Is an Airline Miles Card Right for You?

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When selecting a credit card, you'll want to choose one that offers perks and rewards for frequent use. For travelers, an airline mile credit card is an excellent way to earn free travel and vacation expenses.

Because not all airline mile credit cards are created equal, doing a proper amount of research first is important to get the most out of your card. These are a few things to keep in mind when deciding whether or not an airline miles credit card is right for you.

You need to use your card to enjoy the perks.

This may seem obvious, but the people who get the most benefits from their airline mile cards use the card to make the majority of their purchases, then pay the balance off each month. If you only use a credit card for occasional emergencies, an airline miles card might not be beneficial to you.

The mileage required for a free flight differs from card to card; on average, it will cost between 35,000 and 60,000 miles for a free flight, and most cards provide a mile for each dollar spent. If you don't plan on using the card frequently or paying it off each month, you can still enjoy travel benefits by with a card that offers bonus miles upon signing up.

There are lots of travel perks.

Most airline mile credit cards also allow you to use your points towards other travel-related expenses, including:

  • Hotel accommodations
  • Rental cars
  • Certificates for companion travel
  • Discounts on airfare if you don’t have enough points for a flight

Additionally, many cards offer special travel-related perks such as free baggage check, complimentary in-flight beverages and meals, priority boarding, access to airport lounges, free travel insurance, and more.

Because airline miles can take awhile to accrue, it's not a bad idea to choose your card based on these additional perks, particularly if you aren't a very frequent flier. These perks alone can make an airline miles credit card well worth it and help you save a significant amount of money on your travel expenses.

Annual fees are a given

Almost all airline mile credit cards have annual fees, with the average running around $95 a year. Many cards, including the Citi Platinum American Airlines card, will waive the fee the first year, but after that you can expect to pay.

If you are not accumulating enough points through regular use, it might not be worth it. On the other hand, if you use your card often and travel frequently, the annual fee will be well worth it.

Interest rates are higher.

Airline miles cards have higher interest rates than a standard credit card. For example, the average interest rate for an airline miles card for someone with excellent credit is just over 15% compared with 11-12% for a standard card based on an excellent credit score.

The best way to avoid high interest rate payments is by paying off your balance each month. This way, you can avoid the interest and still earn a significant amount of points.

Restrictions are possible.

Some credit cards have blackout dates or travel restrictions on rewards redeemed through points, often during the most popular travel times of the year. Make sure you know of any restrictions and blackout dates beforehand.

Check for expiration dates as well. Some cards require you to redeem your miles within a certain period of time, so opt for a card that offers airline miles that don't expire.

For frequent travelers, airline mile credit cards are a dream come true. But for those who don't use their cards often, you may end up paying more in interest and fees than you earn in points. Keep these tips in mind when considering whether on not an airline mile credit card is right for you.

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Please note your financial situation is unique and our tips & advice presented here may not be appropriate for your situation. CreditCardXpo.com recommends that you seek different advice & opinions from your own accountant or financial adviser who understands your individual circumstances before making any important decisions or implementing any financial strategy.