View From the Wing

July 27, 2007

Securing Premium Class Awards with Star Alliance

For all the complaints about award travel, and this is something I've written about before (and by no means to brag), I really don't have too much trouble finding award seats.

That's partly because I have a critical mass account balance with several different airlines and major alliances, so when I go to redeem if there isn't availability with one I simply query another.

But it's also because I redeem nmostly for premium class international travel, and while those tickets aren't always available on all routes by any means, I've often seen the biggest complaints - with a few notable exceptions - to be about the old fashioned 25,000 mile domestic awards. And those are hardly the best value anyway.

I'd just assume pay my $250 - $400 for a flight between DC and California, earn miles on those flights, and use the miles for a much greater return: the $10,000+ ticket I could never afford to purchase but that makes travel more than just an uncomfortable means to get from A to B.

Plus, there are a few tricks to the process.

Recently I used United Mileage Plus miles for two international first class awards from DC to Phuket, Thailand, with a stopover in Hong Kong on the return. That's not the kind of award that the United website lets you search for, so it requires a phone call.

"Sorry, nothing's available."

"Are you sure? Is there availability on the Dulles-Tokyo non-stop, either with United or ANA, on my preferred date?"

"Yes."

"How about Tokyo to Bangkok?"

"Yes."

"And Bangkok to Phuket?"

"Yes."

"Great! Let's look at the return. Can I go from Phuket to Bangkok and on to Hong Kong?"

"Yes."

"Great. Let's hang out there for a few days, it'll be interesting to see all the events surrounding the anniversary of Great Britain's handover to mainland China. Now I need to get home. Can I go from Hong Kong to Seoul?"

"Yes."

"How about Seoul to Chicago, on Asiana?"

"Yes."

"Great! I bet we can even find seats from Chicago to DC, right?"

"Yes."

"Great! I think we've found an award itinerary. Now, I still may want to work on the routing, so I'm not quite ready to ticket. But let's put this baby on hold!"

"Have I met all your travel needs today, sir?"

Customers call and get told nothing's available. But that doesn't mean nothing's available. Agents may be poorly trained. It may take work, the computer systems they're working with aren't perfect by any means and may only check a limited number of simple routings. And they may not want to go through all the work of testing segments one at a time, even if it occurs to them that they could.

So I've found one big secret to booking award travel is to do the legwork yourself. That's hard to do on the phone with testy agents. But it's much easier to do by yourself. But most airlines don't let you do it! On their own websites, anyway.

The first thing to do is know the routings. Know the partners. Who flies where you're trying to go? And especially if you're looking for a premium class seat (and you really should be...), but even for coach, start with the hardest part of the trip to get. In this case it was the transpacific segmetns. Look, I know I can get from DC to Chicago or the West Coast and back. The hard part is going to be finding first class seats across the Pacific.

So before I call United I write out United's partners that fly across the Pacific and the routes that they fly. Then I check for availability on those specific flights. And once I find availability, I work forwards and backwards from there, in order to (1) get to the transpacific gateway city, and (2) get from the destination of the flight I've found to the city I'm actually trying to get to, if necessary.

The way I do this when redeeming United miles is that I've signed up for an ANA Mileage Plan account. And ANA Mileage Plan members can use that program's website to check availability on most of their Star Alliance partner's flights. (Swissair seems not to come up as an option on the ANA site.) Air Canada offers something similar, though the ANA site performs better for me.

Working with other airlines it is often the case that you'll need to sign up with frequent flyer accounts with many of the carrier's partners and check each partner individually. A pain, perhaps, but worth the payoff when looking for the elusive three-cabin first seats to Asia.

Now it should be said that the results found on the ANA website are not going to be a perfect match for what United will let you book. ANA does a good job telling you what seats a Star Allaince carrier is making available as an award. But United then filters availability with some parnters on certain routes. So while Thai Airways might be offering an award seat from London to Bangkok, United might reply "not available." They make it sound like Thai isn't offering it, when in reality United just refuses to pay for it.

United uses a system called StarNet for booking these awards, and agents are only supposed to book what comes up there. Used to be that you could still grab an available seat via a 'manual sell'... The agent sends a message to the partner carrier asking them for the award seat, and then it would come back confirmed, bypassing United's filtering in StarNet entirely. But that's exceedingly rare these days, as customer service reps are no longer supposed to do it.

I find the biggest problems with United's filtering to be on Lufthansa, especially routes within Europe, and also premium class long-haul on Thai. They really don't need to do much filtering with Singapre, as those seats are hard enough to come by on their own! (Although I'm always surprised by how much business class availability on Singapore is out there, and how frequently I can find a single seat in First... It's that second seat on the same flights that's so often vexxing.)

Still, the ANA tool is an excellent starting place, and tells you what flights to ask for when calling United. Doing the work for the agent on the other end of the phone is one of the absolute keys to finding the award seats you want.

It's also helpful to know when to look for seats. United in particular releases seats both early and late. Check 5+ months out, check a couple weeks before departure, check 2-3 days before departure. Now, if you're like me you look obsessively more often. And revenue management will release seats at various times. The idea for the airline is to offer as awards those seats they're confident won't be sold, and at the same time ensure that customers don't book award seats that they'd otherwise purchase with cash.

Some seats get released when schedules are loaded 330 days out. But the 'I called 330 days out and the seats were already gone!' complaint misses the point. There may not have been any seats released yet. And just because seats aren't available, doesn't mean that they won't become available.

At least until United's premium cabin availability shrinks dramatically (and perhaps even then) with the introduction of their new business and first class cabins, it's pretty much a lock to be able to find premium class transpacific flights days before departure.

This isn't true with all airlines. In some cases, once seats have been booked, no more will be released, even in the case of an empty cabin. But United definitely dumps unsold seats into award inventory very frequently in the days leading up to a flight.

Check it yourself -- search for international first and business class 2-3 days forward on various transpacific routes and you'll be shocked at how easy they are to get.

Ok, fair enough, you don't want to wait to plan a spur of the moment vacation. But you don't have to. Just plan the best itinerary you possibly can when you're doing your initial booking and "trade up." Look for better seats. Maybe you found an undesireable routing, or you only found coach. Book it, lock in your trip, and then call back to make a change. Unless you're a United 1K you'll have to pay $100 per ticket, but it's a fee I'd find worth it to go from coach to 3-cabin first for a day of flying in each direction.

A co-worker recently came to me for help on a transpacific trip. He was having no luck talking to United. We found some coach seats (what he was looking for) for a transpacific trip, on his preferred carrier even. Then I said "you're so close to enough miles for business class, consider booking the coach ticket and go earn the difference in miles then re-ticket later." He signed up for a United Visa (see here and here regarding the business visa), will soon have the points he needs from the signup bonus, and will be in a position to trade up later.

With 60,000 points for coach and 90,000 for business to Asia (just 15k more each way, and that gets you all the way from the US East Coast to just about anywhere in Asia!), the premium cabin represents one of the best values out there in award redemption.

Posted by gleff at 3:35 AM | Comments (4)

March 14, 2007

Confessions of a former Enterprise manager

Consumerist has a great post, an insider's perspective on renting cars from Enterprise. Everything's negotiable.

Even knowing that, I still won't rent from them. But for those who don't mind the undignified "walkaround" of the vehicle and hard sell of insurance, you may benefit from the tips.

1. Enterprise doesn't have any set prices. That rate you got when you called in was either the full retail rate, or the first number that popped into the agent's head. There are three main categories of rentals: personal (retail), corporate, and insurance, but on every single contract that goes out the agent manually types out how much you pay per day and he has authority to make it pretty much whatever he thinks you should pay. ...

2. By now everyone knows that you don't need that extra rental insurance ...

Call for a reservation, say your car was totaled and you need a replacement; your insurance company is cutting you a check for $25.00 per day flat so you need something for under $25. Tell the agent that your insurance company is State Farm, or Farmers, or someone big--the big insurance companies have the best rates

Posted by gleff at 8:19 AM | Comments (1)

September 9, 2006

Testing Award Redemption

This month's Inside Flyer cover story is about award redemption. They tested several airline programs across several routes, both online booking engines and call centers, at various points in time to get real data on how programs rank in satisfying member needs.

A key takeaway is that the USAirways website is terrible, always call. But more generally, just because the web doesn't show availability with any program, try the phone. Very few websites check more than the most traditional flight routings, and even fewer offer good details on partner award availability.

