July 2004 -- You don't have to fly frequently to reap free tickets. Mile and point-earning credit cards are the most painless way to get free trips. More and more cards are coming with big benefits and no annual fees .
We turned to Randy Petersen, mileage guru at Inside Flyer Magazine (www.insideflyer.com), and asked him what the best cards for budget travelers are right now.
Randy's top deal is the Starwood American Express Card , which is free for the first year and $30 for each year afterwards (but hey, you can always cancel it after the free year.) This card earns Starpoints, which can be used at Starwood hotels (such as Sheratons or Westins) or converted into frequent flier miles for 28 different airlines. Most of the airlines even accept Starwood points on a 1:1 basis; United is the major exception, charging two Starpoints for each United mile.
Since you can't move points between airlines, Starpoints make a great, transferable currency you can use with the airline of your choice. And if you're sick of airlines' blackout dates and seat restrictions, you'll love using your points for Starwood hotels - you can get pretty much any room any time you want. Open a new card account by July 15, and you'll get 4,000 free points when you make your first purchase.
Of airline credit cards, Randy likes the Delta Skymiles American Express Card, also free for the first year, although it's a whopping $85 for successive years. The hook here is that you get two miles per dollar on a lot of purchases, including money spent with gas stations, supermarkets, home improvement and hardware stores, drugstores, the post office, and wireless phone companies. If you're remodeling your house and end up spending $12,000 at Home Depot, Randy says, that's a free ticket on Delta.
Randy didn't mention the Amtrak Guest Rewards Mastercard, but we think it's a particularly good fit for infrequent travelers. There's no annual fee, ever. And while most airlines demand you earn 25,000 miles before you get a free ticket, Amtrak starts giving away free tickets at only 1,000 points. Considering you're earning a dollar per point spent, that's a lot of train tickets. You can also convert Amtrak points on a 1:1 basis to United, Midwest or Continental miles, or get Hilton HHonors points or Marriott, Starwood or Ritz rooms (but not points) with the card.
If you're willing to swallow an $85 (ouch!) annual fee, a recent article in Randy's magazine Inside Flyer says Diner's Club may soon become the ultimate mileage-earning card. Diner's Club already lets you convert their points on a 1:1 basis into 26 airlines and 9 hotel frequent guest programs - a better deal than their major competitor, American Express Membership Rewards. The big minus so far has been that Diner's Club isn't accepted in all that many places. That'll change if Diner's Club joins the Mastercard network, as Inside Flyer says they will.
Bad Credit? No Problem
Even if you have lousy credit, you can still get a debit card, otherwise known as a check card. Debit cards take money out of your checking account rather than charging it to a bill that you pay later. You should never buy travel with a debit card if you can avoid it, because credit cards protect you against travel operators running off with your money. But you can still earn miles for your daily purchases with your debit card.
Both American Airlines and Continental offer mileage-earning debit cards, although they aren't free. Continental's card, for Chase Manhattan Bank checking accounts, gives you one mile for every $2 spent and costs $30 per year - or, if you have a big enough bank balance, you can get a $60 card that earns one mile per dollar.
American's cards are similar, but they work with Citibank accounts instead of Chase. There's either a $25 annual fee to earn one mile every two dollars, or you can get a 1:1 dollar:mile card for $65/year.
Whether you go for credit or debit, there's no reason to use a card that doesn't earn miles today. Grab one of the cards above, and you'll be flying for free before you know it.