Cons
- Expect to dish out annual fees for airline rewards cards. They vary from $50 to $75, says Miller. If you opt for a rewards card without fees, you'll probably earn miles at half the rate. But, bonus rewards points offset the annual fees, he says. You can sign up for them on airline and hotel websites. On the other hand, hotel cards usually don't carry annual fees and travel credit cards often waive their annual fees.
- It can be harder to redeem airline miles. Finding airlines that deliver on rewards promises may be tricky. There may be restrictions and blackout dates that make booking difficult. In recent years, it has become harder to redeem your miles, Miller says. "Airlines are squeezed by fluctuating fuel prices," he says. "And they'd rather sell a seat that generates revenues." Many airlines also don't make the process transparent. So, it's hard to know which airlines have the best redemption plans.Consumers with rewards cards issued by hotels or resorts usually don't have that redemption problem, because hotels have lower operating costs, Miller says. So they're able to easily offer free nights in exchange for rewards points.
- Seating upgrades are possible with airline rewards. For example, airlines may let you upgrade to first class or throw in other freebies.
Travel credit cards
Pros
- Travel credit cards offer more flexibility and give you lots of rewards payment options. For example, the Chase Sapphire Card lets you transfer points between rewards categories such as merchandise, travel or even cash back.
- There are no restriction bottlenecks. When redeeming your rewards card points, the card company actually purchases a ticket on your behalf. "You don't have to put up with the restraints on rewards tickets issued by airline," Winship says, referring to airline rewards redemption bottlenecks like blackout dates.
Cons
- Travel rewards cards earn fewer points. Cardholders usually only earn points for purchases made with their cards. They're linked to transaction amounts, not miles flown. So, you end up getting fewer points than with airlines, Winship says.
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