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Where to Find the Real Deals

Note: Cost per mile refers to the additional cost that consumers are paying to earn miles. As a general rule, you should avoid paying more than 1 cent per mile, and you should try to redeem miles so that they are worth at least 1.5 cents apiece.

1. MCI/WorldCom phone service:
The key to this offer is its simplicity: No matter what long-distance plan you sign up for, you get 5 miles for every dollar you spend. You pay no premium for earning the miles. MCI has a partnership with every major U.S. airline save Northwest and TWA (which work with Sprint), and it awards between 2,000 and 5,000 bonus miles, as well. Cost per mile: 0 cents.

2. Buying airline tickets on the Internet:
Many carriers -- including American (www.aa.com), Continental (www.flycontinental.com), and Delta (www.delta-air.com) -- offer a 1,000-mile bonus if you purchase a ticket online. Often you must travel via E-ticket to get the full bonus. Just be sure you couldn't make the same trip more cheaply from a travel agent or another carrier. A good place to check for prices is TheTrip.com (www.thetrip.com/businessweek, which is a partner of BW Online). Cost per mile: 0 cents.

3. Buying other goods on the Internet:
Are you a regular E-shopper at barnesandnoble.com, Music Boulevard, or a bevy of other Internet businesses? If so, sign up with Clickrewards (www.clickrewards.com), and earn 500 miles for purchases you were going to make anyway. Cost per mile: 0 cents.

4. Riding the shuttle:
Fly the US Airways or Delta Shuttle between New York and either Boston or Washington, and you can earn 1,000 miles, instead of the usual 500. Delta will put the miles into your Delta or United account -- whichever you say. US Airways makes it more complicated. You first have to call 800 872-4738 and register for the deal. Then, whenever you fly the Shuttle, give your US Airways frequent-flier number, and you'll be credited with 500 US Airways miles and 500 American miles. Since the two allow you to pool your accounts when claiming free tickets (see BW, 1/18/98, "The Airlines' New Buddy Systems"), it's as good as earning 1,000 miles on either airline. (American and US Airways, like Delta and United, entered an alliance last year.) Cost per mile: 0 cents.

5. Continental's (www.flycontinental.com) and Northwest's (www.nwa.com) off-peak reward:
Fly within the U.S. during the nine months from September to May, and you'll need only 20,000 miles -- instead of the standard 25,000 -- for a free ticket on either of these two airlines. Look for transcontinental flights that usually run $400 or more. AmEricaWest also offers a 20,000-mile reward -- and it is valid year-round. Even better, AmericaWest awards 5,000 free miles to any new member of its program, according to InsideFlyer. Typical value per mile: 1.9 cents.

6. Southwest Airlines/First USA Visa (888 792-0001):
Southwest and First USA waive the annual fee in the first year. They also offer a 6.9% interest rate in the first six months, before boosting it to about 17.5%. The result: In year one, this deal isn't much different than some of the best nonmileage cards out there. With this card, however, you'll get a SouThwest flight credit every time you spend $1,000. Sixteen flight credits equal a free round-trip. And the sign-up bonus is two free flight credits. Remember, though, if you run a balance, ditch the card after a year. Equivalent cost per mile: approximately 0 cents.

7. Southwest Airlines' frequent-flier plan (www.iflyswa.com):
If you live in a city served by Southwest, this plan has one huge advantage over the other carriers' frequent-flier programs. Whenever there's a seat available on the plane, Southwest will allow you to use a frequent-flier award to fill it. The other airlines set aside just a few seats per flight for free tickets, which is why you often have to reserve awards months and months in advance. Another plus: Southwest awards a free ticket after 16 flights, no matter their distance. On average, that means you earn awards more quickly. Value per mile: not applicable.

8. Continental/Chase Visa or Mastercard (800 245-9850):
With a first-year interest rate of 7.9% -- vs. the typical 17% for mileage-bearing cards -- this credit card is better than most. Typical consumers -- who charge $700 worth of purchases on the card each month and run a $2,800 balance -- will earn about 13,000 miles in the first year and pay only $60 more than they would have with a typical credit card. Dump the card when the rate more than doubles in year two -- unless you always pay your bill in full. Cost per mile (for the typical consumer): 0.5 cents.

9. Citibank Diners Club charge card (800 234-6377):
Sink your mileage-hungry teeth into 12,000 bonus miles -- which can be used on any major U.S. airline. That's what you'll get for an $80 annual fee, as long as you make at least one purchase every month. If you run a monthly balance, though, you may not want to make many more buys. The reason: Diners Club assesses a stiff 2.5% fee on any outstanding balance at the end of the 60-day billing cycle. As long as you do pay it off, you're looking at a maximum cost per mile of 0.7 cents.

10. Trans World Airlines/EAB gold Mastercard or Visa (800 565-1129):
With an interest rate lower than that of most mileage-granting cards and a $125 coupon for a TWA flight, this is one of the few cards that is worth it for the average consumer -- that is, one who carries a $2,800 monthly balance. Keep the card for a year and then get rid of it, unless you can get another coupon. Cost per mile (for the typical consumer): 0.7 cents.

By David Leonhardt


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Updated Jan. 7, 1999 by bwwebmaster
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