Another Foreign Transaction Fee Bites the Dust

Late last year, I wrote approvingly that foreign transaction fees for credit card charges were becoming an endangered species.

American Express had just announced that it would discontinue the fees for its Platinum and Centurion cards.

At the time, Capital One cards were already free of foreign fees, as were the Chase-issued cards linked to the programs of United (Club Visa only), Continental (Presidential Plus card only), British Airways, InterContinental, and Hyatt, and the Chase Sapphire Preferred card.

Citibank subsequently eliminated the fees for users of its ThankYou Premier and Prestige cards (annual fee: $125 and $500, respectively).

And now, Chase has added the Marriott Rewards Premier Visa card to its portfolio of rewards cards with no foreign transaction fee.

That makes Chase the industry leader not just in travel rewards credit cards, but also in cards with no foreign transaction fees. More importantly, the new move further solidifies the trend away from such fees, putting pressure on other card issuers to do the same.

A Good Time to Go Free-Free

If you travel overseas and are in the market for a credit card that allows you to charge purchases with no niggling surcharge, there's never been a better time to sign up for a fee-free card. Bonuses for new travel rewards cardholders are high generally, and especially high in a couple of cases.

The 50,000-mile bonus for new British Airways cards remains in effect. And there's currently an uncommonly lucrative promotion for new Capital One Venture card sign-ups: up to 110,000 points for those who can show they've earned at least 100,000 miles in one of many airline programs.

Reader Reality Check

How much of a concern are foreign transaction fees to you?

Do you feel that foreign transaction fees are fair and reasonable?

Other Posts of Interest

• Foreign Transaction Fees Are an Endangered Species
• The World's Richest Credit Card Sign-Up Bonus: 110,000 Miles
• British Air Card Now Offers 50,000 Bonus Miles, No Foreign Transaction Fees
• Is Hyatt's New Credit Card a Game-Changer?

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Q&A: What's The Best Non-Airline Credit Card for Travel Rewards

Question

I am looking to switch from an airline-specific credit card to American Express. I wonder which specific AmEx card is the best one given the annual fees. I am not a frequent traveler (a few short trips and one long big trip a year) and tend to accumulate miles via purchases.

Answer

For those who earn the bulk of their miles by traveling, I generally recommend a credit card linked to their primary airline mileage program.

You, on the other hand, are at the opposite end of the spectrum—a frequent buyer rather than a frequent flyer. And that calls for a different approach.

Frequent buyers like yourself may be best served by earning their miles with credit cards linked to the card issuer's rewards program, rather than to an airline-specific program. To distinguish them from airline cards, let's just call them bank cards.

Bank cards trump airline-specific cards in one crucial respect: The free flights awarded in exchange for the miles are not encumbered by the capacity controls that make award redemption such a challenge in traditional airline programs. That's because the card issuer simply buys a ticket for the cardholder when he redeems his miles. And since the award tickets are purchased on the open market, they're not subject to the onerous restrictions associated with airline program awards.

All the major card issuers offer bank cards in their product portfolios. Chase offers the Sapphire card. Citibank has its ThankYou Premier card. CapitalOne has the Venture card. And so on.

Since you asked specifically about American Express products, I used the find-a-card wizard on American Express's website, filling in your information to the extent that I could and making educated guesses as necessary.

The app processed the information and returned three recommendations: the Starwood Preferred Guest card, the American Express Platinum card, and the Blue Sky Preferred card.

My guess is that the Platinum card, with its $450 annual fee, is too expensive, plus it's a charge card, so the balance is due in full every month.

The Starwood card is a popular choice among frequent travelers, but its value is primarily as a replacement for or an adjunct to an airline card.

So that leaves us with the Blue Sky Preferred card. Here's how it works.

Cardholders earn one point for every dollar charged to the card for most transactions, two points per dollar at restaurants, hotels, and for rental cars.

On the redemption side, cardholders get a $100 statement credit for travel (airlines, hotels, car rental companies, cruise lines, travel agencies, tour operators, online travel agencies) for every 7,500 points, or 1.33 cents per point for most charges. That's pretty good value, especially considering that you can purchase the travel wherever you choose, getting the most bang for your buck, and there are no capacity controls or blackout dates on flights or hotel stays.

