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How to Maximize Your Airline Credit Cards

Your airline miles credit card can be a budgeting benefit if you think strategically to maximize the miles you earn and get the most value when you redeem miles for tickets.

By Carla Fried  | American Express Credit Intel Freelance Contributor

6 Min Read | June 14, 2021 in Cards

 

At-A-Glance

Airline miles credit cards typically offer all sorts of deals that earn you more reward miles than regular purchases, but you have to know where the deals are.

New card alert: They usually come with limited time offers to earn a big mileage reward by hitting a spending target within the first few months after opening your account.

A simple calculation can help you decide when it’s best to pay for airline tickets or redeem reward miles.

The cost of getting to and from a vacation, or back home for a visit, can be a serious budget buster when it involves flying. Throughout 2020, the average ticket for a U.S. flight was just under $300, which can quickly add up if you’re planning a family getaway.1 International flights can set you back even more. But that new airline miles credit card in your wallet can be a good way to stretch your travel dollars by earning rewards miles that you can redeem for flights.


To wring the most value out of an airline miles credit card, you’ll want to zero in on two key habits:

  • Racking up miles. Hint: You want to use your card for a lot more than booking flights, but check your terms and conditions – not all purchases score miles.
  • Thinking strategically when you redeem miles for airline tickets. Hint: Sometimes it can be better to hold onto the miles and pay cash.

 

Maximize Earning Miles with Your Airline Miles Credit Card

The best airline miles credit cards don’t just offer bonus miles for booking flights, they offer plenty of additional ways to boost your rewards miles. Here are a few:


Grab the bonus miles deal that comes with your new card. It’s not just elite athletes who can snag a signing bonus. Your new air miles credit card has likely dangled a limited time offer that will give you a wad of reward miles if you spend enough on your card. For instance, you might get 50,000 bonus miles if you spend $3,000 in the first three months you have your card, or some similar deal, depending on the card. Just be sure to pay attention to the rules on how fast you need to do your spending. If it’s an amount you would spend anyway, using your new air miles card to earn the bonus payout is an offer that could be easy to accept. On the flip side, it’s a good idea to avoid increasing your spending beyond what you can afford to pay back in full when next month’s statement arrives. It makes little sense to run up a balance you can’t pay back, given the interest you may owe on that money. Unpaid credit card balances can also cause your credit score to drop. To understand why, read “What Affects Your Credit Score?

  
Use your card for purchases that earn extra miles. Your airline miles credit card is not just for booking flights and waiving baggage fees. It’s common to earn miles for every purchase you charge. A mile per every dollar spent is the norm, but some cards up the ante, offering two reward miles (or more) for every dollar you spend with certain retailers, such as restaurants and supermarkets. Log in to your airline credit card’s reward site to learn where your spending will earn you the most.


Aim to earn a year-end bonus. If you hit an annual spending target, some airline miles credit cards offer year-end bonuses like extra miles or travel vouchers. Depending on the card, your total annual spending can also help you earn more credits toward reaching elite status.


Check for online shopping portals. Some airline cards have an online “portal” that connects you to a bunch of popular retailers. Entering a retailer’s site through your airline credit card’s portal sometimes earns you more miles than if you landed directly at the site. Same merch. Same prices. More rewards miles when you use your card to make a purchase.


Add an authorized user. Adding authorized users who make their own purchases to your air miles credit card may help turbocharge your ability to accumulate miles. But it should be done with care since you, and only you, are the party responsible for paying the bills. For more on the pros and cons of sharing credit cards for travel rewards, see “Do Couples Benefit from Sharing Travel Credit Cards?


Ultimately, the best card for airline miles depends on you and your household’s needs. 

 

Maximize Redeeming Reward Miles 

To make the most out of the miles you’ve earned with your airline credit card, you have to be strategic. Here are some tips to help get the most out of your miles:


Say yes to the marketing emails/texts. Even if you reflexively opt out of receiving these pitches, this is one time to reconsider. Airlines sometimes offer flash sales for reward miles travel. You don’t want to miss out on that.


Shop very early…or very late. Airlines typically open up rewards seats a year in advance; for the planners out there, jumping on a deal early – especially if you plan to travel during high-traffic months – is recommended. If you’re traveling off-peak and are a bit of a risk taker, you might consider waiting until the last week or two; airlines often roll out last-minute deals for flights that aren’t yet fully booked.


Be flexible. A direct flight from Point A to Point B during peak season might not have any reward seats available, or the miles you would need to redeem could be very steep. The more flexible you are on the time of year you want to travel, and the more open you are to a connection (or two), the more likely you are to get to your destination using reward miles.


Compare the cash cost to the points cost. Redemption values vary by airline and during peak and off-season travel. The average redemption value for airline miles is around 1.3 cents per mile for domestic flights, and typically slightly more for international flights.2 But a quick and easy calculation will tell you the value you’re getting for using miles for a specific flight:

 

Cash Price of Ticket ÷ Miles You Need to Redeem = Cents Per Redeemed Value


Let’s say you can pay $375 for a ticket that would “cost” you 30,000 miles. Using the above formula, that means each mile equals 1.25 cents. Is it worth it? That’s an entirely personal decision. But generally speaking, the more money each mile is worth, the more bang for the buck you get.

  
Price out the one-legged approach. Prices can sometimes be very different for your departing and return flights – what the airlines call the “legs” of your round trip – and that means the reward miles needed for each may be different, too. If you calculate that one leg has a better redemption value than the other, you might want to use your miles for that flight and pay cash for the leg that’s not as great a deal.


Save ’em for a bucket-list trip. If you have your eye on an international adventure – honeymoon, anniversary, a big “round birthday” – saving your miles can be a smart move since redemption values are typically higher for international flights. You can use the miles for the flight or maybe buy the tickets and use miles to upgrade to a comfier seat on a long haul. Just remember that wherever you’re headed, using your airline miles credit card once you’re there is the ticket to keep earning more reward miles.

 

The Takeaway

There are two good habits to help you make the most out of your airline miles credit card: maximize the amount of miles you earn and maximize the redemption value of your miles. You’ll have to think strategically, but the rewards are often worth the effort.

Carla Fried

Carla Fried is a freelance journalist who has spent her entire career specializing in personal finance. Her work has appeared in The New York Times, Money, CNBC.com, and Consumer Reports, among many other media outlets.

 

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

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