Six Tips to Using Airline Credit Cards
A free airline flight is one of the original and most popular credit card rewards, but those “free” flights have become expensive. If you are redeeming frequent flyer miles, or applying for an airline credit card in order to earn free trips, don’t overlook the hidden catches and the fine print.
Airline frequent flyer programs allow travelers to accumulate free points through most card purchases along with flight miles. Points can be redeemed for free tickets or even an upgrade to first class. Some cards now offer free baggage credit to their cardholders. But making the most of frequent flyer miles requires managing accounts, protecting miles from expiration, using the card for payment and redeeming the miles efficiently.
“It’s easier to earn miles these days, but the number of reward seats are limited, the number of points needed to earn miles for those fewer flights has increased, and more time restrictions apply,” says Michael Komarnitsky, CEO of GoMiles.com, a Seattle-based online service that helps consumers unlock the value of their frequent flyer mile assets. “In some cases, you have to book months in advance and settle for an inconvenient flight time.”
1. Book in Advance
Just because you have the points does not mean that you will get the ticket you want when you want to fly. Some airlines have limitations on “free seats.” Airlines have also reduced the overall number of flights and they use smaller planes to fill up each flight.
“Free flights book quickly. As a result, you may end up doubling the miles to get the flight you want, especially on very popular routes” says Erik Larson, founder and president of San Francisco-based Nextadvisor.com, an online service that analyzes credit card benefits.
The best chance to get the flight you want is to book far in advance. It increases your chances of getting the flight you want with the least number of points or miles.
Some airlines charge a fee for awards booked too close to the departure date. US Airways charges a non-refundable quick-ticketing fee of $75 on each award reservation purchased within 14 days of travel.
“If you don’t book early, you can pay more depending on the airline. United frequent flyer members pay a fee for award tickets booked less than 21 days prior to departure: $75 for General Mileage Plus members, $50 for Premier members and $25 for Premier Executive members,” says Komarnitsky.
2. Beware of Higher Interest Rates and Annual Fees
Credit card issuers dangle bonus miles to attract new applicants. United Airlines’ Mileage Plus Explorer Card and the Continental Airlines OnePass Plus offer 25,000 bonus miles after first use plus 10,000 miles each year you spend $25,000 on the card. Cardholders also receive 5,000 more points if you add an additional user during the first two months. Both cards come with an annual fee of $95 which is waived during the first
year of card membership. The Southwest Airlines Rapid Rewards Plus Card offers 25,000 bonus points after your first purchase plus 3,000 points on your cardmember anniversary date. But it also comes with a $69 annual fee.
These can be attractive cards if you pay off your balance each month and don’t have to pay interest charges. Airline frequent flyer reward credit cards typically charge higher interest rates and annual fees than non-airline cards to offset the cost of rewards.
“If you are a consumer that doesn’t pay off your credit card at the end of the month, be careful about using an airline rewards credit card because the APR can be up to 3% points higher,” says Larson.
3. Accrued Miles Can Expire
Expiration policies vary by frequent flyer program. Some miles expire after 18 months of inactivity. Others never expire.
United has one of the strictest mileage policies. Any member who does not have account activity for 18 consecutive months could lose his or her membership and forfeit all miles.
Southwest Airlines reserves the right to cancel the membership of any member with no points in the member’s account or a member who has earned no points for at least 24 consecutive months.
US Airways Dividend Miles members have an opportunity to reinstate forfeited miles for an additional 18 months for a fee that varies from $10 to $400 depending on the mileage to be reinstated. At 15-17 months of inactivity, customers can pay a $9 preservation fee to remain active for another 18 months.
Keeping an account active may be as simple as buying lunch on the card or a song on iTunes.
4. Pay Attention to Fees and Surcharges
Free flights secured with airline credit cards can save a lot of money but this does not protect you from fees and surcharges.
British Airways offers a 50,000 point promotion programs after the first purchase with their airline credit cards, enough to go to Europe. But consumers can be surprised by the fees that you may have to pay that
accompany the free trip to Europe. Fees and surcharges can add hundreds of dollars to a roundtrip ticket because international flights require more fuel and airlines can charge a higher fuel surcharge.
Airlines charge fees for processing tickets, reissuing tickets or human contact. US Airways charges an award procession fee for all Dividend Miles tickets based on destination ($25 for domestic tickets, $35 for tickets to Mexico/the Caribbean and $50 for tickets to Hawaii, Europe, the Middle East and South America). It also charges a $50 surcharge for issuing paper tickets on e-ticket eligible reservations.
After an award ticket is issued, a service charge may be imposed for each change requested by the member which necessitates the re-issuance of the ticket. United Airlines charges $100-$125 for canceling your trip and re-crediting your account. There is not a fee for changing your date or flight in advance.
5. Pick an Airline Credit Card and Stick to It
“If you fly a lot, it makes sense to stay with one airline,” says Susanna Zaraysky, author of Travel Happy, Budget Low. “The more loyal a flyer is to to a certain airline, the more perks he or she can get. Most airlines have their elite or premium frequent flyer membership levels that give members priority check-in, security and seating privileges, extra mileage bonuses, and upgrades.”
6. Read the Fine Print
Before you sign up for an airline reward card or even use your miles, it is a good idea to read the fine print and understand your account. Here are a few examples of potential gotchas.
* Award tickets may be subject to applicable departure taxes, federal inspection fees, passenger facility charges, and other fees, charges or taxes, and the person utilizing the award is responsible for the payment of any such items that may apply.
* Miles in separate accounts can’t be combined.
* Any valid unused award ticket or certificate may be returned to the Mileage Plus Service Center for a service charge. The mileage used to redeem the award will be credited to the member’s account and be
subject to expiration. (United Airlines)
* The award structure is subject to modification, cancellation or limitation at United’s discretion, with or without notice. The amount of mileage required to redeem any award may be substantially increased, any award may be withdrawn, and restrictions on any award or its redemption may be imposed at any time. (United Airlines)
* All award tickets must be issued and ticketed for roundtrip travel.
* Award travel must be completed one year from the original date of issue of the ticket. (US Airways)
* Special fares, such as senior, infant, child, military, and government fares are not eligible to be purchased with points. Other travel not eligible for purchase with points includes, but is not limited to, charter flights, group travel, vacation packages, service-charged, reduced-rate, tradeout, extra seat, and paper tickets, and travel purchased through a travel agent. (Southwest)
* Airlines may, from time to time, share information about their members with other businesses that may make special offers available through their
respective communication channels. If you do not want to receive these special offers, you must notify your issuer either by phone or in writing.