Points can also be redeemed for gift cards, but at a less advantageous ratio: cashing in 6,500 points for a $50 gift card means you're getting just .77 cents for every point.

The card's $75 annual is among the highest for bank cards. But it's potentially offset by the annual $100 allowance for miscellaneous airline fees such as checked bags, inflight meals and entertainment, blankets, and pillows.

There's also a fee-free version of the card, the Blue Sky card, which features the same earning and redemption rates, but doesn't include that $100 fee allowance.

So, if you anticipate being able to take advantage of the allowance, you'll be ahead of the game by opting for the Preferred card; otherwise, go for the no-fee card.

Reader Reality Check

Do you earn travel rewards with a non-airline credit card? Which one? Would you recommend it to others?

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Will Expedia's New Rewards Program Change the Face of Travel Loyalty?

The launch of an entirely new loyalty program by a major player in the travel marketplace doesn't happen often.

It did yesterday, though, with the rollout of Expedia's Rewards program.

Program Details

Earning Points

Expedia Rewards members earn one point per $1 spent on flights, hotels, and activities, and between two and four points per $1 for travel packages including air, hotel, rental car, and activities.

Significantly, Rewards members earn points for the travel they book, no matter who actually travels. So there's the potential to earn a significant number of points by booking trips for family and friends.

Through August 31, Rewards members who register for the promotion and charge their Special Rate hotel and travel package bookings to a MasterCard will earn double points.

Redeeming Points

For now, Rewards points can only be used for hotel coupons that may be used for free or discounted stays at Special Rate hotels booked on Expedia. The coupons have no residual value, so it's important to redeem for a coupon with a face value below the price of your intended stay.

When redeemed for hotel coupons, points range considerably in value, from an effective rebate of less than 1 percent to as much as an 8 percent rebate.

To illustrate:

• Low end: Earning one point per $1, you'd spend $3,500 to earn 3,500 Rewards points redeemable for a $25 hotel coupon. Value: a 0.7 percent rebate.
• High end: Earning four points per $1 (for packages), spend $12,500 to earn the 50,000 Rewards points redeemable for a $1,000 hotel coupon. Value: an 8 percent rebate.

Flight awards will be added later. In that case, points will be worth 1 cent each when redeemed for flights booked on Expedia.

Elite Program

For big spenders, there's Elite Plus.

How big is big? According to the Elite Plus stand-alone website: "Simply stay 15 hotel nights or complete $10,000 worth of travel booked on Expedia in a calendar year and we'll enroll you in the program."

The perks are decidedly modest. Priority phone service. Space-available room upgrades. Concierge service in three cities. Several other soft benefits.

Points Expiration

Like most airline miles, points expire after 18 months if there's no account activity.

Deal or No Deal

There are two ways of evaluating Rewards: compared to the programs of other online travel agencies (OTAs) like Travelocity, Orbitz, etc., and against the loyalty programs operated by airlines and hotels.

In the OTA space, Expedia Rewards is now the clear leader.

Orbitz and Travelocity, Expedia's main competitors, don't have loyalty programs per se, just credit cards that award points redeemable for travel or other rewards.

While that approach may work for some consumers, it falls short of a fully developed rewards program like Rewards—which doesn't require members to use a particular credit card to participate.

Since travelers can earn miles in airline programs for flights booked on Expedia, there's no reason not to participate in both an airline program and Expedia Rewards. No conflict there.

However, it's a zero-sum game when it comes to hotel programs. Because most hotel programs do not award points for hotel stays booked through Expedia and other OTAs, consumers face a harsh choice: Book on Expedia, and earn Expedia Rewards points; or book on the hotel's website, and earn points in the hotel's frequent-stay program.

While Rewards is clearly geared toward hotel consumers—who are much more profitable to Expedia than airline consumers—it's probably not sufficiently generous to break the loyalty bonds of frequent travelers, who tend to have deeper relationships with suppliers than with distributors.

For less frequent travelers, who are brand-agnostic, Rewards may be a better combination of value and convenience than dispersing their earnings among several different hotel programs.

