Are Airline Reward’s Cards Right For Me?

Airline Cards Aren’t for Everyone

There are many types of rewards cards and Airline Cards is just one of them.  If you aren’t a frequent traveler, these cards probably aren’t for you.  There are many perks to them, but unless you travel often to rack up the points, they are costly.  If the annual fee for the card is $100 and it takes years for you to get a free trip, you have already paid for the trip several times over.

For example, if you keep the card for five years at an annual fee of $100, you have paid $500 in fees, which is equal to two airline tickets at $250 each.  It usually takes 40,000 in reward miles to earn a round trip ticket.  You would have to spend $80,000 on your card to get two free tickets, which would be $16,000 a year for five years.  If you are someone who does not pay your bills in full, you would be paying lots in interest on this $80,000 also.  This would not be a good choice.

Here are a list of advantages and disadvantages of airline cards for you to consider:

Advantages

You accumulate miles faster with airline cards.

You get companion tickets annually.

You receive upgrades to business or first class seats.

You get free membership into airline clubs.

You accelerate your frequent flier status.

Disadvantages

You pay high annual fees for the card.

You pay higher interest rates.

Airline cards may not be accepted everywhere.

You can’t use mileage on black-out dates

You must use this card for most of your purchases to get the mileage.

As I mentioned, these cards are not for everyone.  These are usually targeted for those with high credit scores and not offered to everyone. Evaluate what you need in a card.  Mileage cards may not be for you if you aren’t a frequent flier.  Cash back cards are a better alternative.  You get a percentage back of your purchases and can reap the benefits quicker.

Always keep in mind…cash has no black-out dates and we all understand, clearly, the value of a dollar.

Credit Expert Witness, John Ulzheimer, is the President of Consumer Education at SmartCredit.com, the credit blogger for Mint.com, and a Contributor for the National Foundation for Credit Counseling.  He is an expert on credit reporting, credit scoring and identity theft. Formerly of FICO, Equifax and Credit.com, John is the only recognized credit expert who actually comes from the credit industry.  Follow him on Twitter here.

Categorised in: Credit Cards, Credit Report, Credit Score, Money & Identity

This post was written by John Ulzheimer