Is Low Cost Airlines Really Cheap?

While booking trips for my Miami Spring Break trip, a friend of mine told me that it is cheaper to fly with Spirit Airlines than American Airlines. AA price is $300 while Sprit Airlines is $238 so it caught my attention. A question comes up in my mind instantly: Is low cost airlines really cheap?

I have flown LCA before and they are not bad at all.  However, what I hate most is the “optional fees”. Even though they are “optional”, one cannot avoid paying these fees in order to book the ticket. The nice thing about having LCA is the competition between them and legency airlines, thus lower fares that benefit customers.

A quick look at Spirit Airlines optional fees gives me a quick answer for my question. Assuming one travels with one carry on plus a personal bag, no checked bags, online check in and seating assigned at the airport, here’s the breakdown of all the cost:

Spririt charges $28 for a carry-on each way. It costs about the same to check a bag, however Spirit allowance is only 40 lbs instead of 50 lbs with legency airlines.

Another to imporant factor is that Spirit Airlines departs from Atlantic Airport, which is over an hour drive from Philly. Not only I have to wake up early, I would also have to arrange transportation which cost extra $.

On the other hand, as an EXP on AA, I enjoy first class upgrade, free checked bags, priority services and I can jump on the 15 minutes train to the airport. It’s pretty clear that in my case, low cost airlines is not really cheaper.

LCA may work for you if you fully understand what you’re getting into. For instant, Spirit $9 fare club sounds really good for weekend getaways. However, in my opinion, average travelers will not save much if any from LCA. Not to mention you can reach Star Alliance Silver for several years with a simple transcon flight (Aegean Airlines program), which gives you free checked bag, priority services and no charge for carry on with United and US Airways.

Update: A great video explanning how LCA works:

Picture of the Day

(Disclaimer: I did not set it up;)

The New United Drama

As you may heard, United merged 2 PSS to one this weekend. I have to say they have done an amazing job keeping everything running. However, I have my first MR of the year on United this Tuesday and it's not looking good:(

First off, It makes no sense to me that United chooses A319 on this PHL-SFO transcon. I have seen so many GS in coach on this flight. I have no hope whatsoever for upgrades. 8 F seats on a transcon is unacceptable! A B757 is the right one on this route, not the freaking A319!

Second, due to the PSS integration, I lost most of my assigned seats. The picture below explains it all:

The only seat leftover is the middle seat on the last row of EMB-120. FML.

Third, United new Boarding Groups has some issues. There are too many boarding groups which means it will not be seriously enforced by the GAs. The golden rule is less is more. How does pre-boarding different from boarding? You either board the plan or you don't. Why don't just assign them group 1 instead? Clearly United is shooting in their own foot here.

I also don't agree with uniformed personnel to board with GS. Let me be clear that I greatly appreciate their sacrifice for the country, however it's clear that uniformed personnel are not the most profitable customers. They could have board with Group 2,3,4 or 5 (Elite Boarding) and still get plenty of time to get overhead bin space and settle down. In my opinion, this is a pure political move. Not to mention I'm not sure how they will deal with foreign troops, especially when fights departs from overseas.

I'm extremely happy to fly again especially to test the "new" United. However, after trying out the dAArk side last month, my prediction is the grass is greener on the other side:-P

Til we meet again, Continental Airlines

RIP Continental, it has been a crazy fun 3 years. Your flights depart on time, arrive early, DirecTV is a big plus (in F w/o extra charge of course), and your food is excellent. Despite the lack of vouchers, I still like you. I definitely will miss you ( not the ugly globe icon though:-P).

Til we met again, Continental (PMCO FA that is;)

PS: Please, for the love of God, replace the A319 on SFO-PHL route with something better. I'll never get upgrade on this freaking flight!

Getting back on track

I just got back from a 5-day conference at Charlotte, NC. While I had a great time (who doesn't love Westin Havenly Bed ;), my life is a mess right now. My inbox is overflowed with emails waiting for response and I have a midterm tomorrow. Not only that, I lost my Kindle which has all of my receipts that I need in order to get reimbursed. FML. It will take me a little time to get things back on track. Hopefully I'll post some good stuff over the weekend. Travel isn't always fun:-/

Go Bald

Sarah is amazing!

