How to pick the right airline credit card?
When do airline credit cards make sense?
If both airlines and credit card companies are bombarding you with offers of credit cards that allow you to accumulate airlines miles, there is a reason: These cards are great money-makers for both credit card companies and airlines but make sense only for some consumers. This article will help you decide if an airline credit card is for you, and once you have it, how to make the best of it.
When does an airline credit card makes perfect sense?
- Your credit history is perfect or almost perfect.
- You carry no balance, or in other words, pay off your bill in full when due.
- You are very organized and all your bills are paid off on time.
- You charge a lot to your card (at least $2,000 each month).
- You can fly the same airline to almost everywhere.
- You are very flexible when it comes to redeeming your miles.
What happens if you do not satisfy all of the requirements above?
- The airline credit cards typically charge 5-6% higher interest rates than non-reward cards.
- There is always an annual fee.
- If you are not flexible about where and when you want to go, you may not be able to use the miles accumulated.
- The airlines can change their rules any time. Many airlines that file for bankruptcy protection often refuse to honor their miles commitments.
- The number of miles that you accumulate can have an upper limit.
- There can be more restrictions if you do not pay your balance in full or if you are late with just one payment.
In other words, if you do not have a great credit record then an airline credit card does not make sense for you. However, if you are the type of person who has everything going great, then airline credit card is perfect and here are some tips for making the best of it:
- Try to charge whatever you can to your card to accumulate maximum possible miles.
- Redeem your miles at the first available opportunity.
- Always check the prices of an airline ticket on different discount travel websites. Often times, you might be better off just buying a ticket.
- Do not use miles for a short-distance flight. If flying domestically, try to go as far as you can to get the highest return.
- Try not to use the miles for buying other products and services. They are generally not worth it.
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