What makes a good frequent flyer credit card?
Understand what makes a good frequent flyer credit card before you get one.
This article examines what makes a good frequent flyer credit card. Now let's be clear upfront. If you are a frequent flyer of a particular airline, this article will probably not influence you in your choice of your airline credit card. But it is still important to know what features good airline credit cards offer and how to take advantage of them.
Are you allowed to earn double miles?
This is very important. Most airline credit cards charge an annual fee which ranges anywhere from $25.00 to $85.00 on average. Being able to earn double miles when you make a ticket purchase with your favourite airline will certainly help you earn faster miles and hence a faster free ticket. Most frequent flyer credit cards have versions (normally Platinum or Signature cards) that allows you to earn double miles. Some do not.
Most frequent flyer credit cards charge an annual fee for the card. In fact, they are probably the most profitable type of credit cards for the issuer. Aside from the fees, frequent flyers tend to be travelling business people who spend a lot on their card. The older legacy carrier airlines tend to have higher annual fees for their affinity credit cards. It is not uncommon for them to charge a $75.00 fee for a card that allows cardholders to earn "double miles". However, the newer carriers tend to have lower annual fees on their frequent flyer credit cards. For example, the JetBlue Card from American Express has an annual fee of $45.00, yet allows you to earn double miles. The Air mexicana for example, also has an annual fee of $45.00.
This is a one-time benefit that most frequent flyer credit cards offer. You essentially get some free bonus
miles either when you are approved of the card, or when after you make your first purchase. Some cards give
a lot of bonus miles (15,000 miles), whiles others tempt with just 5,000 bonus miles.
Some frequently flyer credit cards give a free companion ticket or a companion discount certificate if you make an airline ticket purchase within a specified price range. This is, in my opinion, one of the best deals you can get with an airline credit card.
These are bonuses that the card gives you each year you renewe your card. In fact, it is these bonuses that
make airline credit cards good value. Not all frequent flyer credit cards have anniversary bonuses. But let's
take a look at some of these bonuses.
Free Companion Tickets - we mentioned earlier that some airline credit cards give a free companion ticket if
you buy a ticket within a certain price range (no discount tickets). There are a couple of frequent flyer credit
cards that give a free companion ticket every year. This is of very good value if you travel frequently with a
companion. In fact, the value of this feature often more than offsets the annual fee you pay.
Free Lounge Passes - Some cards give you a one or two lounge passes every year you renew your credit card. This
will come in quite handy for the frequent flyer.
But should you get a frequent flyer credit card? - Yes, if you really travel frequently, you spend a lot on your card, and you pay off your balance fully. Why? Because most airline credit cards charge a high annual fee ranging anywhere from $45.00 to $90.00. It takes on average 25,000 miles to get a free domestic airline ticket. That means $25,000 of spending other than airline ticket purchases. If you do not even spend remotely close to this amount a year and it takes you two or three years to get a free ticket, the annual fee you would have paid for two or three years would be enough to get you an airline ticket. Airline credit cards also do not have the lowest apr. Most have
an apr of prime rate plus 9.99% (which is pretty standard for airline or hotel reward credit cards). Hence, if you carry a large balance, getting a low interest rate credit card makes more sense.
If are not fussy about which airlines you fly and just want to get a free airline ticket every year for your vacation, then perhaps getting a reward card like the Citi� Diamond Preferred� Rewards Card, which allows you to earn 5 points for every dollar you spend at standalone supermarkets, gasoline stations and drugstores. That means that by only spending $5,000 on these items, you can earn yourself a free domestic airline ticket - a real value for money considering that the card charges no annual fee.
Summary - If you are a thinking about getting a frequent flyer credit card, try to get one which pays double miles when you make a purchases with the airline. Apply for the card when you get great bonus miles deals. Try to get a card that gives you a free companion tickets or certificates every year. If you use these companion certificates, you would have more than covered your annual fee. You can go to our frequent flyer credit card directory to search for an airline credit card.
This article first appeared in issue 9 of our
Credit Card Tips and Strategies Newsletter
We have since updated the original article
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