“What’s The Best Mileage Credit Card Out There With No Annual Fee?”

Related posts:
-DansDeals Credit Card Links, Reconsideration Numbers, And Card Opening FAQ’s On DDF
-Don’t Know When To Use Which Ultimate Rewards Card? Here’s A Chart!
-Chase Offer Matching.
-Reminder: Activate Your Q1 Chase Freedom 5% Categories Now!
-Renting A Car In Israel? Convert Your Sapphire Preferred Visa Signature Card Into A World Mastercard!
-Spending Strategies: Where You Can Earn More Than 1 Mile Per Dollar Spent, Sorted By Category.
-Last Chance For Continental OnePass Plus…
-Which Credit Cards To Use When And Where?
-Chase Exclusives Bonuses Explained And A Comparison Of Chase Ultimate Rewards Credit Cards.
-Credit Cards With The Best Signup Bonuses!
-Credit Card Benefits, Categorized By Benefit.
-Sapphire Preferred, Starwood, Or Freedom? A Guide For Which Cards To Use For Any Purchase.
-Does Opening And Closing Cards Hurt Your Credit Score?
-The Best Credit Cards For Spending!
-Credit Card Reconsideration: Don’t Give Up!
-Need To Meet A Spending Threshold? Get Waived Fees On AMEX Gift Cards!
-Need To Meet A Spending Threshold? Send And Receive $1,000/Month With No Fees Using Amazon Payments!

————————————————————————————————————-

A DansDeals Facebook group member asked on Friday, “whats the best credit card out there to collect miles? (with no annual cost for the card)”

The truth is that most, though not all, of the best credit cards to earn miles with do indeed have an annual fee.
-Starwood Consumer American Express and Starwood Business American Express, both of which earn the most valuable of mileage currencies, are free for one year and then $65.
-Sapphire Preferred and Ink Bold, which each have very lucrative spending categories, are free for one year and then $95.
-Freedom (which becomes extremely lucrative with a checking account) and Ink Classic (which also has very lucrative spending categories) have no annual fees, but you (or someone you know and trust) need to also have a Sapphire Preferred or Ink Bold to transfer those points into airline miles and hotel points. Still if you are only looking for cards with no fees, these are the 2 cards to get and you can always worry about getting the points transferred into miles at a later date.
-Airline cards with great fringe benefits like free baggage and priority boarding like the Delta American Express, Continental OnePass Plus, and United MileagePlus Explorer (Continental and United also are among the rare cards that give free primary rental insurance) are free for one year and then $95.
-American Express Premier Rewards Gold, which gives triple miles on flight and double miles on gas and groceries, is free for one year and then $175.

However this was the gist of my advice to her:

-Don’t focus so much on no annual fee. Find the best cards for you that have the first year’s fee waived and then:
1. You can get retention bonuses to keep the card open at the end of the year. By explaining to an agent that you aren’t looking to keep another card with an annual fee you can often get an account credit to offset the fee or get bonus miles to make up for it. See countless examples of this in this DDF thread.
Some cards, like the American Express Platinum card ($200 in airline spending renews every calendar year, though lounge access with the card itself continues to work even if the card is closed), Hyatt card (annual free night), Marriott card (annual free night), Southwest card (annual bonus points), Delta card (companion certificate), Continental and United cards (2 free annual lounge passes) have built-in retention bonuses, but that doesn’t mean you can’t negotiate a sweeter deal.

2. You should be getting added value from promotions during the year.
Take a look at a card like the Starwood American Express. Ignoring the valuable points you get from it and the elite night credits and gold status based on spending. There are just so many promotions for having an American Express card.  Look at just the past year.  There was Small Business Saturday (where I got well over $500 of free groceries with the help of fee-free additional cards), there is the ongoing Link, Like, Love that gives account credits for spending at places I shop at anyway, there have been Foursquare promotions for free kosher food a couple of times, there was the Gift Chain where I made thousands of dollars from promotions, there is the current NYC Mix-n-Match Promo for $50 back from stores like Costco and Macy’s and that also works on fee-free secondary cards, etc, etc.
If you’re not making more money on cards like Starwood from promotions during the year you’re seriously doing something wrong.  MasterCard also ran numerous promotions over the last for significant savings from Amazon and on all online purchases during the holidays.

