It seems every industry in recent years has carved out its own niche when it comes to customizing VISA or MasterCard credit cards, based on the type of business or hobby its trying to promote. Cash-back rewards cards and car maker-sponsored credit cards are just two examples. Certainly, the airline industry is no exception. Thus, most of the world's major airlines, in an effort to entice their customers to travel more frequently and promote brand loyalty, have come up with their own unique credit cards. And, with approximately 250 airlines participating, the traveling public has a plethora of possible card choices.
Frequent Air Travel is a Must
As the name - Frequent Flyer Rewards Card - suggests, using a VISA, MasterCard, American Express, or Discover credit card sponsored by a major or regional airline really only makes sense if one is planning to fly much more often than the average traveler. Basically, cardholders earn points or "sky miles" which can be redeemed for free or discounted flights, once the number of points in one's account has accumulated to a certain threshold. Thus, the more a traveller flies, the sooner the necessary point balance is reached, and the first flight "on the house" is earned.
So, what are some of the good points, as well as some drawbacks associated with using airline-sponsored credit cards, in general?
Advantages
- They're great for business travelers. Many executives- who fly extensively and on longer flights- build up a considerable number of sky miles or points in a relatively short period of time. This group, in fact, probably benefits the most from airline card usage. In addition, many companies write off business travel as an regular expense of doing business on their income taxes.
- Besides discounted flights, air travelers can earn discounted rental car service, savings on hotels, gift cards, and reduced prices at certain retailers, among other things.
- Extra class upgrades are often possible upon redeeming enough points or "sky miles."
- Many airlines offer substantial bonus miles or points when signing up for one of their sponsored cards- 12,000 or more is not uncommon.
- Some airlines' cards allow frequent flyers to earn points for flying on other airlines, as well as their own.
- Bonus points are often added to one's account, depending upon the card's restrictions. For example, one airline card- Escape by Discover Card- rewards card holders with a whopping 25,000 bonus miles as long as at least one purchase is made during the first 25 months your account is activated.
- Card features- whereby two miles are added to a customer's sky mile balance for every dollar spent on normal purchases- are more commonplace now.
Disadvantages
- Airline cards typically carry a substantially higher interest rate than their bank credit card counterparts. Thus, it makes much better economic sense to be prepared to pay off the balance in full each month.
- If the airline cardholder doesn't prioritize purchases in a meaningful way, and is overusing the credit card in an attempt to rack up points, it defeats the purpose of having the card in the first place. Before long, the card's monthly balance may easily reach a point where it becomes difficult to make even the minimum monthly payment.
- Since many airline credit cards carry the "gold" or "platinum" designation, annual membership fees are often attached to them- in contrast to most bank cards.
- More due diligence is necessary on the part of the consumer when trying to choose which airline's card to go with. For example, a card which has great benefits overall may be virtually useless if the primary destination the cardholder plans to frequent isn't on any of that particular airline's scheduled routes.
- Travelers must always be cognizant of the fact that many cards have expiration dates associated with their sky miles.
Brian Roush - Brian is currently employed in the title insurance industry in Florida. He works with sophisticated mapping software each day but hopes to ...
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