Meet Sarah from Bethlehem, PA. She is diagnosed with Acute Lymphoblastic Leukemia at the age of 5. She has been fighting for over 3 years and she will continue going strong. Despite the pain, she has an amazing strength and she is still a delightful and happy kid. She makes me realize how lucky I am to have good health and to have the opportunity to enjoy the freedom of travel.

This year, I take part in fundraising for the St. Baldrick's Foundation by having my head shaved. This is the first time I go bald so I'm very excited.  St. Baldrick is a great all-volunteer charity and last year we raised over $30,000. Our goal for this year is $35,000 while my personal goal is $500. Please support me in giving hope not only to Sarah but also to infants, children, teens and young adults fighting childhood cancers. Whether $5 or $50, every cent counts. Thank you for your support!

Click here to make a donation.

PS: Don't forget to check your employer's donation matching policy
PPS: You can use AMEX SPG card to earn points for your donation:D
PPPS: I will post my pic before and after I shave my head. Look for it in March!

Credit card churning for young adults - Part 4: Choosing the Right Cards

Part 1: Background

Part 2: First few months

Part 3: Building Credit History

Part 4: Choosing the Right Cards

Part 5: Meeting the Spending Requirements

Part 6: Taking Care of Credit Reports

Part 7: Conclusion

Choosing a card is a very subjective decision since it depends on one's needs. For the sole purpose of churning cards while having a limited credit, consider these factors:

•  Get a card that you can actually keep for a long time

With a limited credit, opening and closing cards in a short period of time would hurt your credit age. It is essential that you choose the right card that you intend to keep for a long time.

• Get an AMEX first, others later

Creditors like to see AMEX. You are more likely to get approved to other cards if you have one. AMEX charge cards are easier to get approved than regular credit card.

• Apply for 2 cards from the same issuer on the same day

When you apply for 2 cards from the same issuer on the same day, chances are 2 credit pulls will be combined into one. With some exceptions (e.g: Chase will automatically decline your 2nd application), you have nothing to lose when you apply for the 2nd card.

Here are some cards I recommend:

1. Chase Sapphire Preferred Card (SP)

In my opinion, one of the best travel cards available: 2 points for dining and travel (air ticket, car rental, etc), 1 points for everything else, no foreign exchange fee, great customer service. I love its design since it's made from metal and the number is in the back. Points can be transferred to several programs such as United, Hyatt, etc. Current public offer: 50,000 points after $3k spending in 3 months. I don't recommend this card if you have less than 1 year old credit history though.

   2.  AMEX Zync

An easy card to get approved. There are several packages for you to choose, however I don't recommend the additional fee ones since they have a very low 6,000 points cap/packages. All transactions earn 1 point/dollar, with bonus if you have the packages. Some packages are very interesting (e.g: earn points for volunteer work). A good card for low spenders. Be aware that this cards gives you Membership Reward Express, which you cannot transfer to other airlines programs. However, if you own a MR AMEX (Green, Gold, etc), these points will become regular MR points. Current public offer: 10k points after first purchase, $25 annual fee. A better bonus (10k points and no annual fee first year) is only available through referral, so leave a comment below if you are interested.

   3. AMEX Starwood Preferred Guest(SPG)

Starwood points are very valuable. You can easily get 4-5 cents/point with Point & Cash redemption. Not only that, you can transfer 1:1 ratio to a lot of airlines. Every 20k points transfer they will give you an extra 5k! Earn 2 points per dollar at Starwood properties, 1 points for everything else. Be aware that this is a credit card so it has a firm limit and it's harder to get approved as well. Current offer: 25k points after $5k purchase in 6 months.

  4.  AMEX Premier Rewards Gold (PRG)

The most rewarding MR card: earn 3 points on airfare, 2 points on groceries and gas, 1 points for everything else. MR points can transfer to other airlines programs. Current offer: 25k after $3k in spending in 3 months, no annual fees first year. Not hard to get approved.

