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CREDIT CARDS: BANK CARDS
What we're calling 'bank cards' are also known as 'fake miles'
cards and 'choose your own airline' cards. They are bank-issued
cards--typically MasterCard or VISA--with a travel awards program
modeled on the airlines' frequent flyer programs. And they function
very much like airline affinity cards: earn miles for purchases
(usually 1 mile for every $1 charged); redeem miles for free
tickets (a free domestic economy ticket can be had for 20 -
25,000 miles). (In fact, calling the currency of bank cards
'miles' is misleading, since your earnings are based on dollar
amounts charged, not distance traveled. Which is why some call
them 'fake miles.') Notwithstanding the surface similarities
between bank cards and airline cards, the differences are real
and substantial. First and foremost, the "miles" earned for
bank-card charges are proprietary: they can ONLY be earned for
charges made with THAT card. This severely limits your earning
capacity--compared to miles awarded in an airline program, which
can be earned for flights, hotel stays, charges with the program
card, etc., etc. And of course, bank-card miles cannot be combined
with your airline miles or hotel points. On the award side,
bank card programs claim 2 distinct advantages over the airline
programs: (1) you can redeem your miles on any airline, and
(2) there are no blackout dates for award travel. True, but...
There are some important caveats to these programs, which may
make them less generous and flexible than they appear at first
blush. Consider the following: The value of the award ticket
is capped. If, for example, you redeem 25,000 MilesOne miles
for a free domestic ticket, the maximum value of that ticket
is $500. You must request your award ticket at least 21 in advance
of travel. (This allows the bank card programs, through their
travel agencies, to purchase discounted, advance purchase tickets,
thereby lowering their redemption costs.) While the above earning
and redemption limitations don't deprive these programs of value
altogether, they are better suited to frequent buyers than to
frequent flyers. If you travel often, you have more options
for earning miles and awards through the airline-specific programs.
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