Friday, February 10, 2012

They Never Give Up, Do They?

Wheee!  Flying is FUN!
 I'd do ANYTHING to get a FREE FLIGHT! 
I'd even PAY FOR IT!!! 
 Maybe not.

In the morning's mail, this missive:
It's not too late to reactivate your Dividend Miles account! 
We value you as a US Airways customer, and we want you to be able to use your miles. 
Our records show that 88,416 miles were forfeited on 7-31-2011 because the last time you earned or used miles was 1-6-2010 – more than 24 months ago. 
We want to give you your miles back. 
You can:
  • Sign up for and use one of our credit or debit cards*
  • Log in to your account and pay a fee
  • Fly in First or Envoy Class on US Airways**
Act fast, you must take advantage of this offer by 4-29-2012. And when you do, we'll automatically reinstate your miles and your account will stay active for another 18 months

Now some folks might read this and say, "Gee, you're leaving money on the table here!  All those miles are being forfeited if you don't take on the actions listed!  You'd better get on this!"

They throw pennies at us, hoping we spend dollars.

The only thing you would forfeit here would be the money you'd spend to reactivate these frequent flyer miles - and the money you'd spend trying to use them.

You see, that's why those miles expired in the first place - they were largely unusable.  "Well, sir, there are no frequent flyer miles seats left on that flight - you'll have to book further in advance, say, six months?"

Yea, it is a joke - you get a "free flight" but for only one of you, and the other has to go on a separate flight on a different day.

And then there is a fee to process the free ticket - often enough to make a bargain fare on a competing airline look competitive.

Or you have to buy more miles to have enough for the free ticket.  Whenever you spend money on something that is "free" - even if it is a penny - remember that it is not "free" anymore and you have been had.

When you have to spend money to get things for free it ain't free anymore.  Frequent flyer miles are a bad joke in this era of discount fares and horrible airline service.

To me, flying on a plane is not some special treat, but an ordeal to be endured in order to get somewhere.  You stand in line forever, get hustled through security, fight a mad rush to get onboard and get a space for your bag, and then slip in to a seat with 2" less legroom than my femur is long.

Then you breathe other people's farts for two hours, listen to a screaming baby, and read the Skymall Catalog and at first wonder "Who buys all this shit?" and after a while you start thinking, "you know, a talking chimp head would look good in our living room!"

Then you land and deal with all the people who have to rush to stand up and get their bag, push and shove to get off the plane, and then struggle to get a rental car - all while feeling the effects of high altitude and low oxygen content, which leaves you dizzy and nauseous for the remainder of  your trip.

This is the "treat" they are offering you as an incentive to get a 22.5% interest rate credit card?

Wow, what's the bonus for a 17% card?  A nail-gun shot into your head?

Now you know why I "forfeited" the miles.  In order to keep them, I would have had to pay a fee to keep them, or use them to go somewhere (I had nowhere to go at the time) and even then, pay a fee to use them.  It was a raw deal, from the get-go, used to bait a 22.5% interest US Airways Credit Card.

And, yea, we ended up paying interest on that card - more than enough to pay for the "free flights" and "free upgrades" we did use.  Free ain't Free.   In fact, there is no such thing as Free.  No one gives things away and stays in business - and only a chump would believe that.

And now, to get the miles "reinstated" they want us to get a similarly odious credit card, OR pay FULL FARE for a first class or business class ticket (ouch!), OR pay another "fee" (amount not determined).

There is one - and only one - scenario where frequent flyer miles make sense.  And that is when you really are are a frequent flyer and someone else is paying for the tickets.  For example, you fly on business, for your company or the government.  They pay for your tickets on XYZ airline and you get the miles credited to your account.

When you check in, as a real frequent flyer, you can use those miles to "upgrade" a coach ticket to first class.  It is so totally worth it, if you fly a lot.  And since you likely have the highest miles of anyone on the plane, you'll get the upgrade.

Joe Tourist, even if he had the miles, won't get the upgrade, as upgrades are handed out based on seniority - who flies the most with that airline.

