Finance - Page 1
Time to look at another bank's credit card options. I am looking at two of the Aeroplan point gathering credit cards from CIBC. Personally, as you will read later on, I don't think these cards are really worth it for most people. The advantage they have are that they are Aeroplan miles and Visa, but the overall return is substandard compared to other cards.
If you are not familiar with my site, I have written a number of articles that analyze Aeroplan, Air miles, and the cards that you can collect them with. Check out these articles for more information:
- Collecting Air Miles and their Value
- Air Miles Versus Aeroplan Points
- Collecting Aeroplan Points and Their Value
- TD Travel Visas
What Aeroplan Cards Are There with CIBC?
There are two main cards. The CIBC Aero Classic Visa and the CIBC Aerogold Visa.
The CIBC Aero Classic is the entry level card and has an annual fee of $29/year. It has an interest rate of 19.5% and you earn 1 Aeroplan mile for every $2 you spend through the card.
The CIBC Aerogold is the next step up. It has an annual fee of $120/year and an interest rate of 19.5%. You earn 1 Aeroplan mile for every $1 you spend through the card and some stores actually give you 1.5 miles per dollar. You have to look up the list of participating stores to see if they qualify.
Which Card Is Better?
The reasoning behind which card you should get is pretty easy. You want the one that returns the most money to you. This depends on how much money you spend per year. You want to earn back enough Aeroplan miles on these CIBC Visas to cover your annual fee and then some. If you don't even spend that much, you might as well go with a no fees card like what is offered by a number of the other banks such as the American Express Air Miles credit card.
If you really want to stick with the CIBC brand of money back visas, then here are the numbers. The formula for the break even point on the CIBC Aero Classic is 58 / AeroplanPointValue. I value it at $0.016 so that means you need to spend $3,625 to get enough Aeroplan miles to cover your annual fee.
The formula for the CIBC Aerogold Visa is 120 / AeroplanPointValue. Its break even point is $7,500. You might think this is fairly low so you will cover your cost, but remember that if you went with the CIBC Aero Classic you would have already covered your fee plus earned extra miles.
The formula for how much you should spend to make upgrading to the Aerogold from the Aero Classic is 182 / AeroplanPointValue. At $0.016/point this comes out to $11,375. That isn't that much more really. So if you are spending $1,000 a month on your card, this is an easy target to hit.
Summary of the CIBC Visa Cards
I personally think the Aero Classic is a waste of time unless you really want to collect Aeroplan points, stick with CIBC, and you want a Visa. The better option would be the no fee American Express Air Miles card. You earn at a better rate in my opinion than the Aero Classic. American Express Air Miles earns at 1 Air Mile per $20 spent, which I estimate to be worth around 1.25% back on your money spent (I value an Air Mile at around $0.25 a piece). The Aero Classic returns around 0.8% (I value an Aeroplan mile at around $0.016 a mile). Plus, you have to earn enough to cover off you $29 annual fee.
That being said, with my same valuation of an Aeroplan point, the Aerogold returns around 1.6% back of the money you spend on the card ($0.016 divided by the $1 to earn that much is 1.6%). This is a better earning rate than the American Express, but you still need to at least pay off the annual fee.
That leads into a new formula. At what point is it worth upgrading from the American Express to the CIBC Aerogold. This formula is 2400 / (20 x AeroplanpointValue - AirMileValue). Using the same values as before, this comes out to over $34,000 you need to put through on the card. Now that is significant. So unless you are spending more than this or have a specific reason for needing a Visa, I would recommend getting the American Express card.
If you want to see any of the formulas I use, just post a comment. I will add them to this article or in the comments section below.
I analyze credit card periodically to find which ones have the best features. So many of them have reward points, cash back, and other money saving features. Sometimes it is hard to see what is better, so I do a bit of analysis. If you think I'm off base, post a comment.
Today we will look at the TD Rebate Rewards Visa Card. This is a Visa that will put a credit on your account based on a percentage of how much money you spend during the year. The credit happens in January.
What Rebate Cards Are There with TD Bank?
There are two main cards. The TD Rebate Rewards Visa Card and the TD Elite Gold Visa Card.
The TD Rebate Rewards is nice as it has no annual fee. Right off the start you are not out any money for having this card (unless you have a balance as its rate is over 19%). The earning rate is 0.5% on the first $3,000 you spend annually and then 1% on the amount above that up to a maximum of $25,000. Basically, this means the most you can ever get back from this card is $235/year.
