Air Miles Credit Cards – Rewards & Frequent Flyers Guide

Information verified correct on September 27th, 2016
Do your research first before committing to any frequent flyer rewards program Do your research first before committing to any frequent flyer rewards program

Air miles used to be earned exclusively by those who spent a great deal of their time in the sky.

Whether you were a business traveller or merely someone who enjoyed foreign travel, you could earn air miles for every trip you took. The more you travelled the more miles you gained, and the more you could save on subsequent trips.

Over recent years travel companies and credit cards have joined forces to create air miles credit cards, and these have opened up the doors to free travel rewards to a whole new modern day audience.

Welcome to the world of air miles credit cards!

What Is An Air Miles Credit Card And How Do They Work?

To give you a better idea of how these travel reward cards work, let’s recap on how a standard reward credit card operates. Reward cards are used in exactly the same way as a normal credit card. They give you an agreed credit limit when you sign up, you still pay your balance off monthly, and you are still subject to all the normal fees and charges you may face.

Did you know the Qantas American Express Discovery Card offers 1 to 1 point earning? ie. For every $1 you spend you earn 1 Qantas Frequent Flyer point

The main difference with reward cards is that you are literally rewarded each time you spend money with it. The standard process is that you gain a certain amount of points for every dollar spent. It normally makes no difference whatsoever what you spend your money on either. Regardless of whether you are buying your weekly shop, filling your card with fuel, or buying flowers on Valentines day, you will earn points.

There are some reward card offers that will give you bonus points if you happen to make a purchase from one of their partner companies – eg. Qantas Airline Partners. This is a way that the card companies and certain retail outlets joint venture in order to help each other promote themselves. The result is good deals for us consumers.

What you then do is redeem your reward points by choosing from a whole range of items offered by your card company. You will often find rewards come in the form of beauty products, household goods, electrical, and cash back deals. The exact rewards will vary depending on your card lender.

So How Do Air Mile Rewards Relate?

The travel rewards credit card works in virtually the same way except you can earn points slightly differently, and redeem points differently too. With an air miles card, you can earn points every time you book air travel using your credit card. Many cards of this type partner with airlines in order to give you bonus points if you book through them. You can also choose to redeem your points against air travel with these cards. The more you fly using your credit card, the more points you will get, and the more money you will save.

What Is The Best Way To Earn My Air Miles?

Although very simply put you will earn air miles each time you spend money on your credit card, there are certain things you should take into account. Virtually any purchase you make with your credit card will be rewarded with points and air miles. Shopping for clothes will give you points, dining out will earn you points, and even ordering theatre tickets will earn you points.

Look out for special deals which give you bonus points for spending money with a certain retailer, as this can earn you points faster. However, something you must bear in mind is almost always, cash transactions and ATM withdrawals will not give you any reward points. If you were thinking you could just withdraw cash and then put it back into your account then your luck is out. The lenders figured that ploy out and will not allow it.

One of the best ways to earn points with a air miles based reward card is by actually purchasing air travel with them . First of all, the purchase will be quite large and so should earn you some quite tasty points, but often there are incentives for using certain airlines where you get double points for choosing a partner airline to fly with.

How Easy Is It To Spend Reward Points?

The simple answer to this is very! All reward cards will have some sort of catalogue which will be jammed full of different gift and reward choices. If you want to buy some new cutlery for your kitchen, you can, and if you want to treat yourself to a makeover, you probably can as well. There are often some very exciting experience days to choose from.

Of course, where these rewards really come into their own is when you redeem them for air travel. There are sometimes some amazing deals for air mile credit card holders that will often include some kind of reduction in price when paid for with the credit card.

You will also be able to spend your reward points on hotel bookings linked to the journey, giving you even greater savings. If you do not have quite enough points on your credit card to cover the full price of your trip then pay for the difference using your card and you will immediately start building up your points again.

Things To Watch Out For

There are a number of things you should pay attention to with air mile credit cards as there can sometimes be terms and conditions that limit how you use your points. Some things to look out for are:

Point expiry- Some reward cards will give you a set period of time in which to redeem your points. Any points unused after this time will be lost and cannot then be recovered without being earned through spending.