3. You can always close down the card in the 13th month that you have the card after they bill you for an annual fee for the first time and they will refund the annual fee.  You don’t have to close it before the fee posts and the fee is refundable for 30-60 days after it posts.  Plus with most cards you can always open the card again with a new signup bonus.

4. Ideally, instead of closing down the card you should actually apply for other different cards and have the various reconsideration departments approve the new cards by moving over the credit lines from from cards you want to close so that you don’t lose those credit lines and thus your credit won’t be negatively impacted.  This is what I call leveraging your existing credit.  Don’t just close down a card as that card can be leveraged to get a new card and your credit line (and thus your utilization percentage, which is a huge component of your credit score) will be left unharmed.

Remember that some cards, like the American Express Platinum and Premier Rewards Gold cards, are charge cards and do not have a credit line that you will lose if you close them. However they too can be downgraded to cards like the $25/year Zync charge card if you don’t want to close it, but either way you will be able to open them again and get the signup points again.

It’s also worth remembering that the credit line (and utilization) of business cards are not reported on your personal credit report, thus closing them also won’t effect your score, though there’s no reason not to try to leverage those lines as well as some banks, like Chase, will allow you to move that line to get a personal card approved. Getting a business card is simple. If Joe Smith sells items on Ebay or has any other side business/hobby and wants a credit card to better keep track of business expenditures he can just open a business credit card for “Joe Smith Sole Proprietorship” as the business name. Just be sure to select “Sole Proprietorship” as the business type and just use your social security number in the Tax Identification Number field as well as in the social security number field. Spending on business cards don’t count against your credit utilization, so you don’t need to worry about the credit affect of using up your entire credit line, something that is extremely bad for your credit if done on a personal card regardless of if you pay it off every month.

Tweet about this on TwitterEmail this to someoneShare on Facebook

21 Responses to ““What’s The Best Mileage Credit Card Out There With No Annual Fee?””

  1. Sammy Says:
    1

    @Dan,
    Great Post!
    Can you do a writeup on best cards to Churn (and which cards give/dont give the signup bonus the second time around…I cant seem to find it

    ReplyReply
  2. John Says:
    2

    From my experience you can pretty much churn any card out there by giving a new mileage number (which you can marge with the old number later on) except for the BA card which can track that method and the AA card can be picky too.

    ReplyReply
  3. chez Says:
    3

    “4. Ideally, instead of closing down the card you should actually apply for other different cards and have the various reconsideration departments approve the new cards by moving over the credit lines from from cards you want to close so that you don’t lose those credit lines and thus your credit won’t be negatively impacted. This is what I call leveraging your existing credit. Don’t just close down a card as that card can be leveraged to get a new card and your credit line (and thus your utilization percentage, which is a huge component of your credit score) will be left unharmed.”

    Dan, can you explain how this works? When I ask reconsideration to approve me for the new card by moving my existing credit over to the new card, what happens to the old card? Isn’t that effectively canceling it (which would not be good for my credit)?

    ReplyReply
  4. Dan Says:
    4

    @chez:
    You have 2 options. You can move over part of the credit line to get a new card approved, which will leave both cards open.
    Or you can move over the entire credit line and close the older card.

    The only reason in the short-term why cancelling a card hurts your score is the loss of the credit line which also hurts your utilization ratio.
    As long as you retain your credit line your score will not be hurt at all in the short-term.

    In the long-term, after 10 years or so that cancelled card will fall off your report and stop counting towards average age. This is why you never want to close your oldest credit card (though with AMEX they report all of your cards as your oldest AMEX, so with them it makes no difference at all). At any rate assuming this is not your oldest card then in 10 years from now having this account drop off your report should barely hurt you at all as you will have other older cards to make up for it.

    I explain this concept in “-Does Opening And Closing Cards Hurt Your Credit Score?” in the related links.

    ReplyReply
  5. Anonymous Says:
    5

    Dan, if chase tell me that I’m not eligible for a (continental) bonus because I’ve received in the past, is there a way around? also, I would like to know can I borrow sapphire points from chase?

    ReplyReply
  6. John Says:
    6

    I just said exactly how to do that in comment 2.
    I’ve never heard of borrowing from Chase, though they sell points for 2.5 cents.

