The Real Cost of ÔFree' Miles
By: Source: AARP Bulletin Today Date Posted: 2004-12-10 13:36:00-05:00
Are airline-sponsored credit cards taking you for a ride? After crunching numbers, CardTrak, which monitors bank credit cards for consumers, reports that in exchange for free air miles, these cards typically charge interest rates that are 6 percentage points higher and $51 more in annual fees than do cards without rewards from the same bank.
An airline cardholder who carries a $3,000 balance over the two years it takes to earn a free ticket will pay $456 more in fees than a person with a no-frills card—more money than buying a round-trip, coast-to-coast ticket out of pocket.
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