How to compare airline rewards cards


Airline rewards credit cards are rewards cards that offer travel-related incentives in exchange for using the card. This means that every time you purchase something using your airline rewards card, the provider will offer you some form of credit or points that you can put towards travel vouchers or air miles.


There are many different airline rewards cards on the market, and it can be difficult to decide which card is most suitable for you. Here are a few tips on what to look for when you are comparing airline credit cards.

1. Bonus rewards
Although every airline rewards card is designed to reward you when you spend, some card issuers offer consumers added benefits, such as bonus miles and other perks.

When comparing credit card offers, look for a card that offers a points booster if you spend over a certain amount in the first three months or upon your first purchase. However, don't automatically go for the bonus offer with the most points. In order to claim the bonus, you first need to be able to afford it.

Cards with higher bonus amounts tend to come with bigger spending requirements. For example, the American Express British Airways card offers 1,000 BA miles when you spend £500 in your first 3 months, whereas the Virgin Atlantic Black card provides 6,000 Flying Club miles when you make your first purchase and 12,000 bonus miles when you spend £1,500 in the first 90 days. 

When comparing offers, consider whether your income will allow you to safely spend the limit in order achieve the bonus. Then consider whether you will be able to pay off the amount you spent in full so that you can avoid any interest charges.

2. Interest rates
Due to the value of the rewards that airline credit cards offer, the APR on these types of cards is often extremely high compared to standard credit cards or even alternative rewards credit cards. For example, low interest credit cards can offer APRs as low as 6 to 7%, whereas airline rewards cards feature interest rates as high as 18 to 50%.

Typically, the better the reward, the higher the interest rate. So if you plan to carry a balance on your card, estimate how much you will pay in interest and compare that to the value of the reward. You may find that the interest that you pay on your balance is likely to be far higher than the reward you earn. 

3. Annual fees
After comparing interest rates, check to see if there is an automatic charge associated with the card. Many airline rewards cards come with an annual fee, and some annual fees can be as high as £140 per year.

Generally, the better the rewards on offer, the higher the annual fee will probably be. If you're looking at several cards with annual fees, weigh whether the value of the reward will be higher than that of the annual fee combined with potential interest charges. 

4. Credit rating requirements
Most rewards credit cards require applicants to have good to excellent credit ratings. If you are unsure about your eligibility, look at your credit report before applying. If you decide to go ahead and apply for an air miles credit card but are declined, this could further impact your credit score, so make sure you only apply for those cards that you feel confident you will qualify for. 

See related: A quick guide to air miles credit cards; Booking flights on credit cards 'is crucial'

Published: 15 August 2011