| Airline
Mileage Credit Cards Penalize Expats |
| By Adrian
Leeds |
Adrian
Leeds:
Grew up in
New Orleans, attended the Fashion Institute of Technology in New York City,
spent a year on a kibbutz in Israel before settling into a career and family
life, first in Knoxville, then in Los Angeles. In 1994, she brought with
her to Paris more than 25 years experience in marketing and public relations,
first with Levi Strauss & Co., then with television station promotion,
broadcast advertising sales, media purchasing, advertising agency account
management for her own firm as well as others, not to mention a daughter.
She is currently in the Marketing and Public Relations division of Western
Web Works representing WebFrance International. Adrian says that
she was compelled to write this article after spending hours upon hours
researching the credit card situation online and "onphone!"
Adrian wants to ask, "Do the credit card companies want to discourage
inquiries?" - Want to live in Paris? |
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| For years,
I have taken advantage of my Northwest Airlines WorldPerks Visa credit
card (a product of U.S. Bank) to accrue airline miles and gain free
travel for myself and my daughter. All my friends know my system – I pay
for the entire restaurant bill, they give me cash, I get the miles/points
and the best exchange rate possible for converting U.S. dollars into the
French francs. It's been a perfect system until now.
This past November
9th, U.S. Bank started imposing a 2% conversion fee on every purchase made
outside the U.S. I don't recall receiving any notification, although they
said they had. A simple calculation told me that if I used the card like
I normally do, than what it would cost me per year was the price of a round-trip
ticket Europe / U.S. Immediately, I stopped using the card!
For an Internet
geek like myself, the next logical step was to surf the Web for information.
I found an article in the L.A.
Times from
May1 about how "a handful of major banks have 'quietly'
imposed surcharges of 1% to 4% on purchases made abroad" without providing
any new service. |
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| No joke! Wish
I had known sooner.
Then, it was
very easy to find several Web sites that help you compare the benefits
of all the credit cards.
The one I liked
best was http://www.cardrevolt.com and continually went back to the
site for basic information.
At first, narrowing
down the possibilities wasn't all that difficult until the real investigation
began and then I discovered the sad truth of it all.
There is only
one single credit card out there that was found to be worthwhile for an
American spending a lot of time out of the country. In fact, they penalize
expats – and people like us who travel frequently, especially outside the
U.S. Not difficult to wonder -- is this a "Catch 22" or is
it simply ironic? |
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Offshore Resources Gallery
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| Many of the
primary questions I had were actually learned in the process of discovery,
so in many cases, I had to re-phone the credit card company to be sure
of the answers.
Phoning from
France to 1-800 numbers is time consuming and expensive.
They are not
free when calling from outside the U.S. and of course, you must "jump
through all the hoops" -- listen to the instructions, press the right
buttons stay on hold till the line is free, etc., etc. before you finally
get a live agent on the phone.
I also discovered
that each aspect of service is provided by different departments, so that
a question about miles redemption couldn't be answered by the bank representative
and a question about rates couldn't be answered by the awards department.
In one case,
I ended up phoning four different numbers to obtain the information, some
of which was conflicting and one number given me wasn't even correct! I'm
sure when I see my phone bill I'm going to find it has cost me another
round-trip ticket! |
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In the end,
the annual percentage rate ("apr") didn't matter, the grace period
didn't matter, the yearly fee didn't matter – all the things the credit
card companies promote openly on their sites and are happy to compare with
other cards.
The primary
questions narrowed down were:
1.
Is there a conversion fee and if so how much?
2. What airline
restrictions are there?
3. Does travel
have to originate from the U.S.?
4. How many
miles must be accrued to gain a Europe/U.S. trip?
5. How many
miles are accrued for every dollar you spend?
The bottom line
was that regardless of the conversion fee issue, if travel must originate
from the U.S. then I couldn't use the mileage since I mostly travel from
France. Period. |
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Offshore
Resources Gallery
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Here's
the quick low-down on what I learned:
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You might as well
eliminate American Express, Discover and MasterCard, as these cards are
not as widely used in Europe as Visa.
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Visa itself imposes
a 2% conversion fee to all it's member banks, so it's the decision of the
bank as to if they will impose the fee and if so, how much. Some impose
as much as 4%!
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Mileage cards
attached to specific airlines may restrict your travel to a very limited
number of airlines (itself and its partners) and may still charge
a conversion fee, such as the Northwest WorldPerks Visa does.
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All mileage cards
not attached to specific airlines may allow redemption of the award miles
on any major airline, international or domestic, but all travel must originate
from the U.S.
I investigated
thoroughly nine credit cards (not in this order):
Capitol
One Miles One Card
http://www.capitalone.com
Chase Manhattan
Continental Platinum Card http://securecards.chase.com/servlet/page/ContApp
EverCard Platinum
Visa
http://www.gomez.com/deals
First Union
AirMiles Plus Card
http://personalfinance.firstunion.com/pf/cda/ps/product_type/0,,26,00.html
Nextcard Fixed
Rate Visa
http://nextcard-visa-card.com/
Northwest
WorldPerks Visa
http://www.fbs.com/cgi/cfm/credit/worldperks/index.cfm
Security First
Network Bank
http://www.sfnb.com
United Mileage
Plus
http://www.firstusa.com
USAA Eagle
Points Platinum Card
https://www.usaa.com
Bottom line
-- there was only one: United Mileage Plus. $1 = 1 mile. Credit line $5000
to $100,000. $60 annual fee. No conversion fees on purchases made in a
foreign currency. Airlines valid for accrual and redemption: United, of
course, then Aeromar, Air Canada, ALM, Aloha, Ansett Australia, British
Midland, Lufthansa, Mexicana, SAS, Thai and airline valid for accrual only:
Ansett New Zealand, Cayman Airways, Emirates and TransWorld Express. Lots
of other new-applicant bonuses are provided, too: 5000 free miles, $25
gift certificate on a United Airline flight and a free one-way 1000 mile
upgrade certificate.
Happily
I picked up the phone and spoke to the most pleasant telephone agent I
had come across in all my research. Her name was Erica, the same name
as my daughter. I knew I had arrived home and within minutes, had a telephone
application done and in the works. Now I just have to wait the less-than-30-days
to have my new card.
Then, soon
after, United will be seeing our smiling faces instead of the Northwest
I had come to know and love. Guess loyalty only ran 2% deep.
A Special
Note: to apply for a U.S. credit card, you must have a U.S. address
and once the account is open, you can easily change the mailing address
to your foreign address. Until then, all cards and correspondence will
go to your U.S. address.
1 Currency-Exchange
Fees Taking Bite Out of Dollars by Christopher Reynolds, Times
Travel Writer http://pqasb.pqarchiver.com/latimes/
2 Other Web
sites for credit card comparison and information:
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