Published in: Credit Cards | Dec. 4, 2018

7 Things to Know About Airline Credit Cards

Mileage accrual. Intro bonus miles. Annual fees. If you're a frequent flier, consider these 7 factors before applying for your next travel rewards credit card.

yellow airplane with blue credit cardImage source: Getty Images.

The airline business is not only known for shipping passengers from place to place, it’s also a major source of credit cards. Airlines and cards go together like peanut butter and chocolate; frequent flyers love to accumulate miles, which make a fine base rewards currency for flights and other products and services.

In some ways, airline credit cards resemble those from more traditional card branding entities. Cardholders have credit limits, monthly statements, and a set of features and perks that come with owning the card. There are, however, several important distinctions with airline credit cards. So, take any available window or aisle seat for this pre-flight briefing on the subject.

1. Most airlines have more than one card

As with card issuers like banks, airlines like to have several credit cards on offer -- all the better to attack different segments of their market. One handy example of this is United, which has a handful of credit cards co-branded with Chase. Note the numerous distinctions between these products:

Card Sign-up bonus (miles)/spending required for bonus Standard mile earnings rate Annual fee Perks include
United MileagePlus® Club 50,000/$3,000 within 3 months 1.5 miles per $1 spent $450 Free United Club membership; two free checked bags each per cardholder and companion per flight; Free Premier Access® travel services membership.
United℠ Explorer 40,000/$2,000 within first three months from account opening 2 miles per $1 spent (restaurants, hotels, United airline tickets); otherwise 1 mile per $1 spent $95 (waived in the first year) $100 or $85 statement credit every 4 years for Global Entry or TSA Pre✓®; one free checked bag each per cardholder and companion per flight; two United Club® lounge passes on account opening, and each anniversary thereof; 25% discount on United in-flight purchases.
United MileagePlus® Explorer Business 50,000/$3,000 within first three months from account opening; Also, 10,000/$25,000 each calendar year 2 miles per $1 spent (restaurants, hotels, gas, office supplies, United airline tickets); otherwise 1 mile per $1 spent $95 (waived in the first year) One free checked bag each per cardholder and companion per flight; two United Club® lounge passes on account opening, and each anniversary thereof; Complimentary Premier Upgrades when available
United TravelBank* $150/$1,000 within first three months from account opening 2% on United airline ticket purchases $0 25% discount on United in-flight purchases.

* This is a cash-back card; it does not award miles for purchases.

Such a range of offers can be challenging to pick through. On the bright side, this gives potential cardholders a better shot at selecting the product that’s best suited for their wants and needs.

2. Airline cards can have big bonuses

For those who spend (or want to spend) plenty of time in the air, opening a new airline credit card is a fine way to earn miles fast. That’s because these products tend to have relatively generous opening bonuses. Some of the highest bonuses at the moment include:

Card Sign-up bonus Annual fee
British Airways Visa Signature® 50,000 Avios (BA’s rewards currency) after spending $3,000 on the card for qualifying purchases within first three months; 25,000 bonus Avios after spending $10,000 within first year, or 50,000 bonus Avios after spending $20,000 within first year. $95
Platinum Delta SkyMiles® Credit Card from American Express 75,000 Bonus Miles and 5,000 Medallion® Qualification Miles after you make $3,000 in purchases within first 3 months. $195
Citi® / AAdvantage® Executive World Elite™ Mastercard® 50,000 miles after spending $5,000 within first three months. $450
Lufthansa Miles & More® World Elite Mastercard® 20,000 miles after making an initial purchase and paying the annual fee; additional 30,000 when spending $5,000 within 90 days. $89
 

Note that all of these cards carry an annual fee. As with many things in the credit card world, if you want a rich bonus, you’ll need to fork over a bit of cash for the benefit.

3. Perks matter

As with sign-up bonuses and annual fees, the perks offered by airline cards differ, in many cases quite substantially. To stay competitive, all of them offer at least a few extras, more often than not geared towards the frequent traveler.

Here, then, are several common perks to keep an eye out for with an airline’s credit card offer:

Car insurance -- These days, it’s standard for a credit card to provide car insurance for a cardholder on the road. Users need to be aware that there are two forms of this coverage, primary and secondary, with important differences.

Free checked baggage -- This is a nice money-saver for those who want or need to cart along more than a small piece of luggage when they fly. For cards with an annual fee, this perk alone can pay for itself within only a few flights.

Airport lounge access -- This is another not-unusual extra now, although it’s still the province mostly of higher-end airline cards. It provides somewhat of a respite from the crowded, generic confines of an airport, although restrictions can apply.

Lost/damaged baggage insurance -- This assuages a constant worry for the traveler. Coverage can vary by issuer and card but is usually extensive enough to compensate for most items.

Purchase protection -- At one point or another, we’ve all spent money on a bum product that didn’t work. If we had this perk on the card we used to buy it, we’d have been better off -- it provides a means of compensation when refund efforts with the merchant or manufacturer fall short.