And Rewards is certainly a solid option for travelers who frequent independent hotels, not affiliated with a major frequent-stay program.

In general, the program offers the most value for those who regularly purchase travel packages, rather than individual flights or room nights.

Reader Reality Check

Is this program a contender for your loyalty?

If you're a hotel program participant, how might this affect your engagement with the hotel's program?

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Hyatt Offers 10,000 Bonus Points After Five Nights

Last week, reviewing Hilton's second-quarter promotion, I noted that the "latest round of offers does, however, give us a sense of the hotels' waning marketing aggressiveness as both occupancy rates and room rates rise."

The new offer from Hyatt sits squarely on that generally negative trend line, offering a generous bonus, but imposing a qualification threshold that is out of reach for most non-frequent travelers.

Offer Details

Between April 1 and June 30, Hyatt Gold Passport members will earn 10,000 bonus points after five qualifying nights at Park Hyatt, Andaz, Grand Hyatt, Hyatt Regency, Hyatt, Hyatt Place, Summerfield Suites, or Hyatt Residence Club hotels, and 5,000 bonus points for every two nights thereafter, up to a maximum of 60,000 bonus points during the promotion period.

Registration is required, at http://goldpassport.com/possibilities, but that link won't be live until March 31.

Deal or No Deal

There are several points of reference for assessing this offer, including Hyatt's previous Great 10K and Big Welcome Back promotions.

The new Possibilities promotion is marginally more lucrative than the Great 10K, for those who stay seven or more times, but less compelling than Big Welcome Back, which featured a lower qualification hurdle (two nights) and a bigger bonus (either a free night or 5,000 bonus points).

Of course, no promotion exists in a competitive vacuum—Hyatt's must be compared to those offered by other hotel networks.

Hilton's second-quarter promotion, while not especially generous, rewards travelers with bonus points from the very first stay, and InterContinental's Priority Club promotion (targeted offer, not available to all members) for the same period kicks in after three nights.

So compared to the other two promotions so far scheduled for the same period, the distinguishing characteristic of Hyatt's offer is the relatively high number of nights required to earn a bonus.

Bottom line: For travelers who are confident they can log between five and 25 Hyatt nights during the promotion period, this offer is a strong contender. For infrequent travelers—those for whom five nights is an unrealistically high hurdle—there are other frequency-appropriate offers to take advantage of.

Reader Reality Check

How many hotel nights do you typically book during a three-month period?

Other Posts of Interest

Long Run of Generous Hotel Bonuses May Be Ending

Hilton's 2nd Quarter Promo: 1,000 Bonus Points Per Night

Hyatt's Great 10K promotion

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Hilton's 2nd Quarter Promo: 1,000 Bonus Points Per Night

With the economy rebounding and demand for travel picking up, it's a given that the long and continuous wave of generous hotel bonuses will be coming to an end.

But when? And will be the offers be scaled back gradually, or terminated abruptly?

I now have details of several hotel promotions for the second quarter, including offers from Hyatt, InterContinental, and Hilton. So, at least for the next quarter, there's no danger of an industry-wide move to forego promotional activity altogether.

The latest round of offers does, however, give us a sense of the hotels' waning marketing aggressiveness as both occupancy rates and room rates rise.

First up: Hilton's second-quarter Grand Nights promotion.

Offer Details

Between April 1 and June 30, HHonors members can earn 1,000 bonus points for every qualifying night "at any hotel in the Hilton Worldwide portfolio." That includes Hilton, Conrad, Doubletree, Embassy Suites, Hampton Inn, Hilton Garden Inn, Hilton Grand Vacations Club, Homewood Suites, and Waldorf Astoria.

There's no limit to the number of bonus points that may be earned during the promotion period.

Registration is required.

Deal or No Deal

The featured bonus is a modest one.

On the other hand, it can be earned multiple times, at more than 3,600 hotels in 82 countries.

Bottom line: a little something extra for Hilton partisans. For those whose loyalty lies elsewhere, there may be more lucrative offers from competing hotel chains (check out our coverage of the InterContinental and Hyatt offers next week).

