Should I Get an Airline Credit Card?
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If you spend even a little time in airports or on planes, you'll see offers for airline credit cards. It doesn't take long for the travel perks and sign-up bonuses to start calling your name. Maybe there's even a limited-time offer that draws out the FOMO syndrome: fear of missing out. Should you jump on an offer?
The answer hangs on how frequently you travel with the airline offering the card. If you do so only occasionally, a general travel rewards credit card offers more flexibility. If you can't imagine flying with anyone else, it may be time to get rewarded for your loyalty. And if you're somewhere in between, you might be surprised at how quickly an airline card can justify its annual fee.
When airline credit cards are worth it
Airline credit cards are ideal for those who regularly travel with a particular airline, or who could choose to do so. Cards from major airlines typically charge an annual fee, with $95 a common amount. Whether you should get one comes down to whether the value you get from the card exceeds the fee.
These cards earn frequent flyer miles every time you use them — usually one mile per dollar, with extra miles for purchases from the airline itself or with partners. You redeem your miles for free or discounted flights, although award flights may be subject to blackout dates and restrictions on destinations. Airline cards also offer perks like free checked bags and priority boarding. Depending on how you redeem rewards, you might get more value than with a general travel card.
Consider an airline credit card if:
You always check bags
Nowadays, the standard fee to check a suitcase is $25 to $30 each way. When an airline card gives you a free checked bag, that's a savings of $50 to $60 for every round trip. Two round trips a year on that airline — or just one with a companion — and a card with a $95 annual fee pays for itself. You must pay for the ticket with the card to get the perk. Among cards offering free bags:
United℠ Explorer Card: First bag free for you and a companion on your reservation. The annual fee is $0 intro for the first year, then $95
Delta SkyMiles® Gold American Express Card: First bag free for you and up to eight others on your reservation. The annual fee is $0 intro for the first year, then $99. Terms apply (see rates and fees).
You fly a lot with a single airline
Frequent flyers can get a lot of value from an airline card. They have more opportunities to earn extra miles by buying tickets with the card. They have more opportunities to redeem their rewards. And they have more opportunities to use any perks that come with the card. Airline cards often come with bonuses that can be large enough to pay for a trip. The best time to apply for the card is when you have some serious spending coming up, since you must spend a certain amount to earn the sign-up bonus.
Among airline cards that offer hefty welcome bonuses:
United℠ Explorer Card: Earn 50,000 bonus miles after you spend $3,000 on purchases in the first 3 months your account is open.
Delta SkyMiles® Gold American Express Card: Earn 70,000 bonus miles after you spend $2,000 in purchases on your new Card in your first 6 months. Terms Apply.
Southwest Rapid Rewards® Premier Credit Card: Earn Companion Pass® good through 2/28/24 plus 30,000 points after you spend $4,000 on purchases in the first 3 months from account opening. The annual fee is $99. This card also gives you a 6,000-point bonus each year on your account anniversary.
In addition, some cards offer ways for cardholders to earn free or discounted tickets for a "plus one."
British Airways Visa Signature® Card: Get one companion ticket every year you spend $30,000 or more. The annual fee is $95.
Alaska Airlines Visa® credit card: Get one companion fare ticket each year on your account anniversary after you spend $6,000 or more during the previous 12 months, starting from $122 ($99, plus taxes and fees starting at $23). The annual fee is $95.
You travel often and need the perks
Airline credit cards come with carrier-specific perks that you can't match with a general travel card. These vary by card but may include priority boarding, seat upgrades, discounts on in-flight refreshments and a waiver of certain restrictions on budget fares. Some basic airline cards even provide access to airport lounges — access ordinarily restricted to those with elite frequent flyer status, a paid membership or a premium credit card. The United℠ Explorer Card, for example, gives you two passes to United Clubs each year.
Just keep in mind that your credit card doesn't grant you access to every single airport lounge out there.
When a general travel credit card is a better fit
General travel credit cards don't offer airline-specific perks like free checked bags or upgrades, but they give you a great deal of flexibility in redeeming rewards. You earn rewards points or miles with every purchase. You can then use those rewards to book travel, or redeem them for credit on your statement against travel purchases. You also aren’t limited to one airline, hotel chain or rental car agency, so you can travel to more places in the world.
Consider a general travel card if:
You are a budget-conscious traveler
A general travel credit card is for you if you want the cheapest fare, regardless of airline. Book however you want, then redeem your miles to pay for it. These cards let you redeem miles or points (at a rate of 1 cent apiece) for travel expenses:
Capital One Venture Rewards Credit Card: Earn 2 miles per $1 spent on all purchases. The annual fee is $95.
Bank of America® Travel Rewards credit card: Earn 1.5 miles per $1 on all purchases. The annual fee is $0.
Discover it® Miles: Earn 1.5 miles per $1 on all purchases. The annual fee is $0.
You are strategic with rewards
Go with the card that offers the rewards that best match your travel style. Knowing where points get the most value can maximize your travel experience. For example, this card can offer more value depending on how you redeem rewards:
Chase Sapphire Preferred® Card: Points are worth 25% more when you use them to book travel through Chase Ultimate Rewards. Or transfer points to partner airlines. Annual fee: $95.
Know your options
You don’t have to settle on one card. Perhaps you favor one airline, but you want a variety of options for hotels or transportation. If you travel often, you can get an airline credit card and a no-fee general travel card for all other travel-related expenses.
As long as the rewards you get from a card outweigh the costs of carrying it, you'll come out ahead, no matter your destination.
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