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When does an airline credit
card makes perfect sense?
- Your
credit history is perfect or almost
perfect.
- You carry no balance, or in other words,
pay off your bill in full when due.
- You are very organized and all your
bills
are paid off on time.
- You charge a lot to your card (at least
$2,000 each month).
- You can fly the same airline to almost
everywhere.
- You are very flexible when it comes to
redeeming your miles.
What happens if you do not satisfy all of
the requirements above?
- The
airline credit cards typically charge
5-6% higher interest rates than non-reward cards.
- There is always an annual fee.
- If you are not flexible about where and
when you want to go, you may not be able to use the miles
accumulated.
- The airlines can change their rules any
time. Many airlines that
file for bankruptcy
protection often refuse to honor their miles commitments.
- The number of miles that you accumulate
can have an upper limit.
- There can be more restrictions if you do
not pay your balance in full or if you are late with just
one payment.
In other words,
if you do not have a
great
credit record then an airline credit card
does not make sense for you. However, if you are the
type of person who has everything going great, then airline
credit card is perfect and here are some tips for making the
best of it:
- Try to charge whatever you can to your
card to accumulate maximum possible miles.
- Redeem your miles at the first available
opportunity.
- Always check the prices of an airline
ticket on different
discount
travel websites. Often times,
you might be better off just buying a ticket.
- Do not use miles for a short-distance
flight. If flying domestically, try to go as far as
you can to get the highest return.
- Try not to use the miles for buying other
products and services. They are generally not worth
it.
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