Reader Reality Check

Is this offer a compelling one for you?

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Free Flights & Upgrades? There's a University for That

In this digital age, it's easy to forget that worthwhile learning and networking opportunities still sometimes take place in real time, in the real world.

If you're reading this, you're probably a mileage maven. And if you're a mileage maven, there's a real-world learning opportunity that should be on your calendar: Frequent Traveler University.

Frequent Traveler University is a day-long series of workshops where, according to the website, "you'll learn how to leverage the frequent flyer points that you are earning to get the best value and discover how the other half lives."

Among the topics covered:

• Flying nonstop can sometimes be nonsense ... learn to maximize mileage earning.
• Airline programs across the pond could be better than the ones across town ... learn who really values your loyalty.
• Converting your mileage award request from 'no!' to 'no problem' ... learn the art of redeeming miles.
• Wallet-sized precious metals ... learn why platinum and gold are paved with travel riches.

Program Details

Where: Sheraton LaGuardia East, Flushing, New York

When: Saturday, April 30. On Friday evening, April 29, there's a cocktail reception hosted by Randy Petersen, publisher of Inside Flyer and several frequent flyer-focused websites.

How Much: $49, including breakfast and lunch. Special rates are available for those who want to stay at the Sheraton LaGuardia East hotel.

Deal or No Deal

For the price, you can't go wrong, especially if you're already in the New York area. Even if you had to fly in for the event, the value of the information—in future travel savings and enhanced travel comfort—would likely far exceed the expenses incurred.

Reader Reality Check

Is this event on your calendar?

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Hawaiian Airlines, Korean Air Link Mileage Programs

Effective immediately, members of Hawaiian Airlines' HawaiianMiles program can earn and redeem miles on Korean Air flights, and members of Korean Air's Skypass program can earn and redeem miles for flights on Hawaiian Airlines.

Hawaiian already had frequent flyer relationships in place with Continental (limited routes), Delta, Virgin Atlantic, and Island Air. What was missing was a partner with strong Asia-Pacific coverage, to complement Hawaiian's expansion in that region. Korean, with its extensive network of flights within Asia fits that bill nicely.

Normally, the launch of new reciprocal frequent flyer program links is promoted with bonuses of some sort—double miles for the first three months, for example. This, however, is a no-bonus launch.

The frequent flyer tie-up builds on the existing code-share agreements between the two carriers, which will be expanded to include additional routes.

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From American: Bonus Miles for 10 New Los Angeles Flights

On April 5, American will launch 10 new flights to and from Los Angeles. As often happens with new flights, the airline is offering bonus miles to call attention to the services, and to help fill the planes.

Offer Details

Between April 5 and June 30, AAdvantage members can earn double miles on American and American Eagle flights between Los Angeles and Albuquerque, Boise, El Paso, Houston, Oklahoma City, Phoenix, Salt Lake City, Sacramento, and Tucson.

During the same period, program members can earn triple miles for first- or business-class flights to Shanghai, and double miles for coach.

The bonuses may be earned an unlimited number of times.

Registration is required to earn the bonus miles, using promotion code LAX2X for the domestic flights, LAPVG for the Shanghai flights.

Deal or No Deal

Double miles, for almost three months. Nice!

Better still—because you should never overpay to earn miles, even double miles—American is offering attractive introductory pricing, from $54 each way, for tickets on the new domestic flights booked by April 12 and completed by May 25. Sale prices for the Shanghai flights are as low as $399 each way. (As always, be sure to comparison shop before buying.)

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Are Debit Card Miles an Endangered Frequent Flyer Perk?

Earning OnePass miles for using a Continental debit card issued by Chase? Enjoy it while you can.

According to Chase's website, your mileage-earning days are numbered:

"Congress recently enacted a new law known as the Durbin Amendment that significantly impacts debit cards. As a result of this law, Chase will be changing the Chase Continental Airlines Debit Card program.

"After July 12, 2011, cardholders will no longer earn Continental OnePass miles when using the Chase Continental Airlines Debit Card. All OnePass miles you earn with your debit card until July 12, 2011 will be automatically deposited directly into your Continental OnePass account."