American's program fares well as it always does. United didn't do as good a job at redemption as its results two years ago, which is consistent with my own experience as well (though nothing beats Star Alliance awards for Asia).

Despite the article reporting some succeess redeeming for business class awards via Northwest Worldperks, I wouldn't press my luck there. Continental, Delta, and Northwest really are subpar on award redemption.

Here's my general advice on award redemption.

Posted by gleff at 8:10 AM | Comments (0)

August 10, 2006

The Myth of Buying Airline Tickets Wednesday at Midnight

Upgrade Travel Blog has a detailed explanation about why the myth of buying tickets Wednesday at midnight is wrong.

The myth goes this way:

What's the absolute best time to purchase a ticket directly from the airlines? Turns out it's Wednesday from midnight to 1a.m. in the time zone of the airline's "home base."[...] Why? That's when the computer systems of most airlines get rid of the reserved but unbooked lower fare reservations. However,

Held reservations don't all expire Wednesdays
Most fares that are put on hold aren't that cheap to begin with
Midnight isn't when new fares are loaded -- they're distributed at 10:00am, 12:30pm, and 8pm EST and loaded about 2-6 hours later in the GDS and airline sites.

Read the whole thing.

Posted by gleff at 9:01 AM | Comments (0)

July 17, 2006

What Cathy Doesn't Know, or Why Cartoon Characters Can't Redeem Their Miles

Yesterday's Cathy cartoon expressed a common frustration about using frequent flyer miles. I don't mean to dismiss the idea because it is commonly held and people do have difficulty redeeming miles. But the conventional wisdom doesn't match reality.

If you take the miles and points game seriously, you should be able to do pretty well on the redemption side. Here are some basic tips.

Build up miles in a single program until you have enough for the awards you want, and then diversify into other programs. That way when it comes time to redeem you'll have more than one program to choose from. Sometimes United hasn't had seats, but American does. Or Delta won't, but United will.
One good way to do this is to accumulate miles through partner activities (credit cards, mortgages, internet service, online shopping, etc.) with a different program than that of the primary carrier you fly.
Remember partners. Within the United states Delta miles can be used on Alaska, Northwest, and Continental for instance. The Delta website certainly won't show all these options, and not all phone agents will check either. So know the partnerships and request partner flights.
Check partner flights using the websites of partners. The real point here is that airline redemption websites are glitchy at best. So if you want the Alaska non-stop between Washington Reagan and Los Angeles, check for availability on the Alaska website. If you find it you still need to call Delta to use Skymiles for the flight, but you know what to ask for. (One website tip is that the ANA and Air Canada websites actually will show you availability for their Star Alliance partners. These are especially useful tools for the United and USAirways flyers.) On caveat is that not all airlines open the same award availability to their partners that they do to their own frequent flyers, but it's a good first approximation.
Don't trust redemeption websites. They are notoriously bad about checking all available flights and routings. So even if the website says nothing is available, call and ask.
Know all possible routings. If you're using United miles to try to fly from the East Coast of the United States to Bangkok, make sure you know not just the partners as mentioned about (in this case you have ANA, Singapore, Asiana, and Thai in addition to United) but also all the gateways. If you're looking for a business class award, the most important and most difficult piece is the transpacific segment. So of course you can try New York JFK to Bangkok non-stop but also the Los Angeles non-stop... Or New York-JFK to Tokyo, or San Francisco, Chicago, Washington DC or Los Angeles to Tokyo. Or try flying to Seoul on Asiana. Or try Singapore. Or Hong Kong via Chicago or San Francisco. Then work both backwards and forwards (e.g. Hong Kong to Bangkok on Thai, your departure city to your international gateway).

Truth is, I have yet to come up short and I've always booked my premium class awards using the lower 'standard' mileage table.

Still, there will be some difficult awards to claim. Europe in the summertime can be difficult, but sometimes business class is easier than coach. Or if no awards are available, at least a purchased ticket can often be upgraded (provided you're using an upgrade-eligible fare with most airlines). Or if you're comfortable waiting for the last minute, unsold seats are often dumped into award inventory two weeks or a week prior to travel.

Posted by gleff at 6:55 AM | Comments (3)

July 7, 2006

The Challenge of Redeye Flights

The Global Traveler has tips for surviving redeye flights.

Basically don't drink caffeine and try to get to sleep right away. Great as far as it goes, but I find redeyes to be brutal, and survival to depend entirely on the seat.

I had tremendous difficulty flying Bangkok to Narita a couple months back in ANA's old style business class seat. It was just uncomfortable and nothing I did could change that.

Give me a full recline in a comfortable seat and it's a different story. The short flight time would still present challenges and I wouldn't be well rested on the other end, but it would have been far better.

The only real tip for surviving redeye flights is a modern business class or three-class first class seat. I know that won't help many of my readers, but it's all I have to offer...

I do have tips for dealing with jetlag, though.

Posted by gleff at 5:12 AM | Comments (0)

March 19, 2006

Travel items you can't live without

Alex Tabarrok notes his favorite items for travel: an inexpensive noise-cancelling headset, a Paul Frederick non-iron dress shirt, and his Kodak DX7590 digital camera.

Allow me to suggest a wireless pocket router. Too many hotels have wired high-speed internet. I don't always want to sit at the desk to work (especially frustrating at resort properties with balconies overlooking the ocean!). Or sometimes my wife travels with me and we'd both like to be online.

This is the one I've been using, about $40 + shipping after $10 rebate.

Second, power converters. Magellan's has a nice website that'll figure out for you just want converters and adapters you need, wherever in the world you're traveling (I was shocked to find them accurate for Rwanda!).

And don't forget that clicking on the link to Magellan's at ebates.com will earn you a 7% cash rebate on whatever you purchase.

(Most online shopping earns cash or miles, of course, for which Andrew Cram's chart is an invaluable reference.)

And truly indispendable for long trips? Ambien.

Comments are open for your favorite travel items...

Posted by gleff at 9:10 AM | Comments (1)

December 12, 2005

Save more!

Jane Galt offers good basic financial advice.

I do pretty well -- readers of this blog know I can get quite a bit out of a buck, and often not just in travel -- but I know I don't save enough, and like Tyler Cowen I'm not going to give up on eating out.

But it's still worth clubbing myself over the head every now and then about what best practices ought to be.

Posted by gleff at 4:59 AM | Comments (1)

October 23, 2005

Repost: How to Choose the Best Mileage Earning Credit Card

How to choose the best credit card

With this post I intend to outline the major issues that should affect your choice of mileage-earning credit card and to offer some specific suggestions that will work in most circumstances.

Feel free to leave comments if you feel like I'm missing any important issue, or if you'd like specific feedback on your own situation.

Do you pay your bill in full at the end of each month? If not, stop. You may not want a mileage-earning card. At a minimum, miles probably shouldn't determine what card you choose. Instead, you want a card with the lowest interest rates. Perhaps you have balances already, look for a card with 0% balance transfers (and then pay very close attention to the card's terms and conditions in order to retain that 0% rate.)
How much spending are you going to put on the card? Signup bonuses aside (I'll talk about those shortly), if you aren't going to put more than $1000 a month on the card on average, it may not make sense to get a card with an annual fee. For instance, many airlines have free cards that offer 2 miles per dollar spent. At $12,000 in annual spending, that's 6000 fewer miles but you'll save $60 - $80. You're basically buying those miles at 1 to 1.25 cents apiece. At lower levels of spending you're buying the miles at a higher premium. The enhanced earning that comes from cards with an annual fee may not make sense unless you're putting substantial charges on the card.
Are you striving for elite membership in a program? Check whether that program's co-branded credit card will help you get there.
- Many hotel programs give you their lowest level of status for taking their program's credit card. The Hilton Visa gives you silver status the first year, enough to qualify for their elites-only awards. The Hilton American Express offers silver status as long as you hold the card and Gold status for spending $20,000 on the card in a calendar year. Both cards are free. Starwood gives you 'Preferred Plus' status for taking its credit card, basically Gold without the bonus points for spending money at their hotels. Marriott gives you Silver status for taking its Visa card as well.
- The new United Visa Signature Platinum Class offers up to 15,000 Elite Qualifying Miles in the first year of cardmembership based on a combination of spending and United purchases (up to 10,000 qualifying miles in subsequent years). The Delta Skymiles Platinum American Express comes with Elite Qualifying Miles, both with first purchase and based on annual spend. In the past the USAirways Visa Signature has offered miles towards elite status based on annual spend, though I don't think that's currently the case. However, the USAirways card does offer some of the benefits of first-tier elite status such as preferred checkin and boarding along with the occasional upgrade.
Do you spend a lot with 'everyday purchase' retailers like grocery stores, restaurants, or the US Postal Service? If you do, consider a card that offers bonuses for that kind of spending. Consider both the Delta American Express and the Hilton American Express. Since my primary mileage accumulation isn't in a Delta account, I choose to hold the no annual fee Hilton card and I use it specifically at grocery stores and restaurants.
Do you fly a particular airlines? Miles towards elite status aside, there are some cards that offer specific benefits which are useful when traveling with their co-branded partner. Without these types of benefits, I'm not a fan of picking a credit card based on the airline that you fly. You're already earning miles with that airline and if you have enough of a balance to claim the awards you want it's better to diversify into other programs. That makes things much easier when it comes time to try to redeem -- if your main program doesn't have availability, perhaps your second or third program will. That said, some cards like the Alaska Airlines Visa Signature offer nice benefits to customers that fly the airline such as an annual $50 companion ticket (unlike most companion tickets, this one can actually be used -- on any published fare), lounge passes, and day of departure upgrade certificates.

