Mileage Credit Card - Know Before You Buy

A very useful type of credit card is the airline mileage credit card. In summary, these type of credit cards offer you rewards in the form of frequent flier miles for the money you spend with the card. As with any type of financial product, there are different types of a mileage credit card with each having specific advantages and drawbacks. One benefit of a mileage credit card is that you get points for both the dollars you spend and the miles you fly (when a flight is purchased with the card). So essentially, you are getting a double benefit when you purchase a flight with your mileage credit card. The goal of this post is to educate you on what you need to look for when shopping for a mileage credit card.

For starters, do not open a mileage credit card (or any new credit card) if you carry a month-over-month balance. Unless perhaps you are consolidating to a lower interest credit card as part of you reducing credit card debt efforts. If you do not carry a balance, then a mileage credit card may be worthwhile for you.

Airline mileage credit cards are offered both by the airline companies themselves as well as by banks. One benefit to using a bank card over a specific airline's mileage credit card is that usually the miles earned on the bank card can be used on a number of airlines. Depending on what airlines fly into your local airport, you need to be careful when considering a specific airline mileage credit card. There are also other factors when choosing a mileage credit card which may offset this limitation, which we'll discuss next.

Other things to consider when looking into a mileage credit card include the annual fee, the interest rate (again, won't matter if you don't intend to carry a balance which you shouldn't), minimum miles to redeem for a flight, how miles are earned and cashed, processing fees, and when miles expire (if ever). For most airlines, a minimum of 25,000 miles is required with a mileage credit card before you can redeem a flight. Some mileage credit cards will offer you up to 25,000 (occasionally more) miles just for signing up if you qualify. Even if there is an annual fee, in this case it would be offset by the free ticket. It is important to read the fine print as sometimes these miles accrue at a rate of 1,000 miles per month for the first 25 months or something similar.

If you have a specific time frame in mind for when you'd like to use your mileage credit card miles to redeem a trip, the expiration date/life of the airline miles is important. The last thing you want is to save mileage rewards for 3 years for a trip only to have them expire and get no rewards whatsoever for your mileage credit card purchases. Hopefully this understanding of the mileage credit card will be useful as you research which card is best for you.