The Durbin Amendment, part of the Dodd-Frank Wall Street Reform and Consumer Protection Act, limits the swipe fees banks may charge customers for debit card transactions. When the amendment takes effect, on April 22, it will make debit cards less profitable for the banks, which in turn will make it uneconomical for them to market the cards with frequent flyer miles, a significant marketing expense for the cards' issuers.

But news of debit card miles' death may be premature.

The amendment has sparked a battle royal between small businesses—which are in favor of the legislation—and Fortune 500 companies—the banks, credit card issuers, and their supporters that have mounted a concerted effort to have the amendment repealed on constitutional grounds.

The Wall Street Journal (subscription required to read the full article) recently editorialized against the amendment, warning that it "threatens the flow of credit to low-income Americans and promises higher fees on bank services for nearly everyone else."

Senator Durbin's response to the Journal's editorial is here.

More to the point, legislatively, nine senators have introduced a bill that would delay the regulation's effect date by two years, potentially derailing it indefinitely.

It's unclear to me what the net effect of the Durbin Amendment would be. While a reduction in debit card fees would seem to be a plus for consumers, the card issuers could simply charge more and higher fees for other services.

For OnePass members, certainly, losing the ability to earn miles when using the Continental debit card is a definite negative. And that could be just the beginning.

Among the other largest airlines, United has already discontinued its debit card (issued by Chase), but American (Citibank), Delta (SunTrust), and US Airways (Bank of America) still offer them. So there's still plenty of potential disruption to come if other issuers follow Chase's lead and strip their cards of their mileage-earning feature.

For now, for airline debit card-holders, it's wait-and-watch. And rack up your frequent flyer miles while you can.

Reader Reality Check

Do you earn miles with an airline-affiliated debit card?

Any opinions on the Durbin Amendment?

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Prices for United Awards Will Increase, Decrease on June 15

Ninety-nine times out of 100, a change to a loyalty program's award chart is a change for the worse.

So when it was announced on United's website that "updates are coming to the United Mileage Plus award charts," there was legitimate cause for concern. In the past, "updates" has been code for downgrades: higher prices, more restrictions.

This update proves to be the exception to the rule. While there are changes for the worse, there are improvements as well.

Here's a summary of the changes that take effect for bookings made on or after June 15:

• New: Domestic award flights 700 miles or shorter can be booked for 10,000 miles each way.
• Price Decreases: First- and business-class awards to North Asia or South Asia and Central or Southern Africa will be 5,000 miles cheaper, as will business-class awards to Europe and Japan and coach awards to Central and South Africa.
• Price Increases: Awards to the Middle East in business will increase by 5,000 miles, as will coach awards from North America to Europe and Southern South America.

  Domestic upgrades from the cheapest coach fares increase from 15,000 miles plus a $50 co-pay each way to 20,000 miles plus a $75 co-pay.

  For Europe flights, upgrades from full coach increase from 10,000 to 15,000 miles, and the cash co-pay for upgrades from discounted coach increase from $500 to $550.

  For Asia flights, the price to upgrade from full coach to business will increase from 12,500 miles to 20,000 (from Y fares) or 30,000 miles (from B fares). Upgrades from discounted coach will increase from 25,000 miles plus a $500 co-pay to 30,000 miles plus a $600 co-pay.

The Net Effect

The higher co-pays for upgrades are a definitive negative. But that's offset by the new short-haul awards, and the lower prices for some international first- and business-class awards.

Bottom line: The overall effect of the changes for most Mileage Plus members will be neutral or even slightly positive.

United's communication of the changes bears mention as well.

By announcing the upcoming changes three months in advance, United has given Mileage Plus members plenty of time to review them and book awards that will increase in price before June 15, or wait until the changes take effect to book awards that will decrease in price.

On the other hand, United could have done a much better job of communicating the changes in a way that allows for easy before-and-after comparisons. Leaving it to Mileage Plus members (or commentators like myself) to compare the old and new award charts and ferret out the changes is inconsiderate at best. And given the generally benign effect of the changes, such obfuscation is as unnecessary as it is unhelpful.

Reader Reality Check

How will the upcoming changes to Mileage Plus affect you?

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