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MBA Credit Cards (to use while in Business School)

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MBA Credit Cards (to use while in Business School) [#permalink] New post 12 Jun 2009, 22:37
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This post on "How to Save Money in Business School" got me thinking about Credit Cards that would be helpful while in business school. Please beware that only financially responsible individuals should apply for Credit and it can be very easy to overextend yourself. At the same time, if you are disciplined financially, credit card points and reward could be very beneficial to saving money while in business school. Allow me to share some of my favorites with a few descriptions and don't be shy to share yours:

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1. Discover for Students (Gas Card)
No Annual fee
5% cash back on Gas Purchases up to $100/month at ANY gas station that takes credit cards - all except Arco.
I have this card and keep it in the car. Only use it for Gas. It used to have better benefits but still OK. I get $5-6 every month by spending $100-150 on gas. However, you can also double/increase cashback amount by choosing non-cash redemption options such as $20 AMC pack which includes 2 movie tickets, 2 pop corn and soda coupons or a $40 rental coupon for National, Budget, or Enterprise for $20 - other rewards available but these are my favorite.






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2. Starwood Amex - 10K sign up bonus and up to 15K bonus if you spend $15K in 6 months
First year - no annual fee; $45 thereafter
Earn SPG points redeemable for nights at Starwood Hotels (Sheraton, 4Points, W, Westin, Le Meridien, Luxury Collection)
If you need to travel/stay in hotels - this is a great option. Allows to redeem points or use cash&points awards that are substantially cheaper than rack rates. Another benefit is ability to transfer SPG points into airline miles on 1:1 ration with almost all airline programs. Allows to top off accounts as needed. I have this card but the part I don't like is the $45 annual fee after the first year - it is not worth it.


More to come...



My overall collection (some still have activation stickers). There is a duplicate card here which I did not catch - discover. Also there are a few ATM cards here - not all are credit
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Re: MBA Credit Cards (to use while in Business School) [#permalink] New post 13 Jun 2009, 09:27
I used to have a lot but the once a year activity fee's got the best of me, and I didn't like having so many different online accounts.

I would say the AmEx Blue card is a good one.
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Re: MBA Credit Cards (to use while in Business School) [#permalink] New post 13 Jun 2009, 14:52
89nk wrote:
I used to have a lot but the once a year activity fee's got the best of me, and I didn't like having so many different online accounts.

I would say the AmEx Blue card is a good one.


I second the Blue Cash rec (I do not have any vested interest in you getting an AmEx card btw). You get 5% back on 'necessities' like Gas and Grocery once you hit the $6500 mark for the year. The only downside is the $2000 credit limit, which means I still have to carry a 2nd card for making major purchases.
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Re: MBA Credit Cards (to use while in Business School) [#permalink] New post 14 Jun 2009, 05:58
I am a huge fan of cash back cards.

For example: Chase Freedom Card
https://applynow.chase.com/FlexAppWeb/renderApp.do?SPID=CJB3&CELL=6H90&MSC=LSABCFREEDOMC&AFFID=9C.eSeL3cao-ByEjzrPdgXYmcJ2JPXGQ0w
$50 Cash Back after your first purchase!
Always earn a full 1% Cash Back on Every Purchase. Everywhere. From the First Dollar you Spend. There are no spending tiers or earning caps.
It’s Easy to Earn More Cash Back: Up to an additional 10% Cash Back and even as much as 20% at select merchants when you shop online through Chase.
Plus 3% cash back in rotating categories like gas, home improvement and department stores.
0% Interest for 12 months
No annual fee

Citi has a similar program too. I know a few 2nd year friends who got these recently because of the 12 month interest free thing. Since they don't get sign on bonuses until they start, and dont have any income these days and no student loans coming in.
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Re: MBA Credit Cards (to use while in Business School) [#permalink] New post 14 Jun 2009, 15:11
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Right on!

