Pros and Cons of Frequent Flyer Credit Cards
There are plenty of frequent flyer credit cards available that are specifically created to attract prospective cardholders. When used correctly they can be beneficial, however it is important to understand the reward points system in order to grasp the true value of each point earned on a frequent flyer credit card. All frequent flyer point systems differ, so reading the terms of each card application is imperative.
The Pros
Frequent flyer cards offer a variety of rewards, some of which seem to be unlimited. These cards offer thousands of bonus flyer miles just for signing up in many cases, so it can be difficult to pass them up. Travel organizations also offer rewards with frequent flyer cards, and it is even possible to earn free cruises and hotel stays after accumulating enough frequent flyer points. Frequent flyer cards are great for people that do a lot of traveling however may prove to be quite useless for those that are not “frequent flyers.”
The Cons
While the above rewards are certainly appealing, it can be difficult to assess how many frequent flyer points are needed to earn specific rewards. While most frequent flyer credit cards come with bonus flyer miles upon approval, it is important to understand that a lot of the “free” rewards offered by these cards are somewhat misleading to the average cardholder. Many frequent flyer cards offer a set rebate per frequent flyer points. For example, the cardholder may receive up to $100 for every 5,000 reward points they earn. However it is important to note that these rewards do not come up front. In other words, you have to pay for them first, and then you will receive a rebate. It should also be noted that, in the above example, the $100 rebate per 5000 points must be applied in full or the remaining balance is discarded in many cases.
In other words, if you have 5000 points on your card and you spend $75 on an approved travel expense, then you will receive that $75 back as a rebate. However in most cases the remaining $25 will be discarded from the current rewards balance! This is why the terms state that the rebate goes up to $100, instead of stating that it is a consistent $100 per 5000 points. Thus free cruises are not exactly free, as they must be paid for before a rebate can be received. Another negative aspect of frequent flyer cards is the actual rate at which reward points accumulate. The average frequent flyer card offers 1 point for every $1 charged on the card. This means that in most cases the rewards only equal about one percent of the annual travel expenses of the cardholder!
Conclusion
Overall, frequent flyer cards have their uses, and when used correctly with the right rewards program they can be a viable way to save money on travel expenses. However, it is easy to become disillusioned with the true value of the card without a thorough understanding of the points system.
There are plenty of frequent flyer credit cards available that are specifically created to attract prospective cardholders. When used correctly they can be beneficial, however it is important to understand the reward points system in order to grasp the true value of each point earned on a frequent flyer credit card. All frequent flyer point systems differ, so reading the terms of each card application is imperative.
The Pros
Frequent flyer cards offer a variety of rewards, some of which seem to be unlimited. These cards offer thousands of bonus flyer miles just for signing up in many cases, so it can be difficult to pass them up. Travel organizations also offer rewards with frequent flyer cards, and it is even possible to earn free cruises and hotel stays after accumulating enough frequent flyer points. Frequent flyer cards are great for people that do a lot of traveling however may prove to be quite useless for those that are not “frequent flyers.”
The Cons
While the above rewards are certainly appealing, it can be difficult to assess how many frequent flyer points are needed to earn specific rewards. While most frequent flyer credit cards come with bonus flyer miles upon approval, it is important to understand that a lot of the “free” rewards offered by these cards are somewhat misleading to the average cardholder. Many frequent flyer cards offer a set rebate per frequent flyer points. For example, the cardholder may receive up to $100 for every 5,000 reward points they earn. However it is important to note that these rewards do not come up front. In other words, you have to pay for them first, and then you will receive a rebate. It should also be noted that, in the above example, the $100 rebate per 5000 points must be applied in full or the remaining balance is discarded in many cases.
In other words, if you have 5000 points on your card and you spend $75 on an approved travel expense, then you will receive that $75 back as a rebate. However in most cases the remaining $25 will be discarded from the current rewards balance! This is why the terms state that the rebate goes up to $100, instead of stating that it is a consistent $100 per 5000 points. Thus free cruises are not exactly free, as they must be paid for before a rebate can be received. Another negative aspect of frequent flyer cards is the actual rate at which reward points accumulate. The average frequent flyer card offers 1 point for every $1 charged on the card. This means that in most cases the rewards only equal about one percent of the annual travel expenses of the cardholder!
Conclusion
Overall, frequent flyer cards have their uses, and when used correctly with the right rewards program they can be a viable way to save money on travel expenses. However, it is easy to become disillusioned with the true value of the card without a thorough understanding of the points system.