From Kim Ness: “You have written in the past (via a printed medium) about frequent flyer programs where you can earn extra miles by using a certain credit card or long distance carrier. But I cannot recall the logic you used to explain when, if ever, it makes sense to use a credit card that charges an annual fee, instead of using a non-fee card that provides no flyer miles. Could you write about that? I am constantly getting offers that entice me… but so far I haven’t succumbed.”
The miles are worth about 2 cents each to most people, though it varies greatly based on how you travel.
- If you sometimes have to buy full fare tickets for last-minute trips, or wish you could, they’re worth a nickel. Likewise if you fly business class to Europe — now you can buy a super-cheap economy ticket and use 40,000 miles (typically) to upgrade, saving $2,000 — a nickel a mile.
- If you cash them in foolishly, they’re worth just a penny.
- And if it takes you five years to accumulate enough points to cash them in, you need to remember that 2 cents five years from now isn’t worth as much as 2 cents today.
So . . . if you figure you charge $2,000 a year, for which you get 2,000 miles, that’s $40 worth of miles, versus a $50 fee (or whatever) — forget it. But if you charge $20,000 a year, say, then it’s a no-brainer. You want the miles.
Quote of the Day
The test of our progress is not whether we add more to the abundance of those who have much, it is whether we provide enough for those who have too little.~Franklin D. Roosevelt
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