I have a Chase Freedom Plus and was going to recommend that one but it has been discontinued and no longer available, only the regular Freedom :cry:
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Re: MBA Credit Cards (to use while in Business School) [#permalink] New post 14 Jun 2009, 17:53
I like the new Citi Forward (http://www.citiforward.com) and applied for one today to add a Visa card to my wallet. I already have a Citi Dividend MasterCard (1% cashback on everything, 2% on groceries and drugstores) and an American Express Blue Sky card (1 point for each 1$, 7,500 points give you 100$ credit on any travel purchases) I use for buying virtually everything, and yes I ALWAYS pay my bill in full so I couldn't be buggered about APR and late fees and everything.

The new Citi Forward nets you 5 points for every 1$ spent on restaurants, books, movies and music. 100 points every month for paying your bill on time. 2500 points will get you a $25 credit on your student loan account, or spend those points on other more frivolous "gifts" if you wish. "Double dip" on restaurant spending by signing up for UPromise (www.upromise.com) and get even more credits towards student loan balances!

Could be useful for an MBA student, ne c'est pas?

As far as freezing your credit cards goes, great if that works for you, but just bear in mind a credit card offers more protection than a debit card when disputing fraudulent purchases. And it's obviously safer to carry around than wads of cash.
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Re: MBA Credit Cards (to use while in Business School) [#permalink] New post 14 Jun 2009, 18:05
I have a cashback citi mastercard and an AmEx Blue card. My AmEx gives me triple points on money spent on hotels, restaurants, rental cars, airline tickets so was my card of choice when I was living my consulting-esque life.

I also have a clothing store card since they offered a fantastic discount and coupon booklet with it. And I shop there a lot. :P

These are all fee-free and have relatively low APR rates. (A friend of mine had a medical emergency and couldn't pay his bill on time, so got stuck with excessively high charges. I'm usually on time with credit card payments but after that experience, thought it was better to have a lower rate!)
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Re: MBA Credit Cards (to use while in Business School) [#permalink] New post 14 Jun 2009, 23:11
Anyone can recommend a good card that gives lots of frequent flyer miles (Us Airways preferred)?
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Re: MBA Credit Cards (to use while in Business School) [#permalink] New post 14 Jun 2009, 23:56
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Paradosso wrote:
Anyone can recommend a good card that gives lots of frequent flyer miles (Us Airways preferred)?


This is a very tough call.

Since you will be in PHL, the hub of US Airways, it makes sense to get their Credit Card. (Will give you priority boarding and priority checkin). most other benefits will probably be useless (such as companion ticket or qualifying miles). However, they have been voted to be the worst of the legacy US carriers and that should not be taken lightly - charge for soft drinks, no in-flight entertainment on US flights, fees for pretty much everything, etc.

Here are the US Airways credit card options: http://www.usairways.com/awa/content/di ... fault.aspx. You can apply for both the Personal and business card and get 50-60K miles, which could be enough for 2 momestic roundtrips or 1 international trip. Actually, one good thing about them is that partner awards are easier than with United (if you wanted to fly Lufthansa or Singapore air for example using US Airways miles). this is definitely worth the $79 annual fee per card (personal and business).

If you do have a choice, I would advise against US Airways as a program to deposit your miles - may sound not practical if you are located in PHL, I would argue for a different program instead - such as United for example or BMI if you are UK/Europe based (not sure if you can apply for the BMI Amex from Milan or how usable it is in the US with forex fees).

Just my thoughts.
I do travel a lot, however, and have status with multiple airlines - 1K with United and Gold with BMI (British Midland)
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Re: MBA Credit Cards (to use while in Business School) [#permalink] New post 16 Jun 2009, 02:41
Hey, this may be a bit off topic, but can internationals apply for a credit card in the U.S.? I intend to spend some time post MBA and want to start building up my credit score if possible.

Anyone with relevant experiene, please do share!
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Re: MBA Credit Cards (to use while in Business School) [#permalink] New post 16 Jun 2009, 05:14
bb,

many thanks for the relevant, detailed and prompt answer. It really is appreciated (as well as your having founded the GMATClub!).

Since you are into the travel industry, I will expand on my needs.

1) I am an international (Italian). I assume I can apply to US credit cards as long as I have a US checking account. I will apply for it once I am in Philly (already booked my first roundtrip with BA).

