Credit Card Report
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Writing for the New York Times, Ron Lieber recently observed, “One after the other in recent weeks, airlines have altered their frequent-flier mile programs, adding fees, taking away bonuses and raising the number of miles you need for some free tickets.

But lost in fliers’ frustration over the changes is this: It may make more sense to change the credit card you use, not the airline you fly.”

Noting a plethora of changes — none to your benefit — in frequent-flier programs, Lieber suggests five questions “that can help you determine whether you want to keep adding miles from credit card spending to the miles you earn on the plane.”

DO YOU CARRY A BALANCE?
If you don’t pay your bill in full each month, you’re excused from this discussion. You’ll do better by using cards with lower interest rates than frequent-flier mile cards, which generally have pretty high rates.

ARE YOUR CHILDREN IN SCHOOL?
If they are, you’ll be fighting everyone else who wants to travel at the same time. The airlines, knowing your desperation to get out of town, may make fewer free seats available during school vacations, since the airline will probably sell all the seats on those flights anyway.

DO YOU HAVE ELITE STATUS?
Some airlines — like American, Northwest, United and Continental — carve out additional inventory of free seats at their lower mileage levels for some or all customers with elite status. That inventory, plus the bonus miles that most airlines still offer to elite members, make a mileage credit card more attractive.

ARE YOU A BIG SPENDER?
If you’re wealthy, or can run business expenses through your card, you can earn six figures in miles from card spending alone each year. A huge mileage balance gives you the ability to exchange those miles for premium-class overseas tickets, which could cost $10,000 or more if you bought them with cash. Miles are worth a lot more if you redeem them for this sort of travel.

DO YOU VALUE UPGRADES?
It can be easier to get upgrades from coach using miles than it is to book free seats. Business travelers value the ability to get better seats when employers won’t pay for them, and leisure travelers may be willing to burn piles of miles for upgrades to seats they wouldn’t otherwise be able to afford.

So if you’re a big spending frequent traveler and think the value is still there in trading miles for upgrades, you may want to keep collecting miles via credit card spending. If you’re ready to switch to a new primary credit card, however, here are three other types of rewards cards that will probably be most appealing:
[...continued at the New York Times...]
- Source: Ron Lieber, Gauging the Worth of a Frequent-Flier Credit Card, The New York Times, Aug. 15, 2008

If you still want to try your luck at redeeming your miles, you’ll want a get a copy of Mileage Pro: The Insider’s Guide to Frequent Flyer Programs, by Randy Peterson and Tim Winship.