What are Airmile credit cards?


Aeroplane wing at sunset

Airmile credit cards offer reward points every time you spend with your credit card. Once collected, these points (or Airmiles) can be exchanged with popular airline loyalty schemes (like Avios and Virgin Flying Miles) for flights and other travel related perks.

Which Airmile card is the best?

Airmile cards are available from a number of UK card issuers, and although they are broadly similar, each has different features that will determine how appropriate it is for a particular applicant.

For instance, many Airmile cards offer bonus reward points to incentivise applications, but, if the airline does not offer destinations that appeal to you, no amount of points will make the card worthwhile.

Comparing Airmile cards

Aside from the routes a particular carrier flies, there are other questions which must be considered when you compare credit cards before applying, to ensure you get the most beneficial product, such as;

Do you clear your balance every month?

One of the most attractive features of all credit cards is the revolving credit line they offer, which, assuming you meet your monthly minimum payment, can be cleared at a time convenient to you (unlike a loan, which has a fixed repayment schedule).

However, although revolving credit can be a useful tool, the interest incurred if you can't clear your balance in full every month is likely to negate the benefit of any Airmile rewards you have collected. In other words, it will cost you more in interest payments than the value of the points you earn are worth.

Do you have a good credit score?

Airmile cards tend to be premium products and, regardless of income, they are not available to people with a bad credit history. If you have a bad credit history and you know you want an Airmile card, you should first consider rebuilding your credit score (with a credit building card perhaps). This may take some time, but it is likely to be far quicker than being declined for a product, which tarnishes a poor credit score still further.

Which card offers the best Airmile 'earn rate.'

The value of Airmiles differs by reward scheme, so a point with one scheme will not necessarily take you as far as a point from another (and neither is likely to take you a full mile).

Also, although some issuers offer cards for the same reward schemes, the rate at which you earn points can vary considerably. Obviously, the more points you collect, the more you can exchange them for, so maximising 'earn rate' is key to getting the best Airmiles deal.

Annual Fees - to pay, or not to pay?

In the UK, we have become accustomed to credit cards which do not charge an annual fee. However, maintaining a credit card account costs the card issuer in terms of postage, production, administration and servicing. In addition to these costs, Airmile credit cards also require the administration of a rewards scheme. As such, many cards do charge their users an annual fee.

Annual fees can be avoided if you are willing to forfeit some of your points-earning potential. However, depending on the amount you spend, annual fees can worth paying, since they are usually associated with far higher 'earn rates'.

Bonus miles

Most Airmile card issuers offer bonus miles to encourage people to sign up for their products. Bonus miles can be a useful way to fast-track collecting Airmile points, but as with other points, they are not all equal, so simply looking at the number available may offer little insight as to their exchanged value.

Upgrades and companion tickets

If you spend a lot on your credit card, then you should look out for seat upgrades and companion tickets that many card issuers offer to users who reach certain spend levels. In many instances, although you usually have to pay any taxes associated with the flights, these benefits can be worth more, monetarily, than the points themselves.

Two cards are better than one?

Don't be alarmed that some Airmile card products come with two physical credit cards.

Because of the way the interchange (the money that issuers receive from retailers to enable purchases on their cards) is applied, American Express can afford to offer more generous rewards than Visa or MasterCard, and it is for this reason that most Airmile cards are Amex. However, card issuers also recognise that low levels of Amex card acceptance by merchants can frustrate users, so many of these issuers pair Amex cards with the more universally accepted cards. This means that cardholders can benefit from points wherever cards are accepted, albeit they earn more as and when they can use Amex.