Should I Get An Airline Credit Card Or General Travel Card?

January 29, 2015, Written By Jason Steele
Passenger plane above the clouds.

Credit cards that offer airline miles were some of the first reward cards introduced. The premise is that credit card users simply can’t resist the promise of a “free trip.” But in the decades since the first frequent flier programs were created, the airlines have radically altered the character of these programs.

Today, it can be extremely difficult to find available frequent flier awards at the lowest mileage levels, and many airlines are imposing their own additional surcharges on top of any mandatory taxes and fees that must be paid in cash. As a result, airline miles are now worth far less than they once were, and many travelers are simply fed up with the difficulties and complexities of award redemptions.

At the same time, there are still some credit card users who swear by their miles. These are the people who understand how to find the most valuable airline awards, which are typically international flights in business or first class, or pricey domestic flights booked at the last minute.

What are the alternatives to airline credit cards?

In the highly competitive credit card market, the card issuers have seized on their customer’s dissatisfaction with airline miles, and have begun offering some alternatives worth considering. These general travel credit cards offer two types rewards that can be more attractive than miles with a particular airline.

First, there are cards that offer points which can be transferred on demand to miles a variety of airlines, and even hotels. For example, American Express offers several different cards that earn points in its Membership Rewards program which can be transferred to 17 different airline partners. Chase offers its Sapphire Preferred and Ink Plus cards that have 10 different airline, hotel, and rail travel transfer partners, while Citi offers its ThankYou Premier and Prestige cards that feature 10 different airline partners. Finally, the Starwood Preferred Guest card from American Express earns points that can be transferred to miles 29 different carriers.

The idea is that cardholders accumulate flexible miles, and investigate the award availability and mileage requirements on various partners. Then, they transfer their points to a particular airline’s miles and book their award. Should an airline raise the cost of an award, or offer no seats on a particular route, the cardholder can just transfer his or her points to a different airline that offers better options for their individual travel needs.

The other type of rewards are more general travel reward credits. For instance, both the Capital One Venture Rewards and the Barclaycard Arrival Plus offer miles that can be redeemed for one cent each as statement credits towards any airline, hotel, car rental, cruise, or other travel purchase. So these cardholders are just purchasing travel the way they normally would, and then redeeming their rewards for a statement credit later.

Which type of credit card rewards is right for you?

With airline miles being devalued, the real benefit of most airline credit cards are often the perks. Cards like the United MileagePlus Explorer card offer all sorts of travel benefits including priority boarding, baggage fee waivers, and even access to airport business lounges twice a year. Yet the miles that this card offers are only good for travel on United and their partners. So cards like this can make sense to frequent travelers who are loyal to a particular airline.

Those who fly a variety of carriers, as well as those want to diversify their rewards portfolio, should strongly consider one of the cards that offer flexible points which can be transferred to a variety of airline programs. For example, the Chase Sapphire Preferred card is part of the Ultimate Rewards program that offers transfers to airlines, hotels, and even Amtrak Guest Rewards. These cards are best used by those who understand the ins and outs of various frequent flier programs and will use their miles for the most valuable rewards.

On the other hand, those who prefer simplicity can’t go wrong with one of the cards that offer statement credits towards travel purchases. Both the Capital One Venture Rewards and the Barclaycard Arrival Plus offer double miles on all purchases, so cardholders will always receive two cents in value per dollar spent, and these rewards can be redeemed for travel purchases anywhere, and at anytime. However, these rewards will fall short when trying to book business class international flights or flights with no advanced notice, as these are times that airline miles can be worth several cents each.

Finally, there is no reason why your choice of travel rewards has to be exclusive. There are many credit card users who will hold their favorite airline’s credit cards for the perks, make most of their charges on a card that offer flexible points that can be transferred to miles, and cover any remaining expenses with rewards from a card that offers travel statement credits. In fact, this strategy might be the best way to bring the cost of their reward trips down to zero.

Travel rewards credit cards can be incredibly valuable, but choosing the right card is not simple. By considering the different types of reward credit cards offered, cardholders can choose the best cards for their individual needs.

 

 



The information contained within this article was accurate as of January 29, 2015. For up-to-date
information on any of the terms, cards or offers mentioned above, visit the issuer's website.