Last year, we had the “Big Delta Promo”.   Delta later claimed that it was published by mistake, yet they still honored the deal.    My wife and I went from zero to several hundred thousand miles in a few months, enabling our next big family trip,  a “falafel run” to visit family in Israel,  scheduled for next month.

That was last November.    Now this November, Chase and British Airways may top that offer.    Here is the deal.    To break it down, you get 50,000 miles for signing up, another 50,000 miles after your first $2,000 spent within the first three months of the account.    That is 100,000 points for just $2,000 dollar spent, (50 miles per dollar) but we are just getting started.

Spend $30,000 in a calendar year, and you will get a companion award ticket.   This is not a companion ticket good at some paid fare class equal to twice the regular fare, it is an actual free companion award, valid when you redeem any award in any cabin.    Note that British Airways usually operates four cabin aircraft for long haul flights including economy, premium economy, business, and first classes.   For comparison, Delta and Continental only offer two class service, with United, American, and US Airways offering three class.

What You Could Do With This

Gary Leff at the View From the Wing blog and Richard Ingersoll at the Frugal Travel Guy blog are both all over this one.    The theory is that a couple could each get the card, spend $32,000 over the next year, and end up with the equivalent of 480,000 miles, or two first class tickets from LA to Dubai.

Wait One Second

This offer does seem a bit too good to be true, and there are some major catches that Gary and Richard don’t bring up.    I however, started a thread over at FlyerTalk with some real British Airways frequent flier gurus to find out what it would really cost.   I used my “falafel run” from Denver to Tel Aviv, via London as my reference point to how I could use this deal.

In the end, I found out that my family of three would pay nearly $2,000 in fuel surcharges alone on three business class tickets Denver-London-Tel Aviv round trip, about $700 each.     the $32,000 spend also carried an opportunity cost of $640 in rewards had I spent that sum on a %2 cash back card such as Schwab Bank.   There is also a $79 annual fee per card that is not waived the first year.

So the tickets would hardly be free, but the forum members pointed out some real benefits.  First, British Airways awards are reasonably available, unlike say, United.    Also, they do not have multiple tiers like Delta, with the lowest tier being almost completely unavailible.    They are  partners with American Airlines and other OneWorld Carriers, although the companion certificate is only good on British Awards.      Another plus is that British Airways awards are flexible; they can be rebooked on different dates along the same routing for free, and a London stopover is also free.   Another factor is that British allows families to pool miles with household accounts, a really nice feature.   Finally, I discovered that lap child award tickets are available for %10 of the mileage of the parent’s award ticket.   Other airlines have outrageous policies where lap infants traveling with their parents are charged 10% of the highest fare class they can come up with, often more than the price of a coach seat!    This could be a factor considering that it may take over a year to get to the 30,000 mile annual spend, and we may then plan the trip nearly a year in advance to get the dates we want.  If that is the case, it would not be the first time we booked a ticket for a member of our family not yet born at the time.

Unknown Factors

There is another rather lengthy discussion thread on the merits of this deal at FlyerTalk in which it is pointed out that this deal may flood the North American market with BA miles and companion certificates, reducing the once reasonable award availability.      That is certainly a risk.    Another risk is that BA may decide to change it’s redemption policies between now and when I might eventually redeem an award.   As I have said, if I do this, it will be a long term project.   I might apply for the cards now, get the companion certificates in a year, and book travel for some time in 2011 or even 2012 at the earliest.    Who knows what can happen between now and then?

For many this deal will be a no brainer.   If it all works, this could be the biggest credit card deal of the year.    I just hope they don’t pull the deal before people have had a chance to jump at, as what happened with the Delta deal last year.

I just finished interviewing Dawn from Frugal for Life and it was a great interview. Dawn went through a chapter 7 bankruptcy filing more than 10 years ago and in this show, she talks about her experience and difficulties she faced post bankruptcy. This show will be an eye opener for many. So sit back and enjoy.

Continental Airlines has just joined Star Alliance and from now onwards, you can use Continental OnePass Miles to redeem flights on other Star Alliance partners. Here is a screen shot of all the members of the Star Alliance.

Straying slightly from credit cards, I would like to offer you some of my favorite money saving tips.    I presume the only reason that you would read a blog like this is to save money, so here it goes.

