Waiving the first year's annual fee just for signing up for a rewards card have become more common. These are typically tied to a certain level of spending within the first three to six months of receiving the card, though the amounts required aren't prohibitively high--generally about $500 to $3,000.
Travel cards are also competing for your business with introductory bonuses. The best promotion we've seen in awhile was a Capital One Venture offer in 2011 to match up to 100,000 points in an airline frequent-flyer program linked to a credit card. That offer expired after Capital One reached its goal of matching a billion miles. They revived the offer in early 2012, but this time offered new customers twice as many points as they'd spent with a competing card in the prior year. So if you'd spent $20,000 on an American Airlines card, Capital One would give you $40,000 points for signing up. This type of promotion often has a short sign-up period. If you're hoping to snag such a lucrative offer, you can learn more by monitoring websites such as FrequentFlier.com.
More typical are 30,000 or more points sign-up offers that major airlines like American and United might offer for opening a card account. The value of mileage deals depends on whether the card is being offered by an airline or a bank. Airline cards have historically promoted 25,000 points as the equivalent of a round-trip domestic economy ticket. But you might have a tough time booking the trip you want for 25,000 points. That will usually get you a restricted flight, meaning you're subject to blackout dates and airline-imposed limits on the number of seats allocated to rewards use, according to Tim Winship, publisher of FrequentFlier.com.
To get the flight you want for 25,000 points, you might need to book many months in advance. You might have to use up to 50,000 points for an unrestricted flight on the exact dates you want. And of course you can only fly on that particular airline and its partners.
With travel cards offered by banks, the rewards are easier to calculate and use. Typically, 100 miles equals $1 in rewards, so 30,000 miles will buy you a $300 ticket. You book your travel however you'd like, say, through an online ticket broker such as Kayak.com so you don't have to worry about blackout dates or capacity restrictions. After you make your reservation, you contact the card issuer to redeem your points to cover the expense.
There are variations on this formula. For example, the American Express Blue Sky travel card pays $100 in rewards for every 7,500 points earned, for an earn rate of 1.25 points per dollar spent.