Hey buddy, wanna sign up for a credit card?
OK, that wasn't Citi's come-on when it asked Jerry Mandel if he was interested in an affinity card that would help him collect American Airlines (www.aa.com) miles. But it probably should have been.
Mandel, a frequent American customer and engineer based in Dallas, found the offer enticing: It promised significant discounts and perks in exchange for "qualifying" purchases. But Mandel, being the meticulous type -- after all, he's an engineer -- looked for the fine print.
He didn't find it. So he phoned Citi.
Turns out that in order to take advantage of some of the card's guaranteed benefits, he would have to buy a full-fare ticket. "Of course, like many others, I would never buy a full-fare ticket," says Mandel.
That's because a refundable ticket can cost up to four times as much as one that's nonrefundable. Granted, some large corporations will shell out that kind of money. But not mere mortals traveling sans expense account.
Mandel is unhappy. If he hadn't called, he would have assumed that any American Airlines ticket would be good enough. This drama plays itself out all the time, in front of computer screens and often, at those little tables at the airport where airline employees hawk affinity cards. Those are almost as annoying as the flight attendants who try to persuade you to sign up for the airline's frequent-flier program at the end of a long flight. But I digress.
I deal with the fallout from these offers on an almost daily basis. Passengers who made assumptions about their cards that they shouldn't have, and are complaining to me mostly because they want someone to hear them. They know there's little I can do; rules are rules, after all.
Ah, but there is. I can write about this scam.
Did I just call it a scam? Absolutely.
One of the worst credit card offers was made by a European carrier, although I haven't seen it in a while. It pitched a "free" companion ticket, but declined to prominently say that the original ticket had to be of the dreaded full-fare variety. And interestingly, you could probably buy four regular tickets for that amount and take the whole family to London for the Games. Oh well.
It helps to take a big-picture view of affinity card offers made through airlines. What do I mean?
- There's no such thing as "free." Either you're paying an annual fee or you're dealing with confiscatory interest rates.
- There's always fine print. Always! Among the worst gotchas: The miles you accrue don't actually belong to you. If you don't believe me, read the terms and conditions of your airline loyalty program.
- There are hidden expenses. The one no one talks about is the cost of giving your loyalty to the card or the airline, when a cheaper card or airline ticket is available. Over time, that can cost you tens of thousands of dollars.
I hear from many die-hard mileage collectors who say my view of loyalty programs is dead wrong, that airlines are loyal to them. As proof they tell me about their last "free" flight to Hawaii. But what they fail to take into account were all of the purchases they had to make -- and all the overpriced flights they had to take -- to get to that point. Truth is, they didn't get anything for "free."
Fortunately, Mandel didn't take advantage of the affinity card from American Airlines. But I hear from many victims who do. They sign up and move their purchases to the new card, only to find out that the card wasn't what they thought it would be. I wish I could have helped them before they made the purchase.
It's shocking that affinity cards can continue to operate like this after more than two decades, making vague and hopeful promises with virtually no accountability. But the folks creating these pitches aren't dummies and they have expensive lawyers. They know how to circumvent state and federal laws -- and they do.
You have to be smarter. Affinity cards are a booming business -- why else would airlines be hawking it on the plane and in the airport? They know they can get away with their nebulous and seductive pitches. The government is powerless to stop them, despite the recent legislative credit card reforms.
The only person who can protect you from their clever pitches is you. Remember that the next time someone offers you a credit card.
Christopher Elliott is the author of "Scammed: How to Save Your Money and Find Better Service in a World of Schemes, Swindles, and Shady Deals" (Wiley). He's also the ombudsman for National Geographic Traveler magazine and the co-founder of the Consumer Travel Alliance, a nonprofit organization that advocates for travelers. Read more tips on his blog, elliott.org or e-mail him at email@example.com. Christopher Elliott receives a great deal of reader mail, and though he answers them as quickly as possible, your story may not be published for several months because of a backlog of cases.