Cell Phones

Always get credit for outages.   T-Mobile had a massive outage yesterday.     I have four T-Mobile lines, yet I personally didn’t notice any problems.     A two minute phone call resulted in a $5 credit per line, $20 total.   I wish I could make $20 phone calls all day!

Try to get everyone in your family on the same plan.   Not just on the same carrier, but the same bill.    With T-Mobile, for example, my wife and I have included her parents in a family plan.   We pay $50 a month or so for the first line, and $10 a month for each additional.    That adds up to $80 a month for 4 lines. This is a mere $20 per line.   Of course we need only 1000 minutes a month as a large percentage of our calls are to each other.    We also forgo texting and internet fees, as we get more than our share of computer use during the day.  How much are you paying?

Do you really need that new phone?     For a long time, every new phone was smaller, lighter, and had a longer battery life than the last.    These days, they just keep adding features that I have no need for, often at the expense of size and battery life.     When our contract was up, we were offered new phones to replace the perfectly good phones we already had.     What did I do?   I bought four of their most expensive phones, the latest greatest super-duper internet phones available.    Since I was renewing my contract, they sold me four new phones for $200 each.    Then I asked for the unlock codes for use overseas, which they have to provide by law.     I was able to sell them quickly on E-Bay for $500 each.   Even after PayPal fees and E-Bay listing fees, I made a quick $1,000.     When we actually did want to replace our phones, we found suitable new models on E-bay for under $100.     The moral of the story, if your cell phone company is subsidizing your purchase of new phones,  buy the most heavily subsidized one, and sell it on E-Bay.

Always Ask For A Discount

I never hang up with my insurance agent without asking if there are any further discounts available.     They usually come up with something such as accident free, multi-line, smoke alarms, fire extinguishers.    This trick works for cell phones too.    I had my activation fee waived when I was an IBM contractor, and then later had my bill cut by 10% as an employee of another large company.     Government and military discounts are especially common.     The trick is to always ask.    The worst they can say is no.    It also helps to ask before you commit to a purchase.   When they are trying to close a sale, the trick is to say, “I don’t know, are there any discounts available for corporate/government/military/senior/student/AAA” etc.

Be A Student

I have carried my student id with me since I graduated from college 15 years ago.   I have probably saved thousands at movies, museums, and the symphony.   Even if you take one class at a local community college, never get rid of your student id!

Always Get Restaurant Discounts

Sign up for the email list at Restaurant.com.    Their $25 “gift certificates” are almost always available for $2-3 when you have the coupon code that they mail to you about once a week.    The minimum spend to use these certificates is typically $35.   If you spend just over $35,  you will have a bill of under $20, after tax and tip, for a pretty nice meal for two.     The Entertainment book is another great place for coupons, which are usually 2 for 1 deals at restaurants.     My local edition has $20 in cash back coupons at our neighborhood grocery store, so it is a no brainer.   Enjoy The City also puts out a decent coupon book.    Finally, I just started using Open Table for reservations.   Granted, I really don’t frequent restaurants that require reservations, but they are free to use and they offer gift certificates after so many reservations, so why not?

Get An Alarm System

I wrote about how my home was burglarized a few weeks ago.    At first, I was reluctant to purchase an alarm system, as I hate the thought of spending hundreds of dollars a year on a “monitoring service”.    I was pleasantly surprised to find out that I could install a pretty sophisticated system for under $1,000, and that monitoring was available for only $9 a month.    It got even better when I told my insurance company that I have a monitored alarm system.   It turns out that the discount is almost exactly the cost of the monitoring.     So I spend $1,000 dollars once, and I essentially receive free monitoring.   My home is safer and more secure, and the $1,000 will probably be recouped in additional value when I sell the house.

Dear Mr. Credit Card,

I wanted to ask a question not many people have asked on your site. I am moving to Sydney, Australia in a couple weeks and will only be staying in their country for about a year. I’ve been unemployed but will be working there in Australia. I only have one credit card, which is a Discover Card and is not accepted in Australia, so I’m pretty sure I need to pay only the minimum balance on it until I come back to the States. I’m confused about if I should apply for a new credit card in Australia or while I’m still here in the States or if I should cancel my Discover card.

