How Do Airline Miles Credit Cards Work?

Airline mileage cards are some of the most popular reward based credit cards available. Airline miles credit cards are somewhat confusing, but they have a number of benefits that make them a preferred choice for most potential cardholders.

Airline miles are used to purchase domestic tickets on any airline they are associated with. They can also be used for upgrading your seat to first class and various other airline benefits.

Types of Cards

Airline miles credit cards are act like normal credit cards. They tend to come in two separate styles:

  • Airline credit cards – These credit cards are associated with a specific airline. Miles are earned solely for that airline. They are especially useful for frequent flyers, although some have nice benefits for those that don’t mind sticking to a single airline.
  • Bank credit cards – Banks offer credit cards that have similar reward programs, but can be used on any available airline. Banks are under more limitations that other airlines, unfortunately, so there may be more fine print, but the trusted programs still offer great rewards.

Amount of Miles

Though the exact number can change depending on the card and the airlines, most reward programs traditionally provide you with a redemption number of 25,000 miles for domestic seats. When you sign up for the card, many offer bonus miles. Bonus miles are usually around 10,000 to 15,000, but some offer as many as 25,000 miles up front, giving you one free round trip ticket just for signing up.

You earn miles for purchases. Most offer roughly 1 mile per dollar spent, but some offer as many as 2 miles depending on the card. Once you have cashed in your rewards you will need to build the your miles up again. Most spenders can do so within one or two years.

Choosing the Right Card

Many people enjoy the benefits of airline miles credit cards. Free tickets every few years encourage cardholders to take a much needed enjoyable vacation, and the associated cash value of these tickets (the money you would have spent had you purchased a ticket yourself) is at or above traditional “cash back” credit cards.

However, before you decide which airline miles card to use, you should consider all of the following

  • Airline/Bank – If you have a major airline in your area with flights to almost every location you may enjoy, an airline card makes a lot of sense. If you are already signed up for a frequent flyer program, associating a credit card with the program can be beneficial. However, if none of these are the case, a bank credit card tends to have more flexibility and fewer blackout dates, making it a much better option.
  • Blackout Dates – As mentioned, some airlines have “blackout dates” which prevent you from getting a ticket within a certain date or at a certain time. Check to make sure that your credit card doesn’t have any blackout dates that cause an issue for you.
  • Free Miles – When you sign up for the card, you should be offered free miles. The more miles you receive, the greater the benefit. However, make sure the card’s reward program makes it easy to benefit from those miles. Some have tricky rules that may make those cards less valuable.
  • Miles Per Dollar – The more miles you get per dollar, the easier it is to rack up points. 1 mile per dollar is standard, but some cards offer 1.25, 1.5 and even 2 miles per dollar.
  • Traditional Credit Card Rules – Finally, remember that as great as the miles may be, you should always pay attention to the traditional aspects of credit cards. Things like APR, annual fees, and other rules and obligations should not be ignored simply because the card offers amazing miles benefits.

There is a reason that these airline miles cards are so popular. Earning points for free and upgraded tickets is an enjoyable reward for the spending you do every day. Just make sure you have carefully considered each option before you have decided on the card that is right for you.

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