A word of caution: I wouldn't apply for AMEX PRG now since the offer is very weak. I would wait for a better one(50-75k points sign up bonus).

To take advantage of all of your cards, use them based on your purchase types. For example: Use PRG for gas, SP for dining, Zync at "green" store (e.g: Trader Joes, etc) and SPG for everything else. This will maximize your earning power and get the most our of your spending.

Notice: this post is entirely my own opinion. I am not an certified financial advisor. Do at your own risk. I am not affiliated with any credit card company nor do I earn any commission (except for the AMEX Zync referral, which I earn 5,000 MR points if you get approved).

Credit card churning for young adults - Part 3: Building Credit History, Fast!

Part 1: Background

Part 2: First few months

Part 3: Building Credit History

Part 4: Choosing the Right Cards

Part 5: Meeting the Spending Requirements

Part 6: Taking Care of Credit Reports

Part 7: Conclusion

 

Now that you have a few cards to get started, you need to understand how to use them to boost your score as soon as possible. 

First of all, you need a fast track to age your credit report. I recommend getting an AMEX Prepaid/PASS card(not to be confused with gift card), which is a prepaid card so there's no credit check. There is no annual fees and very few fees. The primary points for this card is to take advantage of AMEX backdating policy, which means they will backdate all your future cards to the first card you got from them. For example: if you get the prepaid card in Feb 2012 and get approved for AMEX Gold in July 2012, your credit report will show that the AMEX Gold was opened in Feb 2012, thus tremendously boost your report age. The best thing is you can get AMEX PASS card as early as 13 years old so by the time you get approved for a real AMEX card at 18, your report will change from 0 year old to 5 years old (with perfect payment history!)

                                   AMEX PASS                                       AMEX Prepaid

Another option is to ask your parents to add you as an authorized user. You will enjoy all of their history with AMEX(including opening date), thus If you were born in 1990 and your parents got the first card in 1985, your credit report will show your account was opened before you were born;) It doesn't make sense but the system isn't smart enough to understand.

Secondly, you need to use your current credit cards wisely. Lenders love to see credit report with AMEX. Your goal is to get an it ASAP in order to get approved for other cards. To accomplish this,  you need to show you are their preferred customers: on time payment, pay in full and high spending. Here's how you can achieve these goals:


Assuming you have $500 credit limit:

• Charge as much as you can
• Pay off almost everything before the cycle ends
• Statement closing balance should be under $50-100 (10-20% of credit limit)
• Pay off in full

The impacts are:

• High credit usage
• Low ending balance -> low credit to debt ratio
• Good payment history

If you are not a big spenders, there are many ways to pay for stuff you need to pay by credit cards, which will be presented in the next part. After about 6-9 months with good payment history, you will be ready for your first mainstream AMEX card, and in no time you will get a tons of miles to travel for free:D

Notice: this post is entirely my own opinion. I am not an certified financial advisor. Do at your own risk. I am not affiliated with any credit card company nor do I earn any commission.. 

Taking Advantage of Hyatt Best Rate Guarantee

I love Hyatt and their amazing customer service. I even have a private line agent assigned to me who takes care of all of my problem. However, Hyatt is also known for being more expensive than other competitors. Therefore it's not uncommon for flyertalkers to take advantage of corporate rate (e.g: IBM rate;) or package discount. But one source of discount that people often overlook is the Hyatt Best Rate Guarantee (BRG). Basically if you can find a better rate, they will match it and give you an extra 20% discount. Even though the T&C is stricter compare to Marriott or Starwood, it is still worthwhile to fight for.
I decided last minute to head to NYC for my birthday weekend to see some boardway shows. The cheapest rate at Andaz Wall Street is $225. I found better rate on hoteltravel.com for $135 so I decided to give a call to Hyatt CS for a price match. 