Mr. Edward Park

Answers – There are two ways you can go about doing this. You can apply for either a Visa or a MasterCard before you leave for Australia (but do it quick) since they are the most universally accepted worldwide. The only problem with that is that all US based cards (perhaps with the exception of some Capital One cards) charge a 2% or 3% fee for foreign transaction. Hence, for one year, you’ll simply be paying more for using a US based card overseas. The other issue you have to consider is that you will probably want to set up autopay from a US bank account to pay this card if you use it. You have to make sure you have enough money in this US based bank or if not, you have to set up a monthly transfer from your bank in Australia.

Alternatively, you could get a card from Australia and make it easier for yourself. Most Australian banks will issue either a Visa or MasterCard. You could also get an American Express there. The advantage of having an overseas Amex card is that Amex will issue you one US based card for every overseas card you have. So that may be a good way to enable you to get an Amex when you get back after one year. The disadvantage of having an Australian based credit card is that it is not tracked by the credit bureaus and hence all your timely payments will not help you in building your credit history while you are away.

If I were you, I will not cancel my Discover card because it is a great card and you can use it after you get back here. I would also get a card in Australia rather than trying to get one here.

Chris Elliot has a provocative article about airlines and credit card fees.   He suggests that this is the next frontier in the fee war that airlines have been waging on customers for several years now.   He cites two discount carriers, Allegiant and Spirit as having de facto credit card fees.

My Take

While I share his outrage at the airlines for their reckless treatment of their customers, I am not sure that Allegiant and Spirit are actually applying credit card fees.     This fee applies to everyone who does not purchase a ticket at the airport.    To me, it is just a hidden fee so that they can advertise low fares, and string prospective buyers as far along the road to a ticket purchase as possible, before disclosing the real price.   Sadly, this practice is becoming more and more common with companies from cell phone carriers charging “regulatory recovery” fees to auto mechanics adding “shop fees”.    Don’t even get me started on event ticket “convenience fees”     These fees are all wrong and bad, but it is still not the same thing as a credit card fee, so long as they are not pushing you towards another method of payment.  Doing so would violate their merchant agreements with Mastercard, Visa, and the like.

When Is It Good To Pay Credit Card Fees?

Some European discount airlines are starting to accept PayPal, electronic checks, or other financing options in lieu of credit cards.    In this case, they are actually charging an additional fee for credit cards.

When would I pay these fees?  My gut response is never, however there may come a time where they are a necessary evil.     When it comes to travel, airlines in particular, it has long been held as a rule that you should always pay for your ticket with a credit card.    This is so that when airlines go out of business, you are protected.     Every time it happens, the news reports inform customers that if they paid with a credit card, they merely have to contact their bank and they will get their money back.   People who paid any other way are essentially hung out to dry.    If and when airlines start adding fees for credit card use, I will probably pay them, albeit reluctantly and with disgust.

What Fees You Should Worry About

I am not as worried about pure credit card fees from the airlines as I am with undisclosed foreign transaction fees.   Elliot hits the nail on the head when he berates companies for sneaking these in, seemingly at random, whenever some part of a transaction can be tied to some foreign company.   In all cases, these fees are reversed when you take the time to complain to your bank.   That is further evidence that these fees are bogus,  and that it is up to you to notice them and complain.    At this rate, any time you buy anything not made in the United States, you will risk getting hit with these bogus fees.    Elliot points out that the banks have already been hit with a major class action suit on this matter, and they seemed to have learned nothing.

Until then, be sure to use a card that does not charge foreign transaction fees whenever you are actually making purchases in other currencies.   Such cards include the Schwab Bank card or any card from  Capitol One.    It doesn’t hurt that these cards offer really good cash back rewards as well.

Macys has a whole range credit cards (both Visa and store card versions). We are now going to look at the differences between these cards and highlight its’ features. At the end of the review, we are also going to highlight an alternative card where you can actually earn more rebates when you shop at Macys.com.

Macys Visa Cards – The best way to describe the various credit cards that Macys have is to first actually show you a screenshot from their website.

Rebate Formula – The various card correspond with different levels of the Macys StarRewards Program. There is the

The lowest level is actually the gold level. With the gold card, you get to earn 1.5% rebates for every dollar that you spend at Macys and 1% for other regular non-Macy’s purchases. For the rest of the membership tiers, you get to earn 3% rebates on Macys purchases and 1% on other non-Macy purchases. There is no annual fee for all the cards. Once you have earned enough rebates, you will be given a “reward certificate” that you can use at Macys.

