ON BOARD WITH RANDY PETERSEN

Randy Petersen WHEN A MILE IS NOT A MILE
February 2004
by Randy Petersen

Question:
I have signed up for a Starwood American Express card to earn miles useable on a variety of airlines. I have now noted that Discover has introduced a Discover Miles card, with a $29 annual fee and some flexibility. It advertises one mile per dollar, but I'm not sure I can earn and then transfer the miles to the airline frequent flyer account of my choosing. The details are a little sketchy, and Discover says it will send full information after I sign up. I don't want to sign up until I know the details. Can you find out how the Discover Miles card operates, and how it compares to the AMEX Starwood card?

Answer:
You ask a good question about the Miles Card from Discover, and I've also heard from a few others lately about this card, so I'm going to give you the complete answer—as I know it. First of all, I have to defend Discover since I was able to find out all the information I needed without signing up for the card. You may just have had a service person having a bad day.

Now, let's address your main question and then I'll fill in the blanks. Any mile that you earn from the Discover card is a "private" mile in their program. There is absolutely no way you are able to convert, exchange or move Discover miles into actual frequent flyer miles with any of the major frequent flyer programs. What you will be able to do is earn miles in the frequent flyer program of the airline you take your award flight on—whatever the length of that flight is.

The reason for this is that Discover actually purchases a regular airline ticket for you from any airline of your choice to settle your award claim with them. Again, the miles you might earn with Discover cannot become United Mileage Plus, Southwest Rapid Rewards or Continental OnePass miles.

Now, I'll tell you why I think you might avoid these types of miles cards. For one thing, all your earning power comes just from credit card use. With a credit card like Starwood or others, you can also earn miles from a multitude of partners such as AT&T and Ameritrade. Also, if you are a big spender, you can actually end up earning 1.25 miles for every dollar you spend, something not possible from Discover.

But the real challenge of the Discover program is that while they say you can fly any airline (as you know, with the Starwood card you can also fly just about any airline) your award requires a Saturday-night stay and 21-day advance notice to use the award. While regular frequent flyer programs may have a few restrictions here and there, they are nothing like this. And your free award from Discover cannot exceed $500 in value for a domestic ticket. As you might know, many members use awards with their regular frequent flyer miles that could cost thousands of dollars.

You can contact Randy Petersen at randy@insideflyer.com.

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