Hyatt Rates

Here's my summary after trying for 1hr:
hoteltravel.com ($135+) DENIED. Reason: free account needed 
Innstant.com ($177 a/i) DENIED. Reason:T&C said credit card is not charged instantly 
Expedia.com, getaroom.com, dhr.com all have regular rate so no go.
Supervisor wouldn't do anything. She called the hotel to see if they would honor the rate from innstant.com. DENIED
At that point I was furious with Hyatt ridiculous BRG policy. I told myself not to give up and keep trying. Fortunately AA.com came to rescue me :D. Their rate is $132 so I gave Hyatt one last call. 20 minutes later and I got this:

I couldn't be happier:D They match the price and give me an additional 20%. In the end I pay $105/night for a room in NYC with excellent breakfast, 4PM check out, free in room drink+snack at Andaz and most important I got my stay credit and points. I save 53%.What an amazing deal!

Here's what I learn to take advantage of the Hyatt BRG:

• Always check for other websites for cheaper rate
• The competing website needs to clearly state the room type (King bed room, Superior, etc. Standard room will not work)
• It's a public rate ( so no go with Priceline Name Your Own Price)
• The website doesn't require users to create account/have membership to make reservation
• The website needs to confirm reservation instantly
• As always, YMMV

Next time when you book your hotel reservation, don't forget to shop around to get the best deal out there. You will be surprised how much you save!

AA DEQM Summary

It has been a great journey flying 50k miles on AA in a single month. No doubt this is the craziest month of my life. Even though I have been flying for a while, it still amazes me with all kinds of unexpected. Here are some highlights:

Snowstorm in Seattle

I have such a bad luck with snow since there would be no snow wherever I go. Thus, Seattle got a ton of snow this winter and Philadelphia got nothing so far.

My window view at 6AM

I told myself this is gonna be an interesting day when I look at my window covered in ice. And it was indeed.

5hrs delay

At least I'm lucky since our flight got out of Seattle. Most AA flights that day were cancelled.

"We are gonna die!"

We lost an engine during the flight the next week on the DFW-SEA flight. My first thought is: "This is an emergency landing. This is gonna be FUN :)". At least if I were to die in a plane crash, there would be some sort of foundation in my name and I would be famous :-P #jk

The captain decided to divert to BOI instead of flying straight to SEA as a precaution. Everyone was calm and it was one of the best landing: very smooth and quiet. Right after landing firefighters rushed to check the plane and escort us to the terminal. Now that's VIP service :D

Firefighter checking the aircraft

Since BOI is an American Eagle airport, they don't have any spare MD-80. We landed at 1PM but the replacement plane was not scheduled to land until 7PM. I called AA to get on the Alaska flight to SEA but the supervisor from Alaska didn't like what AA is doing so she denied us to board. In the end the replacement plane came in at 7:30PM and we took off at 8:30PM. 

8hrs+ delay

The best gate agent. Ever!

I became friend to one of the best gate agent that I've ever met. I remember approaching her at 6AM on Saturday with my eyes half open half close since I had 2 hrs of sleep for the last 2 days; she was so nice and happy to help me to get a window seat (I didn't have any status yet at that time so I couldn't choose any choice seats and the day before the gate agent at DFW clearly hates her job). The other time she blocked the whole row for me and suggested me to withdraw my upgrade to save stickers. When my flight was diverted at BOI, she knew I was on the flight despite she didn't work on my flight and she also knew I was coming the next week when my flight was delayed once more time. She proactively look out to make sure I make my connections or get me the best seats available. I have never receive such a detail and amazing attention from a gate agent and I can only say: you are awesome!

She's amazing!

Systemwide upgrades, babe!

16 systemwide upgrades (8 for this year), EXP status until 2014 and lots of more miles, gonna love it:)

It is an amazing month for me. Even though I got some not so pleasant delays and GAs, I met and became friends with amazing people. I'd do this again in a heartbeat(this time I'll be in F all the time. Go EXP :D

Flying is not that glorious

Credit card churning for young adults - Part 2: First few months

Part 1: Background

Part 2: First few months

Part 3: Building Credit History

Part 4: Choosing the Right Cards

Part 5: Meeting the Spending Requirements

Part 6: Taking Care of Credit Reports

Part 7: Conclusion

 

The one biggest disadvantage when it comes to credit for young adults is the lack of credit history, which is the most common reason your applications are declined. However, my strategy is to use this as our advantage rather than giving up: If you have nothing to lose, you can only win. The idea is to apply for as many credit cards as you could because you have nothing to lose if you get declined. Based on my experience, here are some recommendations:

1. Capital One Journey

This card is a great card for building credit. It has no annual fee, 1% cash back on all purchases and 25% extra on top of the 1% if you pay your bill on time. It is extremely easy to get approved as long as there's nothing bad on your credit report. However, Capital One pulls from all 3 credit reports, no sign up bonus and they also give very little credit. Therefore, it is good to use for the first few months and put into the drawer.