Check the terms and conditions very carefully to see if this is the case for you and if necessary book any air travel in advance if that is what you want to spend your points on.

Choice of dates-There can sometimes be terms attached to air travel rewards and you can sometimes be limited in the dates you can choose to travel. For example, you may only be allowed to book travel during the week instead of the weekends, or perhaps you will have to take an early morning flight instead of an afternoon one.

These are things that you should look into before you try to redeem any points.

Airline choice- You may only be allowed to redeem your points for air travel if you fly with a particular airline. This is a result of the joint venture deals that go on between credit card companies and airlines.

Before you join any frequent flyer scheme, be sure to check they are partnered with an airline that is likely to fly to place you will travel to. If you go to America 10 times a year on business, but your reward card only lets you redeem your points on an airline that flies to the middle east only, you are not going to get much value for money!

How Do You Compare Air Miles Credit Cards?

Remember that the basic workings of an air mile reward credit card are virtually the same as a standard card, and so the same sort of features should be compared.

Interest rate- How much is going to be added to any of your unpaid balances at the end of the month? The higher the interest rate, the more you will have to pay so ideally we are looking for a card with a figure as low as possible.

Promotional rate- Even reward credit cards can sometimes come with special deals for new customers, and these can come in the form of low rate balance transfers, or cards with no annual fee. If you find a balance transfer deal then you need to be looking at things like how long do you get the low rate of interest for, and how much will the rate jump to after the promotional period is over?

Annual fee- It is generally accepted that reward credit cards are aimed at more premium card users, and therefore carry a premium annual fee. You will normally find that the more features and benefits that come with the card the more you will pay in fees each year.

Annual fees for travel reward cards can range between $100-$300 per year depending on the lender and the individual offer. It is unusual, but not unheard of for there to be the occasional “no annual fee” deal on this type of card so keep an eye out.

Extras- Many premium cards come with additional bonuses for members including this like free insurances, extended purchase warranties, and identity theft protection just to name a few. Have a look to see what’s available to you. Don’t base your credit card decision on extras alone, but they are nice to have, especially if you are paying a larger than average annual fee.

How does the points system work?- Many cards operate their points system in different ways. You will get cards that run a straight point per dollar scheme, whilst others will give you 2 points per dollar spent, as well as bonuses for shopping with retail partners.

The other thing you want to look at is how valuable the points are. In other words, see how many points you will need to buy various rewards. It is all well and good getting 2 points for every dollar you spend, but if it is going to cost you 1 million points to reward yourself with a box of chocolates then you are going to have to spend some serious money before you can redeem your points for any air travel.

Obviously, very few reward schemes are quite that extreme, but some are definitely more generous than others.

Who Is An Air Miles Reward Card Best Suited Too?

Although the idea of receiving reward points and air miles every time you use your credit card is all very exciting however, not everyone is going to benefit from using such a card. How do you know whether you will get the most from the card, and what kind of consumer is likely to do the best from them?

Business travellers- Those who travel around the world on business trips will do well from using an air miles card. The frequent flying they do will mean they earn more points from making their bookings on the card, and will therefore save money in the long run, probably getting the equivalent of a couple of free trips each year.

Businesses who send their employees away on work trips will benefit from air miles, as points will quickly add up the more the card is used to fund employees travel. Another way that businesses can benefit from this kind of credit card is by using the rewards they earn to use as incentives to reward staff for loyalty or good performance. This can be a great way to boost company moral, without having to spend money from the business.

Regular spenders- Those who do most of their spending on a credit card will do very well from a card of this nature. If you are the type of consumer that does most of their day to day transactions using your card then you will probably amass a useful amount of points and make having an air miles card worthwhile, even if you do not travel very much!

Of course, the only way to make a deal like this really work for you is if you fully repay your balance every month. If you leave anything unpaid then you will start paying interest, and before long, you will find that what you would save on air travel you will have spent on interest, making the points worthless to you.

