How do credit card sky miles work?

I am 26 and have never owned a credit card. However, I would like to build my credit by getting one to use for things I already buy, such as gas, cigarettes, food. I would like to get a card with rewards, such as towards an airline flight or hotels... How does this work?|||I have done some analysis of different credit cards in Canada as I was very curious about this:


http://kcorreia.com/?p=3





Basically, there is no point in getting a credit card with an annual fee. And you are better off getting a card with a cash rebate as you get less money when your credit card is based on points.|||Keep in mind that rewards programs change frequently. What is true today, may not be true next month. The numbers I give you here are examples (except for the WF rewards card that they offered me. You can go to the bank and CC issuer sites with relative safety to check on their current rewards programs.





REWARDS PROGRAMS are designed to do one thing and one thing only: to get the CC holder to spend more money than they can afford. There is no correlation between the points earned and the $ value of those points. You may earn 1 point for each $1 charged, but the actual cash value of those points is closer to $0.01 for each point redeemed. So you charge $50,000 and get 50,000 points, but the $ value of those points is only $500 when you redeem them. The restrictions and requirements are so confusing that it may be near impossible to reap your rewards. An airline ticket may cost 100,000 points at first. But they can change the exchange rate and require 150,000 points for that same ticket. Violate any part of the agreement and you could lose your points and get hit with the default interest rate. To get the points back, you will have to pay an expensive reinstatement fee. The rewards cards, if they do not now, will carry an annual fee. There may even be a fee attached to use your rewards points to buy the airline ticket or hotel reservation (usually is a fee).





Wells Fargo offers a rewards card for $12 per year. You charge $650 and you get a coupon for a free Burger King Whopper. Let us do the math. Pay $12 to get a $3 coupon for a burger. That burger costs $9. What a Whopper of a deal!!! Drop the rewards cards and save your money for your own rewards program.





Chase rewards card and Continental Airlines: Many people use their rewards for airline travel, so let鈥檚 look at that program. The card costs $85 per year just to possess it which reduces the value of your rewards. I鈥檓 not going to include interest charges for balances. We鈥檒l presume that you pay your balance in full every month. But note that if you don鈥檛 pay in full, interest charges will be added to this calculation. To redeem the rewards for an airline ticket:


A. The card holder must purchase a full fare adult ticket. The discount received on the ticket has been lost when you must purchase a full fare adult ticket.


B. $20 maximum discount for destinations to Houston TX, Newark NJ or Cleveland OH (no free tickets to these destinations).


C. Taxes, fees and surcharges, baggage fees are added. These surcharges can be significant.


D. Cannot be combined with other discounted offers


E. Cannot be used on code-share flights (other airlines that use Continental Airlines to connect other flights). As I understand it, your flight must originate, traverse and end on a Continental Airlines branded aircraft.


F. Cannot be used on G/T/E/L/W/S/N class flights or equivalents. These flights are usually business travelers, military travelers on government orders, group travel, travel industry travelers, airline employees, etc.


G. Cannot be used on Fridays or Sundays and requires a Saturday night stay. So, you must travel on Mon, Tue, Wed, Thu or Sat and return on a following Mon, Tue, Wed, Thu or Sat. There must be a Saturday between the departing and returning flights.


H. Blackout dates apply (probably on their busiest travel days).


I. Airlines fill anywhere from 8% to 93% of the free ticket requests. Paying passengers are more valuable than free flying passengers even though those seats were paid for in advance via other fees and interest charges.