Upgraded: Your ability to earn lots of British Airways miles
Chase and British Airways have launched a pretty amazing airline mileage-earning credit card offer. 50,000 BA miles after one purchase, then 50,000 more after spending $2000 within three months. Gary Leff has thought this through and come up with a scheme for 420,000 miles between two people. That’s a lot of free tickets for a $75 annual fee.

Downgraded: Track suits
A Best Buy executive says that United refused him an upgrade because he was wearing a track suit. “United says there is no passenger dress code, but they cited two rules. Ticketed passengers can not be barefoot and must be clothed.” Standards!

Upgraded: Fees for Expedia phone bookings
Expedia announced that it was dropping the booking fees it charged for booking any flight, car rental, hotel or cruise on the phone. As online agencies compete to attract customers, this is the latest fee to drop. Yay, lower fees! Priceline immediately tweeted that they had never had phone booking fees. Nyahh.

Upgraded: Responsibility for rental car reservations
Avis Budget Group has worked with global booking systems to prepare their networks for an eventual introduction of no-show fees for car rental bookings. Frankly, I’m amazed that this is a fee that hasn’t been enforced more widely already.

(image)

Downgraded: American credit cards
For several years now, a pet-peeve of mine as an American traveling abroad has been the challenge of using a swipe-and-sign credit card in a country where chip-and-PIN is the norm. (Consider previous posts on chip-and-PIN challenges. I even wrote a piece for National Geographic Traveler on the issue.) Now the New York Times revisits the issue and finds that it’s getting worse, not better, for American cardholders. When will US card issuers catch up with the rest of the world? (Thanks, David!)

Downgraded: US Customs and Immigration
Did the gruff face of US immigration kill the city of Chicago’s bid for the Olympics? It was apparently a contributing factor, if reports from the IOC are to be believed: “Syed Shahid Ali, an I.O.C. member from Pakistan, in the question-and-answer session following Chicago’s official presentation, pointed out that entering the United States can be ‘a rather harrowing experience.’” Somehow, it’s not a shock that the guy from Pakistan had this particular critique of entering the US. But he’s hardly alone.

Downgraded: Cockpit decorum
When I draft my list of minimum requirements for pilot competence, I think “not getting into fistfights in the cockpit” goes unspoken, an assumed background condition for commercial travel. Apparently, I need to be more explicit with my expectations. An inflight cockpit brawl on Air India, anyone?

Upgraded: Hotel promo deals
Over at View from the Wing, read up on an ongoing Hyatt promotion “the best hotel promo I’ve ever seen.” The deal: 13,500 United Airlines miles and a free Hyatt night for a two one-night stays at a Hyatt property, including discounted Hyatt Place properties.

Downgraded: Brazilian justice
Three years ago, NYT columnist Joe Sharkey was onboard a plane that survived a midair collision over Brazil. He subsequently criticized Brazil’s fractured air traffic control system and came under nationalistic fire for refusing to go along with the official Brazilian line that the (American) pilots of the surviving business jet were solely at fault for the accident. Now, Sharkey is being sued for $250,000 for defaming the entire population of Brazil. The lawsuit is offensive and absurd. For more background on the case, see here and here.

Downgraded: Helicopter service in Manhattan
Helicopter service from downtown Manhattan to JFK, canceled? I’m shocked, shocked!

Upgraded: Electronic cigarettes on airplanes
Back in February, I posted about a report of an impending deal between an electronic cigarette manufacturer and an unnamed airline. Immediately, I thought it would be a European low-cost carrier. Sure enough, it’s the granddaddy of ‘em all: Ryanair. For €6, you can buy a pack of 10 (disposable, I assume) nicotine-vapor sticks.

Upgraded: Clear’s life chances
Clear / Verified Identity Pass, the subscription-based service that promised shorter airport security lines, before it died an abrupt and refund-less death, may be back. I was a skeptic from the get-go — frequent travelers already get shorter lines, without having to give up their personal information. I’m still a skeptic.

Upgraded: Bloggers branching out
Brett Snyder of CrankyFlier is expanding the Cranky franchise: He’s launching a new service, dubbed CrankyConcierge. For $30, he’ll help you find a low fare, track your flight status for you, look for alternatives in case of rebooking, and aid you in post-trip dispute assistance. At the same time, Gary Leff of View from the Wing is now charging $150 to help travelers book frequent flier tickets. I’m looking forward to seeing these business ideas develop. Good luck, guys!

