Information Center – News and Articles about Credit Cards
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Flying High by Applying for a Credit Card
Choosing a credit card travel rewards program can be intimidating. After all, you have as many flashy choices as you do in a mall at Christmas. The Internet is helpful, but it can only add to the sense of being overwhelmed by options. There are so many programs and so many different benefits to choose from. How on earth can you decide?
There is some good news lurking among all the offers. The fact that these lenders are all competing for your business means that somewhere hidden in the hype is the perfect travel rewards program for you. The challenge is figuring out what to look for.
Flier or Buyer?
These are two main categories for travel rewards programs. Are you a frequent flier who travels often on airlines? If so, your best choice is probably an airline credit card which rewards you with points for every mile you travel. Airline cards are typically run by the airline, and so the points you earn may only apply towards tickets for their flights.
Are you a frequent buyer who doesn't travel very often? Then you may want to choose a cash back rewards credit card with a rewards program that isn't limited to airline tickets. Some of these give you points for every purchase you make with your credit card. The points you earn can then be used not only for airline tickets, but for discounts on hotels, cars, gift cards, and even flat cash rewards. The cash can sometimes even be applied directly to your credit card balance, making some of your purchases free!
Comparison Shopping
Once you figure out whether you are more of a flier or a buyer, there are a few other things to consider when you're comparing these credit cards.
Is there an Annual Fee? Airline credit cards usually charge an annual fee. This fee can start as high as $75, and it may take more than $8,000 in charges yearly to earn back this fee. Many cash-back reward cards don't have an annual fee. And they are more likely to deal with different airlines, giving you a choice of who to fly with.
What is the APR? With either type of card, you will still want to compare the APR offered by each card if you often carry a balance on your credit card.
Are there any Travel Restrictions? Cash-back credit cards may be used with more airlines and charge smaller or no fees, but you will find that many of these cards have certain travel restrictions. This means you can only travel to certain locations on certain dates. You will also probably need to book a flight well in advance to avoid other complications.
How many Points per Ticket? It can make a big difference when you consider how many points you will need to earn before you can redeem a ticket. 25,000 points is the most common number of points needed for a ticket, but some frequent flier, cash, or reward credit cards automatically credit you points when you first open the account. There are also some programs that give you double points for purchasing plane tickets. Some may give you points for the dollar amount of the ticket and also points for the frequent flier miles with it. There are even programs that use unique formulas to determine the points required per ticket.
When do the points expire? It can be important to know how soon you have to use the points you earn. Many of these cards count on the fact that the points will expire before many of their customers actually have a chance to redeem them. If you’re saving for a dream vacation in a few years, you need to make certain that the points will still be valid.
If the more obvious issues don't give you an clear best choice, then there are other factors that you might want to consider.
What's the economic health of the airline? If an airline declares bankruptcy or has to merge with another airline, your travel points will probably be lost in the shuffle. Is your frequent flyer card from an airline that flies out of your most convenient airport? This could make a big difference for you. You might also want to consider whether or not the commuter flights they work with are also part of the program.
Do you have a preference for certain airlines? This may matter to you if you feel that the seats are more comfortable, the flight attendants are more pleasant, and the experience is more enjoyable. After all, that’s part of the reward!
Still Can’t Decide?
If you haven’t been able to narrow your options down simply from considering the issues above, you may want to make a comparison chart of the most likely choices. List at the top the credit card attributes that are most important to you.
Down the side, list the airline or cash rewards credit cards you are considering. Then you can use the Internet to check out the many Web sites that have actual comparison charts for the many cards. You may even come across a card that you hadn’t considered which meets your needs perfectly! Whether you finally choose an airline card or a cash-back card, don’t forget to carefully scrutinize the program's fine print. Then it’s time for happy flying and buying!
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