Airline Miles Credit Cards Verses Rewards Cards
If you have a credit card there is a good chance that it is associated with some type of program where you earn points. Many people who travel or make frequent purchases accumulate lots of points that can be beneficial for personal use, such as in a vacation. However, what card may be best?
For years the benchmark card in the credit card industry if you wanted to earn “something” was the airline frequent flyer credit card. Typically a credit card that earns frequent flyer miles allows you to accumulate 1 mile for every dollar spent. Each card is associated with a particular airline and each month your points are deposited into your frequent flyer account with that airline. For example, if you have a Delta Airlines American Express card and you spend $1000 this month, you will see 1000 miles deposited into your Delta airlines frequent flyer account at the end of the month.
A reward credit card is similar to a frequent flyer credit card in the sense that you earn points based on each dollar you spend. However, the main difference is that it is not associated with a particular airline but rather a rewards program. Usually within the rewards program, one option is to redeem points for airline tickets. The cardholder also has the option to redeem points for other prizes, such as hotel stays, electronics, etc.
Most airlines advertise that you can get a frequent flyer ticket with 25,000 miles in your frequent flyer account. However, in recent years airlines have significantly reduced the amount of frequent flyer seats on each plane. Usually you must have a very flexible travel schedule or plan well in advance to use a frequent flyer ticket. Also, there are blackout dates where there are no frequent flyer tickets available. The upside is the actual cost of the fare does not come into play, so if there is a frequent flyer seat available it is yours.
Rewards credit cards get will often advertise no blackout dates. The reason they can do this is that they are actually purchasing a ticket for you with the airline rather than using a frequent flyer seat. The normal limit for the 25,000 points is a $400 ticket. So this means that you can purchase any ticket on any airline available, up to $400. The downside with this is that if you want to purchase a ticket over $400 you are out of luck unless you want to cough up more points (usually 5000 for each $100 increase in ticket price).
Both types of credit cards will usually offer some sort of initial teaser incentive. The most common one is a big point bonus with your first purchase, such as 10,000 miles or points. If you shop around you should be able to find either of these cards without an annual fee, or at least the fee waived the first year.
What card is actually best varies by person. If you travel a lot on one airline and spend a lot, a frequent flyer credit card may be best. Also, if you are in a position where you can travel on a more flexible schedule, such as in retirement, then a frequent flyer credit card is a better choice. If you do not spend as much, and appreciate more options in a reward program, a reward credit card is a better choice. The option of any ticket under $400 on any airline is definitely a good option for most any person. So evaluate your situation and decide what works, and then enjoy the free perks you will be earning.
If you have a credit card there is a good chance that it is associated with some type of program where you earn points. Many people who travel or make frequent purchases accumulate lots of points that can be beneficial for personal use, such as in a vacation. However, what card may be best?
For years the benchmark card in the credit card industry if you wanted to earn “something” was the airline frequent flyer credit card. Typically a credit card that earns frequent flyer miles allows you to accumulate 1 mile for every dollar spent. Each card is associated with a particular airline and each month your points are deposited into your frequent flyer account with that airline. For example, if you have a Delta Airlines American Express card and you spend $1000 this month, you will see 1000 miles deposited into your Delta airlines frequent flyer account at the end of the month.
A reward credit card is similar to a frequent flyer credit card in the sense that you earn points based on each dollar you spend. However, the main difference is that it is not associated with a particular airline but rather a rewards program. Usually within the rewards program, one option is to redeem points for airline tickets. The cardholder also has the option to redeem points for other prizes, such as hotel stays, electronics, etc.
Most airlines advertise that you can get a frequent flyer ticket with 25,000 miles in your frequent flyer account. However, in recent years airlines have significantly reduced the amount of frequent flyer seats on each plane. Usually you must have a very flexible travel schedule or plan well in advance to use a frequent flyer ticket. Also, there are blackout dates where there are no frequent flyer tickets available. The upside is the actual cost of the fare does not come into play, so if there is a frequent flyer seat available it is yours.
Rewards credit cards get will often advertise no blackout dates. The reason they can do this is that they are actually purchasing a ticket for you with the airline rather than using a frequent flyer seat. The normal limit for the 25,000 points is a $400 ticket. So this means that you can purchase any ticket on any airline available, up to $400. The downside with this is that if you want to purchase a ticket over $400 you are out of luck unless you want to cough up more points (usually 5000 for each $100 increase in ticket price).
Both types of credit cards will usually offer some sort of initial teaser incentive. The most common one is a big point bonus with your first purchase, such as 10,000 miles or points. If you shop around you should be able to find either of these cards without an annual fee, or at least the fee waived the first year.
What card is actually best varies by person. If you travel a lot on one airline and spend a lot, a frequent flyer credit card may be best. Also, if you are in a position where you can travel on a more flexible schedule, such as in retirement, then a frequent flyer credit card is a better choice. If you do not spend as much, and appreciate more options in a reward program, a reward credit card is a better choice. The option of any ticket under $400 on any airline is definitely a good option for most any person. So evaluate your situation and decide what works, and then enjoy the free perks you will be earning.