Should I ditch my Air Miles card?

January 12, 2008 12:36 PM

I'm in Canada, and have an Air Miles card, which I use sporadically on grocery purchases..and that's about it. I just checked my total, and it turns out in seven years, I've earned a paltry 474 miles (less than half of what I'd need to get, say, a free blender). Needless to say, I'm not thrilled with those returns. Should I scrap the card, or try to use it more wisely - maybe get an Air Miles credit card, or go to different stores? Suggestions welcome.

Also worth noting: I'm neither a big spender nor a frequent flyer, and I don't own a car or home. My daily purchases are pretty standard, but obviously do not include gas or vehicle maintenance. I expect I'd use my miles mainly on gift certificates, gadgets or household items, but not on actual flights.

posted by lindsey.nicole to shopping (10 comments total)

Sorry all for the messy formatting. Evidently I've forgotten how to post questions properly.
posted by lindsey.nicole at 12:39 PM on January 12, 2008

Just about any reward program amounts to about a 1% return on the money you spend. Canadian Tire money and Shoppers Optimum are the only ones I know that give you significantly more than that as a matter of course -- but those are limited to only one store.

The best rewards program is the one (whose rewards you actually want) where you can collect the most points at the places you already shop.

The key to collecting the most points is usually in the credit card. I use the AirMiles Mastercard for all my purchases (and pay it off in full at the end of the month).

The second most significant factor for me is bonus air miles offers. Not that you should just buy things just for the bonus miles -- that's a recipe for overspending. I value the Air Miles at about 20 cents each (which is about what they're worth when you redeem for a transcontinental flight -- for the lower-end rewards like movie tickets, they're worth more like 5 cents) and will go out of my way for a bonus offer when it's unquestionably a huge reward on something I would buy anyway. e.g. I don't shop normally at the supermarket that offers air miles, but on the few occasions a year that I do, I usually get something like 150 air miles for a $100 order.

I have redeemed my Air Miles for seven transcontinental flights since starting collecting them in 2000 and currently have 3000 air miles in the account.
posted by winston at 12:47 PM on January 12, 2008

where you can collect the most points at the places you already shop.

What I meant was "where you can collect points at the most places you already shop."
posted by winston at 12:48 PM on January 12, 2008

Switch to BMO. They offer the Mosaik Mastercard (which is tied to Air Miles), but more importantly they've expanded the currency earning to their debit (interac) purchases as well.

No, I don't work for BMO, nor do I bank with them. I've been thinking of switching though.
posted by dirtynumbangelboy at 1:13 PM on January 12, 2008

If you want to recieve significant amounts of miles (or cash back, or whatever) you have to do two things:

1) Maximize the amount you put on your credit card. Use it for EVERYTHING. (then, of course, pay it off at the end of the month). Why would you ever use a debit card or cash when you could be earning 1-2% back?

2) Maximize the amount your credit card will give you. Shop around, look at current credit card deals. The Fatwallet.com forums are a good place to start. Even if the bonus on a credit card is good for only the first year, take it if the amount back is right. You can always switch cards a year from now and find another deal.
posted by chrisamiller at 1:57 PM on January 12, 2008

Canadian here - I have an American Express Air Miles card. There is no annual fee. And you get 1 Air mile for every 20$ you spend (even if it is 20 x 1$ charges).

And at places where they accept the Air Miles card itself, if you present the Air Miles card and pay with your Amex, you get twice the points!

The downside is that there are some places that do not take Amex so you will have to carry a spare Visa or M/C as well.
posted by bitteroldman at 3:00 PM on January 12, 2008

There are two approaches to rewards programs:

-- Change your habits in an attempt to maximize rewards.
-- Just passively collect whatever you get.

The second approach doesn't get you much the way of rewards, but it also costs you very little in real terms (your opinions on data privacy will affect how you feel about the less concrete costs). In that scenario, any rewards you get -- your current total would buy you about $40 worth of gift certificates -- are basically free, since the program is free.

Alternately, you can change your habits, choose your stores, credit cards, etc to maximize your gains. This will often have direct costs -- higher prices, annual fees for cards, etc -- that mean you have to be much more careful about the value you receive.

It is absolutely possible to come out ahead with Air Miles -- between my mother and I (we share an AM card and a Mastercard) we earn more than one, and sometimes more than 2 flights a year worth of Air Miles. This is based on having a WestJet Gold Air Miles Mastercard. It costs about $100 a year in annual fees, but we pay it off each month so it doesn't cost anything else. I put nearly all of my purchases on the card, and my mother puts most things over $100 on it. Between the two of us, we run between $2500 and $5000 a month on the card in a typical month. At 1 mile per $15, that's a lot of miles. Outside of the card, we probably earn about 500 miles a year via other sponsors, but that's negligible compared to our card earnings, and neither of us really goes out of our way to earn miles that way. I admit I occasionally buy things at the grocery store that I wouldn't if they didn't have an Air Miles bonus offer attached, but that's really bad practice -- I'd be better off to wait for those same items on sale.

More importantly, that particular card, co-branded as it is with WestJet, offers redemption discounts -- we get a flight for 1600 or fewer miles within Canada on WestJet. Since the flight we take most often -- from her home in Prince George to mine in Toronto -- is normally 3800 or more miles, that discount is a significant factor in making the whole exercise profitable. Our $100 a year investment in CC fees and my occasional stupid purchase (maybe $50 a year) buys us about $750-1000 a year in air travel discounts. It's well worth it for us.

When looking at merchandise and gift certificates and such, the per mile exchange value is generally quite a lot lower than the value when used on airfares.
posted by jacquilynne at 4:28 PM on January 12, 2008 [1 favorite]

Adding to what I said above, I've calculated that for the way I use miles, each mile I earn is worth about $0.32-$0.53. That's based on the cost of that specific flight, which ranges from about $600 to about $1000 and 1400 to 1600 Air Miles. You have to pay $150 in taxes for the flight even if you use Air Miles, leaving about $450 saved for 1400 miles and $850 saved for 1600 miles. It leans closer to .32 than .53, though, because availability tends to be very poor on the more expensive flights (that's why they're more expensive in the first place) so I usually don't get a chance to use the miles for things like going home for Christmas.
posted by jacquilynne at 4:34 PM on January 12, 2008

I second the Air Miles Amex (although I had a customer service nightmare with Amex which has sworn me off of them). I got quite a few points using it at Dominion for all my regular grocery shopping, plus putting everything I possibly could on the card (and then paying it off of course).

Air Miles might not be the rewards program for you. Poke around on places like http://www.redflagdeals.com for rewards offers.
posted by stephthegeek at 9:44 PM on January 12, 2008

It's all getting a bit crazy. I rented a car yesterday and ended up showing my business card and Autoshare card for a discount, and I got points from Air Miles and my RBC Avion Visa. There's so much hassle and so much plastic for a pretty paltry payoff. I still do it, but there are so many easier ways to save.
posted by gesamtkunstwerk at 5:11 AM on January 13, 2008