General advice

If you pay your bill in full every month, charge a decent amount to the card, and don't have special needs like help making elite status, then some general advice is probably most useful.

The best general, all-purpose rewards card is the Starwood American Express card.

It's free the first year and $30 thereafter, comes with a signup bonus of 6,000 points with your first purchase and up to 6,000 more for hotel stays, and offers points which can be used for hotel nights or converted 1:1 into most airline programs.

The card isn't a good option for earning United Airlines miles, though, because the points only transfer at a rate of 2:1. BankOne, which issues the United Visa, provided lots of money when United went into bankruptcy and doesn't like the competition from this card. When you covert 20,000 points at a time into airline miles Starwood gives you 5,000 bonus miles -- which means you're really earning 1.25 miles per dollar on most every carrier, better earning than most airlines' own co-branded offerings. The flexibility, though, is the best benefit. With, say, an American Airlines Mastercard you're stuck with American Airlines miles. With the Starwood American Express you earn whatever miles you want and you don't have to decide until later.

An example of the power of this card -- spend $50,000 on the United Visa or American Mastercard, and you have enough miles for a coach ticket to Europe. Spend $50,000 on the Starwood American Express, and you can transfer those 50,000 points to Cathay Pacific in exchange for 60,000 Asia Miles which are enough for a business class ticket on British Airways from the East Coast of the U.S. to most destinations in Europe.

Be aware, though, that transfers from Starwood into an airline program are not instantaneous so you may not be able to reserve your award before making a transfer on carriers that don't let you hold awards (e.g. Northwest) or that don't permit you to hold them for very long (e.g. United at 72 hours).

Still, with Starwood I can stay at some of the top hotels in the world and my airline mileage earning is supersized, 25% better than airline cards themselves. This is by far the best all-around mileage earning card.

I also carry a Diners Club card and a Hilton American Express.

The Diners Club card is now a Mastercard, so it's accepted universally. I use the card with merchants that don't take American Express. Their points program offers transfers into most airline and hotel programs. I can even launder United or American miles into other programs through this program (with some devaluation).

Since Diners Club became a Mastercard, it lost some of its unique features -- such as two billing cycles to pay and a lower than usual foreign currency conversion charge. But it maintains its primary insurance coverage on rental cars, and since it's a Mastercard it's useful for airline and hotel promotions that require payments with that brand of card (such as Hyatt's outstanding Faster Free Nights promo).

Downsides to the card are a charge for transferring points to airline miles (95 cents per 1000 miles) and a $90 annual fee. I rent cars enough to make this worthwhile.

I use the Hilton American Express only for things where I earn bonus points. I use it at the grocery store and at restaurants and my cell phone bill is automatically charged to the card. I run no more than $1000 or $1500 a month on this card. If I ever run out of Gold status with Hilton, I'll probably notch up the spending to reach $20,000 to retain my status.

Full disclosure, I also carry other cards that stand apart from this general advice. For example, I have an American Express Platinum card with Membership Rewards because it provides a greater credit line than traditional points-earning cards. It's useful to me for charging large events, and has lots of extras like lounge access (Continental, Delta, and Northwest), elite status with Starwood and Avis, and the Fine Hotels and Resorts program which offers extras at properties like Ritz-Carlton and Four Seasons. It's expensive at $395, so not useful for most.

The Membership Rewards program offers transfers to a variety of airlines and hotel programs, but it's been eroded over the years. Marriott dropped out last year. No replacement was ever made for Northwest or TWA (when the latter was acquired by American). But it works for me, because I couldn't otherwise put such large charges on a single card. And a seven figure membership rewards balance is certainly better than paying by check!

If you don't charge enough to warrant an annual fee card, consider a free card.

The Amtrak Mastercard gives one Amtrak point per dollar spent. The value in this card is that points can be used for train travel or transferred one-to-one into Continental, and Midwest Airlines and one-to-two into Hilton. You can transfer 25,000 points out of an Amtrak account each calendar year (elite members can transfer out 50,000 points.) The Amtrak card also offers redemption for gift certificates, generally valuing points earned at one cent apiece. The card offers pretty good earning considering that it's fee-free.

I don't trust the company running the Amtrak program, though. They tend to make changes without notice -- such as imposing a cap on points transferred out (it used to be unlimited) and ending transfers into United.

The Hilton American Express comes with 15,000 points as a signup bonus, Silver Elite status in the Hilton program, and earns 3 Hilton points per dollar spent (or 5 on 'everyday spend' charges like restaurants, grocery stores, and cell phone bills).

Consider also cash rebate cards. Most of them cap the amount of money you can earn, but if you're spending less than $15,000 or so a year that may not be an issue. This type of card is outside the scope of the post. Miles are usually worth more than money in a rewards program, since the latter tends to return only about 1%. But $150 may be worth more to you than 15,000 Amtrak points (though shrewdly used, the Amtrak points can be worth more than the money).

Stay away from proprietary rewards programs, like the CapitalOne GoMiles card.

Proprietary miles programs have marketing appeal, offering "any seat on any airline" and tapping into the frustration that some feel trying to redeem their miles. But these programs turn the value proposition of miles on their head. Miles are most useful for tickets that would have been too expensive to purchase -- international business or first class tickets, or even last minute transcon flights (which aren't as expensive as they used to be). Proprietary programs generally offer coach seats, which have to be purchased a few weeks in advance, and often cap the amount of airfare that they'll pay.

Furthermore, proprietary miles can be earned only through credit card spending so it may be harding to reach the point of redeeming for a free ticket. Airline and hotel points can be earned through a variety of partnerships, whether it's telephone or internet or mortgage financing, let alone actually flying or spending the night somewhere.

While some may get value from these offerings, my general advice is to avoid them. They more or less amount to a cash rebate card where you can only spend the rebate on specific travel offerings.

Earning bonus miles from credit card signups

In some cases, depending on the credit card issuer, you can sign up for the same credit card more than once and pocket the signup bonus over and over.

This is especially true for cards issued by BankOne (e.g. United, Marriott, British Airways, Priority Club) and Citibank (e.g. American Mastercard, Hilton Visa).

I'm not a frequent Northwest flyer, so I've used signing up for their credit card three times as my qualifying activity in the annual Fly Free Faster promo. While it's not easy to get a signup bonus from US Bank more than once for the same card, you can sign up for each of their different cards and earn the signup bonus each time. I've gotten the Visa Platinum, the Visa Signature, and the Visa Business card, and each time that qualified me to earn an additional 10,000 miles from the summer promo. (I'd never sign up for the Northwest card unless it qualified me for some other offering, since those offerings come around so regularly and I wouldn't want to blow the chance to use the card as an activity towards the bonus.)

Credit cards generally can offer some of the richest bonuses around.

The American Airlines Mastercard is currently offering 15,000 miles with first purchase and fee waived for a year.

The United Visa is also offering 15,000 bonus miles with first purchase and fee waived for a year. Update 8/28/05: There's also an offer of 20,000 bonus miles with first purchase and fee waived the first year.

The Delta American Express makes that same 15,000 bonus mile with first purchase offer, fee waived the first year. (There are occasionally even better offers on this card as well.)

