Facts About Airline Credit Cards
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Even though airlines have credit cards branded with their logo’s and names, they do not in fact issue them. These credit cards are issued by normal banks and just have the airlines branding on it. Therefore the same application process is used as if you were applying for a VISA, Master Card or Amex for example.
Airline credit cards have an industry guideline of an interest rate of 9.99%, most stick to this guideline interest rate. Most of these credit cards carry an annual card fee of anywhere between $40 up to $400 per year, depending on the benefits and perks the airline loyalty program decides to give to its users.
Airline Credit cards are a great way to increase your airmiles due to the fact that the airlines give you miles per amount spent, and then often double up your miles if you have bought a flight with them using that airliner’s credit card. So doing a few short-haul flights using your credit card as payment could ensure that you have a free flight lined up in no time. Many airlines also offer free or cheaper upgrades to the class that you have purchased, and sometimes your ticket is automatically flagged for upgrade if possible when you buy your flight ticket with that airline’s credit card.
Another great advantage airline credit cards have over normal bank credit cards is the huge competition factor they face. Due to the many airlines offering their own credit card, each airliner is now trying their best to lower card fees, add extra perks such as bonus miles, sign-up miles, free or reduced companion tickets, anniversary bonuses, and many more reasons why you should take out Airline A’s credit card compared to Airline B’s credit card. This can be a great bargain sometimes if you sign up for the best suitable program for yourself, but remember do not over-extend your credit limit.
However, an important thing to remember, as mentioned above, is that airline credit cards are regulated exactly the same way as the credit cards issued by banks, therefore if you cannot afford to keep up with the monthly credit card payments, your card will be canceled and you will more than likely lose all reward miles you have earned so far. These credit cards also have the annual card fee attached, which most bank credit cards do not have. This all ads to an extra burden you do not have to pay with a normal bank credit card.
In our opinion, having an airline credit card managed properly every month, and if you do enough traveling in a year, you will really benefit from having an airline credit card. The rewards far outweigh having a normal bank credit card, and sometimes the annual card fee is justified.
If you can manage your credit card judiciously, and make at least the minimum payment each month, you will soon be winging your way to the destination of your choice (dependent upon the airline of course!)
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