Consumer World Celebrates 30 Years: 1995 - 2025  
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Capital One No Hassle Rewards: Only $48,000 Roundtrip

Capital One card Everyone has seen the Capital One TV commercials that convey the impression that cashing in points you have earned for a free trip with other banks’ credit cards is nearly impossible. Whatever date you want, “the answer is always ‘no’.” [Watch commercial.]

The fix, they say, is to get a Capital One “no hassle” card with no blackout dates on any airline. Sounds great, right?

What they don’t tell you in the ad is that they charge you an arm and a leg in points for some “free” domestic roundtrips — far more than many of their competitors. So, in keeping with the spirit of their press release a few weeks ago, urging consumers to be more informed when making financial decisions, herewith are their terms and conditions: 

*MOUSE PRINT:

§ The number of miles required by the Cardholder for travel redemption will depend on the cost of the itinerary chosen by the Cardholder at the time of redemption. The mileage requirement is as follows: 15,000 miles are required for tickets up to $150.00; 35,000 miles are required for tickets from $150.01 up to $350.00; 60,000 miles are required for tickets from $350.01 up to $600.00. For tickets over $600.00 in value, the required number of miles will be determined by multiplying the cost of the ticket by 100 (ex. $768 ticket requires 76,800 miles). [see website]

Translation: A $400 airline ticket will require 60,000 points. To earn 60,000 points under Capital One’s revised system where every dollar spent earns 1.25 points on their regular card [up from 1 point], you would have to purchase $48,000 worth of goods and services.(Some purchases and other of their cards may earn 2 points per dollar spent.) 

It has been a rule of thumb in the travel industry to charge 25,000 points or miles for a free domestic roundtrip. Bank of America, for example, lets you redeem 25,000 points for a ticket worth up to $400. Earning points at the rate of 1 point per dollar spent, your free trip would require $25,000 in expenditures on the card, about half what Capital One requires.

Providian’s “Real Rewards” card earns a point per dollar spent, and one can get a $500 ticket for only 20,000 points. [Card no longer available to new applicants.]

Both Chase and Citibank, the two leading credit card issuers, make it almost impossible to determine in advance of applying for their cards how many points are required for particular rewards. And some of them are now imposing up to a $59 redemption fee.

The power of repeated advertising for Capital One’s “no hassle” card no doubt has brought it many customers who didn’t bother to check the fine print before applying.

Consumer World Celebrates 30 Years: 1995 - 2025  
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Discount Airfares: The Not So Fine Print*

Chuck Cohen, a writer for the Christian Science Monitor, makes fun of the airlines’ often ridiculous restrictions on deeply discounted airfares in this humorous article, appearing on December 1, 2006:

Backstory: The Not-so-Fine Print on Those Discounted Airfares

A fictional $99 fare to Paris comes with some, ahem, unexpected restrictions.

Great $99 roundtrip airfares from Chicago to Paris! (Some restrictions apply.) 

* All seats are shared.

** Travel must begin on a Tuesday and end on a Wednesday, unless it is a nonleap year, in which case it must begin on the flight captain’s birthday and end on his wedding anniversary, unless the captain is not married, in which case travel must wait until a full moon or Pamela Anderson starts dating Bill Moyers … again.

*** Fare will be paid in drachmas obtained at the current rate of conversion or the rate determined by a panel of economists chosen by the airline who are familiar with the Greek monetary system, and who are resentful of Bill Moyers dating Pamela Anderson and have vowed to take it out on any passenger flying from Chicago to Paris for $99.

**** One free bathroom visit per flight.

Story continued at The Christian Science Monitor.

Consumer World Celebrates 30 Years: 1995 - 2025  
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Frequent Flier Miles: Will Expire Sooner*

Fasten your seat belts, and keep your air sickness bag handy. Travelers are about to be hit with a double whammy.

Not only is it often difficult to redeem your hard-earned frequent flier miles for the flight of your choice, but now the miles on some popular programs are going to expire much sooner if your account is inactive.

Both Delta and US Airways have quietly amended the terms and conditions of their frequent flier programs to cut the expiration of banked miles from three years to between 18 months (US Airways) and two years (Delta).

*MOUSE PRINT for US Airways:

Effective January 31, 2007, active membership status is based on having earned or redeemed miles within a consecutive 18 month period. With our new Mileage Reactivation Policy, Dividend Miles members have an opportunity to reinstate their Dividend Miles accounts to active status for an additional 18 months for a $50 processing fee and reactivation fee of $.01 per mile. If members do not extend with this reactivation option, the Dividend Miles account will be closed and all miles forfeited.

So not only will the miles expire in half the time, they are graciously allowing you to buy them back at a ridiculously high price. It is not clear if the new 18 month expiration period is retroactive.

*MOUSE PRINT for Delta:

Starting December 31, 2006, we’re modifying the above policy and miles will expire after two years of account inactivity. Mileage balances of members who have had no SkyMiles activity within the last two calendar years (2005 and 2006) will expire on Dec. 31, 2006.

Adding insult to injury, Delta is clearly making their policy retroactive to already earned miles.

The easiest practical way to keep your miles from expiring is to either spend some of them on cheap things like magazine subscriptions, or earn more miles by doing business with one of the airlines’ partners. Here is the US Airways partner list, and the one for Delta. Both allow you to make purchases from SkyMall, for example, and earn miles. You can also buy something at Officemax.com and earn US Airways miles, or join NetFlix and earn Delta Skymiles. Be sure to use the link provided at each airline’s website if you are going to shop at an online partner. Going directly to one of the participating online stores will not earn you miles.

The bottomline is that these changes are nasty, and exhibit a degree of chutzpah. The airlines make it hard to spend your acquired miles on flights because they don’t make enough free seats available, and then they take away your miles if you don’t use them.

For more details, here is a New York Times article on the subject.