Both the American and United bonuses can be earned more than once. The Delta American Express doesn't offer similar possibilities, although with all cards you can generally earn miles not just for a personal card but also for a business card. Some issuers require a certain minimum business income to qualify, and some consumers think "I don't have a business." But what if you are looking for consulting work on the side, even if you don't do any such work at this time? Most of us can qualify as "Our Name & Associates" - boom, our own business, and own business credit card with signup bonus.

Be aware that each time you apply for a credit card the issuing bank will pull your credit report. Each 'hard pull' on your report is logged, and too many pulls over a short period of time can temporarily reduce your credit rating. On the other hand, having a decent amount of unused credit can be valuable, a lower percentage utilization of your available credit helps your score. So does having a long average age for your accounts, so cancelling unused fee-free cards may not be wise. Suffice to say that credit score issues are beyond this scope of this inquiry, but be aware that your credit score will affect your ability to obtain credit and the interest rates you'll pay (such as when applying for a mortgage). These are complicated issues worth understanding. Here's a good basic overview. Here's a way to estimate your score for free and play with the different variables.

Posted by gleff at 4:30 PM | Comments (0)

October 5, 2005

Dealing Directly with a Hotel for the Best Rates

There's a decent article on getting the best prices for hotels up over at everything2.com.

Don't believe every claim 100%, but many of the general broad brushes are correct. Best Rate Guarantees notwithstanding, you often won't get the best price possible for a room by booking on the internet or calling a chain's 800 number. A hotel's in-house reservations or revenue manager can certainly often provide a better deal.

You usually won't do better that way than on Priceline, contrary to what the article suggests, and the techniques involved are tedious and time-consuming... but there's little downside, especially in just realizing that while some chains offer discounts to members of their loyalty programs, that's not where to start when dealing directly with a hotel that sees the program as a tax rather than a benefit.

A better discussion of using corporate rates can be found on Flyertalk than is offered in the article, however.

Posted by gleff at 7:38 AM | Comments (0)

July 27, 2005

Best Mileage Earning Credit Cards

How to choose the best credit card

With this post I intend to outline the major issues that should affect your choice of mileage-earning credit card and to offer some specific suggestions that will work in most circumstances.

Feel free to leave comments if you feel like I'm missing any important issue, or if you'd like specific feedback on your own situation.

Do you pay your bill in full at the end of each month? If not, stop. You may not want a mileage-earning card. At a minimum, miles probably shouldn't determine what card you choose. Instead, you want a card with the lowest interest rates. Perhaps you have balances already, look for a card with 0% balance transfers (and then pay very close attention to the card's terms and conditions in order to retain that 0% rate.)
How much spending are you going to put on the card? Signup bonuses aside (I'll talk about those shortly), if you aren't going to put more than $1000 a month on the card on average, it may not make sense to get a card with an annual fee. For instance, many airlines have free cards that offer 2 miles per dollar spent. At $12,000 in annual spending, that's 6000 fewer miles but you'll save $60 - $80. You're basically buying those miles at 1 to 1.25 cents apiece. At lower levels of spending you're buying the miles at a higher premium. The enhanced earning that comes from cards with an annual fee may not make sense unless you're putting substantial charges on the card.
Are you striving for elite membership in a program? Check whether that program's co-branded credit card will help you get there.
- Many hotel programs give you their lowest level of status for taking their program's credit card. The Hilton Visa gives you silver status the first year, enough to qualify for their elites-only awards. The Hilton American Express offers silver status as long as you hold the card and Gold status for spending $20,000 on the card in a calendar year. Both cards are free. Starwood gives you 'Preferred Plus' status for taking its credit card, basically Gold without the bonus points for spending money at their hotels. Marriott gives you Silver status for taking its Visa card as well.
- The new United Visa Signature Platinum Class offers up to 15,000 Elite Qualifying Miles in the first year of cardmembership based on a combination of spending and United purchases (up to 10,000 qualifying miles in subsequent years). The Delta Skymiles Platinum American Express comes with Elite Qualifying Miles, both with first purchase and based on annual spend. In the past the USAirways Visa Signature has offered miles towards elite status based on annual spend, though I don't think that's currently the case. However, the USAirways card does offer some of the benefits of first-tier elite status such as preferred checkin and boarding along with the occasional upgrade.
Do you spend a lot with 'everyday purchase' retailers like grocery stores, restaurants, or the US Postal Service? If you do, consider a card that offers bonuses for that kind of spending. Consider both the Delta American Express and the Hilton American Express. Since my primary mileage accumulation isn't in a Delta account, I choose to hold the no annual fee Hilton card and I use it specifically at grocery stores and restaurants.
Do you fly a particular airlines? Miles towards elite status aside, there are some cards that offer specific benefits which are useful when traveling with their co-branded partner. Without these types of benefits, I'm not a fan of picking a credit card based on the airline that you fly. You're already earning miles with that airline and if you have enough of a balance to claim the awards you want it's better to diversify into other programs. That makes things much easier when it comes time to try to redeem -- if your main program doesn't have availability, perhaps your second or third program will. That said, some cards like the Alaska Airlines Visa Signature offer nice benefits to customers that fly the airline such as an annual $50 companion ticket (unlike most companion tickets, this one can actually be used -- on any published fare), lounge passes, and day of departure upgrade certificates.

General advice

If you pay your bill in full every month, charge a decent amount to the card, and don't have special needs like help making elite status, then some general advice is probably most useful.

The best general, all-purpose rewards card is the Starwood American Express card.

I also carry a Diners Club card and a Hilton American Express.

Downsides to the card are a charge for transferring points to airline miles (95 cents per 1000 miles) and a $90 annual fee. I rent cars enough to make this worthwhile.

If you don't charge enough to warrant an annual fee card, consider a free card.

Stay away from proprietary rewards programs, like the CapitalOne GoMiles card.

While some may get value from these offerings, my general advice is to avoid them. They more or less amount to a cash rebate card where you can only spend the rebate on specific travel offerings.

Earning bonus miles from credit card signups

In some cases, depending on the credit card issuer, you can sign up for the same credit card more than once and pocket the signup bonus over and over.

This is especially true for cards issued by BankOne (e.g. United, Marriott, British Airways, Priority Club) and Citibank (e.g. American Mastercard, Hilton Visa).

Credit cards generally can offer some of the richest bonuses around.

The American Airlines Mastercard is currently offering 15,000 miles with first purchase and fee waived for a year.

The Delta American Express makes that same 15,000 bonus mile with first purchase offer, fee waived the first year. (There are occasionally even better offers on this card as well.)

Posted by gleff at 3:43 PM | Comments (1)

July 7, 2005

Disputing the fair market value of a prize

A story in the Wall Street Journal yesterday has been much talked about on the web, the man who turned down 12 round-trip coach tickets for two from the U.S. to anywhere in the world American flies. (He won the 'We Know Why You Fly' contest, I'll save mocking American's ad campaign for another post.)

The man turned down the prize because American reported that each ticket would be worth $2200, and so his tax liability was going to be $800 per ticket. The tickets expire within a year, and he quite reasonably didn't think he'd get as much value out of them as he'd be liable for in tax.

As the Journal piece notes, it is possible to dispute the reported value of a prize.

Mr. McCall says he was aware of the possibility of challenging American's valuation of the vouchers on his tax return, but he thought that tactic was too risky. "The problem with that is that if the IRS didn't buy it, I'd be" in trouble, he says. "And if I report something different than what American does, that's a red flag for an audit. And who wants to be audited by the IRS?"

Nora Butler, an IRS spokeswoman, says an audit wouldn't necessarily result from such a return. Still, she said the agency might need further clarification. "The best option for a person in this situation is to try to work it out ahead of time" with the company giving the prize away, she says.

The article doesn't explain how this process works. Though not to be confused with tax advice, here's my understanding of it from personal experience:

First, you should attempt to negotiate with whomever provides the prize. The official way to do it (since in most cases you won't be successful just asking for an adjustment) is to call the IRS at (800) 829-1040. It's best to do so early in the morning in my experience, since you'll have a better chance of getting through.

Explain that you received the 1099 and disagree with the amount that was reported on it, and that you've tried to resolve the situation but have been unable to.

Tell them that you were advised to have the IRS complete a Form 4598, "Form W-2 or 1099 Not Received or Incorrect." It's not something you can just download from their website.

You'll need to give the IRS the payer information from the 1099 you received and the details of how you arrived at your own valuation figures.