(image)

Pity the poor hedge fund managers in Greenwich, Connecticut… They can’t use the American Express Centurion (a.k.a. the Amex Black Card) to pay for their airport parking at the White Plains Airport (HPN) in Westchester…

But the Visa Black Card is a-ok?…

Any theories on why the Amex Black is banned at HPN airport parking? Hit the comments!

(Photo excerpted from a larger image; thanks to Dr. Vino for snapping the pic!)

Related:
- Is Visa’s new Black Card worthy of the hype?
- How can I upgrade flights using American Express?
- In defense of reward-earning credit cards

Downgraded: Bangkok airport duty-free
If you’re in Bangkok, you might want to skip the duty-free shop. Customers have been falsely accused (better: framed) of shoplifting. And thanks to an apparently collusive agreement between the police, the duty free operator (King Power), and individual “translators,” all working in cahoots, travelers have been forced to pay up thousands of dollars in order to leave the country. “The British Embassy has also warned passengers at Bangkok Airport to take care not to move items around in the duty free shopping area before paying for them, as this could result in arrest and imprisonment.” Absurd! Read the whole convoluted story of the “zig zag scam” here.

Downgraded: OpenSkies
British Airways is looking to sell its all-business class OpenSkies subsidiary, only a year after buying L’Avion and merging the two operations. The airline-in-an-airline is still operating, though, and there are some pretty sweet deals for premium class travel. If you’re flying between New York and Amsterdam or Paris anytime soon and looking for a relatively inexpensive upgrade, this could be the ticket. (~$1230 all-in roundtrip for a 140° cradle seat, or ~$2100 for a 180° flat bed.) But I wouldn’t book more than a month or two out.

Upgraded: Inflight internet overseas
Lufthansa is reportedly exploring ways of restarting the now-defunct Boeing Connexion satellite-powered inflight internet service. The receivers are already installed on many of their planes (a process which was undertaken at a hefty cost. Panasonic is the most likely provider of the services to the airline.

Downgraded: The St. Regis Monarch Beach
Upgraded: Irony
You may recall the St. Regis Monarch Beach in California as the site of controversy — Weeks after accepting a huge federal bailout, AIG executives spent nearly half a million smackers to host a swank affair at the resort. Now the resort itself has gone into receivership: Creditor Citigroup has foreclosed on the property, taking possession from the franchisees, Makar Properties. (Perhaps not surprising if reports of 15% occupancy rates are true.) But foreclosure doesn’t mean closure. The property remains open, albeit under new ownership.

Upgraded: Exotic inflight vermin
Paging Samuel L. Jackson! A passenger on a Southwest Airlines flight departing Phoenix was stung by a scorpion in flight. The creature fell out of luggage in the overhead bin, where numerous other scorpions were residing.

Downgraded: Budget Rent-a-Car’s ethics
Budget Rent-a-Car is still working with Trilegiant, the shady operators who send out “checks” you shouldn’t endorse. Signing the back commits you to an expensive membership in a “consumer club” with minimal benefits — all billed to the credit card you used when you rented a car from Budget. I reported on this back in January. I just received a similar solicitation this week, offering me a $10 check in exchange for a $219.98/year membership in “HealthSaver.” Shame on you, Budget, for pimping out the credit card data that your customers trusted you with.

Downgraded: Airline fees
Another week, another hike of airline fees. Continental, as part of its earnings report, is raising the cost of checked luggage by $5, bringing it to $20 for the first bag and $30 for the second. Also: Delta is adding a $5 in-person luggage fee for bags not checked in in advance online.

(image)

United Airlines is innovating again… with new ways to pass costs onto others. This time, the issue is credit cards.

Tom Botts explains:

United [on Wednesday] informed a currently unknown number of travel agents that they would no longer be able to use the industry reconciliation system, ARC, to process tickets which were paid for with a credit card.

United is asking these travel agents to process credit card transactions themselves and then report the sale as a cash transaction. Until now, when a travel agency (or OTA) has sold a published ticket on United (or any other carrier) the credit card is actually processed by the airline. As such, the airline is responsible for paying the 2-3% (in rough numbers) that Amex, Visa, Mastercard and Discover charge for using their cards. In the new world proposed by United, agents will process the credit cards themselves (presumably along with an additional consumer fee) and then remit the full amount of the ticket back to United. This would obviously save a considerable amount of money for United if widely adopted.