The TD Elite Gold is 1% for all your purchases annually and there is no limit. It also includes other features like travel insurance coverage so you don't have to pay for it yourself. You do have to pay an annual fee of $99 however.
Which Card Is Better?
I have a couple points here. First of all, the ScotiaBank No Fee Money Back Visa Card gives you 1% back on net purchases which has no maximum and has no yearly fee. This is far better than the TD Rebate Rewards Visa Card as it has a lower return rate and a maximum limit on it.
If you really want to stick with the TD Bank's cards though, I did an analysis on when upgrading would cover the annual fee and earn you more money back. The magic point is at $33,400/year. When you put this much through your Visa each year, it will start to earn more money on the Elite Gold than on the Rebate Rewards card. The other argument is that if you take at least one trip a year where you would purchase baggage or other travel insurance, then the $99 fee would easily be covered.
Summary of the TD Visa Cards
Don't bother with the TD Rebate Rewards Visa as the ScotiaBank Money Back Visa gives you a lot more for the same "no annual fee". In fact, the ScotiaBank card earns the same as the Elite Gold, but without he fee. There is no point in upgrading to the TD Elite Gold Visa unless you are going to save more than the $99 annual fee you pay in travel insurance costs throughout the year. Think of it as a $99 flat rate for travel insurance for the year.
If you really want to stick with the TD brand of money back visas, then the upgrade point should be if you spend more than $33,400/year on your Visa or take enough annual trips where your insurance costs savings are over $99 for the year.
TD Bank offers a few different rewards Visas you can choose from. There are their Travel Reward cards that you earn TD Points with or the straight up cash back rebates on the TD Reward Cards. There are a few others like low interest, student, and business cards. You can check them all out at the TD Visa Homepage.
I am not going to touch on the other cards, because they don't interest me as low interest rates are not an issue. If you ever keep a balance on your credit card, I can almost tell you for certain that the low interest cards are definitely the route you will want to go. You will have to figure out how much you are going to save in interest and what your annual fee is to see if it is worth it.
I have previously looked at Aeroplan and Air Miles and you can read about them in these articles:
- Collecting Air Miles and their Value
- Collecting Aeroplan Points and Their Value
- Air Miles Versus Aeroplan Points
- Scotia Bank No Fee Money Back Visa Card Review
How To Collect TD Points
There is only one way to collect TD Points. You must have one of the TD Travel Visas and you must charge stuff against it. Unlike Aeroplan and Air Miles where you can use their seperate card at various businesses, you must use the TD Visa.
There are 3 different cards available. Unfortunately, there are is not a single "no fees" card available.
Redeeming TD Points
I was researching on their website to redeem them and it appears to be their TD Travel Rewards site. You must have a login (your card number) and password.
Note: Their website states that you must redeem 10,000 TD Points at a time when you do use them. That sucks a little bit, but that is in $50 increments which would be easy to use up on flights and such.
What Is A TD Point Worth?
I was frustrated that I could not log in and check since I personally don't collect them, but from checking out their website it appears that they are worth about $0.005/each. You can input how many points you have and it will tell you the value of them. It appears that you don't have to pay a TD Point rate for a flight, but you use your TD Points at a rate of 0.5 cents/each to pay for the flight.
The downside is that your points are never worth more than 50 cents, but that also means they are worth no less. It also appears that they are no subject to blackout periods because of this. You can just book any flight and use your points like cash to pay for them.
Bottom Line: Each TD Point is worth 0.5 cents.
Which Card Is Worth It?
With each point being worth 0.5 cents, it is easy to figure out if they are worth it or not. The 3 different cards have an annual fee of $19, $99, or $120. So you need to at least recover the fee you pay in TD Points to make these cards worth it.
Each card earns points at different rates though. The TD Classic Travel Visa earns 2 points for every $1 spent for an annual fee of $19. The TD Platinum Travel Visa earns 3 points for every $1 spent for annual fee of $99. The TD First Class Travel Visa Infinite earns 3 points for every $1 spent for an annual fee of $120. It includes a few other perks like cancellation insurance that explain the increased annual fee.
From my calculations you would need to spend at least $1,900 to cover your fee on the TD Classic, $6,600 for the TD Platinum, and $8,000 to cover your fees on the TD First Class card. Everything you spend on top of this will be the extra points you are using.