The IRS will send the complaint form to the payer, who has 10 days to respond (you should receive a copy as well). Hopefully the payer will simply send a corrected 1099.

If you don't receive a satisfactory response by the due date of your return, you have two options.

One is to include the amount that you believe to be correct on your return and attach the Form 4598 and an explanation. The IRS may later send you a notice of the discrepancy, so keep your records in good shape.

The other option is just to enter an adjustment as a negative amount. (You can even do that without going through the process of seeking to adjust with 1099, but your case may be more strongly documented if you've taken that step.)

If you received a Form 1099-MISC that shows $1,000 in box 3 for a prize yon won in a contest, but you know that a local store has the same item available for $750, you argue that the fair market value is $750. You can enter the $250 difference as a negative adjustment under Other Miscellaneous Income. One of the popular tax software packages advises that you enter "PRIZE FMV ADJUSTMENT" for the description and "-250" for the amount.

No matter what course of action you pursue, you'll want to document your adjustments, such as with ad clippings. If the prize was miles, and the fair market value was listed at a cost per mile greater than what the airline charges, simple printouts of the 'purchase miles' web pages should do the trick.

Posted by gleff at 7:28 AM | Comments (2) | TrackBack

May 18, 2005

Yummmmm

Had some pretty good dim sum for lunch today at Mark's Duck House. If you find yourself in Northern Virginia, it's worth going. Got out of there at $20 for two people.

And if you're in DC needing a hip place for dinner with good food and excellent service, recently I've been a big fan of IndeBleu. It's Indian-French fusion, decor is straight out of a W Hotel, and the staff were brought in from European charm schools. Outstanding, though a bit pricey. The biggest driver of cost is that the menu is set up as four courses. I keep it affordable by ordering a couple of second courses, using one as my main.

For what it's worth people seem to like my restaurant recommendations. A large contingent of my office came back from Miami raving about Las Culebrinas, a great little Cuban restaurant on the corner of 47th and Flagler. Clientele is mostly Cuban and the staff speaks mostly Spanish. Portions are huge and prices are low. Go to the one I recommend, not to their other location in Coral Gables.

Posted by gleff at 11:46 AM | Comments (2) | TrackBack

April 26, 2005

Myths and Reality in Obtaining Airline Upgrades

James Wysong's newest column is on ways to get an upgrade. His advice:

Become a member of that specific airline’s frequent flier mileage club. You can be a member of many different airlines’ clubs. Unlikely. Being an elite member of an airline's frequent flyer program is the surest way to an upgrade, although each program's terms and conditions are different -- you may need to pay a certain fare or spend upgrade certificates, and the rules likely vary between domestic and international flights. But simply joining a frequent flyer program is unlikely to score an upgrade (except in one limited circumstance, overbooking of coach, discussed below).

The flight is oversold in economy, but there are empty seats in business and or first class.Absolutely. Airlines oversell coach and instead of denying boarding (which is costly, requiring both reaccomodation of passengers and compensation) they'll upgrade people to the next class of service. This is called an 'operational upgrade' and is intended to get the plane out with the least amount of disruption.

Sometimes being an elite member of a frequent flyer program helps. Some agents will use frequent flyer status to determine whom to upgrade. But remember, this is about getting the plane out full and not a perk of the loyalty program. Sometimes people will be bumped up seemingly at random.

Operational upgrades may be done a few hours before the flight (you check in, and are given an upgraded boarding pass). Don't check in too early, say more than three hours in advance, because you may miss out on the chance to be upgraded. The airline isn't likely to call you back to give you a new boarding pass.

Operational upgrades are also done at the gate. The master at these upgrades is Flyertalk's PremEx. Here, it's best not to pester the gate agent. Go up, lay your boarding pass on the desk (which will show your elite status, if you have it) and say something like

I'm traveling with you ["Full Fare" if applicable"] to [CITY] today and I'm quite happy with my [Seat X], but if you should need to move anyone up, I'd be happy to help out. My name is X and I'll be sitting right over there...Stay around in that spot and don't move.

Don't board right away, either. An agent isn't likely to come onto the plane to find you to move you up, they're likely just to pick someone else instead.

And just because an agent tells you "first class has checked in full" don't take it to mean your chance for an upgrade is over. Often a first class passenger will be connecting from another flight, and they may well misconnect -- meaning that the first class seat that has already checked in will actually become available.

You are dressed smartly or in business attire. Jacket and tie for men and a dress/suit for women. Looking appropriate doesn't get you an upgrade, but dressing down could certainly cost you the upgrade if a gate agent is deciding whom to move up for operational reasons. This only applies to at the gate operational upgrades.

You are traveling alone. Sorry, if you’re with kids, it’s almost an automatic disqualifier.One seat is much easier to accomodate up front than several. That's a bigger reason for this than a desire to keep kids out of the front cabin.

Always be willing to move when asked. I know of a man who refused to move because he was seated on the aisle. What he didn’t realize was that the seat they were offering him was in first class.Sure, you may be getting moved up front, but this is unlikely. Onboard upgrades are rare (except, perhaps, on British Airways or Aeroflot -- for a fee -- which in the latter case is actually a bribe).

Be early. Your chances of sitting up front diminish quickly when you inquire at the last minute.But not too early -- don't checkin before advance operational upgrades are done, three to four hours in before departure.

Use the right card. Many times the credit card you pay with has a redeemable mile feature usable with several different airlines.The USAirways Bank of America Visa Signature comes with upgrade benefits but you're at the very end of the line for upgrades. Only flights that would otherwise have empty first class seats are likely to provide this benefit.

The American Express Centurion Card comes with elite status on Delta, USAirways, and Continental (which also provides upgrades on Northwest). That card can get you upgrades directly via your automatic elite status.

But other than those two cards, the point of 'choosing the right card' is really 'accumulating the right miles' and looking at what opportunities there are to use your miles for an upgrade -- often at the time of booking -- but just as with elite upgrades, there may be minimum fare purchased requirements and the rules likely differ from domestic to international flights.

When you book the ticket ask about upgrades and prices. There is a fare called Y-UP fares that cost a little more but increases your upgrade chances immensely. If you're paying full fare, you may be entitled to a first class seat. YUP fares are sometimes less expensive than full fare, and sometimes less expensive than first class.

But don't also forget to inquire about the price of a first or business class ticket -- sometimes it's less than you might imagine. I searched for a colleague's trip to Bucharest yesterday. Most business class fares were $5000, but both Continental (with intra-European flights on KLM) and Alitalia offered $2500 fares. That's a relatively small premium over coach for the days she's traveling.

Posted by gleff at 6:54 AM | Comments (1) | TrackBack

April 22, 2005

Independent Hotel Reviews

This Seattle Times piece (hat tip Tripso Daily) discusses internet web sites that allow travelers to post reviews of the hotels they've stayed at.

Sites like TripAdvisor.com are absolutely invaluable for getting a window into a hotel property. Reading what past travelers have had to say can be very useful. The piece observes, though, that reviews are posted anonymously. I haven't found that to be a problem so much as the other observation in the article, that individual's standards vary greatly.

The best thing to do in reading internet reviews is to read through several of them and look for consistent themes and patterns. Those are most likely to provide a window of truth about a property. And then it's important to read between the lines: one resort where I stayed last year had several negative reviews, all commenting on how expensive food was. The food was pricey, but no more so than you find at other high end resorts. The people writing the reviews had different expectations than I do. Their negative ratings really didn't reflect on my likely enjoyment.

Still, frequent comments like dirty, front desk takes a long time to answer requests, there's always a long line to check in, are very telling. Look for consistent fact patterns rather than average ratings.

I'm personally hoping that Flyertalk's Reviews section grows substantially, because I trust the opinion of the median Flyertalk member far more than the general internet writer.

Posted by gleff at 1:10 PM | Comments (0) | TrackBack

April 19, 2005

CapitalOne Go Miles Card and the Hilton American Express

A colleague asked me today about the CapitalOne Go Miles Card. He said

From what I got in the mail it seems you get 20,000 bonus miles and can use the points for a bunch of airlines, and there is no annual fee. I’m wondering what the catch is.Smart fellow, assuming there was a catch, it's that the miles are in CapitalOne's own own proprietary program (they aren't really "miles" as normally understood).