“If widely adopted.” Which, in the airline industry, means that this practice is about to become universal.

This could mean the reversal of the online travel agencies’ “no fee for airline bookings” policies that took hold with the majors in the last few months.

And reinstating the fee would be justified, frankly, if this goes beyond United. If the agenc is the one charging the cost of the ticket, then the agency is the one who bears the financial risks (primarily from chargebacks), and the agency is the one who would need to seek the refund of their money from the airline.

This also messes with the economics of ticket sales from the airline’s perspective, and not necessarily in an obvious way. Previously, airlines wanted to bring all sales to their own websites. Now, there’s actually a financial incentive for United to have the agencies book the ticket. A $200 ticket purchased on united.com yields about $195 for the airline, after credit card fees are backed out. The same ticket sold by an agency would now yield $200 for the airline.

The bottom line: This is going to tick a lot of people off. Agencies are already upset. Customers will be soon.

Wednesday’s post on the premature declaration of the demise of rewards cards brought some angry responses in my e-mail inbox. One example:

How can you even suggest that the existence of these cards is anything but a fraud committed against the American consumer? People are fooled into thinking that points have value, and your blog is perpetuating the myth that we can get a free lunch. Shame on you.

My, my, how the economic climate has changed. A post on points and miles even a year ago wouldn’t garner such vitriol. Today, it’s a “fraud.”

But my view remains. I rise again in defense of reward-earning credit cards, and their responsible use.

Let me be clear: I have no love for credit card companies and their abusive practices and devious schemes like two-cycle billing and universal default. I also have little pity for customers who spend more than they can afford and run up five-digit card debts, regardless of whether they grow irrational at the prospect of a “free” ticket or other reward, or simply want to keep up with the Joneses. (If people run up huge medical bills and are forced to use cards, they will find my pity, as well as my anger at our dumb health insurance system, but that’s another issue…)

The role of rewards in pushing people into debt is likely overstated: The tendency to overspend has been driven by the desire to pursue a certain lifestyle with the purchased objects and services, not earn a few points or cash back. Just look at the latest iteration of the Pew “luxury vs. necessity” survey, gauging which objects people claim they can’t live without. In a survey whose takeaway message is actually that people are ratcheting down their material expectations during this Great Recession, flat-screen TVs still came in as “necessary” for 8% of the population. I love my plasma tv, but a “necessity”? Seriously?

And yet, Americans as a group are coming to their collective senses, financially, and are starting to pay for things with money they have, rather than money they borrow. Debit card purchases exceeded credit card purchases for the first time last month, according to Visa.

That said, I still firmly believe in the responsible use of rewards-earning credit cards, with three conditions: 1) If you use such a card, you must be able to pay your bill off monthly; 2) you must be responsible in your spending, as well as your payments; and 3) you must not pay excessive annual fees, compared to the value you receive in rewards.

If you carry a balance, focus on your interest rate, not your rewards. And if you don’t charge much at all, avoid cards with annual fees, period.

If you can live within your means, then by all means, plow your spending into your cards and use the cards as an interest-free loan every month.

Several readers asked what I’m carrying in my wallet. So here’s full disclosure. I personally have four cards, only one of which has a fee. They are:

• American Express Starwood card
  $45 annual fee, fees waived the first year
  I use this card for domestic travel, restaurants, Costco purchases, and most automatic payments (like insurance, utilities, etc.) The card yields one Starwood point per dollar, plus periodic bonuses. (It currently has a 10,000 point bonus for new signups, with another 15,000 point bonus if you charge $15,000 to the card within 6 months.) Points are swept monthly to your Starwood account, where points can be spent on hotel rooms (generally at places I like to stay), can be converted to frequent flyer miles at favorable rates, or can be spent on plane tickets (though I’m no fan of the latter option). I very much like the option of converting 20,000 Starwood points to 25,000 miles on a range of airlines. I aim for 2 cents per point or mile in redemption value when I cash in my points (and I often get far more than that),which puts the value of the rewards in the 2 to 2.5% range.
• Chase Freedom Plus Visa
  no annual fee
  This exact card is no longer offered to new accounts, but something very similar is. I used to carry a United Airlines Mileage Plus Visa, but the annual fee was just too high, and I was locked into United miles. So I converted to this, which has no annual fee, comes with Visa Signature benefits, and offers a wide range of reward options. I use this card nearly exclusively for groceries, gasoline, and drugstores, for 3 points per dollar. Points can be converted to cash, 1 point for 1 cent, or can be converted to United Airlines miles (5000 miles = 6000 points) or other rewards at generally favorable rates. I get an effective rebate of 2.5% here.
• Citibank Dividend MasterCard
  no annual fee
  This is the black sheep in the wallet. (I looked: It’s actually not even in my wallet right now, and I may have card’s precise name wrong. It’s no longer offered at the Citibank website.) It has a cashback feature, but I rarely ever use the card unless there’s some benefit that comes with paying with MasterCard (Hyatt had a worthwhile MasterCard promo at one point, which I recall). There was also a time when Citibank was giving zero-interest rate cash advances with no transfer or finance fees. None. Insane. With no other balance on the card, it was a six-month interest-free loan, and it even paid a cash rebate. Citibank paid me to borrow their money, so my rate of return was infinite. (No wonder one share of their stock costs about as much as a Big Mac.) A more realistic rebate rate is closer to 1%.
• Visa card issued by my credit union
  no annual fee
  This is my go-to card for international travel — no currency conversion fees, no annual fees, and simply no BS make this a great choice. The downside: I’m not earning rebates or points, but I’m saving big bucks on currency conversion fees. And if I ever need to carry a balance, this would be the card, with a fixed 8.6% rate.

I’m comfortable with this mix, for now, with two cards in regular use, both yielding over 2% on purchases, one card for international use, and one warming the bench. Could I be doing better, and milking even more out of my cards? Perhaps.

Could I be doing better? Perhaps. I’m always open to suggestions.

So, wise and worldly readers, what’s in your wallet?

For years, savvy consumers have used credit card spending to beef up their frequent flier mileage balances, their hotel points, or just plain old cash. For those who paid off their bills in full every month, cards have been a great way to put off payment for three to six weeks, while earning a nice return — of hundreds or even thousands of dollars’ value — through rebates or points.

But credit card companies have always hated clients who paid off their bill on time. (With a taste for irony, they call them “deadbeats.”) And now, with the Obama administration starting to tighten the leash on the banks that were allowed to run amok with usurious rates and obnoxious fees for the last decade, the question arises: Is the party over for credit card points?

No. The banks may be cutting back on the size of credit lines, but the rewards card is unlikely to go anywhere.

Ron Lieber, in the New York Times, addresses this question head on. I agree wholeheartedly with his assessment:

So will credit card companies kill reward programs or drastically scale most of them back? Of course not.

“If you strip away the reward component of a credit card, it’s essentially a commodity,” said Rick Ferguson, editorial director at the loyalty marketing company LoyaltyOne. “The reward is what gives it its personality. It works from a branding perspective as well as a mechanism to influence customer behavior and consolidate spending on a particular card.”

That last part is crucial. People who spend a ton generate fees galore from merchants, and that money helps the card company stay in business. So you may soon see card companies giving away more goodies or lowering annual fees for people who hit certain spending thresholds each year. American Express already does this on a number of cards.

This last point is key: So much of the discussion in the media has focused on interest rates and the fees charged by banks to the debtors. This ignores the profits that banks make on processing the transactions themselves. Those fees may be charged to the merchant, but the bank doesn’t care where it makes its money, as long as it makes it.

Bottom line: Reward credit cards aren’t going anywhere. If your bank starts to get chintzy with its rewards, or starts hiking an annual fee, call them up and negotiate. Threaten to start shopping around for an alternative if they don’t maintain — or improve upon — the status quo.

If you’re rented a car or truck from Budget, you may be receiving a check in the mail. But don’t sign it.

There are offers in the mail referencing Budget car rentals, but signing the check will activate your membership in “Everyday Values,” a shopping “club” membership that promises big discounts but costs you hefty membership fees. The program is managed by Trilegiant, a former Cendant subsidiary that specializes in separating people from their money in convenient monthly installments.