2) US Airways is the only airline that flies directly from Milan (from where I hail) to Philadelphia. I will fly most times with my girlfriend, who got a Visa and will be staying in Philly with me. However, other airlines, most notably SwissAir, Lufthansa and BA, offer convenient 1-stop options (London or Zurich).

3) I don't mind stopping, any charges for drinks etc. or no entertainment (I usually read books or sleep). I am very price conscious as I will take 6-10 international flights a year.


Given the details above, my guess is that my best option is the US Airways card, that gives companion tickets/60K miles/direct flights to Milan/priority check-in. However, if you tell me there are better cards associated e.g. with Lufthansa / BA / Swiss -usable miles/benefits, I will opt for these instead (I too hear US Airways is crap plus I am likely to use extra miles with European airlines).

Also, I assume all airline cards convert my spending into miles (which is what I want).

Thanks again!


bb wrote:
Paradosso wrote:
Anyone can recommend a good card that gives lots of frequent flyer miles (Us Airways preferred)?


This is a very tough call.

Since you will be in PHL, the hub of US Airways, it makes sense to get their Credit Card. (Will give you priority boarding and priority checkin). most other benefits will probably be useless (such as companion ticket or qualifying miles). However, they have been voted to be the worst of the legacy US carriers and that should not be taken lightly - charge for soft drinks, no in-flight entertainment on US flights, fees for pretty much everything, etc.

Here are the US Airways credit card options: http://www.usairways.com/awa/content/di ... fault.aspx. You can apply for both the Personal and business card and get 50-60K miles, which could be enough for 2 momestic roundtrips or 1 international trip. Actually, one good thing about them is that partner awards are easier than with United (if you wanted to fly Lufthansa or Singapore air for example using US Airways miles). this is definitely worth the $79 annual fee per card (personal and business).

If you do have a choice, I would advise against US Airways as a program to deposit your miles - may sound not practical if you are located in PHL, I would argue for a different program instead - such as United for example or BMI if you are UK/Europe based (not sure if you can apply for the BMI Amex from Milan or how usable it is in the US with forex fees).

Just my thoughts.
I do travel a lot, however, and have status with multiple airlines - 1K with United and Gold with BMI (British Midland)
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Re: MBA Credit Cards (to use while in Business School) [#permalink] New post 16 Jun 2009, 05:49
Paradosso, I believe airmiles earned on any Star Alliance airline can be redeemed on US Airways. So in theory you could get yourself a Lufthansa or Swiss or Singapore Airlines card and earn their miles, but redeem them on the US Airways flight to Milan.

Also, unless I'm mistaken I don't think having a checking account in the US will necessarily lead to you getting approved for a credit card. Or did you mean debit card?
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Re: MBA Credit Cards (to use while in Business School) [#permalink] New post 16 Jun 2009, 06:41
solaris1 wrote:
Paradosso, I believe airmiles earned on any Star Alliance airline can be redeemed on US Airways. So in theory you could get yourself a Lufthansa or Swiss or Singapore Airlines card and earn their miles, but redeem them on the US Airways flight to Milan.

Also, unless I'm mistaken I don't think having a checking account in the US will necessarily lead to you getting approved for a credit card. Or did you mean debit card?


Yeah, from what I remember from my undergrad days, getting a credit card as an international is a bit of a hassle if not impossible. Having a checking account in the US will not necessarily lead to approval of a credit card (in most cases, it doesnt or thats my understanding). I never tried to get one since I had a family credit card issued in my country, but didnt notice any of my international friends getting one in the States. It's a "credit card", meaning you are borrowing based on your credit, and to have it, I believe you need to have established your credit score one way or another in the States.

If you had an active Social Security Number, the story might be different, but it is difficult to get one these days unless you intern or work in the country. I somehow got one during my college days, but since I have no record, it often works to my disadvantage (they always ask me why there is no record - looks a bit suspicsious at first).

Even getting a contracted cell phone&service is a hassle for us. Normally, we need to pay $500-ish deposit to just get one (unless you use prepaid, which really really sucks).

So, the best option, probably, is to get a US Airways credit card in your home country. I do it with United, and they give me 15 miles for every $10 I spend.
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Re: MBA Credit Cards (to use while in Business School) [#permalink] New post 16 Jun 2009, 09:20
That really sucks for internationals!

