What is the Best Credit Card for Airline Miles
Airline Credit Cards are perhaps the most lucrative when it comes to rewarding programs. Unfortunately, these cards are not meant for everyone. If, for instance, you don’t travel regularly then getting these cards won’t hurt you but neither will you be able to fully utilize it. These cards can help make your business and unofficial trips both convenient and rewarding.
But, how do you choose the best airline credit cards out of the dozens available in the market? How do you even know that this kind of credit card is the right choice for you? Well, this read should provide you with the insight you need.
Who are Airline Miles Credit Cards made for?
Airline credit cards are intended for everyone who travels frequently. This is why these cards partner with different airlines to offer their clients the best experience possible. Some of these cards will even go as far as providing their customers with a hotel, restaurant, and other services to different destinations.
Airline credit cards have excellent perks but they do come at a price. The cards require a FICO score of at least 670. If your score is lower than that, chances of getting approved are very minimal. Some companies still offer pre-approval tools that can help you estimate the likelihood of your application going through before placing an actual application.
Additionally, these credit cards and their incentives will remain beneficial only if you can make the monthly payments on time. Failure to do so leads to accumulation of balances and interests which will overshadow the rewards offered.
How to Choose the Best Airline Credit Cards?
There are many airline credit cards in the market but not all of them are beneficial to all travelers. Some of these cards partner with a specific airline and hence if you don’t normally use that particular airline, getting such a card is rather pointless. Additionally, some cards have high spending thresholds that qualify one for the rewards. If you don’t travel frequently enough or spend enough to reach such a threshold, you won’t earn the points and neither will you enjoy its benefits.
Picking the ideal card for your specific case is, therefore, a complicated affair. The following tips should make your experience a bit easier:
Estimate your earning potential
Airline credit cards have different rewards in different categories. Some cards will offer you higher rewards when spending on a particular airline and much lower rewards when it comes to restaurants and other purchases.
Some cards provide more rewards on business-related expenditures such as office supplies, utilities, travel expenses i.e. car rentals and gas etc.
The best travel cards are not co-branded with any airlines. These offer flexible opportunities for you to earn more rewards and hence get the best out of the card.
The trick is in knowing your spending habits and using that data to calculate your earning potential from a particular card. Do all the calculations before making your application. Some tools online can help you with this.
While calculating your earning potential, don’t forget to deduct annual fees. You will only get a comprehensive picture of the full value of your earnings after deducting the annual and all other fees.
Be cautious with the sign-up and welcome bonuses
Sign-up and welcome bonuses have for a very long time been used as the main selling point of most cards. These offers tempt a lot of people into signing up for a credit card before they even sit and evaluate what the card really has to offer. Don’t be one of such people. Sign up offers are always welcomed but there is more to a credit card than a couple of welcome points. Take into account other fees and penalties associated with the card and see whether the card is still worth it after all the deductions have been made.
Understand how the point redemption program works
You need to know how you can earn the points, their value and the procedure of redeeming them. With this information, you can target and use your credit card to gain as many points as possible.
Most travel cards offer one point for every cent spent. Airline co-branded credit cards might stretch it a bit and give you a point for every 1 to 5 cents spent depending on the specific issuer you are dealing with. A few factors such as flight prices, availability, route etc. may also influence how many points you get.
As you can see, determining the exact value of your points can be quite difficult. Just try to estimate the how much your points are worth and how to redeem them. This should help you understand what you can do to earn maximum points and how to redeem them. A few airlines such as United and American have made it easier for their customers to know the value of their miles by publishing award charts.
We always caution our clients to remain objective while dealing with reward programs. Don’t get too obsessed with earning points and start spending on unnecessary stuff. This is one of the easiest ways of destroying your credit score. Remember that no credit card issuer will ever give you more rewards than what you spend.
Check out other travel benefits offered
Airline cards come with numerous benefits that can make your trips very comfortable. Ideally, you should get a card with as many of these benefits as possible but there is always a catch. Cards with so many benefits are normally more expensive.
Some of the more common benefits include auto rental insurance, lost baggage protection, no foreign transaction fees, concierge services, late checkout privileges, extended warranties, extended return periods, roadside assistance and trip cancellation insurance. Cobranded cards offer even more valuable benefits which may include companion tickets, priority check-in, priority boarding, waived baggage fees, free access to airport lounges with drinks, Wi-Fi, and free snacks and discounts on in-flight purchases.
Top 3 Credit Card for Airline Miles
1. Chase Sapphire Preferred Card
The Chase Sapphire Preferred Card is one of the most lucrative when it comes to travel rewards. Upon signing up, the company will welcome you with 50,000 points for spending $4,000 within the first three months. These points are worth at least $500 in statement credits and around $625 in Chase’s travel portal. You can also transfer these points to their partners, Hyatt, Southwest, British Airways, Executive Club, United etc. where they’ll be worth even more.
You can use the card on travel and different restaurants around the world and earn 2 points for every $1. The card doesn’t have any foreign transaction fee and the annual fee is also waived in the first year.
The Chase Sapphire Preferred Card has so much to offer to every traveler out there. This explains why it was also named the “Best Credit Card for Flexible Travel Redemption” by Kiplinger’s Personal Finance, June 2018.
2. Capital One Venture
Capital One Venture offers its new customers 50,000 points after spending at least $3,000 in the first three months. You will then get unlimited two miles for every dollar you spend on your purchases. This credit card is also popular due to its flexibility. The card allows you to redeem the miles you accumulate for any travel purchases. There is also a 2x miles earned on all purchases you make across different product categories.
The Capital One Venture also allows cardholders to book their flights through an app or a website. The benefits of the card also spread to hotels and rental cars company.
There is also no blackout dates and foreign transaction fees.
3. Discover it Miles
Discover it Miles is yet another very rewarding traveling card. In your first year after getting this card, Discover will automatically double up all the miles that you’ll accumulate. If, for instance, you make 20,000 miles, the company will give you 40,000 miles which is equivalent to approximately $400!
The credit card offers 1.5x miles for each dollar you spend on all purchases. There is also no blackout dates. The card allows you to stay at any hotel and use any airline. What makes the card even better than its competitors is the zero annual fees which make the card affordable to almost everyone.
To ensure optimal security, the card has a freeze option that takes effect in seconds. This option also allows you to prevent balance transfers, cash advances, and new purchases when not needed.