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4 Features to Look for in an Airline Credit Card

This article explains what to look for in an Airline credit card.

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 similarly; purchases charged to the credit card earn travel points for the cardholder. 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 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 cardholder who does not carry a monthly balance need not 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 on airline credit cards can vary from a few hundred dollars to thousands. 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, habitual 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 you 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 more excellent compatibility with other frequent-flyer programs than airline-sponsored credit cards that usually focus on a single airline.

Annual fees: Several airline credit cards 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 free cards. Moreover, if the card is used for business-related travel, the annual fee can also be tax-deductible.

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