Editorial Policy

How to Get the Most Out of Airline Rewards Cards

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By Eva Norlyk Smith, Ph.D.
May 28, 2010

For the frequent traveler or savvy consumer, airline credit cards have a lot to offer. Not all travel rewards credit cards are made equal, however, and even the most lucrative rewards programs may not be the best for you, if they don't match your lifestyle and spending habits. Here is a guide to how to find the best travel rewards credit card for you.

Most airline travel rewards cards fall into one of two categories: generic travel rewards cards and frequent flyer credit cards, which are affiliated with specific airlines. Generic travel rewards cards offer points that can be put towards travel on any airline as well as cruises, hotel stays, car rentals, and other travel related expenses. Frequent flyer credit cards, on the other hand, lets cardholders accrue miles from purchases, which are added directly to the cardholder&#039s frequent flyer account.

Generic airline rewards credit cards generally speaking offer the most versatile rewards. However, generic travel rewards points can't be consolidated with frequent flyer miles, so cardholders have to rely on spending alone to generate rewards—which can make it harder to accumulate enough points for a free air ticket (or provide a potentially detrimental motivation to make excess purchases). In addition, rewards earnings are connected directly to the card itself and will be lost should the account be closed before earnings are cashed in.

Frequent flyer credit cards, on the other hand, combine credit card rewards miles with the frequent flyer miles earned from the affiliated airline, increasing the speed at which cardholders can earn free travel. Many frequent flyer cards also award premium mileage earnings on flight purchases made with card; purchases with the airline's partners—which may include car rental companies, clothing stores, and even office supply shops—may also earn double points.

Another drawback of frequent flyer credit cards is that they often come with higher APRs and more sizable annual fees. Of course, consumers who regularly carry a balance will want to use a low interest credit card instead, as the money paid in interest on a revolving balance will quickly undermine any money saved through travel rewards.

When looking to apply for a frequent flyer credit card or a generic travel rewards card, check the terms and conditions carefully. Some generic travel rewards cards, for example, require cardholders to book flights with three weeks of advance notice. Furthermore, some require a Saturday night stay during the trip, and still others disallow international travel. On the other hand, seat selection is available across multiple airlines, often providing more options for getting tickets at the desired travel times than may be available with frequent flyer credit cards, which are limited to one airline and its partner airlines.

As a general rule, generic travel rewards cards will best suit cardholders who put a large number of purchases on their card (but pay the balance off each month), and who want the flexibility of choosing any airline they wish to fly with. Frequent flyer credit cards, on the other hand, are a great option for travelers who is comfortable booking flights through one specific airline and its partners, and who prefer to optimize miles earnings through flights as well as purchases.