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Why Airline Credit Cards Can Be a Bad Idea

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When people think of reward credit cards, the first thing that may come to mind is an airline affiliated credit cards that earn frequent flier miles. A few miles never hurt anyone, but airline credit cards are not for all credit card users. Here are the counter arguments against these popular products:

Most credit card users don’t travel enough to offset the annual fees and utilize the perks. Nearly every airline offers an affiliated credit card and almost all of them require an annual fee. But cardholders should never pay these fees unless they are receiving so much value from these cards that it easily makes up for the cost. For example, cards such as United’s and Delta’s offer checked bag fee waivers that can pay for their annual fee with only one trip a year. If these perks aren’t being utilized, cardholders should be hesitant to renew their card and pay the annual fee.

Many cardholders don’t spend enough to earn rewards. The ideal airline card user spends tens of thousands of dollars each year on his or her card in order to receive enough miles to justify the annual fee.  Yet most households don’t meet that profile and earning just a few thousand miles from a rewards credit card is an insignificant reward. At that rate, it could take years just to earn two domestic round trip tickets in coach. For cardholders with more modest spending requirements a cash back card is a better product.

Most cardholders shouldn’t be using any kind of reward cards. The unfortunate fact is that most credit card users carry a balance. These users should be scrutinizing their interest rates, not worrying about rewards. No matter how much frequent flier miles they are earning, it will pale in comparison to the amount interest being paid when a balance is carried. Those who fall into this category should instead look for a credit card that provides a 0% APR on balance transfers.

 Frequent flier miles are difficult to redeem. There was time when passengers could simply call their airline and choose to redeem miles for an award flight rather than pay cash. Those days are long gone as carriers have severely restricted the availability of award seats at the lowest mileage levels. Customers can always use their miles, but they must typically pay two to three times as much as they were originally promised an award trip would require. To add insult to injury, many airlines are now adding hefty fuel surcharges to award tickets that had been advertised as “free.” In extreme cases, the cost of the taxes and fees on an award can even exceed the cost of simply purchasing a ticket.

The promise of a free trip is a strong incentive to apply for an airline affiliated credit card. But only by examining the advantages and disadvantages of these products can cardholders choose the best card for their needs.

Editor's Note: This content is not provided by Citi. Any opinions, analyses, reviews or recommendations expressed here are those of the author's alone, and have not been reviewed, approved or otherwise endorsed by the Citi or any of the other companies whose products are featured in this content.

About the author

Jeffrey Weber

Jeffrey Weber has been following and blogging about the credit card industry since 2004. He has also written for Forbes and been cited in a wide range of major media outlets including USA Today, Time, MSN Money, The Christian Science Monitor, The Detroit Free Press and numerous other prestigious online and print publications.

Jeffrey resides in Easton, Connecticut and enjoys spending his free time chasing after his two year old son, watching films with his wife and occasionally taking a holiday to go snorkeling.

– has written 46 posts.

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