Advice needed from you who use frequent flier miles

[booger]

I've never used frequent flier miles so far, and I usually use American Airlines (two flights from where I live) = $500 approximately R/T. On my current credit card from a local bank they only lower offer air fares to Mexico. I could conceivably charge everything to my credit card and pay it off monthly. Any in sight would be appreciated. I just don't know where to begin...

You can do so much better than that. Spend some time reading travel blooger sites, or spend some time on Flyer Talk. Both will give you the answers you are looking for with a little research. I personally recommend using a card that transfers to numerous frequent flyer programs, not a single program like AA. U will see the best results in churning credit cards and taking advantage of sign-up bonuses.