$6,600 is fairly easy to spend and you might think right away that the TD First Class Visa is worth it, but that isn't a true comparison. That number is just to break even. If you owned the the Classic card, you would have already attained an extra 10,000 points or $50 above your break even point. So the TD Classic card would still be better at this point.
I did the math to see how much you need to spend before upgrading your card is worth it. Please keep in mind that there are other perks to these cards that might make you decide they are worth it (travel insurance, etc). The bottom line for the TD Classic is that you need to spend $1,600 to just break even.
Here is the table with my calculations of the minimum amount you should put through your card annually to make it worth it. There is more explanation after the table.
Table Minimum Spending Amounts| Card | Annual Fee | Earning Rate per $ | Minimum Annual Spending Amount |
|---|---|---|---|
| TD Classic | $19 | 2 | $1,600 |
| TD Platinum | $99 | 3 | $16,000 |
| TD First Class | $120 | 3 | $20,200 + one extensive trip |
For the TD Platinum card, my calculation (post a comment if you want to see them) is that you need to spend at least $16,000 before the Platinum card starts to earn more money back after deducting annual fees. That is a hefty jump.
The step up from the Classic to the TD First Class would require $20,200 in purchases, but if you try to compare the Platinum to the First Class you cannot as the earnings rate is the same. The Platinum always looks like the better by.
That being said, there are other considerations. The TD First Class earns a higher rate on purchases made through the Travel Rewards Centre than the Platinum card and you always receive free cancellation and interruption insurance. There is also medical insurance for trips under 8 days. If you make one significant trip a year within the country that you would purchase insurance or you go out of country, this feature would more than pay for itself on the TD First Class card.
In my opinion, the TD First Class card is great for people who travel extensively at least once a year. The TD Platinum card is ideal for people who just travel within country and it is on short little trips.
I have had a few people write me concerning my articles on Aeroplan and Airmiles, asking how I created my formulas for figuring out how much money you would need to put through your credit card to get back the annual fee for the credit card. This only works for cards that have a reward feature like airmiles, aeroplan points, or some other reward points.
I will try and get a baseline value for each type of reward point on each card and keep it in a table on this page (see below). If you want me to look at a card, let me know the name of it and I will look up the details.
This page will have 3 sections.
- Show how I create my formula for how much money you need to spend on a credit card to pay for the fees.
- List the formula for major cards.
- Use one of the reward items available for each card to figure out an exact value for how much money needs to go through the card to pay for itself for that reward item. I'll try to stick to gift cards since the value is fixed (i.e. $20 gift card) and is subject to change like airfare is.
The reason I give you the formula and my estimation is that every reward is different and can give you a different value to your points. Depending on what you use your card for, it can really change how much you are getting out of each point. Movie tickets give you more than a gift card for example. But who is going to want to use all their points on movie tickets.
Creating A Credit Card Formula
There are two pieces of information you need to know when figuring this out.
- The annual fee for the credit card (i.e. $29/year).
- The rate at which reward points are accumulated (i.e. 1 Aeroplan point per every $2 spent).
I will show formulas with the following variables:
- PointsEarned: The number of reward points we can get from spending money.
- MoneySpent: How much money we put through the credit card.
- EarningRate: How quickly we can earn reward points. This should be expressed as points per dollar. If you earn 1 point for every $2 spent, then it is written as 1/2. You could also say 1 divided by 2.
- PerPointValue: How much each point is worth if we used it to buy something. This is a dollar value. If a 2 for 1 movie pass is 25 points and it saves as $10 because that is the cost of a movie ticket, then each point is worth 40 cents. 25 points x 40 cents/cent = $10. So $0.40 would be our PerPointValue.
- CardFee: The annual fee to own the card (i.e. $29/year).
How Many Points Do You Earn Formula
The first concept we need to know is that if we spend a certain amount of money, we receive a certain number of reward points.
PointsEarned = MoneySpent x EarningRate
How Much Do You Need To Spend To Recover the Fee Formula
The second concept is that we want to spend enough money on the card to at least cover the fee we paid to have the card. So we put the CardFee on one side of the formula and the other side of the formula is our calculation for dollar value of our accumulated points.
CardFee = PointsEarned x PerPointValue
Combining Formulas
The next step is to substitute our PointsEarned value in our second formula with the formula for PointsEarned we created in our first formula. Our equation now looks like this:
CardFee = MoneySpent X EarningRate X PerPointValue
What I am interested in is the MoneySpent value so if we divide both sides by EarningRate and PerPointValue, we end up with:
CardFee / (EarningRate X PerPointValue) = MoneySpent
Re-arranged again.
