Airline credit cards have steadily been gaining popularity in
the past few years. Airlines and other companies related to the
travel industry benefit as customers utilize their services more
frequently; brand loyalty is strengthened as well. Consumers
with a good credit history gain by obtaining greater value from
their credit cards. Fundamentally, airline credit cards operate
in a similar manner; purchases charged to the credit card earn
travel points for the card holder, these points can be redeemed
in various ways, for example contributing toward free travel,
hotel stays, service at a car wash, etc. Four key features to
consider while selecting an airline credit card are given below.
Low Interest Rate: The cost of credit is measured in terms of
the annual percentage rate (APR). A good credit profile helps to
obtain a low APR, i.e. prime + 4%. Most credit cards offer a
"variable rate" plan in which the APR changes with certain
economic indicators. The interest rates vary with the cards and
are influenced by other offerings such as the grace period,
annual fee, bonus points, etc. A card holder who does not carry
a monthly balance need not really worry about interest rates;
however, people who do carry their balances forward can select
from a number of airline credit cards that charge a low interest
rate. Some cards offer an introductory rate of 0% interest on
balance transfers over a period of time, which is typically 12
months.
Preset spending limit: The spending limit in airline credit
cards can vary from a few hundred dollars to thousands of
dollars. The minimum monthly payment is liable to increase with
higher spending limits. Some cards allow users to spend over the
credit limit, the amount over the limit and the resulting
penalty are settled in the subsequent month's payment. Credit
card bills can quickly balloon to unmanageable proportions.
Therefore, inveterate spenders are well-advised to carefully
consider the preset spending limit before settling on an airline
credit card.
Compatibility with other frequent-flyer programs: It is
important to check whether an airline credit card offers this
feature; portability of miles points is desirable as it allows
one the freedom to use the services of more than one airline for
redeeming the points. By not being tied down to one airline,
users have an increased number of destinations to choose from.
Bank-sponsored airline credit cards offer greater compatibility
with other frequent-flyer programs as compared to
airline-sponsored credit cards that usually focus on a single
airline.
Annual fees: There are several airline credit cards that do not
charge an annual fee. Non-airline credit cards that allow users
to accumulate miles are usually fee-free. The purpose behind
fees is to try and defray the costs of the free miles and other
freebies. The average annual fee for airline credit cards is
around $ 70. Frequent fliers stand to gain more by using cards
that charge a fee because with these cards the airline miles
benefits are more as compared to cards that are free. Moreover,
if the card is used for business-related travel, the annual fee
can also be tax deductible.
About the author:
Samuel Petry recommends you visit Credit Card Assist for more
information on
a
irline miles credit cards.