You can't actually transfer points earned with this card to other airlines. Instead you use the 'points' towards a ticket they purchase for you.
The value of that ticket is capped and requires advance purchase. This flips the frequent flyer mile proposition on its head -- miles are best used for expensive tickets like last-minute transcon flights (at least) or international business or first class travel, rather than cheap advanced purchase domestic coach flights that can be generally had for a few hundred dollars anyway.
You can only earn points from one source -- credit card spending -- rather than combining from several sources like you can with frequent flyer miles (e.g. flights, credit cards, hotels, rental cars, online surveys, whatnot)

The benefit of a card like this is that you don't have to deal with capacity controls. If you follow the rules, redemption is easy. The downside is that earning is limited and the value of redemption is limited.

The best way to think about the CapitalOne card (and any other credit card company proprietary mileage program) is that it's a cash rebate card where you're restricted in the way that you can use the rebate. You may be better off going for a real cash rebate card instead.

If your real desire is flexibility, consider that (a) redemptions can be made easier if you outsource them to a company like AwardPlanner and (b) there are traditional programs you can earn points in that really do provide flexibility without sacrificing value.

My favorite one of these is Starwood. The Starwood American Express earns one point per dollar spent, and Starwood lets you redeem those points for hotel stays without capacity controls (if there's a standard room available, you get it) or transfer the points to most airline programs. You get to choose whose miles you want later, and you can use the card to top off various accounts. Moreover, if you transfer 20,000 points you get 5000 bonus miles - so in most of those cases you're really earning 1.25 miles per dollar rather than just 1. And the card (free the first year, $30 thereafter) is even cheaper than most airline cards.

Some have argued that recent changes to the Hilton American Express make it a better general use card than the Starwood card. It has no annual fee, and instead of the usual 3 Hilton points per dollar spent it earns 5 Hilton points on purchases at supermarkets, drugstores, gas stations, dining establishments, the U.S. Postal Service, and for wireless phone bills.

The changes to the Hilton American Express are indeed intruiging. They've even included Gold elite status if you spend $25,000 in a calendar year. (Though readers of this blog are all already Gold.)

By the way I'd love to see Diamond offered for $100,000 in spend, I'd put that on the card in a second. I'd also love to see Starwood offer Platinum for $100,000 in spend on the card as well. That may seem far-fetched, but credit card spending is as important as product loyalty to many of these programs, and I do think this will be a future trend. Furthermore, since Starwood is apparently offering Platinum status to top-tier elites at Delta, the level doesn't seem quite as vaulted and rare as it once might have. (Not to mention that it's a published benefit of simply holding an American Express Centurion card, though that comes with a hefty $2500 annual fee.)

Even at 5 Hilton HHonors points per dollar spent, the Starwood card is still a better card for earning frequent flyer points than the Hilton one, even if a majority of your spending is on things like groceries and dinner out just based on conversion ratios.

If you're simply comparing earning for hotel night awards, and you leave aside ease of redemption and quality of properties (we all have different tastes!) then the Hilton card wins on those spending items where American Express is offering 5 points per dollar.

But that strikes me as a pretty limited case, and certainly doesn't describe my situation -- I value the ease of redemption (no capacity controls, unlike Hilton) and the specific properties that Starwood offers. Frankly I don't want too many hundreds of thousands of Hilton points, as you can only go to Hawaii so many times.

I do have both cards, and I have changed my spending patterns slightly. I put my cell phone bill on the Hilton Amex (I used to put it on Diners Club) and I put grocery bills on the Hilton card as well. But it hasn't come close to supplanting my Starwood Amex as my "favorite card in the wallet."

Posted by gleff at 1:52 PM | Comments (0) | TrackBack

March 31, 2005

Getting Upgrades at Hotels

The Bay Area's ABC TV station ran a piece on getting hotel upgrades. The sum total of their advice: ask.

That's actually good advice as far as it goes. More than anything else, style and mojo matter. I'll usually say something at checkin like, "I've heard really great things about this hotel, so I'm pretty excited. I was hoping you might have a room with one of your special views?" More often than not the person at the desk will try to comply. It really doesn't cost them anything. It makes me happy. And it avoids putting them in the position of either disappointing me in person or getting an earful (I'm not rude, but many guests are).

If I have a reason to explain that a particular stay is 'special' I might send a fax to the hotel's reservations manager a few days before my stay. I'll write something about how I understand I may not be entitled to it, but it's my anniversary/wife's birthday/Arbor Day and I was hoping for a nice room as part of the celebration. A fax is better than a call because a call depends on who you get on the phone, whether they have time to deal with you, and whether they even remember to do something after the call. A fax will go to the right person's desk and serve as a reminder. It's not a silver bullet, but at nice properties seems to work more often than not. And it's one step in the process.

I'll likely also have mentioned my upgrade request with my reservation. So combined with the fax and the checkin ask one is likely to hit.

Being entitled to an upgrade of some kind helps as well. If you travel alot, focus your loyalty on a single chain and earn elite status. (Know the details of what the chain offers to elites when selecting a program.)

Even if you don't travel enough to earn status, many hotel programs offer a low tier of status just for getting their co-branded credit card. The Marriott Visa comes with Silver status. The Hilton Visa and America Express come with Silver status. If you spend $20,000 on the Hilton Amex in a year you get Gold status. The Starwood American Express comes with 'preferred plus' status, which is basically Gold without the bonus points. The Priority Club program doesn't offer status with their credit card, but their even their top tier can be had without staying a single night -- just earn 60,000 points in a year (12,000 can be earned opening a checking account, points can be purchased, bonus points count, points can be transferred in from other programs).

Comments are open: how do you secure the best rooms at a hotel?

Posted by gleff at 5:16 AM | Comments (2)

March 21, 2005

Frequent Flyer Advice: the End of Nuance and the Last Man

The Denver Post carries a piece in what seems like a neverending stream of stories on how difficult it is to use miles, and how miles are worth less today than ever before. (Hat tip to Today in the Sky.)

The article makes the correct point that major airlines are on financially shaky ground. After two years in bankruptcy, United still lost over $300 million in January. But while the future of USAirways is up in the air, most flyers have little to fear in the immediate term over losing their miles. To name just one data point, American Express prepaid half a billion dollars for miles, they seem pretty confident about the future of the Skymiles program.

Still, the article is correct that the number of miles required to redeem many awards has gone up, and increased demand for seats from an ever-growing stash of unclaimed miles has made award redemption at times quite difficult.

The flip side of that equation is that it's easier than ever to earn miles. Where once you could earn miles by flying, or staying at a hotel, or maybe renting a car, nearly half of all miles are earned from credit card spending. You can now earn miles by refinancing a house, switching long-distance companies, clicking on emails, and shopping online. So the higher prices are, to my mind, balanced out by the ease of acquiring those miles.

Furthermore, most programs now offer robust partnerships that allow award redemption across multiple international and domestic partners. That increases the range of award options and carriers offering seats. That upside has to be factored into the equation as well.

That's why the simple formulation of 'the sky is falling' doesn't quite ring true. Award prices will go up tomorrow and the day after that. I've written extensively on this in the past. Furthermore, there is some risk to holding miles in simply betting that the sponsoring carrier will exist in the future or that their miles will be honored by another carrier. But the programs are still highly valuable.

The real answer is to 'burn as you earn'. Walking away from the programs makes no sense. Awards are valuable, and miles are easy to earn. But any given mile will never be worth as much as it is the day that you earn it. So earning and spending activity need to be matched, and the concept of saving up large quantities of miles needs to be discarded.

Posted by gleff at 12:19 PM | Comments (0)

March 16, 2005

Paying More and Getting More Value

Joel Widzer''s new column up at Tripso.com is about spending more on travel and getting value for money spent. His basic message is right on the money: the rock-bottom lowest price isn''t always the best deal, and it can be worthwhile to spend a little more when traveling.

That doesn''t mean, as Joel says, "you get what you pay for." I don't think he means to imply that paying more is always worthwhile. Just this past weekend I helped a colleague get a room at the Jersey City Hyatt for $55 when they were looking for an inexpensive stay in New York. There wasn't anything available inexpensively in Midtown. It's certainly not the case that they would have been better off picking a $100 or $150 room (though if they were full price patrons at the Hyatt they might have gotten a more desireable room there, to be sure, but that wouldn't have been worth the extra $150 a night to them).

But Joel's point is certainly correct: paying a little more can often yield comfort, enjoyment, and even net savings.