When I flew United, on business, coast-to-coast once a month, yea, it was worth it.  But once I stopped?  Buying airline tickets as a tourist means finding the best fare, not dicking around with flyer miles.

Cashing them in for tickets, as I noted, is problematic - getting seats on a flight for you and your spouse, without booking months and months in advance, is problematic.  And you may have to pay a fee to get the tickets, which sort of negates "free".  

And while a real frequent flyer might be able to accumulate miles quickly enough to get a free trip for the wife and kids, Joe Tourist, on the other hand, won't travel enough to accumulate enough miles to even buy a talking chimp head.  The miles expire faster than you accumulate them!

And if you are dumb enough to try to accumulate miles using a credit card, well, unless you are Donald Trump, chances are, you don't charge $50,000 a year on your credit card, which is what you will need to get that "free flight" for you and your spouse.

For most of us, the miles expire faster than they accumulate.  It is just a stupid game that you can't win at, like most rewards programs.

So what about cash back bonuses?  Yea, Discover offers those, and other credit cards are now offering them, too.  You'd think that would be a better deal, as cash is cash, after all.  But many of these programs don't give you cash back.

Huh?  What did you say?  Cash back doesn't give cash back?  Well, at least with Discover, No.

They give you "credits" on an "account" and it is incumbent on YOU to LOG IN to this account and see how many "credits" you accumulated.  And of course, what they want you to do with the credits is spend them on "offers" from "cooperating retailers" for special bargains.  In other words, they want to SELL YOU A DISCOUNT COUPON for a new flat-screen TV.  The coupon costs $50 and gives you $50 off on the TeeVee.  But of course, Circuit City charged Discover only $25 for that coupon, so it is not really a good deal for you (and better bargains can be had just by shopping around).

If you really push it, they will give you $50 off on your credit card bill, by applying a "cash coupon" to your balance.  But you have to accumulate $50 (minimum) of "credits" before they will do this.  They will not automatically apply the discount.

Another system rigged as bait to get you to consume - to spend more - and to get you to think, "Gee, I am a smart consumer!  I am getting bonus cash back!  The more I spend, the more I save!"

But you can't spend your way to savings.  If you carry a balance for even one month or two, the vaunted "cash back savings" on your credit card are wiped out by interest.  And the credit card companies are counting on this!

And yea, I had a Discover card.  I think I got $100 cash back and paid $200 in interest.  Score:  Discover 1, Me 0.  I don't have a discover card anymore.

Interest rates on "rewards" cards of any kind are such that if you end up paying interest at all, it will be onerous.  What's that you say?  You always pay off the balance?  Yea, maybe.  So far.   It is like the old saying about motorcyclists.  There are two kinds - those who have had an accident, and those who are going to.  If you "pay off the balance every month" that is just Jim Dandy.  But 70% of Americans carry a balance.  You are just a motorcyclist who hasn't yet had a car turn left in front of them.  But it will.  And reconstructive knee surgery is no fun - as it paying off a 15% interest rate credit card over a period of ten years.

And the entire scheme - and it is a scheme - is distracting you from more important things in life.   If you are chasing S&H greenstamps in life, then you may not be keeping an eye on prices of the groceries.

You may think you are being "smart" by spending your financial energies on coupons, cash-back bonuses, discounts, rewards cards, and the like.  But you are just playing a game where they make all the rules and are getting you to spend a lot of time and energy chasing down tiny discounts and rebates - while you blithely ignore the more important things in your life - and the more blatant rip-offs.

"But I'm a smart consumer!" you say, just like our friend, Lucky Mouse.  But you aren't.  You are engaging in faux financial acumen.  It is just consumerism - spending - disguising itself as financial wizardry.

Consumerism is not going to make you money.  Yes, get the best deal you can.  But when someone presents a complicated deal that involves miles, credits, rewards, points, coupons, or whatever - watch out!  They are trying to get you to ignore dollars and chase after this corporate scrip instead.

And people do this - with regularity - enthralling their neighbors with how many "points" they accumulated, while at the same time, ignoring how much they paid to get those points.

Just walk away from complicated deals and schemes.  They are complicated for a reason!