MoneySpent = CardFee / (EarningRate X PerPointValue)
In words: The money you would need to spend is the card's annual fee divided by the point earning rate and then divide that whole number by the value per point.
Example
I have a BMO Gold Mosaik Mastercard. The annual fee is $90 and I will receive 1 Air Mile for every $15 I put on the card. I can get a $20 gift certificate for Shell gas stations for 175 Air Miles. That means each Air Mile is worth 11.4 cents. So my variables are:
CardFee = $90
EarningRate = 1/15 or 0.06666666
PerPointValue = $20/175 or $0.114
The formula is:
MoneySpent = $90 / (0.066666666 x $0.114) = $11,842
Wow, I would have to spend $11,842 on my mastercard just to get back the fee I paid for it if I was going to use the miles for the gift card at Shell.
Keep in mind that this is for the Shell gift card reward. Other rewards give you move value for your points (movies, airfare, theatre tickets, etc).
Since the value of your point can change based on your use, I usually leave this part of the formula as a variable so you can plug in whatever you want:
MoneySpent = CardFee / (EarningRate X PerPointValue) = ($90 / 0.0666666666) / PerPointValue
MoneySpent = $1350 / PerPointValue
Just plug whatever you think it is worth in there and then you can get how much you need to spend to recover your annual fee value in points.
Formulas for Various Credit Cards
Using the same method I did in my above example, I have made formulas for the various cards. Just plug in how much you think a reward point for your card is worth and it should give you a number. As a hint...Airmiles PerPointValues I use are between 13 cents and 45 cents. Aeroplan PerPointValues can be between 1 cent and 3.5 cents. I know the range is big, but it really depends on what you use your points for.
I am also including cards that do cash back or have no fees just to keep the information filled out.
Note: If you want me to add a card, just post a comment and I will add it (and email you if you leave your address).
| Credit Card | Annual Fee | Earning Point Rate | Formula |
|---|---|---|---|
| American Express AeroplanPlus Card | $60 | 1 per $1 | 60/PerPointValue |
| American Express AeroplanPlus Gold Card | $120 | 1 per $1 up to $10,000 and then 1.25 per $1 after that | (150/PerPointValue) - 2500 |
| American Express AeroplanPlus Platinum Card | $499 | 1.25 per $1 up to $10,000 and then 1.5 per $1 after that | (748.5/PerPointValue) - 2000 |
| American Express Air Miles | $0 | 1 per $20 | N/A |
| BMO Gold Mosaik Mastercard | $90 | 1 per $15 | $1,350/PerPointValue |
| BMO Silver Mosaik Mastercard | $35 | 1 per $20 | $700/PerPointValue |
| BMO Mosaik Mastercard | $0 | 1 per $40 | N/A |
| CIBC AeroClassic Visa | $29 | 1 per $2 | $58/PerPointValue |
| CIBC AeroGold Visa | $120 | 1.5 per $1 | $80/PerPointValue |
| ScotiaBank No-Fee Money Back VISA Card | $0 | 1% back | N/A |
| TD Classic Visa | $19 | 2 per $1 | $1,600 |
| TD Platinum Visa | $99 | 3 per $1 | $16,000 |
| TD Gold Elite Vias | $120 | 3 per $1 | $20,200 |
Is The Credit Card Fee Worth It?
Listed below are some major credits cards and how much money you would need to put through the card if you were going to at least get back the value of the fee you paid for the given reward.