MVP Gold members on Alaska Airlines receive complimentary upgrades, space available, 72 hours before departure. But there are tons of MVP Gold members (which is why Alaska is likely to introduce a new Platinum level next year) and upgrades on some routes (such as Seattle-Newark or Seattle-Washington Reagan National) are a crapshoot at best. Another benefit of Alaska''s Gold status is that purchasing a "Q fare" or higher entitles the member to confirm an upgrade any time from ticketing to checkin, whenever an upgrade seat is available. That fare might be $100 more roundtrip flying Seattle-Los Angeles, or $200 more than the lowest fare for a Washington, DC - Seattle roundtrip. I''ll pay $20 per hour of first class time to guarantee my seat at booking and not play the upgrade lottery; money well spent.

Similarly, an upgrade to a hotel's club level is often worthwhile - especially for families. Hardly a luxury property, the Sheraton Seattle will often offer $30 upgrades to a club level room. Theirs is (relatively speaking) at the low end but it includes breakfast and even snacks. Ritz-Carlton may charge an extra $100 for a club level room, but the displays of caviar along with champagne may be well worth the money -- not to mention access to a butler/concierge whose assistance may prove invaluable.

Widzer makes another good point: let your travel provider (or more generally, whomever you do business with) know when you're displeased. I'm not suggesting you complain to an airline that doesn't carry your favorite soft drink and expect to get something in return. But if there were major inconveniences during a hotel stay, try to get them resolved on the spot and let the manager know what happened. Diligent management will often appreciate the information so that they can improve their product, and will try to make it up to you -- perhaps a future free stay, waived charges on your existing stay, or at least a complimentary upgrade on your next visit.

Of course it's important that the inconveniences are real if you're going to complain. But when they are there's usually not a reason to keep silent.

Posted by gleff at 2:33 PM | Comments (0)

January 9, 2005

Whose miles are the most valuable?

Speaking as someone with a hefty seven-figure total mileage balance (which doesn't compare to some folks I know with an eight-figure balance), my own preferences are as follows, in order:

Starwood: hotel rooms are almost always available, plus points transfer into most airline programs is at 1:1 -- plus 5k bonus for transferring 20k. Starwood Amex is the best points-earning card to the extent that spending earns 1.25 miles per dollar on all spending when transferring points in 20k blocks to airlines with 1:1 ratio, which is better than the AA Mastercard for instance. Not to mention the card is cheaper.

American: I've never had any problems with availability. Partner awards are great. All miles earned count towards lifetime elite (we'll see if that feature lasts).

United: Availability on UA metal ain't what it used to be, but Star Alliance provides for amazing redemption options. Required mileage is low by most standards (e.g. 90k miles for a business class ticket to Australia from the U.S.). No fees for last minute bookings.

Alaska: Provides great availability. Only 10k miles to confirm an upgrade from any fare. That would get you from Boston to Juneau. Good partnerships (AA, BA, CX, QF, KL, CO, NW, DL for example). 20k domestic awards on Alaska metal.

Delta: Have had good experiences with availability. Good partnerships. But this is bottom on my list because I simply don't trust the program, award costs have risen, and I can always transfer points in from Membership Rewards so why go out of my way to earn directly from Delta?

(Oh, by the way, I'm not including Diners Club Club Rewards or American Express Membership Rewards on this list, perhaps I should and need to rethink my ordering. I'd probably rank Diners second, Membership Rewards behind American.)

I stay away from:

USAirways: I burned my miles there. What have I really lost by playing it safe and claiming awards? I've gotten use out of the miles, which is all I'd have gotten later anyway. And since they participate in Membership Rewards I can always deposit more in my Dividend Miles account if I need to. Current balance: 236

Continental: Continental availability is terrible. The only saving grace is that they have partners who offer better availability, like Delta and Alaska. Mileage prices are on the high side for valuable awards. Also a Membership Rewards participant, so why would I want to earn exclusively in the Continental program? Exclusive earning, for me, goes to programs whose points are inherently valuable and where I have a more difficult time accumulating. Current balance: 719

Northwest: Love the elite program for domestic-only flyers, hate the redemption program. Massive price increases for awards. Saturday stays required for domestic standard awards. And I've found availability on NW metal to be pretty poor, at least as a non-elite there. If I ever want to claim an award on Northwest metal I'll transfer points to Continental or Delta from Amex, or I'll use Delta or Alaska miles I've chosen to build up. I use these miles when I can, keeping balance low. Current balance: 2719.

America West: They just lack the route network and partnerships to offer valuable awards. And while they offer some attractive fares, especially for last minute travel and for their premium cabin, I don't really want to fly the airline anyway if I can avoid it. Current balance: 60.

I don't meaningfully participate in the Southwest, Airtran, or JetBlue programs either; short expiration of credits and inability to redeem for the kind of awards that I value.

I have some British Airways miles but don't go out of my way to accumulate. I'm glad that I don't hold a big balance with Qantas, what with the gutting of their award chart.

I have plenty of points with Amtrak, Hilton, Priority Club, and a few others. I consider those somewhere in the middle of the pack. Amtrak transfers 1:1 into Continental and Midwest (but they dropped bigtime in my book by pulling the rug out from under United transfers). Priority Club redemption is excellent in my limited experience and points are easy to accumulate. Hilton redemption is less than stellar.

Posted by gleff at 6:12 AM | Comments (0)

December 29, 2004

Applying for credit card signup bonuses... over and over

A reader writes:

Hi Gary:

I've been reading your blog for quite a
while now and find it highly enjoyable and informative.
Thanks!

However, I've never seen one question asked or answered. How frequently can you sign up for an airline or hotel credit card, get the signup bonus, cancel the credit card, then sign up again? I've signed up for the various airline and hotel credit cards, used them for a while, then canceled them since I never actually used them much. My credit rating is good enough that it can suffer another round of hard inquiries on my credit reports if I were to sign up for those credit cards again and would be worth the extra signup points.

I'm somewhat puzzles that this isn't a more frequently asked... Perhaps I am missing something.

This is actually one of those 'dirtly little secrets' that isn't discussed very much but which some people take advantage of tremendously. I hope that posting about it doesn't facilitate closing of loopholes.

The ability to claim multiple credit card signup bonuses differs by issuer.

While there are some exceptions to this, where the issuers don't track properly or experience some other snafu, USBank (which issues the Northwest Visa) will only give a signup bonus once. American Express will give a signup bonus for a particular card once, but if a new signup bonus is better than the original one, Amex will give you the DIFFERENCE when signing up for a new card (e.g. you signed up for a Hilton Amex @ 7500 bonus points, cancelled, and the new offer is 10k bonus points you'll get 2500).

Citibank, which issues the Hilton Visa and American Airlines Mastercard, allows multiple signup bonuses -- though I don't know how frequently. What's nice is that the Hilton Visa comes with no fee and there are often no fee promos with the American cards that usually delay the fee for six months, long after the bonus has posted.

BankOne is by far the best and easiest for this. They issue the United Visa, British Airways Visa, Southwest Visa, Priority Club Visa, and Marriott Visa.

The Priority Club card is no-fee. The Marriott cards are no-fee the first year. And there are often first year fee waived promos with the United card. What's more, the bonus points usually post with the first statement and the fee with the second, so if you cancel after the points post you may not even deal with a fee (and you could cancel even after the fee shows up and still not owe the fee provided you deal with the issue with customer service).

But there's even a better way of dealing with the card than cancelling -- BankOne allows you to combine credit lines from multiple cards, so just add the credit from the card you want to cancel into another credit line and zero out the card. That'll prevent a fee from being assessed, in my experience. Furthermore, I've heard that you can apply for each BankOne card every three months though I haven't tried it that frequently.

Bank of America I'm less familiar with. They issue the USAirways Visa, America West Visa, and Alaska Visa. I don't know whether they'll give you multiple signup bonuses.

In all cases you can certainly get different TYPES of cards (e.g. personal and business cards, as we all have businesses... "Your Name & Associates")

Two credit line clarifications are in order.

The reason that it's better to keep an account open, especially if it has no fee, is that the more credit you have that goes unused, the lower your utilization percentage, the higher your credit score (in general). The logic is that you demonstrate you can have credit without maxing it out, and thus are a responsible user.

Second, every time you apply for credit, a "hard inquiry" shows up on your credit report. If you apply for too much credit in a short period of time, your credit score falls temporarily. The fear is that you might be prepaing to go on a credit binge. I believe that hard inquiries appear for six months, so if you apply for a bunch of cards your credit score may fall for six months and then recover.