I have personal and corporate credit cards in my country, but aren't you losing a ton on commissions on exchange rates? When I spend with AmEx in the USA, I am being hit hard.

Can one reap the miles/benefits with a debit card? Canone get a card that does not carry a balance (i.e. always pays the month balance in full?)?

Many thank guys!
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Re: MBA Credit Cards (to use while in Business School) [#permalink] New post 16 Jun 2009, 10:09
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Paradosso wrote:
That really sucks for internationals!

I have personal and corporate credit cards in my country, but aren't you losing a ton on commissions on exchange rates? When I spend with AmEx in the USA, I am being hit hard.

Can one reap the miles/benefits with a debit card? Canone get a card that does not carry a balance (i.e. always pays the month balance in full?)?

Many thank guys!


You don't want to use an international card in the US - forex fees will add up quick.

I saw Milan on your profile but was not sure if you had Credit History in the US.
If you don't have a Social Security Number - you won't be able to get a Credit Card or a Checking account to start with. A few years ago DHS was very militant about giving students an SSN but after a bunch of them could not get Driver's Licenses, Bank Accounts, or other things, I think they relaxed it, so the first thing you will need to do when you get into the US is get the SSN - your school can help.

Then you should open a checking account. Your credit history will be Zero, so you won't get approved for anything except a secured credit card and that's probably a way to start.

There is a checking account from Bank of America that earns US Airwasy miles - http://www.bankofamerica.com/deposits/c ... ards_usair but it is 1 mile per $2 spent.

I'd say - don't worry about the Checking account earning miles - just focus on getting your credit history established in the US.
If you can get an auto-loan (or any loan), even with exuberant rate of 20% - it may be worth to keep it on the books for a few months as that will boost your credit history tremendously.
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Re: MBA Credit Cards (to use while in Business School) [#permalink] New post 16 Jun 2009, 11:16
bb,

thanks again for your input. I agree with the point of the abroad-issued cards: definitely don't want to use that in the US. I also am focused on building a credit history and earning miles via credit card --not checking account.

I should add that I am getting a checking account at Digital Federal Credit Union (I will take their no-cosigner loan for Wharton), so that may be something to start with.

Two more questions:

1) What exactly is a secured credit card? Can I get one with a SSN (given to me by the school) and the DFCU checking account?

2) Do you think I could get a secured US Airways Visa, or any other method to get miles?

Manu thanks, and any other current student input is appreciated as well.


bb wrote:
You don't want to use an international card in the US - forex fees will add up quick.

I saw Milan on your profile but was not sure if you had Credit History in the US.
If you don't have a Social Security Number - you won't be able to get a Credit Card or a Checking account to start with. A few years ago DHS was very militant about giving students an SSN but after a bunch of them could not get Driver's Licenses, Bank Accounts, or other things, I think they relaxed it, so the first thing you will need to do when you get into the US is get the SSN - your school can help.

Then you should open a checking account. Your credit history will be Zero, so you won't get approved for anything except a secured credit card and that's probably a way to start.

There is a checking account from Bank of America that earns US Airwasy miles - http://www.bankofamerica.com/deposits/c ... ards_usair but it is 1 mile per $2 spent.

I'd say - don't worry about the Checking account earning miles - just focus on getting your credit history established in the US.
If you can get an auto-loan (or any loan), even with exuberant rate of 20% - it may be worth to keep it on the books for a few months as that will boost your credit history tremendously.
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Re: MBA Credit Cards (to use while in Business School) [#permalink] New post 16 Jun 2009, 12:45
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Deposit-Secured credit is a GREAT way to start.

It works like this: you give the credit union (I'm a CU girl at heart, but most financial institutions do this), say $1000. Then, they stick that $1000 in a CD for you - a CD you can't access. They then give you a loan for $1000 with a regular payment schedule. Now, you make your regular payments. If you ever stop making payments, the credit union can transfer your CD to pay off the loan.

You can even do this without having $1000 to start with - they "lend" you the $1000 and then put THAT in the CD.

