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How to Choose the Best Airline Credit Cards

Fiona Leake
Fiona Leake
  | Edited by Fiona Leake
Updated 4th February 2021

Cut the cost of flying with an airline credit card. You can earn points or miles as you spend to make your next holiday that bit much cheaper. Read our guide to find out whether airline credit cards are worth it and how you can use them effectively.

What is an airline credit card?

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Airline credit cards are a reward card. You can earn air miles and travel-related points whenever you make a purchase using the card. 

Each card is tied to an airline rewards scheme. Usually, more rewards are on offer when you use the card to make purchases with the specific airline you got it from. 

The miles, rewards and points can be used for flights, car hire, hotels and other travel-related spending. 

How do airline credit cards work?

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You earn travel-related points or air miles when you make everyday purchases with an airline credit card. You can convert the miles you’ve earnt into flights but you’ll still need to pay taxes and other fees. You’ll never get a completely free flight! 

Some airline credit cards won’t offer you miles but points instead. These points are designed to be used for travel-related purchases such as hotels, car hire and restaurants. 

Airline credit cards are usually tied to a particular airline which means you can earn more points or miles whenever you fly using that airline. 

The number of miles you earn per £1 spent is different with every airline credit card. However, the general idea is that the more you spend, the more miles you earn. Don’t be tempted to overspend though! 

These credit cards do tend to have a high-interest rate to make up for all of the air miles and points on offer. You might also find that your airline credit card comes with a monthly or annual fee. 

What are air miles and how do they work?

Air miles are a particular type of loyalty reward that can come with airline-specific credit cards. The air miles you earn can be exchanged for flights. So, for example, per £1 spent you might earn one air mile. 

You might earn more air miles for travel-related purchases or when you buy things from that particular airline. For example, you might earn three points for every £1 spent at British Airways.

The more you spend, the more miles you earn which can be exchanged for flights. Air miles are designed to encourage loyalty to one particular airline. So, make sure you pick an airline credit card with a company you often fly with. For example, if your card earns you Avios, you can only use them to pay for flights with British Airways, Aer Lingus, Iberia and Vueling.

Who are airline credit cards for? 

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Airline credit cards are best suited for frequent flyers and high spenders. You’ll need to use your credit card a lot to make purchases in order to build up sufficient points to exchange for flights. You’ll also need to be a frequent traveller to make the most of other rewards on offer such as hotels and car hire.

Airline credit cards also come with high-interest rates. These cards are suitable for people who can comfortably afford to clear their balance every month. Avoid added interest as it’ll wipe out the value of any rewards you earn.

What’s the difference between airline credit cards and travel credit cards?

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Airline credit cards and travel credit cards are often confused as the same thing but they are actually very different. Travel credit cards are designed to be used when travelling abroad. Whenever you make a purchase in a foreign currency, your credit card will be charged a foreign transaction fee which is around 3% the cost of your purchase. These fees begin to add up whenever you use a credit card abroad. Travel credit cards don’t charge this fee abroad, making it much cheaper to spend overseas. 

Travel credit cards don’t tend to come with other rewards. On the other hand, airline credit cards are a type of reward credit card. Whenever you make a purchase using an airline card, you’ll earn air miles or points to use when travelling. 

What are Avios credit cards?

Avios is a type of rewards scheme that comes with British Airways, Aer Lingus, Iberia and Vueling airline credit cards. Avios points work in a similar way to supermarket loyalty cards like Nectar and Tesco Clubcard. 

Avios cards are probably one of the most popular airline credit card types in the UK. Most of the major airlines offer these frequent flyer programmes. However, make sure the Avios card you pick flies to destinations that interest you. You can’t simply fly wherever you want using these points, so, always check this before applying.

How to use an airline credit card

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Collect as many points as possible by using your airline credit card for all everyday purchases you normally make. Remember to always use your airline card whenever you buy flights from the company tied to your card, you’ll normally earn bonus points by doing this. 

Here’s a basic step-by-step on how to use an airline credit card:

  1. Spend on your card regularly for everyday purchases
  2. Buy flights using your new card - often gives you extra air miles
  3. Convert points to miles from other reward schemes like Clubcard
  4. Use your miles for flights or other travel-related perks like hotels

There are a few things you shouldn’t use your airline credit card for:

  • Expensive purchases - if you want to spread the cost of an expensive item, a 0% purchase card that charges no interest over a set period of time would be a better fit. Airline credit cards are best if you can clear your balance monthly.
  • Balance transfers - if you use an airline credit card for balance transfers, you’ll end up paying fees and a lot of interest. If you need to transfer debt, 0% balance transfer cards won’t charge you interest for the first few months.
  • Cash withdrawals - making a cash withdrawal on an airline credit card will charge you a fee and interest will be added immediately. Avoid this and make the most of the rewards you earn.

How do I collect air miles with an airline credit card?

The best way to collect air miles is to make regular flights with the same airline. You earn significantly more air miles when you purchase flights than you do with regular purchases. 

However, the great thing about airline credit cards is that you still earn air miles or points with regular spending, even at your weekly supermarket shop!

You might earn bonus points or miles for hitting certain spending milestones. For example, if you spend £10,000 the first year you use the card, you might get 100 extra points.

Another way to earn air miles is by converting supermarket loyalty points. For example, Tesco Clubcard points can be converted into air miles.

Are airline credit cards worth it?

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Deciding whether an airline credit card is worth it depends on your personal situation. You’ll need to be in a financial position to clear your balance, spend a lot on your card and love flying.

Let’s weigh up the pros and cons of airline credit cards to help you decide. 