Frequent flyer members- If you are a regular traveller, it may be that you already receive air miles from a frequent flyer scheme. If this is the case then by using a travel rewards credit card you will be able to add more points to the ones you already earn as part of your frequent flyer membership. This will net you even more value for money.

Who Should Avoid This Type Of Card?

Those with poor credit- If you have a worse than average credit score then the chances of you being accepted for this kind of card are slim to none from the start. Most will also require you to be earning a certain amount of money before they will even look at your application.

Emergency users only- If you are the type of credit card customer that only uses their card in an emergency then this type of travel reward card will be of no use to you at all. As you only receive points when you spend, the amount of points you will amass with your small amount of spending will probably be wiped out by the annual fees you pay.

If you do not use your reward card regularly, it will actually cost you money, rather than save you money.

Minimum monthly payers- If you do not pay your full balance off each month then you should steer clear of air miles reward cards. Unpaid balances equal interest, and that will mean that any savings you make will be cancelled out in interest payments.

The only way to ensure you save money, and get the best value from a rewards card is to ensure your balance is paid in full every month. If you feel you may struggle to repay your balance in full each month then the chances are you will not benefit from having the card.

Getting The Most Bang For Your Buck

So you have decided that an air miles reward card is going to be good value for you. How are you going to get the most from your card? What tricks and tactics can you employ to make sure you get the most points for your money?? Here are some tips.

Use your card all the time- As long as you are 100% sure you will be able to repay all your purchases at the end of the month then do as much of your daily spending on your credit card as you can. Petrol, shopping, lunch at work, whatever it is, use the card. This way you will rack up points quickly and will not have to pay any extra as you would have been spending the money anyway. As mentioned this tactic only works if you repay your balance in full every month!

Make the most of bonuses- Pay special attention to the retail and airline partners of your credit card, as spending with these companies will often result in bonus points. Get hold of a list of partner stores, see which ones are in your area and if you can buy an item you need from more than one store, try to buy it from the one that will give you the most points.

Consider additional card holders- Some air mile cards will let you add one or more card holders to your account. This means for no extra charge you can let a loved one have access to a card of their own. These cards are linked to the same account and will be part of the same credit limit. What having an additional card holder will do is give you more opportunity to spend money between you thus earning more points.

The balance repayment rule still applies here!

Let friends and family help you- This tactic is slightly risky and will not be for everyone. However, if you have friends or family that may be about to book a holiday or make a large purchase then you could let them do it using your credit card. They could then pay you the cash which you can use to repay the balance. They get their purchase, and you get your reward points.

This should only be used with people who you really trust, and whom you know will give you the money they owe.

Look out for new customer bonuses- All of the credit card companies are pulling out all the stops to try and win your business. This means they are constantly coming up with clever ways to entice you through the doors!

One of the more popular tactics used in the case of travel reward cards is the “Introductory Points Deal”. This offer gives new card holders a bundle of points to get them started. For example when you sign up you may receive 10,000 free points as a new member. Look out for certain terms and conditions that may be attached to these offers as they are there to catch you out.

You may find some offers that will only give you access to those free points after you have been a card holder for a certain period of time, and others will give you the points but after you have earned an equal amount of points from your own spending.

All of these details should be outlined in the terms and conditions of the card and should be checked thoroughly before you sign up.

Are Air Miles Reward Cards Really Worth It?

If you are the right kind of customer for this kind of deal then 100% yes, they are worth it. They offer regular spenders the chance to earn cash back, rewards in the form of gifts and experiences, and for those that travel the chance to save money on flights and other travel related purchases.

If you travel for business, or find you take regular holidays around the world then not only are you going to be able to save money on your next trip, but by using the card to book your travel you will also be earning points for future breaks away.

As long as you are disciplined in your spending and repayment habits, and as long as you use the card enough to justify the higher than average annual fees, then the air miles reward card is going to become very useful to you.

The good news is that there are tons of great deals available, and most of them can be found and compared online. In most cases you can even apply for a card on the lenders website and some will give you an instant answer as to whether you have been successful in your application. Get searching, and Bon Voyage!

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