Macy’s Store Cards – The Macy store cards are not Visa credit cards so you can only use them at Macy’s. The store cards allow you to have exclusive savings when you shop at Macy’s.

Verdict – The Macys Credit Card will appeal to those who shop frequently at Macys because you can earn 3 points for every dollar that you can spend on Macys. One of the drawbacks of this card is that you can only use the reward points you have earned for reward certificates that can only be used at Macys. But if you are a die hard Macys fan, you might want to consider this card as you can earn points and be invited to special events and sales.

Their store cards (the non-Visa ones) are also popular among folks who have bad credit. But since you can only use them at Macys, I suggest getting a secured credit card instead.

If you really want to earn reward points or cash rebates with Macys, then you should consider the Discover® More(SM) Card instead. Discover has a shopping portal called shopdiscover.com. If you go to macys.com through your Discover account (same site), Macys will track your purchase and give you a 5% rebate. Let me show you a few screen shots as to how this works.

Clicking on the Macys icon takes you to the page which list some terms and conditions.

Once you click the shop now button, it will take you to the macys.com site. When you use your Discover Card to shop, it will record the transaction and let’s you earn 5% rebates with every eligible item you buy.

The advantage of getting a Discover Card over the Macys card is that you can earn more rebates (5% versus 3%) and you can use the rebates for other stuff (not just at Macys). Furthermore, Discover has over 100 partners where you can earn anywhere between 5% and 20% rebates. Hence, even if you shop a lot at Macy’s and are looking at their credit card, I suggest you get the Discover® More(SM) Card instead as you can earn more rebates and have a greater variety of places to earn rewards.

As predicted, the cat and mouse game that is CARD Act compliance just took a new turn.    It seems that some Capitol One cardholders are receiving an interesting proposition.

You Have The Right To Remain Compliant.   If You Choose To Give Up That Right……

One of the provisions of the CARD act is that banks will no longer be able to approve transaction that are over your credit limit, only to charge you “over the limit” fees.   Actually, the law specifies that you must choose to allow these fees.    The theory behind these fees, as told by the credit card companies, is that you would much rather get a $39 “over the limit” fee than have a charge denied.   Presumably, the emotional damage from that denial will cause lifelong psychological issues for you that make the $39 fee worth it for your coffee charge to go through.     To most consumers, this is a great way for credit card companies to gouge you by approving an over the limit transaction, and then slapping a huge charge on to it.

Capitol One’s pitch, as described at this post on The Consumerist, is to get you to opt in to them being able to approve over the limit charges by giving you something in return.  What are they giving you?   They are generously offering to reduce their over the limit fee from $39 to $29.     It’s like the mob saying “we ain’t allowed to break your legs no more, but if it’s OK with you, we’ll just smash your toes.”

Needless to say, I do not advise anyone to give up their rights under the CARD act.    If you bump up against your limit, you should have your charge declined.    It is no big deal.   I get charges declined from time to time.   It is almost always because a merchant is running my card incorrectly, or some other technical glitch.   Somehow I manage to go on.

What To Do If You Are At Or Near Your Limit

At the risk of stating the obvious, call the credit card company up and ask for your limit to be raised.   If you have a good payment history, and haven’t had your limit raised recently, you will probably get an immediate answer.   The worst they can say is no.    Another important thing to remember is that you should never have a single credit card.    There are many reasons for this, and in fact your credit score will be higher if you have five credit cards than if you have only one or two.     One of the big reasons for this is that you can always use another credit card if you max one out.     If you need more credit, it you can also appeal to multiple companies if you have multiple cards.

When Have I Ever Maxed Out A Card?

