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Credit card airline miles - what is the catch?

post #1 of 11
11/28/09 at 3:56pm
Thread Starter 
You know all those spam letters you throw out immediately? "Sign up for the XYZ Visa today and earn 25,000 United miles instantly!" Things like that.

My automatic reaction is to throw out - but seriously, what is the down side? Is it really as simple as:

1) Sign up
2) Make a purchase
3) Pay off bill from aforementioned purchase
4) Collect free miles
5) Cancel card before annual membership fee kicks in

Positives:
- 25,000 airline miles

Negatives
- Credit score may be impacted negatively, but not by much
- I am assuming they can get you by charging the membership fee upon cancellation even if it is before the normal date the fee is usually assessed, or by at least charging a pro-rated part of the fee (which would not be so bad for 25,000 miles).

I must be missing something here, because it sounds too good to be true. Credit card experts - please advise! Thanks.
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post #2 of 11
11/28/09 at 4:03pm
There's not always a catch. I've done it with a couple cards (the best was for 50k miles) and cancelled before being assessed any membership fees. A lot of the offers, though, are for something like 25% of the offered miles up front, 25% six months later and the remainder at the end of the year assuming you've spent the required amount on the card. Those kinds of deals are a lot less attractive.
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post #3 of 11
11/28/09 at 8:25pm
When they give you 25,000 miles, does that essentially mean you can fly up to 25,000 miles for free? I don't understand using the miles earned works.
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post #4 of 11
11/28/09 at 8:28pm
Quote:
Originally Posted by tc6 View Post
When they give you 25,000 miles, does that essentially mean you can fly up to 25,000 miles for free? I don't understand using the miles earned works.

Hahaha.
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post #5 of 11
11/28/09 at 10:19pm
Quote:
Originally Posted by tc6 View Post
When they give you 25,000 miles, does that essentially mean you can fly up to 25,000 miles for free? I don't understand using the miles earned works.

If only. 25,000 usually can't even get you a round trip domestic ticket in coach.
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post #6 of 11
11/29/09 at 12:02am
The "sky miles" have a conversion ratio to "real" miles, which is shady. Usually the conversion is like 100:1 or something. So 25,000 miles might get you 250 actual miles, which is easier to drive than fly.

Also, you probably need to cash in points for round trip flights only. Meaning you need to rack up TWO free flights to cash it in. Also, you must use these points within 18-24 months or so.

Furthermore, there are lots and lots of blackout dates and never underestimate the power of the phrase "**applicable flights". So where you want to go and when might not even be possible.

I tried cashing in some of my points for a flight I'm taking next month only to find out it's not applicable.

lame.
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post #7 of 11
11/29/09 at 12:08am
Thread Starter 
Well it's pretty much applicable as long as you can double it. So if a flight is "25,000" with 50,000 there should be no blackouts.
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post #8 of 11
11/29/09 at 12:13am
With Southwest you can get no blackout dates if you double it, true. That means you'll have to rack up 4 flights for a trip, which is a lot in the 18-24 month period they give. You'd have to be spending like mad. I booked the hotels through the rewards program, we'll see how this helps. I'm supposed to get extra points using their affiliates.
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post #9 of 11
11/29/09 at 12:17am
Thread Starter 
I mean unless you fly every week for a living racking up points sucks. Which is why I was interested in the CC programs to just bump all my airline miles to usable levels.
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post #10 of 11
11/29/09 at 4:03pm
There aren't any catches. There just aren't any real benefits other than the airline miles. I have the AAdvantage Amex and Mastercards. I think there are annual fees, but they aren't much. Round trip awards in the US start at around 20K miles. I also like the fact that AA has a program that lets you book and pay for hotels with miles.

United is cool because they have a mall where you can buy stuff with miles if they're about to expire. Obviously the most efficient way to use miles is by redeeming them for flights, but you can't always do that.
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post #11 of 11
11/30/09 at 1:52am
my parents do it all the time
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