Don't you hate responsible people? The sort of real-life Ned Flanders' who make voluntary super contributions, return library books and always pay their credit card balance in full at the end of each month? Well, if ever there was a card for those people, this is it.
Today we posted an article about free credit cards - cards which have a $0 annual fee and an interest free period. In theory, you could use the card, pay off the balance in full before the expiry of the interest free period and (as long as you avoid cash advances, over-limit fees etc) you would never have to pay the bank a cent.
The American Express Blue Sky credit card is one such card. It even falls into the category of credit cards that earn you money, because it has a rewards program. As long as you're one of aforementioned boy scouts with the financial discipline to never exceed the interest free period, there is no reason to not get an American Express Blue Sky credit card.
Firstly, the rewards program. American Express have compiled a competitor to Qantas' popular Frequent Flyer program. Under the Blue Sky program, you earn 1 point per $1 spent and points don't expire. This is hardly an exhaustive analysis; however we did a quick comparison of the points value between Qantas Frequent Flyer and American Express Blue Sky using a return economy airfare from Adelaide to Cairns as a guide. Under the Frequent Flyer program, the trip would require 36,000 points (excl. taxes) and under Blue Sky it would require 42,000 (also excl. taxes). The difference isn't huge so a decision between the two reward programs would come down to the earn rate of the individual card. Also, the difference may be more or less under different destinations.
The other good features are free domestic and international travel insurance, 50% off Blue Sky flights until 2010 (both of which make this card a serious consideration for any traveller), purchase protection and extended warranty.
On the downside the interest rate is quite high (19.99%) and you must earn at least $40,000 a year to be eligible.
In summary, if you have the discipline to use this card for your purchases, earn the rewards points then pay the balance in full within 55 days the American Express Blue Sky credit card is a great option. For those likely to lapse outside the interest free period, consider a card with a lower interest rate.