Those of you who read this page regularly know that I only use credit cards as method of payment, not a means of finance.    That is another way of saying that I never carry a balance.   I always pay my entire balance in full every month.    That said, I can remember a couple of times that I needed a balance increase.    Early in my career, I traveled a lot for business.    I could easily incur thousands of dollars a week in airfare and other travel expenses.   My company would promptly reimburse me, and I would pay off the balance in full when the bill would come due.   That meant that I might have up to a $15,000 balance at the time my payment was due.   This was far more than I could imagine in personal expenses.    Thankfully, my credit card  company had no problem increasing my credit limit to accommodate me.   Three years ago, I sold my condo and bought a 70 year old house.   I took some of the proceeds from the condo sale to use to renovate the house.    I spent tens of thousands of dollars in a very short time period.    As usual, I charged everything to my credit card, and paid it all off in full, yet I also required a credit limit increase to handle that project.    If I were to graph out my expenses, the resulting line would resemble a python eating a large mammal!

In Conclusion

Don’t be fooled into giving up your rights under the CARD Act.   Over the limit fees are a egregious rip off, and that is why they will soon be illegal.    Somehow, the banks got Congress to grant them a loophole for suckers.      Don’t be one of those suckers.    There are many, many good options to paying an “over the limit” fee.

If I use my credit card for all purchases and I pay the balance at the end of every month, which card is best for earning travel points so that I can upgrade my seats? I already have enough points to travel coach for free, but it seems impossible for me to get upgraded. Is there a card that allows me to purchase a coach ticket but be able to upgrade more reasonably?

Dr Iliana Sweis

Answers – Dr Sweis, what is not clear in your question is what points do you have? What I mean is do you have frequent flier points of a particular airline (where you have enough for a coach class ticket)? If that is the case, then the only way to get an upgrade is to earn miles with that particular airline. If we are talking about credit cards here, there are a couple of ways to do that. Firstly, you can simply get an airline miles credit card of that particular airline. That way, you can earn miles for every dollar that you charge to your credit card.

Alternatively, there are a couple of reward programs that allow you to transfer points into miles. Examples would include the Membership Rewards from American Express and the starwood preferred guest program.

If what you meant was you have a regular credit card reward program points (enough for a coach airline ticket), then unfortunately, you will need to earn the required points for a business class ticket. For example, if you need 25,000 points for a coach class ticket and 80,000 points for a business class ticket, and all you have is 25,000 points, then you will have to earn that extra 55,000 points.

Only airline frequent flier miles allow you to pay for a ticket and use points for an upgrade.

It’s Sunday so I’ll take a break from talking about credit cards. My Friend Kevin at www.satellitetvguru.net has some interesting tips for using coupons to save money on your entertainment cost. Many bloggers blog about supermarket coupons but very few blog about coupons for entertainment. So I thought it would be a good idea to ask him to write about this since everyone is in the “save money” mode these days

Earlier this week, Mr Credit Card featured a post about the importance of using coupons to save money on your daily expenses. Coupons are a great way to save on entertainment expenses as well, and are often overlooked. In fact it’s amazing just how much you can save on weekend entertainment by using the right coupons.

Movie Ticket Coupons

These days it costs more for a family of four to go to the movies, then to just buy the movie when it’s released on DVD or Blu-ray. We’ve talked about ways that your family can cut down on movie costs before, however one thing we didn’t mention in the previous post is that using online coupons to make going to the movies a little more affordable.

If you use Fandango.com and you’re a Visa Signature Card Holder, you can currently redeem this coupon that gives you a free second ticket with the purchase of any movie ticket up to $13.50 in value. There are quite a few other movie ticket coupons out there, most of which work with Fandango and give you free tickets, concessions, or a % off your purchase.

Concert Ticket Coupons

You can also use the same strategy to save on concert tickets you buy online. TicketsNow, Stubhub and RazorGator often have coupons that you can find online such as this one that allows you to save $20 on any purchase of $200 or more. While doing a quick search we also came across another coupon that gives you $15 off a purchase of $100 more more.

These coupons are widely available online and easy to find, the sad fact is that most people simply just don’t take the time to do a quick Google search and use them. By getting in the habit of searching for coupons every time before you buy anything online, you can save hundreds of dollars a year.

Satellite and Cable TV Coupons

If your looking to save money on Cable or Satellite service like Dish Network you can find a lot of promotions before signing up, again by simply doing a Google search. The important thing to note here is that you need to find these deals before signing up, if you’re already a subscriber there isn’t much you can do.

If your looking to order Dish Network, by using the promo code on that page you can save $45 and get a free DVR upgrade as well as free installation. You can also find similar coupons and offers when signing up for Comcast cable or Verizon FIOS.