Credit Cards that Earn Airline Miles

When used wisely, credit cards that earn airline miles can be a great way to save money. Savvy consumers use them to get free airline tickets for vacations or business trips.

How Airline Mile Programs Work There are countless credit cards that offer airline miles as rewards. Some are offered directly by an airline. The miles for these cards are generally only redeemable through that particular airline. Cards offered through a bank usually offer more flexibility as far as which airline you can use, though other restrictions may apply.

Basically, for every dollar you charge on your card you receive a certain amount of airline mile points. The number of miles per dollar charged can vary from one credit card to another, as does the number of miles needed to earn a free ticket.

Potential Pitfalls While airline credit card reward programs may sound like a deal you can't lose, there are some downsides you need to be aware of:

Some programs set an expiration date on the miles you earn. If you don't use them in the alotted time you forfeit them. This can make it tough for you to earn enough miles for a free ticket if you use your credit card sparingly.

Many airlines only reserve a handful of seats for rewards earners, which can make it tough for you to get a seat on board a crowded flight. Additionally, there are usually blackout dates in which you can not reddem your points for a free ticket. These blackout dates are usually around the busiest times for travel, meaning you may not be able to use your miles when you need them the most.

Airline mile credit cards do not necessarily give you the best deal. The interest rate is often higher than regular credit cards so you'll end up paying more in finance charges. Also, almost all airline credit cards have annual fees. You must add that in when deciding whether you can get the best deal with an airline miles card or a regular credit card.

For example, let's say that it takes you 2 years to build up enough miles to earn a free ticket valued at $500. Also assume you maintain a balance of $2,000 in that time.

If you use an airline miles card that charges 14.99% interest and has a $75 annual fee it would have cost you about $750 to earn a ticket that only cost $500.

On the other hand, if you had stuck with a regular credit card with a lower interest rate of only 9.99% and no annual fee, it would have cost you $400 in finance charges.

So you can see that while potentially valuable, an credit card that offers an airline mile reward program is not necessarily the best option. You must compare all terms and fees related to different cards in order to choose the best deal.

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