Credit card

[KarmaPolice]

Ok so I am looking into getting my first credit card that is totally mine. I am not sure what my credit score is but I am 23, have zero debt, have had no credit issues, and I had a credit card in my name that I used just for things like a washing machine or something my parents had needed where I would put it on my card and then they would pay it off so I could build some credit. I don't really need a credit card right now but I figure...I am good at budgeting money so why not get something out of it like free miles(I love to travel). Anyone have one of these types of cards and do you generally need to have good credit to get these reward programs?

 

[Tarrant64]

I'm not sure exactly what cards give the best deals. CitiBank is what I use right now and they have a ton of different cards. I think Discover is a good choice too.

As far as credit goes, you are on the right track. A lot of those cards come with the rewards, regardless the limit. So the amount approved shouldn't affect the benefits of any particular card.

Be sure to keep an eye on all features of the credit card. Just because you get killer miles doesn't mean you won't will get stomped on interest rates. The more you purchase with your CC and pay off every month(or without letting it accumulate rediculously like I do ) the better off your overall credit will be.

Always read the fine print. Read every single line of every application. There's always something you miss. Be sure to ask your parents too for approval as they have better CC experience. I wish I asked my parents before. Too late now.

 

[Special K]

See this thread:

link

 

[ppdes]

I remember looking at cards that rewarded miles for my first card. I stupidly thought that the miles you earn were miles you could redeem in the form of a ticket. Instead they are just frequent flier points, the equivalent of having flown that far, and the tickets you redeem them for are for much shorter distances. Probably obvious to people who have flown a lot before, but I hadn't.

 

[dullard]

Originally posted by: ppdes
I remember looking at cards that rewarded miles for my first card. I stupidly thought that the miles you earn were miles you could redeem in the form of a ticket. Instead they are just frequent flier points, the equivalent of having flown that far, and the tickets you redeem them for are for much shorter distances. Probably obvious to people who have flown a lot before, but I hadn't.

Yes, it is a bit confusing. They need to rename it "miles flown" and not just "miles", because people think that means "miles to be flown".

KarmaPolice:

1) A typical card gives you one mile per dollar spent. An airline mile is usually worth 1 to 2 cents (exceptions do exist on either side of that range). Thus, you essentially get 1 to 2 pennys back for every dollar you spend. That is 1%-2% cash back with the limitation that you can not spend that cash as you want, but instead it must be spent on non-blackout time airline tickets. For that reason, it usually is better off to get a 1%-2% cash back (or more) card. Then spend that money on airline tickets or whatever else you want without restrictions.

2) Unless there is more to your story, I would bet that your credit score is in the lower 700s (lets say ~720 for a rough guess). That is right about average. You don't have a long good history to bring your score up, and you don't have problems to bring your score down.

 

[LS20]

listen to dullard #1... mile cards yield equivalent rewards as cash cards...except they may come with more restrictions... so in effect cash cards are superior

 

[UTmtnbiker]

I can't comment on the "good credit" part as I do have good credit and have always been approved. But that's not to mean that if you have bad credit or not such good credit that you wouldn't get approved.

My wife and I like to travel also, and we have a couple of credit cards that may address you needs: AmEx Starwood Preferred is our favorite but also AmEx Delta isn't bad, Citi has some also that are pretty good for travel. However, I think SPG (Starwood Preferred) is a better choice as you can convert these to airline miles and you're not locked in to just Delta, and you have the option of using points at Starwood properties (Sheraton, Westin, W, etc). We've used it (we charge a lot because of wife's business) for free hotel and airline tickets to Europe, free hotel stays in the Bahamas, and next year, we're planning on a big trip to Asia using points.

If you're primarily interested in traveling and credit cards, flyertalk.com has a good forum on just that. May be worth checking out.

 

[SoulAssassin]

Originally posted by: Special K
See this thread:

link

Or one of the hundreds of other threads here that have covered the exact same question.