My credit union would charge 2% more on the loan than you would make on the CD, so it was a very cheap way to establish credit. If the CD was earning 3%, then you'd pay 5% on the loan. It's especially nice since you paid 5% on a diminishing balance and earned 3% on a growing balance.

They can do essentially the same thing with credit cards, though you might have to put in $1500 on a $1000 limit, and probably the rate margin wouldn't be as small. This is because it's easier to cause losses for the credit union if you rack up over-the-limit and late payment fees.

And btw - it might not be an SSN you want or can even qualify for. It's been a while, so I'm fuzzy on the rules - but it's probably an ITIN (inidividual taxpayer identification number). These are for non-residents/citizens/green card holders who want bank accounts or need to file taxes.
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Re: MBA Credit Cards (to use while in Business School) [#permalink] New post 16 Jun 2009, 14:09
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aaudetat wrote:
And btw - it might not be an SSN you want or can even qualify for. It's been a while, so I'm fuzzy on the rules - but it's probably an ITIN (inidividual taxpayer identification number). These are for non-residents/citizens/green card holders who want bank accounts or need to file taxes.


I am rusty on this as it's been quite a while. i was lucky to get my SSN through a work&travel program a long time before I came to the US to get my MBA.
Checked with a friend of mine: You are correct, now all international students are getting ITIN's. You can use those numbers to build your credit history.

However, there is a loophole (still I believe) to get a SSN if you want to (not sure why really but if you do want to) and that is to apply for a job on campus - then you have a valid reason for SSN - at least that was true 2 years ago when my friend was going through all this fun stuff. Now this conversation took a very different turn.
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Re: MBA Credit Cards (to use while in Business School) [#permalink] New post 16 Jun 2009, 14:16
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Paradosso wrote:
bb,

thanks again for your input. I agree with the point of the abroad-issued cards: definitely don't want to use that in the US. I also am focused on building a credit history and earning miles via credit card --not checking account.

I should add that I am getting a checking account at Digital Federal Credit Union (I will take their no-cosigner loan for Wharton), so that may be something to start with.

Two more questions:

1) What exactly is a secured credit card? Can I get one with a SSN (given to me by the school) and the DFCU checking account?

2) Do you think I could get a secured US Airways Visa, or any other method to get miles?

Manu thanks, and any other current student input is appreciated as well.


Sorry for taking a while to get back with you on this - my day job is quite busy today.

I am really into travel and miles (big fan flyertalk.com - online travel community). You have a few things going on:

If you travel international 6-10 times a year - that's pretty considerable and that will net you a status of at least Silver or Gold with one of the carriers as long as you stick with them. Status counts and works towards accumulating more miles. For example if you are Gold with US Airways (50K miles flown annually), you will get a 50% mileage bonus on any flight with US Airways. If you are at 75K or 100K level, that's double the flight miles), so you accumulate miles a lot faster. You will also get upgraded on the local flights (not international), will have access to exit row seats - can be Huge if they are available as they will over significantly more leg room to sit and work in comfort (US Air Gold members can book them in advance but there are only a few of them per plane, so chances are slim if you are not booking way out), can use priority security and checkin counter

Also, once you hit Gold Status with Star Alliance (US Air, United, Lufthansa, Swiss, BMI, Austrian, Singapore, ANA, Asiana, Turkish, etc) - you have access to the Lounge at the airport as long as you are flying international (or there is a loophole - you get access in the domestic lounge if you have a Status with Non-US Star Alliance carrier such as LH, LX, BMI, etc). Not huge but a very nice perk esp if there are flight delays or a long layover - you can spend a few hours in a comfortable environment with snacks, tea, coffee, soft drinks and using internet for free.

So there are definitely reasons to stick to one airline and get the status on THE airline you will fly the most. So, if US Airways is the one, then stick to it and fly its planes (even though you will get credit for flying Swiss or Lufthansa, but you wont' get extra bonus miles). You will still get a special counter and priority boarding across all Star Alliance carriers.

Based on this info just by flights, US Airways is a good option to put your points into. Other two programs you could consider are United and BMI - you can credit miles to those programs. The disadvantages are 1) No emergency row seats - will be a big deal on international flights.

