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Is an Airline Credit Card Worth It for You?

Some of the best airline credit cards offer benefits that can make travel more affordable and more comfortable. Find out whether an airline miles card is right for you.

By Frances Coppola | American Express Credit Intel Freelance Contributor

5 Min Read | October 1, 2021 in Travel

 

At-A-Glance

Airline miles credit cards are co-branded credit cards that can help you earn airline miles, among other air travel perks, like free checked bags or airport lounge access.

Simple no annual fee cards provide a straightforward way to earn miles, whereas premium airline cards offer a slew of benefits that can make air travel more luxurious.

But airline credit cards aren’t a fit for everyone. They’re best for frequent travelers who are loyal to a specific airline.

Airlines have been issuing their own credit cards for decades. In the past, accumulating “air miles” on credit card spending was an easy way to save money on flights – and it still is. But in recent years, more and more travel-related credit cards have entered the market, including general-purpose travel credit cards and hotel credit cards.


With so many travel-related cards available, how do you choose the right one for your lifestyle? Read on to learn how airline credit cards work and whether one of these miles-boosting cards may make sense for you. 

 

How Do Airline Credit Cards Work?

Like conventional credit cards, airline miles credit cards are issued by banks and card issuers. However, they also bear the name of the partnering airline. And instead of earning points or cash back rewards, card members accumulate “air miles” by making eligible purchases on the card. The rate at which you earn air miles depends on the card and the spending category. Purchasing goods and services from the partner airline usually earns more air miles, typically around two or three miles per dollar. Some cards offer bonus rates for additional spending categories, such as restaurants or supermarkets.


Many airline cards also offer welcome bonuses that encourage card members to spend a certain amount on the card within a set time. For example, one popular card gives 40,000 bonus miles to new card members who spend $1,000 or more within the first three months of card membership.


When the cardholder has accumulated enough air miles, they can use them to buy flights to a range of destinations from the partnering airline. Depending on the card, miles can sometimes be redeemed for other goods and services from the airline and its partners, such as airport transit and hotel bookings. Note that it generally isn’t possible to use air miles earned on a branded airline card to buy flights or other goods and services from another airline.

 
Put simply, if you’re an avid air traveler – and are loyal to a particular airline – a co-branded airline credit card may be a good option for you. But there are other factors to consider, too.

 

Airline Credit Cards Aren’t Just About Air Miles

Many airline miles credit cards come with valuable perks, such as free checked bags, priority boarding, airport lounge access, free annual companion tickets, and travel insurance. While these cards typically come with a higher annual fee (more on that later), they’re often the best airline credit cards for passionate travelers who like luxury.


What’s more, some airline credit cards can help card members gain elite loyalty status with that airline – which means the perks are bigger. For example, one airline offers its elite loyalty members who use one of its branded credit cards one free checked bag each for the cardholder and up to eight companions. At a typical baggage fee of $30 per flight, a group of nine friends could save up to $540 per round trip. 

 

Before Choosing an Airline Miles Credit Card, Consider Costs

Annual fees on airline credit cards range from under $100 to over $500. Cards with higher annual fees tend to provide more perks and higher welcome bonuses. For example, a card with a $99 annual fee might offer benefits like free checked bags and various ways to earn miles. A card with a $550 annual fee, however, might offer additional benefits, like annual companion tickets, complimentary upgrades, and airport lounge access.

 
Meanwhile, no annual fee airline credit cards can offer a simplified way to earn bonus miles without many of the added perks – making them a good option for infrequent flyers who still want to build up miles over time. However, avid air travelers may be best suited for a higher annual fee airline credit card to earn more miles faster and enjoy certain perks – such as free checked baggage – that are not usually available on a zero-fee card.

 
Ultimately, the best airline credit card is one that matches your personal finance and travel preferences. Consider whether you’ll be able to get the most out of the card’s benefits without hurting your budget. For example, you’ll need to spend on the card frequently to maximize your miles. But running a balance – and having to pay interest – effectively reduces the value of air miles earned. As always, it’s best to pay your balance in full and on time every month. For more on picking an airline card, read “How to Choose the Best Airline Miles Credit Card.”

 

When to Consider a General Purpose Travel Credit Card

Perhaps the most important point is that airline credit cards are generally a better choice if you fly frequently with the same airline. The perks alone can considerably reduce the cumulative cost of travel while enhancing your journeys – especially if you qualify for elite status. But if you fly infrequently or prefer to use multiple carriers, you may find an airline card too restrictive for your needs. In this case, a travel card with transferrable reward points and multiple airline partners may be a better alternative.

 


For example, general purpose travel credit cards let card members earn points that can be redeemed not only toward flights but hotel stays – among other things. Benefits might include air-related perks, like free airport lounge access and free checked bags, as well as hotel perks, like late checkout times and room upgrades. And, like airline credit cards, you can expect different tiers of annual fees – the higher of which tend to come with additional benefits that are often especially valuable for those who travel big and travel often.


If you’re considering a hotel credit card, read “Comparing the Best Travel and Hotel Credit Cards.”

 

The Takeaway

Choosing the best rewards credit card for travel can be tricky. People who fly frequently with the same airline can find airline credit cards significantly reduce the overall cost of their travel, while perks and loyalty status boosts can make traveling more comfortable. However, airline credit cards aren’t a match for everyone, and annual fee cards can become expensive if the rewards aren’t fully used. Before applying for an airline card, be sure to consider whether the card matches your financial habits and travel preferences. 

Frances Coppola

Frances Coppola spent 17 years in the financial services industry before becoming a noted writer and speaker on banking, finance and economics. Her work appears in the Financial Times, Forbes and a range of financial industry and other publications.

 

All Credit Intel content is written by freelance authors and commissioned and paid for by American Express. 

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