The Best Non-Airline Credit Card for Travel Rewards?

Dear Tim–

I am looking to switch from an airline-specific credit card to American Express. I wonder which specific AmEx card is the best one given the annual fees. I am not a frequent traveler (a few short trips and one long big trip a year) and tend to accumulate miles via purchases.

Beth

Dear Beth–

For those who earn the bulk of their miles by traveling, I generally recommend a credit card linked to their primary airline mileage program.

You, on the other hand, are at the opposite end of the spectrum—a frequent buyer rather than a frequent flyer. And that calls for a different approach.

Frequent buyers like yourself may be best served by earning their miles with credit cards linked to the card issuer’s rewards program, rather than to an airline-specific program. To distinguish them from airline cards, let’s just call them bank cards.

Bank cards trump airline-specific cards in one crucial respect: The free flights awarded in exchange for the miles are not encumbered by the capacity controls that make award redemption such a challenge in traditional airline programs. That’s because the card issuer simply buys a ticket for the cardholder when he redeems his miles. And since the award tickets are purchased on the open market, they’re not subject to the onerous restrictions associated with airline program awards.

All the major card issuers offer bank cards in their product portfolios.
Chase offers the Sapphire card. Citibank has its ThankYou Premier card. CapitalOne has the Venture card. And so on.

Since you asked specifically about American Express products, I used the find-a-card wizard on American Express’s website, filling in your information to the extent that I could and making educated guesses as necessary.

The app processed the information and returned three recommendations: the Starwood Preferred Guest card, the American Express Platinum card, and the Blue Sky Preferred card.

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My guess is that the Platinum card, with its $450 annual fee, is too expensive, plus it’s a charge card, so the balance is due in full every month.

The Starwood card is a popular choice among frequent travelers, but its value is primarily as a replacement for or an adjunct to an airline card.

So that leaves us with the Blue Sky Preferred card. Here’s how it works.

Cardholders earn one point for every dollar charged to the card for most transactions, two points per dollar at restaurants, hotels, and for rental cars.

On the redemption side, cardholders get a $100 statement credit for travel (airlines, hotels, car rental companies, cruise lines, travel agencies, tour operators, online travel agencies) for every 7,500 points, or 1.33 cents per point for most charges. That’s pretty good value, especially considering that you can purchase the travel wherever you choose, getting the most bang for your buck, and there are no capacity controls or blackout dates on flights or hotel stays.

Points can also be redeemed for gift cards, but at a less advantageous ratio: cashing in 6,500 points for a $50 gift card means you’re getting just .77 cents for every point.

The card’s $75 annual fee is among the highest for bank cards. But it’s potentially offset by the annual $100 allowance for miscellaneous airline fees such as checked bags, inflight meals and entertainment, blankets, and pillows.

There’s also a fee-free version of the card, the Blue Sky card, which features the same earning and redemption rates, but doesn’t include that $100 fee allowance.

So, if you anticipate being able to take advantage of the allowance, you’ll be ahead of the game by opting for the Preferred card; otherwise, go for the no-fee card.

This article originally appeared on FrequentFlier.com.