The advantages are more miles - United will give you 100% bonus rather than 50%. However, I don't think United is a good fit for you if you can't get their top status with 100K flight miles per year. Therefore, I would recommend BMI will give you much more liquid miles but with a modest bonus of only 25%, but BMI allows one-way award flights and I am spoiled so I try to fly Business as much as I can and with BMI a business class roundtrip is 37K miles + 250GBP compared to 80-100K miles or US Airways or United - quite a bit of difference. Economy is 25K + 170 GBP vs 60/50K miles on United/US Airways and the fact that I can do one-way flights is also very versatile for me. The only downside I found so far is that I have to call UK to redeem awards, so I call late at night or early in the morning.

One BIG issue to consider is that US Air uses a calendar year for their status calendar, so if you flew 40K miles before december and then another 40 in January, you would not get a Gold status as those miles were flown in different years. This is important if you are starting your flights this year (to school and back home for Christmas). However, BMI uses a rolling year, so you would actually get Gold status in January and it would be valid for 12 months after that. (FYI: If you have a status with any airline, you can do a status match on a different carrier - can be very helpful).

Now, about secured credit cards - it is a special type of a card (only some banks issue them). They way it works - you deposit $1,000 into an account and that's the security deposit and your "credit" line. If you deposit $2K, then your credit line is $2K and so on. It is a credit card to start building your credit history - usually comes with all kinds of fees and nasty tricks but not much you can do.

Therefore, you most likely won't be able to get a US airways card out of the gate, so you will be stuck with a secured card for about 6-9 months - that's the end of first year, so there is no value in US Airways miles per se. About $99 companion tickets - that's within the US only - not international travel. However, if your GF and you want to travel around the US - could be handy, but again, you wont' be able to get a card probably until end of the first school year (summer)

What it comes down to is which of these is important to you:
1. Have one way flights and ability to use Miles+Cash for quicker rewards and ability to have status sooner due to rolling qualification year (BMI)
2. Have an option (not always) to grab exit rows on international flights but get your status only in the Fall next year (US Airways)


I would pick option 1 as I would not be tied to Fly US Air (to get the exit row that I may or may not get) and I could fly a variety of carriers without too much concern. Also hitting Gold status with BMI would give me access to the Lounges on the domestic flights. At least I would start out that way. Then if for some reason it was not working out for you, you can still get a US Air card and switch your pattern to US Air in January since this year is a throw-away due to qualification timeline anyway.



Disclaimer: both BMI and US Airways can vanish and disappear at any time and your miles may be worth nothing. US Airways is struggling financially and BMI just sold 50% stake to Lufthansa, so there is a chance that BMI will be absorbed (in that case your miles will become LH Points, but that's a process of a few months/years rather than days). Just want to make it clear that points in Airline programs are not FDIC insured and get devalued on a regular basis - use them. Don't hoard them


P.S. for every day spending (not sign up bonuses), I can recommend SPG Amex - you earn 1 point for every dollar spent and then you can transfer those points to any Airline program on a 1:1 basis (almost any - not BMI unfortunately). When you transfer 20K pints, you get 5K point bonus - a 25% bonus, so you technically earn 1.25 miles for every dollar you spend on anything. That of course if you don't spend your SPG points to stay in a Sheraton or Westin or W somewhere with your Girlfriend.
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Re: MBA Credit Cards (to use while in Business School) [#permalink] New post 16 Jun 2009, 18:33
Yeah getting a SSN is really difficult these days. None of the first years from my country I talked to had a SSN. I don't think you need a SSN or ITIN to open a checking account though, or at least I didn't. B of A was located in my college town, and I was able to open an account with ease once I show my student ID.

With my international card, I am only paying about 1-2% extra on currency rate (on top of forex rate) with no other charges. And when I wire my money, I am paying about the same (I don't think you can transfer money on forex rate since banks take margins and such). It is actually more expensive when I exchange my money at airports. So, I never took notice of the extra I might be paying off my credit card. But alas, maybe this only applies to me.

US Airways check card looks fantastic! I never thought of something like this. And I found United Mileage Plus check card with Chase. I guess I am opening my account at Chase after all.
Re: MBA Credit Cards (to use while in Business School)   [#permalink] 16 Jun 2009, 18:33
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