 

[L1FE]

Miles in general aren't worth it - unless you're using it to get status with certain airlines. Otherwise, cash or hotel points are far more worth it IMO.

 

[KarmaPolice]

Thansk for the suggestions...it does make sense that if the cash back ones give the same amount back in cash form they are better. Then again I bet if you choose a FF program you will get extra perks if you fly a lot with them. Its just a little much cause there are so many different cards.

 

[RossMAN]

1) Are you aware that most frequent flier credit cards charge an annual fee $60 - $100 per year?

2) How much you charge on credit cards total annually?

3) Are you a CostCo member?

 

[KarmaPolice]

1) No, but I guess that makes sense
2)None at the moment cause I don't have one....but I don't see why I can't charge most things if I have the money to pay the full balance
3)No

 

[nace186]

citi premier pass is pretty good. You get a point for every dollar spent, and it give you a point for every 3 miles you fly under your name. Also the point never expire, as long as you use the card once every 3 year.

25,000 points would earn you a free round trip ticket, and 60k for international I think. It's comparable with other credit card that offer points, and no annual fees.

 

[DaWhim]

i like starwood from amex. You can transfer to other mileages club. check it out.

 

[dullard]

Originally posted by: nace186
citi premier pass is pretty good. You get a point for every dollar spent, and it give you a point for every 3 miles you fly under your name. Also the point never expire, as long as you use the card once every 3 year.

25,000 points would earn you a free round trip ticket, and 60k for international I think. It's comparable with other credit card that offer points, and no annual fees.

So, lets say you want a free round trip domestic ticket. That'll cost you 25,000 points. To get 25,000 points, you have to spend $25,000 on that card.

For comparison: 5% cash back on some items, 1% cash back on the rest. Lets say you average 3% back. $25,000 * 0.03 = $750 in cash that you can spend anywhere and any time, cash in your wallet doesn't ever expire whether you use it or not. How many domestic round trip tickets can you buy for $750? Usually 2-3. Play your cards right and always get 5% back and you'll net $1250; which sometimes is enough to buy an international ticket.

Comparison #2: Wait around for this offer to come again. 3% cash back on many purchases, 1% on the rest, and $250 right away in your pocket. That'll buy you a round trip ticket to many locations without even spending more than a penny on the credit card. Or, spend $25,000 with an average of 2% cash back and get $850 total.

 

[Dunbar]

Originally posted by: dullard
So, lets say you want a free round trip domestic ticket. That'll cost you 25,000 points. To get 25,000 points, you have to spend $25,000 on that card.

I thought most cards started you off with 15-20,000 miles. I recommend picking an airline that offers lots of destinations from your city and get their credit card.

 

[RossMAN]

Originally posted by: Dunbar

Originally posted by: dullard
So, lets say you want a free round trip domestic ticket. That'll cost you 25,000 points. To get 25,000 points, you have to spend $25,000 on that card.

I thought most cards started you off with 15-20,000 miles. I recommend picking an airline that offers lots of destinations from your city and get their credit card.

Agreed and I cannot emphasize this enough.

Let's say you live in Dallas, Texas why would you choose an Alaska Airlines/BOFA credit when American Airlines/CitiBank has a hub at DFW?

 

[nace186]

Originally posted by: dullard

Originally posted by: nace186
citi premier pass is pretty good. You get a point for every dollar spent, and it give you a point for every 3 miles you fly under your name. Also the point never expire, as long as you use the card once every 3 year.

25,000 points would earn you a free round trip ticket, and 60k for international I think. It's comparable with other credit card that offer points, and no annual fees.

So, lets say you want a free round trip domestic ticket. That'll cost you 25,000 points. To get 25,000 points, you have to spend $25,000 on that card.

For comparison: 5% cash back on some items, 1% cash back on the rest. Lets say you average 3% back. $25,000 * 0.03 = $750 in cash that you can spend anywhere and any time, cash in your wallet doesn't ever expire whether you use it or not. How many domestic round trip tickets can you buy for $750? Usually 2-3. Play your cards right and always get 5% back and you'll net $1250; which sometimes is enough to buy an international ticket.

