There’s a reason why more than 70% of consumers in the U.S. have at least one credit card. They’re convenient, they help build good credit when used responsibly, and they offer points with every purchase made.
In regards to the last point, credit cards offer consumers a convenient way to put more money back in their pocket every time they use them. Reward programs offer consumers incentives to spend by paying back a percentage of the amount spent to the cardholder. Such points can then be spent on a myriad of things including groceries, merchandise, fuel, and even travel.
There are dozens of different types of credit cards available that can make choosing just one a bit confusing. While there are certain factors that should be considered before applying for a specific card, the reward program is one of them.
If you’re an avid traveler, perhaps an airline credit card might be the ideal option for you.
How Do Airline Credit Cards Work?
The best airline credit cards work similarly to other rewards-based cards. For every purchase you make, you earn a certain number of points. Once you accumulate a specific amount, you can redeem them in the form of airfare to a destination of your choice.
However, credit cards that offer airline miles work somewhat differently than most general rewards credit cards. With an airline credit card, you would accumulate a certain number of miles based not only on the amount you spend on your credit card, but on how far you fly. These miles can then be used to buy tickets.
The “miles” accumulated are like points in a typical rewards program. Every airline credit card will specify the required number of miles accumulated to earn a free return flight from point A to point B.
Essentially, you can earn miles by actually booking flights with the airline or through specific purchases. Airline miles are basically like any other type of credit card rewards program. You get points for making purchases, and you can eventually earn enough points to get a free flight.
Many airline credit cards also offer additional perks that the average general travel card doesn’t offer, including:
- Complimentary seat upgrades
- Priority boarding
- Discounts on in-flight food and beverages
- Access to VIP airport lounges
What Consumers Should Be Aware of
Airline credit cards might offer rewards that can help pay for the flights you take, but they’re not always free of flaws. Even the best airline credit cards might have a few snags that consumers should be aware of.
Your award flights could be subject to restrictions in dates and destinations. Just because you may have accumulated enough points to cover the entire expense of a flight doesn’t necessarily mean that you have complete freedom to pick and choose when and where to apply those points. Many airline credit card programs impose certain restrictions and blackout dates that can leave consumers flustered.
These types of credit cards work best for those who are flexible with their travel plans. If you have some wiggle room with the dates of travel and have an open mind about where you’re headed, such a drawback won’t affect you.
Taxes might still be applicable. While you might be able to get the airfare for free by paying with your accumulated points, you might be unpleasantly surprised to find out that you might still be stuck paying taxes on your flights. Many times the taxes are next to nothing, especially for domestic flights. But if you’re planning to book something international, you could be faced with tax amounts in the hundreds of dollars.
It’s not unusual to pay an annual fee for credit cards, and airline credit cards are no exception. Some cards might let you go without a fee for a few months as a sign-up incentive. But after you’ve enjoyed the rewards for a while, you’ll have to start paying an annual fee as high as $120 for a premium credit card.
Should You Get an Airline Credit Card?
Whether or not you should apply for an airline credit card depends on how often you travel with a specific airline. If you rarely take a trip, airline cards may not be the most beneficial for you. Even if you do travel often, they still may not be worth it if you tend to take any airline that’s offering the best deal. In this case, just a general travel reward credit card will suffice.
On the other hand, if you’re a loyal customer of a specific airline, then having a credit card that offers you points towards flights with that airline just might be worth it. In this case, you should be able to accumulate points and recoup your annual fee very quickly.
What’s the Best Airline Credit Card?
If you’re looking for the best credit card for airline miles, consider any one of the following:
- Earn 40,000 points after spending $1,000 on purchases during the first three months after account opening;
- Earn 6,000 bonus points on your membership anniversary;
- Earn 2 points for every dollar spent on Southwest purchases;
- Earn 1 point for every dollar spent on all other purchases;
- No blackout dates;
- No seat restrictions;
- $99 annual fee;
- 16.99% – 23.99% variable APR.
- Earn 50,000 miles after $2,000 spent in purchases in the first three months after opening an account;
- Earn a $50 credit after making a purchase with Delta within the first 3 months;
- Earn 10,000 miles after another $1,000 is spent on the card within the first 6 months (limited time offer);
- Earn 2 miles for every dollar on direct purchases through Delta;
- Earn 1 mile for every dollar on all other purchases;
- First checked bag is free;
- Priority boarding;
- $0 introductory annual fee for the 12 months; $95 after that;
- 16.99% – 25.99% variable APR.
- Earn 50,000 miles after making $2,500 in purchases in the first three months after opening an account;
- Earn 2 miles on eligible American Airlines;
- 25% discount on in-flight food and beverages;
- First checked bag is free on domestic flights;
- Preferred boarding;
- $0 annual fee for the first 12 months; $95 after that;
- 17.24% – 25.24% variable APR.
- Earn 40,000 miles after spending $2,000 on purchases in the first three months of opening an account;
- Earn two miles per dollar spent on airline tickets purchased from United Airlines;
- Earn 1 mile per dollar spent on all other purchases;
- First checked bag is free;
- Priority boarding privileges;
- $0 introductory annual fee for the 12 months; then $95;
- 17.24% – 24.24% variable APR.
The type of card you inevitably choose will obviously come down to how you travel. If you’re the type to fly with the same airline every time, opting for an airline credit card would make sense. On the other hand, if you’re all over the place with your travels, you might want to have a general travel card in your wallet.
Otherwise, there’s nothing wrong with having one of each. That way you can accumulate miles towards flights while using a general card for miscellaneous travel expenses. Either way, you should do your homework on the types of credit cards out there before deciding on the best airline credit card for you.