Pros of airline credit cards

  • Airmiles - the main benefit of airline credit cards is the air miles you can accumulate as you spend. These miles can be spent on flights, saving you a lot of money.
  • Priority boarding - some airline credit cards will allow you to get on the plane earlier with priority boarding 
  • Lounge access - airline credit cards can sometimes allow you access to airport lounges. You can enjoy certain benefits in these lounges such as food, drink, wi-fi and magazines.
  • Companion flights - some airline credit cards might offer free companion tickets, meaning you can bring a friend or partner along on your next adventure!
  • Bonus miles - when you first sign-up, airline credit cards tend to offer bonus points for the first few months if you meet a certain spending limit.
  • Extra perks - on top of offering air miles, some airline credit cards might also offer other travel discounts on hotels and car hire services. 

Cons of airline credit cards

  • High-interest rates - airline credit cards charge a higher interest rate than standard cards. Pay off your balance in full every month to avoid building debt.
  • Annual fee - some airline credit cards will charge an annual fee which can be quite pricey. Make sure the rewards outweigh the fee.
  • Overspending temptation - if you want to rack up a lot of points and miles, you might find yourself overspending.

Before you decide whether an airline credit card is worth it, ask yourself the following questions. 

Will I clear my balance every month?

The points and miles you earn from an airline credit card will only be worth it if you can avoid the high-interest rates. If you know that you’ll be able to comfortably clear your credit card balance every month, then an airline card might be worth the rewards.

If you’ve struggled with debt in the past, an airline credit card might not be for you. These cards require a good or excellent credit score.

Are air miles the type of reward I want? 

There are plenty of rewards credit cards out there, including cashback. Do you travel enough that air miles will seriously save you money? Or, would you rather earn cashback for every pound you spend?

Choosing what rewards card suits you best depends on what you enjoy doing most. Think carefully about the places you shop and what you enjoy doing to help narrow down your search.

Airline credit cards golden rules

Airline credit cards can be great for those that love travelling the world. However, there are some golden rules you’ll want to follow to get the most out of this reward card. 

1. You MUST repay in full every month

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If you know you won’t be able to pay off your credit card balance every month, there is no point in getting an airline credit card. The high-interest rate will simply dwarf any gain you got from points or air miles. 

If you use your credit card for everyday spending, you’ll know roughly how much you’ll need to pay off each month. If your monthly outgoings on your credit card are around £700, set up a direct debit for £700 every month to your credit card company. This way, you won’t forget and your balance will automatically clear, just make sure you have enough money in your account!

2. Airline cards work for big spenders

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Airline credit cards reward those that spend a lot of money on their card. For example, the BA Premium Plus Amex gives you a companion ticket if you spend £10,000 a year. 

So, if you usually spend that amount of money and can comfortably afford it, then an airline credit card could give you huge rewards. However, if you aren’t looking to spend much, other credit cards might suit you better.

3. Airline credit cards AREN’T for borrowing

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Airline credit cards are best when you use them like a debit card and clear your balance every month, only spending what you can afford to pay back. 

If you’re looking to borrow money, you’ll want a credit card with a low or 0% interest rate. For large purchases, 0% purchase credit cards can be a good option. You won’t be charged any interest on your purchases for the first few months.

4. Use for all NORMAL spending 

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Never spend more money than you need to on an airline credit card. Instead, use this card for all your normal everyday purchases such as food and petrol. Set up a direct debit to pay these expenses off in full every month.

It can be tempting to spend loads and see the miles add up. However, if you can’t pay it back by the end of the month, the miles you’ve earnt will feel much less exciting when you see how much interest you have to pay!

5. Free flights are a myth

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When you earn air mile points through your airline credit card, you can redeem them for reward flights. However, the flight will never be completely free, taxes and charges will still be added on top.

You will still save a significant amount as you won’t be paying for the flight ticket but taxes and charges do still add up so expect to pay something.

6. Reward flights are restrictive 

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When you spend your miles or Avios points on a flight, you won’t be able to pick any time, destination or class you want. The availability of reward flights is much more limited so you’ll need to be flexible. 

We recommend booking a reward flight far in advance, as much as a year before. Seats start being released about a year in advance so be quick and book early. 

How to compare airline credit cards

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What should you look for when comparing airline credit cards? Here’s a list of things to consider when picking your card:

  • Air miles or points per pound - compare how many air miles or points you’ll earn per pound spent on the card. Next, take a look at how many miles are required for a flight to Paris, for example. Then you can work out how much you’ll have to spend on each card to earn a Paris flight.
  • Welcome bonus - look for an airline credit card that has a generous welcome bonus. This could be something like 10,000 bonus miles when you spend £5,000 in the first six months. Don’t overspend just to meet the welcome bonus but if you normally spend that much, it can be a great perk!
  • Annual fee - most airline credit cards do come with annual fees but that’s not always the case. If a card doesn’t come with a fee, the rewards are likely to be less generous. Airline cards that do come with fees might offer more rewards, just make sure they outweigh the cost of the fee. 
  • Interest rate - airline credit cards notoriously have high-interest rates. If added interest worries you, try to look for the lowest APR. However, you should avoid interest by paying off your balance in full every month. 

I can’t meet my minimum credit card payments due to coronavirus. What should I do?

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Coronavirus has put a financial strain on many. If you have a credit card and are struggling to meet your minimum repayments, you may be eligible for help.

The Financial Conduct Authority (FCA) has introduced measures that allow you to request a freeze on credit card repayments for 6 months. However, you may still be charged interest in this period.
You have until the 31st March 2021 to request a freeze but make sure you agree with your lender before stopping repayments. This won’t leave a bad mark on your credit history either due to the exceptional circumstances.

If you can afford to keep paying, it’s best to do so as you will still be charged interest during this holiday period.

All payment holidays must end by 31st July 2021.

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