Charging your way to free travel
Everyone wants a free flight to paradise, and we'll charge our
way there if we have to. Attach air miles to a credit card and people
will spend an average of $25,000 a year.
"We all work our tails off and travel
is our getaway," says Chris Theoharides, president of Advantage
Consulting Group in Massapequa, N.Y.
"People love the idea of free travel."
Banks know this, and that's why there
are hundreds of air mile credit card offers flooding the marketplace.
Finding a deal that's right for you takes some work.
"Spend a few minutes. Do the math,
and figure out if this card is going to earn you something worthwhile,"
says Gerri Detweiler, author of "The
Ultimate Credit Handbook."
good from the bad
There are plenty of so-so offers mixed in with the good ones. So
be careful. If one card doesn't seem so great, keep on shopping.
There are tons of offers to choose from.
More than 35 air mile credit cards are
linked to specific airlines and specific frequent flier programs,
according to Randy Petersen, editor and publisher of Inside Flyer
Magazine and producer of the Web site WebFlyer.
These types of cards have been around
since the late 1980s. You typically earn one air mile for every
dollar that you spend. The miles you earn with your credit card
are automatically added to your frequent flier account with the
You earn additional miles when you use
your credit card to make purchases at airline partners, such as
hotels and rental car agencies, clothing stores, office supply shops
and even long distance phone service companies.
Partner lists seem to go on and on. A
typical frequent flier program has more than 80 partners. Delta
Skymiles, for instance, boasts more than 90.
With the Delta
Skymiles card from American Express, you earn two air miles
for each dollar you spend at supermarkets, gas stations, drug stores,
home improvement stores and the U.S. Postal Service.
Of course, you can also earn air miles
the old-fashioned way -- by flying. Let's say you book a flight
on Delta with your Delta Skymiles card. You'd earn from 500 miles
minimum to 150 percent of mileage. It's a great way to rack up air
The price of the
The downside of airline credit cards is the price. Annual fees range
from $25 to $180. They also tend to have higher-than-average interest
Bankrate tracks the best of the frequent-flier
credit card deals. Go to our credit
card rate table to explore the choices currently offered.
Because of the high interest rates, it's
not a good idea to carry a balance on these types of credit cards.
Not keen on the high price of an airline
credit card? You have lots of other choices. Hundreds of additional
air mile cards promise to reward customers with a free-round trip
ticket that can be used on any airline.
"There are so many of those they're
difficult to keep up with," Petersen says.
The hook of these generic air miles cards
is their flexibility. You earn miles toward free air fare that can
be used on any airline. They also tend to have lower fees and lower
interest rates than cards associated with specific airlines.
The downside of generic air miles cards
is you can't dump the miles you earn with the card into a frequent
"You have to earn all your miles
on the card," Theoharides says. "There's no combining
with a frequent flier account. So it takes a little longer."
Miles on generic cards may not be good
for international destinations. Be sure to check this out, especially
if you have your heart set on a free trip to Rome.
Some generic cards require 21-day advance
notice and Saturday night stay when you book your free flight. So
a free last-minute getaway may be out as well.
Before signing up for an air mile credit
card, be sure to study the details.
Where can you fly with your air miles?
Will they take you to your dream destination? Petersen hears from
people who've racked up thousands of miles on a card only to learn
it won't take them to the place they most want to go.
"All frequent flier programs are
not created equal," Petersen says.
So decide where you'd really like to
go, and then shop around for a card and rewards program that will
get you there with the least amount of spending.
Make note of mileage requirements and
blackout dates. Be sure to check out the list of partners for each
frequent flier program. Do you already shop at an airline partner?
What kinds of bonus miles opportunities are available? Be prepared
to do some digging.
Low APR? What's
On the credit card side you'll want to compare the interest rate,
annual fee and grace period. Some air mile card deals are pretty
expensive. Some of the lower priced ones may not be as good as they
And there are plenty of folks out there
who should avoid air mile cards altogether. Because of the high
interest rates, air mile cards are not a good choice for people
who carry big balances.
If you don't spend thousands of dollars
a year on a credit card or travel frequently, it's going to be awfully
tough to earn enough miles for a reward.
"Most people don't spend $20,000
on their credit cards -- enough to get a ticket in the first year,"
Detweiler says. "Most people won't earn the maximum rewards.
You have to be realistic about how much you will earn."
Look at your financial situation, and
be realistic about how much you can afford to spend on an air mile
"No matter what they tell you in
all the fancy literature, these programs are not for everyone,"
Petersen says. "If you're only spending $1,000 a year, I wouldn't
get any of these cards. I would go out and get a fee-free one with
a low interest rate."