| Credit Card | Annual Fee | Example Reward | Points For Reward | Value Per Point | Money To Recover Fee |
|---|---|---|---|---|---|
| American Express AeroplanPlus Card | $60 | $50 Gap Gift Card | 6,000 | $0.0083 | $7,200 |
| American Express AeroplanPlus Gold Card | $120 | $50 Gap Gift Card | 6,000 | $0.0083 | $15,500 |
| American Express AeroplanPlus Platinum Card | $499 | $50 Gap Gift Card | 6,000 | $0.0083 | $87,820 |
| American Express Air Miles | $0 | $20 Shell Gift Card | 175 | $0.114 | $0 |
| BMO Gold Mosaik Mastercard | $90 | $20 Shell Gift Card | 175 | $0.114 | $11,842 |
| BMO Silver Mosaik Mastercard | $35 | $20 Shell Gift Card | 175 | $0.114 | $6,140 |
| BMO Mosaik Mastercard | $0 | $20 Shell Gift Card | 175 | $0.114 | $0 |
| CIBC AeroClassic Visa | $29 | $50 Gap Gift Card | 6,000 | $0.0083 | $6,960 |
| CIBC AeroGold Visa | $120 | $50 Gap Gift Card | 6,000 | $0.0083 | $9,600 |
| ScotiaBank No-Fee Money Back VISA Card | $0 | N/A | N/A | N/A | $0 |
| TD Classic Visa | $19 | N/A | N/A | N/A | $1,600 |
| TD Platinum Visa | $99 | N/A | N/A | N/A | $16,000 |
| TD Elite Gold Visa | $120 | N/A | N/A | N/A | $20,200 |
This is perhaps the best explanation video I have seen for a basic look at the mortgage crisis going on in the U.S.. Check it out if you want to know more about it.
I just learned of another way to get air miles at no extra cost by using the site airmilesshops.ca.
This site, which is part of the Airmiles Official Site allows you to use your Airmiles collector number and look for retailers which offer AirMiles on-line. This is above and beyond the usual stores you can think of like Shell, Boston Pizza, and Westjet. I also shop at Dell and Expedia which are on-line stores that do not directly let you collect Air Miles with them. You can get points from them at airmileshsops though.
How AirMilesShops Works
When you click on a retailer on airmilesshops, you are taken to a page that explains the Air Miles you will receive if you make a purchase on-line. You can then enter your AirMiles Collector number if you haven't already and click on a button that redirects you to the retailer's site where you can shop as you normally would and make a purchase if you want. If you place an order on-line then they give you a certain number of Air Miles based on the rate they are offering.
This is great, because now Air Miles are available at more stores than they normally were. For example, I just booked tickets on Expedia for a business trip of mine. They normally don't offer Airmiles, but they were listed on the airmilesshops.ca website and when I clicked on them I found out they offer 1 Airmiles for every $35 spent on their site and you get a bonus 35 miles the first time you make a purchase. I was going to buy my tickets on Expedia anyway, but this was a way to gain a few extra miles.
Do You Pay More?
I was worried that they might charge more when Air Miles were included, but I was wrong. I compared prices by trying to book from a different computer where I did not go to the Expedia store by using the affiliate link from airmilesshops (would not get the AirMiles) and by using a computer where I did use it. The prices were identical and I could not even see a difference in how the site looked.
So basically, it is just another way to get Airmiles from companies that don't offer it directly (why I don't know).
Double Dip To Maximize Your AirMiles
If you already have a credit card that collects Air Miles like the American Express Air Miles card or the BMO Mosaik Mastercard then you will collect miles when paying with your card and you will receive the airmilesshops miles in addition to that.
For example: I $500 flight through Expedia for the first time would give you the following miles (assuming your have the Gold BMO Mosaik Mastercard):
- BMO Mosaik Mastercard (1 for $15): 33.3 miles
- Expedia (1 for $35): 14.3 miles
- Bonus miles: 35 miles
- Total: 82 Air Miles (rounded down)
That is 82 AirMiles instead of the 33 you would normally expect. Even if you have already used your first purchase the 14 extra miles is over 40% more than you would have received normally and there is no extra cost.
What Retailers Are There
A lot of good on-line retailers are listed. This includes Expedia, Dell, Apple, Bose, TigerDirect, Chapters, Amazon, La Senza, and the list goes on. Here is a screenshot of some of the top ones from the site.
I was recently emailed from someone concerning the Air Miles for Everyone event currently going on.
It is for their 15th anniversary event. I thought Air Miles were around longer than that, but maybe I'm just getting too old.
There are a set of anniversary coupons you can receive. You have to enter your collector number to get them and then you get bonus air miles depending on how many you use.
The second part to the event is a story submission section. Basically, individuals submit their heart warming stories about how they have used their Air Miles and people vote on them. The best story will receive 15,000 Air Miles. That is enough for a return trip from Calgary to Victoria or a number of other destinations depending on where you live.
Definitely check it out for interest's sake and if you want some more coupons to help collect. Remember my math on how much an Air Mile is worth. If the coupons aren't giving you enough of a deal it might not be worth it.
Having good credit is a huge advantage when making financial decisions in your life. It opens up opportunities to further your business, personal lifestyle standard, or fulfill any travel ambitions.
