American Express launched a travel rewards credit card this week called the Blue Sky Preferred Credit Card, a card aimed at frequent travelers that don't mind paying an annual fee. The card offers double points on hotel, car rentals and dining purchases, and one point on all other eligible purchases. Points are redeemable for travel, cash back or gift cards starting at 7,500 points. Most interestingly, cardholders get an annual $100 allowance for airline incidentals.
That is, cardholders can get reimbursed for flight-related expenses, such as checked-baggage fees, in-flight meals and movie purchases, by using the card for the ticket and fee, and requesting the rebate within 60 days of the bill.
The card comes with other perks from American Express, such as purchase protection and extended warranty coverage.
The allowance alone can offset the annual fee, at $75, but only if you travel frequently and typically pay fees when you fly. In general, paying an annual fee for premium rewards doesn't make sense if you don't charge much during the year.
Consumers that spend less than $5,000 annually are considered "low volume users," according to a calculator at Bankrate.com that helps you find the best credit card for your lifestyle. Low-volume users should generally stick with fee-free cards.
As I've stated in previous posts, there is no best credit card for everyone. If you sometimes carry a balance, a low interest rate should be the primary concern. If you are paying a high interest rate on a balance, consider a card that offers a low interest rate on balance transfers, a nominal balance transfer fee and a lengthy introductory period on that transferred debt. If you're new to credit, look for a card that reports to the major credit-reporting agencies and if applicable, charges an annual fee under $50.
Weigh in: Do you possess or would you ever consider getting a fee-based rewards card? Share your thoughts in the comments section.
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