Hong Kong Consumer Council (HKCC) has cautioned credit card holders about programs offering air travel "reward" based on the value of purchases made by credit card. Some rewards aren't such a good deal. Depending on which card one uses, there can be huge differences in actual per-mile costs.

Citi Bank gives card holders a mile of air travel for every three dollars they charge to their cards.

HSBC card holders, using the same travel reward program, have to spend HK$16.6 for that same mile of air travel - more than five times more, according to a survey conducted by the council last month among 14 credit card issuers.

Differences like that can "make a big difference amounting to tens of thousands of dollars," Ron Hui hu-yuen, vice chairman of the public relations arm of the council said in a press release.

For example, he noted, a roundtrip economy class ticket between Hong Kong and Taipei would require a Citi Bank cardholder to spend HK$45,000. The HSBC card holder, by contrast, would have to spend as much as HK$250,000 on his credit card for the same trip.

"The contrast is more striking in the case of a longer distance journey," he said, citing a ticket between Hong Kong and Tokyo that would require a minimum of HK$90,000 versus a maximum of HK$500,000.

Disparity was also evident in valid periods of redemption, processing for a request, handling fees and other limitations.

While there are credit cards whose bonus points never expire, a majority of surveyed credit cards have valid periods, spanning from 1 to 5 years.

The council has received 14 related complaints from consumers in the first nine months this year, in contrast to 22 complaints during all of last year.

In one case, a credit card holder, who had been assured both by the bank and the airline that her bonus points had no expiry date, was later informed her mileage redemption rewards had expired.

"We strongly suggest consumers read thoroughly the terms and conditions of mileage redemption before making a credit card application," said Hui.

"Consumers should make certain of the valid period and whether their regularly patronized airlines are included."

Consumers are also advised to make early bookings. In peak season, it generally takes four to six weeks to process a request.

Eight of 14 surveyed credit card issuers charge handling fees ranging from HK$50 to HK$500 for every travel reward redemption, in addition to their annual fees.

Four card issuers require consumers to register for the redemption programs in advance, with two charging sign-up fees of HK$240 and HK$300.

"First of all, I'd say it's good to have credit card bonus points, which can be used to go shopping and eat in restaurants. Now they just add one more channel to get air tickets. Just don't use it as the way to acquire all your air tickets," Connie Lau Yin-hing, the council's chief executive, said after the press conference.

"Would you try spending HK$500,000 specially for an air ticket to Tokyo? Certainly not," she said.

China Daily

(HK Edition 10/16/2010 page1)