hotel card, or even the Amtrak Mastercard which carries no fee but allows points to be converted 1:1 into United, Continental, and Midwest Airlines and 1:2 into Hilton? That card earns United miles just as fast as the United Visa but doesn’t carry the same $60 price tag.

If you’re looking for the best mileage earning credit card, check out this discussion which should point you in the right direction.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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