4. Miles can be used to buy other products and services

Most big airline frequent flyer programs are well established and quite extensive. They’ve built partnerships with a host of merchants and service providers who offer the chance for members to redeem their miles for goods and services. It’s not unusual to find exclusive deals from these businesses through your favorite frequent flyer program.

There are a great many products and services that can be bought for airline miles. Through United’s MileagePlus® program, for example, a member can use their award miles to pay for Apple phones, tablets, and computers, car rental from several providers, Schwinn bicycles, Michael Kors fashion and accessories, and many other items.

One important note about this, however -- since airlines generally prefer that you redeem your miles for travel on their planes, you might not get the same mile-per-dollar value if you opt instead to redeem for an iPad or a snazzy new watch.

5. Miles can be used with partner airlines

Frequent flyer programs and the credit cards linked to them are designed, of course, to keep a customer’s loyalty (and, by extension, continued ticket sales). As mentioned, earning miles on cards almost always favors the co-branding airline.

This doesn’t mean you’re only limited to that carrier when you redeem, however. American Airlines’ AAdvantage® frequent flyer program allows members to use their miles to book flights on carriers such as Alaska Airlines and Hawaiian Airlines. These flights tend to be slightly more costly in terms of miles than those offered by the “home” program, but not prohibitively so.

Some of the bigger airlines are also members of globe-spanning alliances; two major players in this game are oneworld and Star Alliance. Using American Airlines as an example once more, AAdvantage® members with sufficient miles can go basically anywhere in the world by booking with oneworld’s international carriers like British Airways, Japan Airlines, Iberia, and Qantas.

However, caution needs to be exercised here. The web of airline partnerships and alliances can be a tangled one, and it isn’t unusual for a partner carrier’s flight to not show up when a user is searching a route online.

Considering that, it’s not a bad idea to use “neutral” travel search engines such as Kayak.com or Expedia.com. It’s also a smart move to search on the site of a partner airline, if you’re aware of one that flies the desired route.

If you discover a compelling flight that hasn’t shown up in your original search, you can try to call your program’s airline to book it. Do make sure that you’re not dinged with a telephone booking fee -- an annoyingly common charge -- for doing so (after all, said flight didn’t appear in your original search, and it should have!).

6. Beware of blackout dates

Ah, the notorious blackout dates. As with many businesses, the airline industry has its peak seasons (think the late-year holidays like Thanksgiving and Christmas). Because demand spikes during these periods, carriers are hardly desperate to give seats to rewards customers; take-up will be heavy enough. This supply/demand shift also explains the higher pricing in such periods.

Because of this dynamic, it’s normal for airlines to black out these dates, i.e. not make them available for rewards booking. So your plan to sacrifice most of your program’s miles to visit mom and dad back East for Turkey Day could very well not work.

Like many other aspects of travel, flexibility is the key here. A flight you book with accumulated miles shouldn’t be one that butts into a holiday period -- tempting as it might be to get away at that time. Stay open to the possibilities of escaping during less-trafficked periods.

This can have an additional positive effect -- avoiding the crowds. No living human being should have to endure the tourist armies invading Venice, Italy every summer. Fly there in shoulder season, though, and you’ll have more space and experience less stress exploring the beautiful old city.

7. Consider foreign airline cards too

The airline industry outside our borders tends to consist of one big incumbent airline, and perhaps a few upstart rivals, in every country. Many of those incumbents are popular and well-established… and more than a few offer U.S. dollar-denominated credit cards that can give American cards a run for their money.

As with their U.S. counterparts, cards from foreign airlines are particularly valuable if you either fly the carrier already, or it’s based in a region you’ll be visiting often. Because of their distance, trips abroad tend to earn miles well and quickly.

We’ve mentioned the British Airways Visa Signature® card previously, noting in particular its high potential sign-up bonus. Here are a few other cards from foreign lands that offer a generous sign-up bonus, earn miles at a brisk pace, or are otherwise compelling.

Card Sign-up bonus (miles)/spending required for bonus Standard mile earnings rate Annual fee Partner airlines
Aer Lingus Visa Signature® 50,000 Avios (the carrier’s rewards currency)/ $3,000 within three months; 25,000 Avios after spending $10,000 within first year, or 50,000 Avios after spending $20,000 within first year 3 Avios per $1 spent on eligible purchases at IAG members; otherwise 1 mile per $1 spent $95 British Airways, Iberia
Asiana Airlines Visa Signature® (Similar to British Airways; it’s owned by the same company, IAG). 30,000/$3,000 within 90 days; 10,000/$25,000 each calendar year 3 miles per $1 spent on eligible purchases at Asiana; 2 miles per $1 spent on purchases at grocery store and on gas; otherwise 1 mile per $1 spent $99 Star Alliance (including United, Air Canada, Air China, Lufthansa, Avianca, Singapore Air, Swiss, etc.).
 

Final Thoughts

If you’re a frequent flier on one particular airline, getting an airline credit card can make a lot of sense. Take a look at your favorite airline’s credit card options and weigh the bonus, perks, and potential miles acquired through spending to find the perfect card for you. If you fly on multiple airlines consistently, take a look at our favorite travel rewards credit cards to get more flexibility with your miles.  

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