More Mileage From Your Credit Cards

Whether he's buying dinner, shoes, or theater tickets, Chicago attorney Bob Nesbit whips out his Visa card. Nesbit uses it for more than convenience: Every time he charges a purchase, he earns frequent-flier miles on American Airlines. "I charge around $1,500 a month," says Nesbit, "and at one mile per dollar, that comes out to about a free ticket a year."

Bank cards tied to individual frequent-flier plans have been gaining in popularity (table). Now, American Express has added a new wrinkle: Its Membership Miles program not only allows cardholders to earn travel on seven airlines, it lets them cash in miles for vacation packages.

HEY, BIG SPENDER. To determine which card deal is best for you, figure out how much you charge each month. Under the AmEx plan, mileage is redeemable only after you charge $5,000 in one year. Infrequent card users should stick with airline cards, which credit mileage monthly for even tiny balances.

Next, compare fees and finance terms. AmEx will waive the $25 annual fee for Membership Miles the first year, but after that, it becomes among the most expensive mileage-linked cards, at $80 annually (including the $55 basic fee).

Membership Miles is handy for travelers in several airline programs who want to use AmEx-earned miles to "top off" accounts to specific award levels. But if you only plan to add miles to one airline account, it may be wiser to go with that carrier's card.

Remember that some airlines place restrictions on your charging power. United put a 10,000-mile-per-month, 50,000-mile-per-year cap on credit-card mileage. Midway credits all Membership Miles you accrue but requires at least one flight before you can redeem an award.

Finally, because most mileage-linked cards charge premium interest rates of 18% and above, it's best to use them for purchases you'll pay off each month.

      Airline         Card         Annual fee/    Dollar charges
                                   Interest rate  for free ticket
      AMERICAN           Citibank Visa,      $50      $20,000
                         MasterCard        19.80%
      CONTINENTAL        Marine Midland       $45      20,000
                         MasterCard         18.95%
      CONTINENTAL, DELTA,American Express,  $80-95      20,000 to
      MGM GRAND, MIDWAY, Optima  16.25%     *  40,000
      NORTHWEST           Bank One Visa        $55      20,000
      TWA                Chase Manhattan       $75      20,000
                         Visa  19.80%
      UNITED             First Chicago         $60      20,000
                         Visa, MasterCard     18.40%
      *Optima only; American Express charges no interest  DATA: BW
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