Comparison #2: Wait around for this offer to come again. 3% cash back on many purchases, 1% on the rest, and $250 right away in your pocket. That'll buy you a round trip ticket to many locations without even spending more than a penny on the credit card. Or, spend $25,000 with an average of 2% cash back and get $850 total.

Well, you don't have to spend 25,000 to get 25,000 points. I fly 4-5 times a year, and since the card give you a point for every 3 miles I fly. I have already reached 25,000+ points and I have only spend a little bit over 10k. Also, I forgot to mention that when you sign up, they give you 5000 pts (I think they increased to 10,000 pts now). So, if I subtract the 5k free points, I still averages 2 pts for every dollar I spend, which is much better than any points systems out there.

Also, you can use the points on other stuff, not just for flight... They have a reward program for trading points for items such as books, electronics, games, concert events, etc.

I should mention in my previous post that this card is good for people that fly a lot, since it could increase your points fast.

 

[dullard]

Originally posted by: nace186
Well, you don't have to spend 25,000 to get 25,000 points. I fly 4-5 times a year, and since the card give you a point for every 3 miles I fly. I have already reached 25,000+ points and I have only spend a little bit over 10k. Also, I forgot to mention that when you sign up, they give you 5000 pts (I think they increased to 10,000 pts now). So, if I subtract the 5k free points, I still averages 2 pts for every dollar I spend, which is much better than any points systems out there.

Also, you can use the points on other stuff, not just for flight... They have a reward program for trading points for items such as books, electronics, games, concert events, etc.

I should mention in my previous post that this card is good for people that fly a lot, since it could increase your points fast.

Spin it all you want, you are getting less for your buck with those cards.

 

[DT4K]

I'm a big fan of Amex. As long as you don't have negatives on your credit report, they can be very generous with credit lines and regular increases.

Check out their Starwood and Hilton cards. Both of these cards will give you more value than an airline card. When I estimated the value of the rewards, it ended up being 3-5% (maybe higher) of your spending, depending on which hotel you use the points at.
The Hilton card is good because you have more hotels to choose from and you get extra points on certain types of purchases (gas, groceries, etc.)
The Starwood card is good because there are no blackout dates, you can combine points with cash to pay for your hotel, and if you use points for 4 nights, you get the 5th night free. So if I spend 40,000 on my Starwood for instance, I get 40,000 points and with those 40,000 points, I can get 5 nights at the Times Square Sheraton, which is around $300 to $350 per night. That's a $1500 hotel stay on 40,000 of spending, which is a 3.75% reward.

 

[nace186]

Originally posted by: dullard

Originally posted by: nace186
Well, you don't have to spend 25,000 to get 25,000 points. I fly 4-5 times a year, and since the card give you a point for every 3 miles I fly. I have already reached 25,000+ points and I have only spend a little bit over 10k. Also, I forgot to mention that when you sign up, they give you 5000 pts (I think they increased to 10,000 pts now). So, if I subtract the 5k free points, I still averages 2 pts for every dollar I spend, which is much better than any points systems out there.

Also, you can use the points on other stuff, not just for flight... They have a reward program for trading points for items such as books, electronics, games, concert events, etc.

I should mention in my previous post that this card is good for people that fly a lot, since it could increase your points fast.

Spin it all you want, you are getting less for your buck with those cards.

lol, how am I spinning it? You did notice I mentioned that it's good for people that fly a lot, which is true in my case. I didn't say it's the best card out there, I'm just saying it's a good card.

With your calculation, let say 3% on the 10k I spend, that's only $300. Which is barely enough to get me a plane ticket from where I am now to my parent's place, and that's during the off season. With the card, I could get any domestic ticket that is up to $500, and I could pay off the difference if the price is higher.