But the really sneaky part — and the reason this is relevant to travel — is that your signature on the check gives Trilegiant the right to get the credit card information you used when you rented a vehicle with Budget.

That’s unacceptable. Swiping the card for a rental transaction is intended for use in the rental transaction, and that transaction alone. It’s shameful that Budget has no qualms sharing your card number with a company that uses such fishy customer acquisition tactics.

But this is unfortunately not new. Complaints on the web date back to 2005, and may be even older, based on Trilegiant’s longstanding history of shady offers. Budget and Trilegiant were once under the same corporate umbrella (Cendant). But while they’re no longer corporate siblings, their partnership lives on.

Inquiries to Budget went unanswered.

Full scans of the letter I received after the jump…

(more…)

Recession be damned! A new “ultra-elite” credit card has launched in the US, in an effort to woo clients who aspire to better travel benefits and members-only services. Barclays is behind the new Visa Black Card, which obviously hopes to emulate the aura of exclusivity and status that the black Amex Centurion Card has evoked for years.

But the black Visa isn’t in the same league as the black Amex. For starters, the black Amex is by invitation only, while the black Visa is a card you can apply for. The black Amex gives you automatic elite status on several airlines, while the black Visa doesn’t. But the black Visa also costs a heck of a lot less per year: $495 annual fee vs. a jawdropping $2500 for the black Amex.

(Incidentally, Latin American customers have had access to an even higher-end Visa product for a few years, which is closer to the black Amex: The Visa Infinite card, reportedly with a $2000 annual fee.)

For its $495 fee, the black Visa is unsurprisingly more comparable in benefits to the platinum American Express (annual fee currently $450).

Like the both the platinum and black Amex, the black Visa comes with membership in Priority Pass, the airport lounge network. But hold on: According to these reports, the Priority Pass membership included isn’t the top-tier version, which costs $399/year. Instead, you only get the equivalent of two guest passes. Two. Thereafter, you pay $27 a pop. The Platinum Amex is far superior on the airport lounge front.

One thing that’s nice about the black Visa: It includes trip interruption insurance, which used to be part of the Visa Signature benefits package. I’m not sure when that got nixed from the Signature profile, but it’s a good benefit to have. My wife and I took advantage of this benefit with our Visa Signature card back when we were on our honeymoon years ago… Because a tropical storm delayed our return home, and because we had charged our airline tickets to the Visa, the card covered our hotel, meals, transfers, and other expenses. But that’s no longer a Signature service (at least not in the US). I was disappointed to no longer find that benefit anymore when I looked over the list of Visa benefits.

But other card perks are less interesting. 1% cash back? Big whoop. Plenty of cards do that. Concierge services? Potentially interesting, but hard to gauge. “Luxury gifts from the world’s top brands” — what the hell is that?

The last remaining perk — if we can call it that — the card itself. It’s made of carbon, rather than plastic, so you can impress waiters, hotel lobby staff, and cashiers. And they’re certain to be impressed that you wasted $495 a year on a card with so few meaningful benefits at such a high cost.

Related:
- Reader mail: How can I upgrade flights using American Express?
- How to lounge in airports
- Reader mail: What kind of point-earning credit card is best?

While the mileage game isn’t as fun as it used to be, there’s something to be said for a boatload of miles, with relatively few strings attached. Two offers of to note for those looking for a fairly quick juicing of the mileage accounts:

1) 40K United Mileage Plus miles
Chase is rolling out another fat bonus with their Mileage Plus Visa: 40,000 total bonus miles, but you don’t get them in one shot. 20,000 up front, and more as you spend, and after one year:

20,000 bonus miles after first purchase
10,000 bonus miles after your first anniversary
10,000 bonus miles after approval and making $10,000 in qualifying transactions in the first six months

The first year fee of $60 is waived. One other caveat: The fine print says you can’t get the bonuses if you’ve had a Mileage Plus card before. (Hat tip to AskMrCreditCard!)

2) 25K American AAdvantage miles
A simpler, less-confusing offer. 25,000 AA miles from Citibank, with their MasterCard or Amex (yes, Citibank issues Amex cards now). Spend $750 on the card, get the bonus.

Again, the first year’s fee ($85) is waived.

—

If you’re going to collect these miles, don’t hoard ‘em, spend ‘em. And consider canceling the card after you’ve collected the bonus.