Unfortunately, bad credit can do the opposite for you. Unpaid bills, bankruptcy, large debt to service ratios, and other circumstances can put a real damper on what type of credit a banking institution will be willing to grant you.
If you are someone who is in the bad credit category, then there are options available to help relieve the situation. I have been looking over RMCN Credit Services website. They have ordered up a LinkWorth LinkPost review. I always enjoy these opportunities as it gives a good opportunity to look over a site in detail.
Credit Repair Using Credit Scores
RMCN offers services to review your financial situation and generate a credit score. The score basically describes the likelihood that you will default on a loan within the next 24 months. It can be used to help close on mortgages or other loans.
Basically, RMCN is in the business of credit repair. There goal is to help you attain the necessary loans and at better rates then you might be able to attain on your own. If you need credit help then read over their site for information regarding how a credit score will be calculated for you and how it can be used.
Highlights Of RMCN's Website
At the beginning of the page are some examples of what bad credit can cost you in your mortgage or car loans. Then they follow up with an overview of what is used and what is not used in determining your credit score.
On the Credit Scores page there is a large amount of good information. It is organized quite well and you could almost print this off to read if you wanted as there are several pages here.
The Do's and Don'ts sections are very good. If you want to start down the path of achieving a better credit rating, then read this over. Nothing that is rocket science, but a very good overall for establishing some goals and focus points in your current financial future.
Further down the page there is a breakdown of what is a good score or not and what some of the reason codes are on the different credit score reports.
How much is a United Airlines Mileage Plus mile worth?
I thought I would take a look at another airline rewards program. This time it is the United Airlines Mileage Plus Program. After doing some calculations I valued one of the United Airlines Miles to be worth 1.28 cents or $0.0128 when you redeem your miles for flights and up to 5 cents or $0.05 when redeeming for restaurant certificates. I know that seems like a small number especially with how many decimal places I have gone to, but they add up when you are talking tens of thousands of miles to fly somewhere.
Keep in mind when I say the 1.28 cents/mile is for flights that is a rough estimate based off of one flight I found. Using it for other rewards will also change its value. I find travel is one of the worst uses for it in terms of monetary value. Entertainment rewards are usually the largest value/mile (probably because of the high markup). Using mileage plus miles for restaurant certificates on Restaurant.com, it appears that you can get anywhere from 2.5 cents/mile to 5 cents/mile. That is a much better deal.
I was not able to check electronics as they are not immediately accessible anyways until you reach Elite status.
The ultimate resource for the Mileage Plus Program is the United Airlines Mileage Program page itself. There are lots of links on how to redeem for rewards and earn miles by traveling or using a Mileage Plus Visa Card.
What Is The Value Of A United Airlines Mile?
TravelI priced out a flight from New York to Los Angeles and back using Mileage Plus miles and just paying for it regularly. To try and be a bit more fair, I found the cheapest flight I could for a one week round trip as well.
The price to leave 2 weeks ahead was US$318.80 for a round-trip. The price in United Airlines Miles was 25,000 miles and no booking fee because I booked far enough in advance.
If you do a bit of math you find the $318.80 divided by 25,000 will give you the price per United Airline mile (I will just say price per mile from now on.
This number if US$318.80/25000 = $0.0128/Mile. This is rounded to the nearest 100th of a cent.
Keep in mind this is the value of an Mileage Plus Mile for this specific flight. You can calculate the value for any flight or any other products by taking the amount of money that would have come out of your pocket that you have saved by using the miles and dividing it by the number of miles you used. This will tell you the value per mile on that product. Some flights are better than others. Electronics are typically a lower rate of return for you mileage plus miles, but entertainment is better.
EntertainmentAdvertised on the website are restaurant certificates from Restaurant.com. These are gift vouchers for partnered restaurants that you can search for on their website.
The gift vouchers are $25 for 1,000 miles or $100 for 2,000 miles. $25 divided by 1,000 and $100 divided by 2,000 give you 2.5 cents and 5 cents per mile. That is a very good return compared to the flight, but you have to remember you are getting food and that's it. Depending on what you are looking for, you are going to spend your miles on what you want.
If you like eating out and like traveling, it tells you to use your miles for eating out and just pay for your plane tickets out of your own pocket.
How To Earn United Airlines Miles
There are lots of ways to earn these United Airlines miles, but please note that they all involve spending money. There is no way around it, these programs are to encourage spending. The good thing is, you have to spend to live, so why not take advantage of by signing up for free programs like this.
