credit cards

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 in Jericho, 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."

Airline Credit CardsGeneric Air-Mile Cards
  • Pro: Earn one air mile for every dollar you spend on that airline.
  • Pro: The miles you earn are automatically added to your frequent flier account.
  • Pro: Earn additional miles when you use your credit card to make purchases at airline partners. A typical frequent flier program has more than 80 partners.
  • Con: Airline credit cards annual fees range from $50 to $125.
  • Con: Tend to have higher-than-average interest rates.
  • Pro: Earn miles toward free air fare that can be used on any airline.
  • Pro: Tend to have lower fees and lower interest rates than cards associated with specific airlines.
  • Con: You can't add the miles you earn with the card into a frequent flier account.
  • Con: Miles on generic cards may not be good for international destinations.
  • Con: Some generic cards require 21-day advance notice and Saturday-night stay.

Separating the 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 airline.

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.

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 miles.

The price of the perk

The downside of airline credit cards is the price. Annual fees range from $50 to $125. They also tend to have higher-than-average interest rates.

Just look at the US Airways Dividend Miles Visa from Bank of America. It comes with a variable APR of 15.24 percent and annual fee of $50 for a classic card and $70 for a gold card.

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.


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