In the formulas that determine a credit score, how long you have had credit may seem to be a somewhat minor factor. That statement certainly sounds true for the FICO score, which counts this portion as [...]
What are air miles?
Air miles are a reward issued by credit cards affiliated with airlines. The holder of the card earns air miles with every purchase.
Credit card companies partner with major airlines to offer credit cards that reward customers for spending. Some companies reward customers with a designated amount of air miles for opening the credit card. Others allow customers to earn bonus miles based on their spending in certain categories. Once you have accumulated enough air miles, you can turn them in for an airline ticket. How you accumulate air miles varies based on the terms of your credit card.
When it’s time to redeem your air miles, you must select an eligible flight. Some air miles programs have blackout dates. You cannot redeem your miles for travel during this time. These dates are usually around major holidays when air travel is at a high.
Many credit cards that reward air miles have an annual fee. Be sure to consider the fee when deciding if a card is a good deal. To get the most value from your card, pay it off every month to minimize your interest costs.
Air miles example
If you’re searching for a way to make travel more affordable, a credit card that issues air miles is one way to earn a free flight. Assume that your credit card requires 25,000 air miles for one domestic round-trip ticket. When you apply and secure approval for the credit card, you receive a one-time bonus of 5,000 air miles. You receive 10 air miles for every dollar you spend on air travel and two air miles for every dollar spent elsewhere. Over a period of six months, you spend $1,200 on air travel and $12,000 on other purchases. You earn 12,000 air miles thanks to your air travel and 12,000 air miles from your other transactions. Your total miles now equal 29,000, more than enough to earn a free flight.
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