Current methods of earning United Airlines Miles are:
- Booking flights with United Airlines. They are a member of Star Alliance as well. This is a group of airlines all over the world, so it opens up the possibilities of flying to a number of locations.
- Spending money using the United Airlines Mileage Plus Visa Card.
- Spending money at United Airlines Mileage Plus Partners. These include Safeway, NetFlix, Neiman Marcus, and variety of other stores and restaurants.
Mileage Plus Visa Card
Just a note about using the Mileage Plus visa. For me, credit cards are the quickest way to earn miles. Unless you travel a lot on business, it is probably the same for you. Currently there are 4 cards featured on the United Airlines Visa Card page. What visa card should you pick? Good question.
Let us get one thing out of the way. If you carry a balance on your credit card...THEN STOP IT!. These cards do not have a very good interest rate on them (still over 18%), so if you can find a credit card with a better rate, it will still save you more money (you might as well pay for the flight yourself).
Each card offers varying features, but they all have an annual fee (as far as I can tell). Keep in mind that you need to spend enough money on the card to get enough miles to pay for the annual fee. If you do not spend at least that much money, then you are better off getting a no fee credit card somewhere else.
An example of this is if I plan on using my Mileage Plus miles for travel then I will value them at around 1.28 cents per mile like I stated above. The lowest fee card that is available is $25/year. To recover that $25, I need to at least get that money miles. $25 divided by 0.0128 (price per mile) is around 1,953 miles. That many miles will get you around $25 worth of flights. Now, to get that many miles with the $25/year card (the Mileage Plus Visa Check Card) you need to spend around $3,906 because you only earn 1 mile per every $2 put on the card.
That was assuming the 1.28 cents/mile value I feel I am getting from booking a flight as well. Let's say that I plan on using my miles for eating out at restaurants that are affiliated with Restaurant.com. Now I can max out my value at 5 cents/mile. $25 divided by 0.05 comes out to $500. That is a far lower amount of money to be spent to break even.
That is just that card and using the value per mile from the example flight above. Each one has its own perks (for higher fees of course). Some pay 1 mile per every $1 spent, some pay 2 miles per every $1 spent on a United Airlines product (flight, etc). Except for the Platinum Visa card, they limit to how many mileage plus miles you can earn in one calendar year (60,000 or 100,000 for the Gold card). These can all play a factor.
I have done a chart for each Mileage Plus Visa card. In the chart I show the name of the card, the yearly fee, the dollars needed to be spent to earn 1 mile, how much spending it would take to pay off the annual fee when using the miles for travel and then for restaurants, what the yearly limit is on how many you can earn, and other notes. Keep in mind I am not factoring in the bonus miles for signing up, earning bonuses for buying certain products, or other factors. This is a worst case scenario for uninfluenced spending on each card. You might have spending patterns that cater to using a card and earning even more miles at a better rate.
| Visa Card | Annual Fee | To Earn 1 Mile | To Break Even Travel | To Break Even Restaurants | Yearly Earning Limit | Other |
|---|---|---|---|---|---|---|
| Mileage Plus Visa Check Card | $25 | $2 | $3,906 | $500 | 60,000 | |
| Mileage Plus Visa | $60 | $1 | $4,688 | $1,200 | 60,000 | |
| Mileage Plus Gold Class Visa | $53 *($85) | $1 | $4,140 | $1,060 | 100,000 | Fee is $85, but you get 2,500 miles for free every year (worth $32). |
| Mileage Plus Platinum Class Visa | $140 | $1 or $0.50 | $10,938 or $5,468 | $2,800 or $1,400 | Unlimited | A lot more opporunities to get 2 miles per $1. |
As you can see there are a lot of options. Basically the higher the fee the quicker you can earn miles, but you need to spend the minimum amounts listed to get your money back on the annual fees themselves. They also give you more bonus miles on the higher fee cards, which gives you back some of the money, but remember that you are getting back miles and not real cash. Bonus miles are like "gift cards" for their own store, which will makes sure they get the money back anyways.
Using United Airlines Miles
United Airlines Miles can be used for a variety of options. Most common are flights or travel.
There can be some extra monetary fees with travel bookings depending on how far in advance you do it. Here are the rules currently:
- Award travel ticketed six days or less prior to departure $75.
- Award travel ticketed 7-13 days prior to departure $50.
- Award travel ticketed 14 days or more prior to departure $ 0.