Special Report 10 Theo Brandt-Sarif Travelexpert.com Phone 310-841-5085
Mirror, Mirror on the Wall Which Is the Best Credit Card of Them All?
The summer my family took our around-the-world trip, we were able to do it in style. We traveled first class across Japan on the bullet train; cruised Alaska on a luxury Princess-line ship; enjoyed a business class roundtrip flight from Los Angeles to London and Kenya... Those four roundtrip business class tickets on British Airways were “free,” courtesy of Diners Club, which I use for all travel expenses and for anything else I can. As an affinity card, Diners Club has had a standing promotion with British Airways in which earned miles—i.e., those miles banked in a Diners Rewards account until needed—are increased 50% to100% if converted into British Airways frequent flyer miles during a specified period. Thank goodness for credit and charge cards—undeniably the best way for road warriors to transform their spending into free trips…and for infrequent travelers to realize dream adventures of a lifetime.
Credit Card Versus Charge Card—What’s the Difference? We’ve all known about credit and charge cards since our childhood days, when our parents handed over a piece of plastic in exchange for a product or service. Nowadays, we are all familiar with the threats posed by mounting credit card debt, which has enabled the American consumer to achieve instant gratification while paying for that privilege over time and with interest. Charge cards, on the other hand, must be paid off in full within 20 to 60 days, a concept Americans have become accustomed to with the use of the American Express card. A charge card forces the consumer to exercise a greater level of fiscal responsibility and is the standard card issued by companies to their business travelers.
What Makes a Credit or Charge Card Great? The most important criteria for me when choosing a credit or charge card are the type and amount of travel benefits that come with it, specifically in the form of frequent flyer miles or hotel points. Since no significant difference exists in the frequent flyer offerings of the various major US airlines, I am relatively indifferent to which airline miles I earn—as long as I earn a lot of them! Some airline miles are more difficult to use than others, but the savvy traveler will always be able to use miles accrued from any airline at some point to realize a dream trip—either on the airline itself or on a partner airline. The next key requirement for a great card is acceptance. Naturally a card that can be used virtually everywhere will trump one that can be used only at select merchants.
And finally I look for exceptional service. Surprisingly few credit card companies offer superior service. But there is one card that defies conventional wisdom by providing spectacular service….
So Which Credit Card Is the Best? Unfortunately, there is no one “best” card, and the savviest travelers intent on maximizing their free travel will carry at least two or three cards. I carry several—each one providing unique benefits. For the independent business traveler or company seeking the best charge card offering unlimited charge capability, Diners Card emerges as the indisputable champ, for several key reasons: (1) outstanding service (2) banked frequent flyer miles that can be transferred on an “as needed” into all major domestic and international airlines and hotels, with regular bonus mile opportunities that can significantly increase earning opportunities beyond the standard “one mile per dollar spent” (3) primary car rental collision coverage, meaning the credit card company pays all collision damage claims in full (whereas all other cards provide secondary coverage, compensating only what is not covered by your personal auto insurance) (4) the ability to withdraw cash from any ATM. Not surprisingly, Diners Club has taken the number-one position as best credit/charge card at the past seven consecutive Freddie Awards, sponsored by Inside Flyer magazine. In contrast, the American Express card, with its Membership Miles program, has been progressively declining in popularity,
earning position #10 in the 2004 Freddie Awards. The Diners Club card’s sole disadvantage is its lower acceptance rate than American Express, Visa, or MasterCard. But it is welcomed by all airlines, hotels, car rental companies, and upscale restaurants, which truly makes it the perfect card for travelers. There is also a possibility that Diners will soon be accepted by all merchants accepting MasterCard if a current deal in the works closes. Annual fee is $95/year.
For the infrequent traveler who does not fly very often or the road warrior seeking a credit card rather than a charge card, the Starwood American Express card is by far the best. Each dollar charged earns one Starwood point, which can be converted into one frequent flyer mile with virtually all major domestic and international airlines. Like Diners Club, Starwood also offers regular bonus mile opportunities that can significantly increase earning opportunities beyond the “one mile per dollar spent” standard. Starwood points can also be used for free nights in Starwood hotels, a chain that arguably has the best portfolio of properties among all the hotel chains (including Luxury Collection, St. Regis, Westin, W, and Sheraton). Since this card is offered by American Express, acceptance is widespread. And the cost of the Starwood American Express credit card is unusually low—zero the first year and $35/year thereafter.
Finally, we all know that some outlets accept only Visa or MasterCard. Almost all major airlines are affiliated with a Visa card, and determining which is best of these numerous offerings is largely subjective. Some travelers use their Visa card to boost their miles from flying, an excellent strategy. Other road warriors will choose a Visa card to
earn miles with an airline other than the one they usually fly on to diversify their frequent flyer miles. If I had to name any one Visa credit card as a standout, I would choose the Alaska Airlines card, because Alaska frequent flyer miles can be used on a vast range of domestic and international partners including American, Continental, Northwest, British Airways, Cathay Pacific, and Qantas.
For those wanting to earn frequent flyer miles without an annual fee, the Amtrak (rail) Visa card is the answer, since accrued Amtrak points can be transferred into Continental or United Airlines at an effective rate of one mile per dollar spent. My favorite MasterCard is the American AAdvantage offering from Citibank, which earns one American Airlines mile per dollar spent. And I think the AAdvantage frequent flyer program is the best of them all since (a) there are more ways to earn AAdvantage miles than with any other program. (b) not only is American Airlines the largest airline in the world, but it has multiple partners that will enable you to use your AA miles to get virtually anywhere on earth. (c) American miles are the easiest to use.
In conclusion: Credit cards represent the most effective way to boost your free travel at a nominal cost. My top pick is Diners Card for the road warrior needing an unlimited spending capability and primary car rental coverage. For all other routine expenditures, apply for the Starwood American Express card. And for those few places
that accept only Visa or MasterCard, the Alaska Airlines Visa is your best bet because of Alaska’s extensive domestic and international partner network.
Dr. Theo Brandt-Sarif is a self-admitted “travel-aholic.” While traveling on research assignments in the quest for innovative new drugs, he developed his second infatuation – how you travel in luxury for much, much less! He has become the world’s preeminent expert on strategies to travel in style, while keeping costs miniscule. Request Theo’s monthly newsletter Luxury Escapes to become privy to the insider secrets that airlines, hotels, and even your travel agent don’t want you to know! Every issue of Luxury Escapes will provide money-saving tips, strategies to get preferred and upgraded service, bargains on travel accessories and services, smart ways to play the points and miles game, and take you on an adventure of exotic destinations. Subscribe at Travelexpert.com. Theo is the co-author with Jay Conrad Levinson of Guerrilla Travel Tactics: Survival Strategies for World Travelers & Road Warriors. For more book details, check out Travelexpert.com. Purchase your copy from Amazon.com or your local bookstore. If you have enjoyed this Special Report and are interested in reviewing additional offerings to help you travel in luxury for (much, much) less, check out Travelexpert.com for a complete listing of available resources. Theo is a very entertaining platform presenter, and the undisputed expert in how your members can slash their travel costs. To make your meeting a huge hit, book Theo as a speaker for a fast-paced dynamic general session for business travelers or an engaging spouse program that covers all the angles associated with booking a luxury vacation for less. Call 877-TRAVLUX or check out Travelexpert.com for details on how to book Theo.