2. Citi Forward 

Link to 10k bonus

Link to 30k bonus

I highly recommend this card for beginner. No annual fees, 5 points/dollar for bookstore, restaurant and entertainment and no cosigner needed. Somehow Amazon.com is classified as bookstore so you are earning 5% off on Amazon purchases! You also earn 100 points/month for paying on time. 0% intro APR for 12 months on purchases and balance transfer. This card has the best offer I've ever seen for this market segment. There are 2 promotions going on: earn 10,000 points(~$100) after $650 in purchase and sign up for paperless statement in the first 3 months. The 30,000 points offer has a higher spending requirements and only earn 2 points/dollar in bonus categories. Therefore, I recommend the lower bonus. As always, YMMV. If the 30k works better for you, go for it. This is a great card for amazon and dining out. Citibank also does a decent job to increase your limit without an extra hard pull.

3. Credit card with your existing bank

If you have a checking account, it's worth getting a credit card from the same bank since you already establish a relationship with them. However, please make sure it is unsecured credit card, no annual fee and there is no requirements for a cosigner. If your bank doesn't offer student card or it has an annual fee, I recommend get the 2 cards I mention above.

The most important detail about your first credit cards is they need to have no annual fees so you can keep them as long as you can. It will help you to age your credit report without much effort. After a few months establishing your credit, we can start moving to mainstream credit cards where the game begins.

Notice: this post is entirely my own opinion. I am not an certified financial advisor. Do at your own risk. I am not affiliated with any credit card company nor do I earn any commission.. 

A Great Start to the New Year with Hertz

I'm in love with Hertz and USAA. This Friday I had an interview appointment with an employer for my first Co-op. My original plan was to take public transportation to the site. However, on Thursday night I realized SEPTA changed their schedule and that means I'd have to leave the house at 5:30AM for the 30-minute 10AM interview and wouldn't be back home til 3PM. I also had a MR at 6PM that evening so this wouldn't work for me. I was going to cancel the appointment all together since I was tired after 12hrs of flying on Thursday. However, Hertz came and save my day :)

Most car rental companies have a minimum age requirement of 25 and a surcharge for those who are 21-24. In general, 18-20 are SOL when it comes to renting a car. However, Hertz has a deal with USAA to allow their members to rent without surcharge at 18+ years old. The little known thing is everyone is eligible for USAA limited membership without any military affiliation. Not only that, setting up Hertz account through USAA will also get free Gold membership and good discount too. It's the best of both world if you ask me.

One thing I learned from taking advantage of deals are to prepare for the worst. I printed out the screenshot of the USAA age requirements, my AMEX primary coverage and the phone number of the employer in case I couldn't rent the car. I don't have car insurance either which could make the matter worse. I was super nervous and set appropriate expectation (or the lack thereof). Much to my surprise, I was in and out the office for less than a minute. Even though this is my first rental, everything was pre-printed; the agent verified my driver license and credit card, got my signature to save on file and I was on my way in no time. She didn't even attempted to sell me LDW nor question my age! Starting the next rental I don't even need to sign anything except for showing my ID. Way to go Hertz Club Gold!

For my car rental I used my Chase Sapphire Preferred instead of my AMEX PRG. The reason is Visa Signature has better coverage than AMEX in which Visa would pay loss of use without fleet utilization log while AMEX wouldn't and car rental companies never release the log. I also earn double points on the rental since it's classified as "travel" category. Gonna love Chase!

I hope this will help young travelers to overcome one of the biggest challenges. Feel free to let me know if you have any questions. Happy New Year!