Frugal Travel: Stop Paying Twice For Your Airline Tickets
Rick Ingersoll, The Frugal Travel Guy, points out a basic consumer mistake.
- Charleston-North Charleston, SC (1888PressRelease) August 18, 2011 - Every time you buy an airline ticket from the airline's website, or use any other travel site to pay for you're a business trip or vacation, you have just paid the airline the second time for that ticket, according to Rick Ingersoll, the popular "travel hacker" behind The Frugal Travel Guy blog.
"Think about," he said. "Our entire society, except for a few examples like farmers' markets and kids' lemonade stands, accepts credit cards as a form of payment for goods and services. And in the pricing of any item for sale, every savvy merchant has factored in the costs of accepting credit card payments. Merchants pay a transaction fee for each credit card payment they have processed. You are already paying for the credit card transaction in the price you pay for almost everything you buy."
On top of that, Ingersoll pointed out, major banks and credit card issuers, such as American Express, Citi, Chase, et al, purchase airline miles from the airlines, to entice consumers to use their credit card products in exchange for receiving miles. Those frequent flier miles - which can be exchanged for free airline tickets -- are sign-up bonuses for banks' and airlines' new cardholders. Those cardholders continue to accrue miles for every dollar they spend on the cards.
"Those of us who pay off our balances in full each month incur no cost for the use of the credit card, have a free system of record keeping, and we earn frequent flier miles for free, which we can then redeem for free flights," he said. "With all those miles, why would we ever purchase an airline ticket? It would clearly amount to paying for that ticket twice."
Of course, if you don't pay off your credit card balance every month, you're paying interest on your balances, he noted. "So the rest of us can let those paying interest and late fees on their credit cards pay for our free travel."
As Ingersoll said, banks make millions on their credit cards, as do the airlines by selling their miles to the banks and other retailers to induce loyalty among consumers.
"By searching out the best credit card offers, and by using them responsibly and often, you can see the world at next to nothing," he said. "And we can all afford that."
For more frugal travel tips, techniques and advice, visit Ingersoll's blog at www.frugaltravelguy.com.