Questions My Beginner Friend Asked as She Applied for Two Credit Cards

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Japan's Cherry Blossoms

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Today I was with my friend as she applied for two credit cards. Her knowledge of miles and points is average for an American, which is to say, it’s almost non-existent.

The questions she asked me while we talked about which cards she should get were illuminating. They reminded me of a few facts that I’d like to drill into beginners’ heads. Please forward this post to anyone who has ever expressed interest in miles and points or envy at the way you travel.

My friend told me that she wanted to collect miles to go to Japan and London in economy. For Japan, the best miles are American Airlines miles because you can fly on American or Japan Airlines, and for six months per year, the price is only 25k miles each way. For London, many miles are roughly equal including American Airlines miles, which allow you to fly to Europe for 20k miles each way seven months per year.

Japan's Cherry Blossoms
Japan’s Cherry Blossoms

I suggested that she open the Citi® / AAdvantage® Platinum Select® MasterCard® and The US Airways® Premier World MasterCard® at the same time to earn 93,000 American Airlines by early next year by taking advantage of the merger between American Airlines and US Airways.

She accepted the advice, but she had a lot of questions.

  • What does she have to do to combine the miles?
  • What if the spending requirement is too much?
  • Will I see her financial information if she applies for the cards through links on my site?
  • What are the fees associated with the cards?
  • Will canceling these cards in the future cause her to forfeit the miles?
  • How can she check her credit score?
  • Should she close other credit cards she has?
  • How can she book her award tickets?

What does she have to do to combine the miles?

American Airlines and US Airways miles will be separate until the second quarter of 2015 at which point, they will be combined into her American Airlines account. Theoretically this will happen automatically. In practice, I recommended that she contact me on April 1, 2015 to ask how to link her American Airlines and US Airways accounts. (I’ll cover it on the blog when the info is released.)

American Airlines hasn’t told us how we will be able to link our AAdvantage and Dividend Miles accounts, but it will probably take just a few clicks and will guarantee that our accounts are combined seamlessly instead of having problems arise from having a common name on your account.

What if the spending requirement is too much?

The spending requirement on The US Airways® Premier World MasterCard® is one purchase to unlock the 40,000 bonus miles. The spending requirement on the Citi® / AAdvantage® Platinum Select® MasterCard® is $3,000 in the first 3 months to unlock 50,000 bonus American Airlines miles.

That’s $3,001 total in three months or about $1,000 per month. She’s 95% sure she can handle that. If she can’t, I suggested that she go to her regular grocery store or gas station and buy herself a gift card to that store or gas station that she could then use in the coming months.

Will I see her financial information if she applies for the cards through links on my site?

No. Links on my site take you to the banks’ websites. I receive no personal information about any applicant.

What are the fees associated with the cards?

The US Airways card has an immediate $89 annual fee. The American Airlines card has no annual fee for the first 12 months after you get it; then you pay $95.

You can cancel either card at any time to avoid future annual fees if the value proposition of keeping the card open longer is negative. I told her to mark her calendar for November 1, 2015 to decide then whether she wants to hold or cancel each card.

The bigger fees, of course, are in the form of interest or late fees when you run a balance or miss payments on your rewards cards. Set up your online account to auto-pay in full, and you’ll never pay these fees.

Will canceling these cards in the future cause her to forfeit the miles?

No. Cards that earn airline miles deposit those miles into your airline account. Canceling your credit card doesn’t make the miles instantly disappear from your airline account.

The miles will only eventually expire if there is 18 months of inactivity in the frequent flyer account. Generating activity to restart the 18 month clock is very easy.

How can she check her credit score?

Barclaycard has been offering its cardholders free access to their real FICO credit scores for a year now.

Barclaycard issues The US Airways® Premier World MasterCard®, so after she gets that card, she can check her credit score for free on the Barclaycard website.

Should she close other credit cards she has?

She has five other credit cards including an American Express Blue Sky, a United card, a store credit card, and more.

Whether to keep or cancel any individual card is a simple math problem, and only she has the inputs.

Here is what you need to know for yourself: Should I Keep This Card? Whether to Hold or Cancel a Rewards Card When an Annual Fee is Due.

How can she book her award tickets?

Her best option to Japan will be a direct flight on Japan Airlines, an American Airlines partner. Award space on Japan Airlines flights is not searchable on aa.com. She will need to search for award space on ba.com. Any award space on Japan Airlines flights on ba.com is bookable with American Airlines miles by calling American Airlines at 800-882-8880.

To London, some partners are searchable on aa.com, and some are not. She can search more comprehensively on ba.com or hire the MileValue Award Booking Service to book her award.

Do you have any other questions?


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9 COMMENTS

  1. Most important you want a Great trip at a Cheap price not the other way around !!! Do your homework Election day is not the best day to start your trip in Paris however the weather was nice..

  2. I’m trying to book a trip to Croatia in Sept 2015. I opened up a US Airways credit card in July and have enough points to book through British Airways (aa.com) but wasn’t sure if we could use Dividend miles to book via aa.com now or if we need to wait until Q2 2015… If it’s the latter, I’m nervous that it will be too late to book award travel for Sept. Thoughts?

    • You cannot use US Airways miles to book via aa.com. You can call US Airways and book all oneworld partners including British Airways. Both AA and US Airways collect fuel surcharges on BA flights, so I’d recommend you do not book this reservation.

      • What would you recommend is the best to search? aa.com is not showing very much availability — should I be searching the websites of each oneworld alliance airline individually?

  3. Speaking of beginners, Scott do you know cc companies’ policies on the age of approving applications? I’d like my college-student son to get in on the game (yes, he’s very responsible) but he’s been turned down for several cards. He’s 18, about to turn 19.

  4. Credit is possibly tighter than when I was a student, but you should get an entry level card and possibly sign for your child. Free travel should not be your focus, but establishing a credit history. Paying for flights is cheap, ruining your credit could be costly.

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