    ReplyReply
  7. Anonymous Says:
    7

    @John: Thank you John, my question was, after receiving the card not realizing that I had a continental card in the past, I received that letter, so now my question is if anyone knows if a secured message will help or any other method, if you know please let me know.

    ReplyReply
  8. John Says:
    8

    If you applied with the same mileage number there’s nothing to do now. But at least you know for next to make a new mileage number before applying again.

    ReplyReply
  9. sara Says:
    9

    if i have a spg personal card and good credit, will i not have any problem signing up for a spg business card and churning it- without having any credit pull?

    ReplyReply
  10. sam Says:
    10

    I canceled an amex platnum and two months later received a letter from the lounge card company saying that I am welcome to keep the card, but since I canceled my credit card so the regular airline lounge fees will now apply (it is no longer free lounges after cancellation).

    ReplyReply
  11. Dan Says:
    11

    @sara:
    You can definitely get a SPG business card, but you always get a pull when applying for a new card.
    It’s not a big deal though, hard pulls fall off soon enough. If you apply for other business cards at the same time (like Delta Business Gold or Business Platinum) then you may be able to get multiple signup bonuses with just 1 pull.

    @sam:
    Lounge card membership does get cancelled, but the Platinum card itself continues to works for lounge access.

    ReplyReply
  12. Al Says:
    12

    My Starwood Amex is coming up for renewal in 2 April. It is my oldest card and has a $21k credit limit.

    Should I cancel and open a Business Starwood?

    Given the high credit limit and the age of the account I was afraid to cancel just to save $65. Should I have the $21k credit limit transferred to my Hilton Amex?

    If you apply for a business card as a sole proprietorship, isn’t there a personal credit hit?

    ReplyReply
  13. Dan Says:
    13

    @Al:
    The truth is that with AMEX you can close it and open a new card and the new card will have the age of your first AMEX, but why close it?

    You should easily get enough from AMEX promotions during the year to make it worth carrying both Starwood cards.

    The real question is why have a Hilton AMEX?

    Yes, they do pull your personal credit to get a business card, but spending on a business card doesn’t hurt your utilization ratio.

    ReplyReply
  14. asher Says:
    14

    @Dan: Some airport lounges will actually swipe your credit card, wont they see that its cancelled?

    ReplyReply
  15. esther12 Says:
    15

    Dan, if i have amex platinum card with $475 annual fee open (so that i can get the bonus points) is there a way to keep it opne and not to pay annual fee? like to open another amex and ask them to move credit line from this one? but what about annual fee? also, if i close the amex platinum card am i able to open it again and get the signup bonus?

    ReplyReply
  16. Dan Says:
    16

    @asher:
    Nope.

    @esther12:
    -It’s $450/year and there’s no way around that though you may be able to negotiate a retention bonus.
    -There is no credit line on it as it is a charge card that must be paid in full monthly.
    -You can churn it.

    ReplyReply
  17. Al Says:
    17

    @Dan,

    I’ve had the Hilton Amex for years, there is no annual fee. I use it only for cable and cell phone charges because it earns 6x points on those charges. That’s all I use it for and any Hilton brand stay.

    ReplyReply
  18. esther12 Says:
    18

    Dan, what you do you mean by “you can churn it”. i am just not familiar with this concept yet. thanks for your explanation.
    also, if i close it and open it again will i get signup bonus again?

    ReplyReply
  19. Henry Says:
    19

    My friend has chase points w/o the ink bold or saphire prefered how do I transfer his points to my account as I have both the ink bold and saphire preferred thanks

    ReplyReply
  20. Chani S. Says:
    20

    Hi, Am I correct in seeing that it’s much more economical to first transfer the miles onto the Airline company’s account rather than use the American Express Rewards Travel website? It appears that Amex is charging 44,000 miles round trip vs. 24,00 points round trip (AirTran).
    I’d prefer other airlines, though — Will BA miles work on AA?

    Is there a forum thread/link that discusses this?
    Thank you!

    ReplyReply
  21. george Says:
    21

    do you have any tips/deals for Canadian based travelers? most credit cards that you mention is not available in Canada

    ReplyReply

Leave a Reply

Please note: Comment moderation is enabled and may delay your comment. There is no need to resubmit your comment.

Current day month ye@r *

Switch to our mobile site