Posted by gleff at 5:00 AM | Comments (0)

December 9, 2004

Useful advice on upgrades

Smarterliving.com has two new useful columns on upgrades. First is a piece by Tim Winship on affordable first class and second is an article by Erica Silverstein on upgrading with miles.

Both are useful and worth reading, although it's always worth remembering that any time you try to tackle such a broad subject across a range of carriers, the devil will be in the details and some small items will be wrong or misleading.

Contra-Winship, not all carriers offer unlimited domestic upgrades to their elite members. United, for example, does not.

Erica Silverstein offers a bit of confusing prose about what fares are eligible for upgrades on US carriers.

Northwest allows all but the most deeply discounted fare classes to be upgraded; and Delta only allows full-fare economy economy tickets to be upgraded. She's correct about Northwest with respect to domestic tickets -- elites can upgrade pretty much any fare, and non-elites can upgrade most fares (but not the cheapest). Internationally, Northwest allows mileage upgrades only on full fare (Y and B) across the Atlantic and on almost full fare (Y, B, and M) across the Pacific.

Delta allows full fare tickets to be upgraded internationally as well as M fares which are a notch below full fare.

Similarly there's a bit of confusion on partner upgrades

United and US Airways do not seem to allow upgrades on their partners.While United and USAirways do not allow mileage upgrades on each other (though elite members can purchase upgrade certificates and use those), United does permit upgrades with miles on its partner Lufthansa.

So always worth reading upgrade primers. Just know that you still have to check the details for each carrier. Or drop me a note and ask, and I'll dig up the details for you.

Posted by gleff at 11:58 AM | Comments (0)

November 26, 2004

New hotel search tool

Airfare metasearch website Mobissimo now has a hotel metasearch as well.

I much prefer the display and features of TravelAxe, though.

Posted by gleff at 7:40 AM | Comments (0)

November 25, 2004

Why you should keep earning miles, in spite of rising award prices

Several days ago I offered a long discussion of why I believe that frequent flyer awards will get more expensive over time, and why the best strategy is to "burn as you earn" rather than building up large balances.

I also said, though, that the programs remain a good value and well worth participating in.

Several readers asked if this wasn't a contradiction.

I actually believe both simultaneously. Award prices are going to go up over time, so the value of previously earned and banked miles will be diluted. At the same time it's easier to earn new miles than ever before (part of why prices will go up in the first place) so it may not be any harder or take any longer to earn awards under new reward charts.

A decade ago you couldn't earn miles for credit cards, telephone, online shopping, taking surveys, flying on partner carriers, renting cars, signing up for program emails, and supporting breast cancer research.

Inflation destroys the value of savings. But if earning keeps pace with inflation, then current (points) income buys just as much (award) travel.

So don't assume your banked miles will be worth as much tomorrow as they are today. Spend those points. But earn more points for use in the future.

Posted by gleff at 5:38 AM | Comments (0)

November 21, 2004

Spend your miles NOW (and earn more...): why mileage award prices will rise now and in the future

Over a year ago I posted on Flyertalk.com a fairly lengthy explanation of why I thought that the mileage required for most airline awards -- especially premium class international awards -- would go up over time.

In light of Northwest's recent announcement that its best awards would cost 25-40% more next year, I thought it prudent to recreate the argument here ... So that folks can attenuate their strategies accordingly, before more airlines follow suit (which they will).

The August 2003 issue of Inside Flyer had a cover story (subscription required) on making your miles last into retirement, essentially creating a mileage 401(k) plan. With all due respect to the folks at the magazine, this strikes me as the worst possible mileage strategy.

Miles are worth more now than they will be tomorrow and the day after and years from now. The value of your retirement pool can only go down and not up.
Even if mileage values held constant, I'd rather spend miles now instead of money and save the money. Money earns a rate of return when properly invested. Airlines don't pay a return on miles held in your mileage bank.

The reason why award prices will go up, almost inevitably, is obvious with a bit of basic economics.

Nobel laureate Milton Friedman is the father of an economic school of thought known as Monetarism. Uncle Milton, as he is affectionately known, showed the world that inflation is a monetary phenomenon -- increase the supply of money in the economy, and the general price level will rise.

The famous and deceptively simple formulation of this is: mv = pq

m = quantity of money

v = the speed at which money circulates in the economy

p = general price level

q = quantity of goods

Friedman argued that the speed at which money circulates is, generally speaking, constant. Folks plan over time for their spending needs. On the whole, if people get paid on Friday they don't spend all their money on Saturday but spread the spending out until their next payday. (Obviously this isn't universally true, but on a macro level it winds up being true.)

The upshot of this famous formulation is that when m goes up, p or q needs to go up. If the quantity of goods remains constant (q), that means that p (price) must rise and you have inflation.

I think that this simple formulation is helpful in thinking about loyalty programs.

If m = miles, v = the speed at which folks redeem awards, p = the price of awards, and q = the supply of available award seats, then...

Sometimes the speed at which awards are redeemed goes up. For instance, when loyalty program members are uncertain about the future of their points. There is a common belief that when United declared bankruptcy, there was a 'run on awards' -- people believing that they needed to cash in now while the airline and the loyalty program was still around.

But on the whole, the fact that 8% or so of seats go to award redemption (over time and across programs) suggests that v is usually stable or that award redemption is at its production possibilities frontier (such that q will not rise).

If m -- the quantity of miles or points -- goes up, then one of two things has to happen:

Either the quantity of award seats have to become more available, or the price of awards has to go up. Otherwise there will be a shortage.

As unhappy as members get about award price increases, member unrest over award shortages is even less manageable -- hence the David Spade commercials for Capital One (by the way, the Capital One 'mileage cards' are about the worst credit card decision you could make outside of earning no reward at all).

And since it's so much easier to accumulate miles than at any time in the past -- as programs sell miles to all comers, and miles have become such a popular phenomenon and useful marketing tool -- the quantity of miles is ever increasing. It's profitable to the airlines to sell miles.

As I explained, one of two things has to happen when the quantity of miles rises:

The quantity of award seats goes up
The price of awards goes up

It is true that award redemption is slightly on the rise. But the quantity of seats available for redemption hasn't been growing, in large part because of the economic problems of the airlines which are forcing them to restrain capacity growth. Plenty of planes that were flying before 9/11 are still parked in the desert. There's less slack in the award system. Even though the number of redemptions goes up, it's increasingly hard to redeem. Besides, no one would claim that the pace in growth in award seats is keeping up with the pace in growth in available mileage.

Since the quantity of available seats can't keep pace with the rate at which airlines 'print' mileage, award proces will go up. Mileage balances will become worth less. It's the same thing that happens to money savings under inflation. It's also why I don't like the idea of stashing away miles for retirement. I'd rather use my miles now and save money, putting the money away for retirement -- because I have greater faith in the Federal Reserve to control inflation than I have in the airlines to control point inflation.

I haven't been shouting from the hilltops that you should redeem your miles due to airline bankruptcies (although full disclosure I'm down to 20,000 USAirways miles). But I do think you should redeem your miles for awards now, because awards will only become more expensive later. Miles will never be worth as much as they are now.

You should still accumulate miles. They're an excellent value proposition. But the key to a successful return on your miles is to burn as you earn rather than build up large balances for use later.

I do have a seven figure mileage balance, but I'm also enjoying my miles. I'm spending at a rate of over half a million a year -- spending miles just as fast as I bring them in the door. My net increase isn't more than a hundred thousand a year or so these days.

This advice won't change until we get an independent mileage currency board or appoint Alan Greenspan as head of Mileage Plus and Paul Volcker of Aadvantage.

Posted by gleff at 3:43 AM | Comments (2)

November 13, 2004

Stupid stupid stupid stupid stupid

Good Housekeeping should offer itself a seal of stupidity. It recommends best rewards credit cards and somehow manages to put the Capital One GoMiles card at the top of the list.

Capital One's "Go Miles" Visa lets you rack up miles without airline restrictions or blackout dates. For every dollar spent, you earn one mile, and for every 9,000 miles you earn $100 toward a plane ticket.This amounts to a 1.1% rebate, but unlike most rebate cards that pay you cash this rebate limits what you can do with the money. It's a small award, 1.1%, and the award can only be used on airline tickets. And then you have to book the ticket through Capital One, complying with their rules and restrictions. David Spade may be a cool spokesman, but could there be a worse rewards card?

See this post for the actual best reward cards.

Posted by gleff at 4:11 AM | Comments (0)