The Basics Of Credit Card Airline Milesby Philip Bennett Jun 03, 2022
Whether you like the aisle or window seat when flying, savings don’t have to take a back seat when it comes to travel. You needn’t be a jetsetter or a frequent business traveler to rack up frequent flyer miles; you can reap some of the same free flight rewards just by using your credit card.
Read on to find out how airline miles work on a credit card. Before you know it, you could be packing your bags and heading to the airport – without the baggage of an expensive airline ticket.
Credit Card Miles That Go The Distance
It’s a pretty simple equation: Credit card miles are rewards earned for spending with a credit card. Think of it this way: A rewards credit card can offer you one or more miles for every dollar you spend.
It’s worth noting that the term “mile” doesn’t refer to the distance you can travel. In general, miles are the same as “rewards points”; the two terms are essentially interchangeable.
Keep in mind that different credit card issuers and airlines assign a specific value to their points. For example, one point may be worth 1 cent in one program, and perhaps 2 cents in another. The more you spend on your credit card, the more your points balance increases.
Once you’ve accumulated a certain number of points, you can redeem them for a “free” flight. But be aware that there is no guarantee that a flight will be totally free – you could be responsible for additional costs such as fuel surcharges, government fees, and taxes. On the flip side, you may be able to apply credit card miles for other travel expenses such as tours, car rentals, and hotels.
Types Of Airline Credit Cards: Generic Travel Cards and Co-Branded Airline Cards
You can choose from two types of credit cards to earn miles. The type of card you use can impact how you can spend the miles.
Features and usage stipulations for generic travel credit cards include:
- Frequent flyer miles not tied to a specific airline
- Possibility of transferring general points to a specific airline’s frequent flyer program
- A corresponding rewards portal that allows for using points to book flights with any airline, or that lets you use your points for travel credits for travel expenses reimbursement
If you choose to use a co-branded airline credit card, you can expect:
- Miles that are only redeemable for flights on a specific airline and their partners
- Special airline perks, including flight upgrades, snack credits, lounge access, free checked bags
- The same type of frequent flyer miles you earn when flying with that airline
Ways To Earn Credit Card Miles: Sign-Up Bonuses, Multiple Cards, Travel Cards, Referrals
Before you sign up for an airline miles credit card, shop around a bit. You might find a card that offers a significant bonus to new cardmembers who spend a specific amount of money within months of opening a card.
Many savvy travelers focus on earning miles through sign-up bonuses, and opt to churn through new credit cards every so many months. While this sounds like a savvy plan, the downside is that every time you apply for a new credit card, the application generates a hard inquiry on your credit report, which could ultimately lower your credit score.
Using multiple cards can help you to maximize rewards. Consider the following multicard strategies to make the most of your mile-earning potential:
- Combine a general travel card and an airline card
- Combine a good redemptions card and a good spending card
- Combine cards that offer different spending category bonuses
- Combine an “everyday” card with one that offers a high multiplier in one or more spending categories
Each airline miles credit card comes with its own perks. Read the fine print carefully, and choose a card that matches your particular spending habits and budget needs. For example, if you have a daily work commute where you rack up a lot of miles, look for a card that offers bonus points for money spent on gas. If you routinely use the same airline, look for a co-branded airline card that pertains to that particular carrier.
In addition, remember that some travel cards come with an annual fee; look closely at the benefits the card offers to see whether paying the fee makes financial sense.
Some cards provide you with a special referral link you can share with your family, friends, and co-workers. If someone clicks on the link and subsequently opens a new card, you can receive bonus points that will be added to your account. On average, general travel cards offer better referral options than do co-branded cards.