Airline miles on credit cards

Airline miles are some of the most sought after rewards from credit cards. There are a number of different offers which suit a number of different travellers.

There are two basic types of credit cards that offer airline miles, airline tied cards and generic air mile cards.  The best type of credit card depends on whether the credit card user is likely to be a loyal traveller or will shop around for the best deals.

Airline tied credit cards are good for people who are likely to be tied to a particular airline, as they cannot use the miles on other airlines.  These cards tend to be tied into airline rewards programs so they tend to be more effective.  There are a number of reasons to be tied to an airline.  It may be that the cardholder lives near an airline hub and so can use the airline to have a choice of flights to most common destinations.

Alternatively there may be a preferred airline for employer travel, while at the same time there is a policy of paying employee expenses after they are incurred.  Another reason to tie to a particular airline is if the vast majority of flights are on one or two routes and so using the same airline is practical.

One common way that these credit cards are marketed is through airline loyalty programs.   These tend to be already enrolled into an air mile program and a traveller who gets this program should ensure that the offer is significantly better than the current program.

Generic airline cards do not tend to be tied in with airline reward programmes.  This means that they are not suitable for people who are likely to be tied in with a particular airline as the rewards tend to be of a lower value.  This can be offset by the fact that as the discounts can be used against any airline they can get a discount on an already lower price.  A tied airline discount may also be useless if the airline doesn’t fly to the required destination or does fly but at an inconvenient time.

Airline reward cards tend to have higher interest rates and slightly worse terms than standard credit cards.  This can be offset for a frequent traveller.

It is often a good idea to not have an airline card as the only credit card, particularly if it is used to pay off work expenses.  This is because airline tied credit cards tend to have higher interest rates than balances.