Are airline credit cards worth it

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Citi / AAdvantage Executive World Elite Mastercard

Sign-up bonus: 50,000 miles after you spend $5,000 on purchases in the first three months of account opening.

Rewards: 2 miles per dollar on eligible American Airlines purchases, and 1 mile per dollar spent on everything else.

Why it’s the best airline card for Admirals Club: If you fly American frequently, this card is worth having for its perks. It comes with an Admirals Club airport lounge membership that gets you and your immediate family (or up to two guests) into dozens of club locations around the world when you have a same-day boarding pass for an eligible American Airlines or select partner airline flight. You can also add up to 10 authorized users — who receive the same benefit — at no additional charge.

You’ll get priority check-in, airport screening and boarding when flying American, a first bag checked free for you and up to eight companions on the same reservation and a Global Entry/TSA PreCheck application fee credit (up to $100) every five years.

Annual fee: $450.

Related: Citi AAdvantage Executive Card review

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Advantages of Travel Credit Cards

Included Travel Benefits

While travel cards with an annual fee might be a waste of money in some situations, in others they can be a major win even for basic travelers. In fact, some of the best card benefits specifically cater to economy flyers and limited-service hotels.

Airlines offer several overlooked benefits to cardholders that can make a travel credit card a necessary tool in your arsenal. For example, United Airlines builds in access to additional award inventory available only to cardholders, making it easier to reserve the specific flight you want. Add in the free checked bag offered on many airline cards, and the annual fee could easily be worth it.

A popular perk on hotel credit cards is the inclusion of a free night certificate every year when you pay the annual fee. These certificates are typically only valid at hotels up to a certain cost in points, which will usually include comfortable stays but not premium properties. If that’s the type of travel you’re looking for, you’re in luck: It’s not hard to break even on a card’s annual fee with a single free night.

Increased Earnings

One of the most compelling reasons to choose a travel card—even with an annual fee—is they often rack up rewards more quickly than their cash back counterparts. Travel cards are highly competitive, so it’s not uncommon to see welcome bonuses worth $1,000 or more for eligible new cardholders. The best cash-back cards, on the other hand, tend to fall closer to $100 to $200 (or maybe even zero).

After the one-time welcome bonus, many travel cards also continue to outperform cash-based programs. The U.S. Bank Altitude® Reserve Visa Infinite® Card*, for example, will earn 5 points per dollar on prepaid hotels and car rentals booked directly in the Altitude Rewards Center, 3 points per dollar on eligible travel purchases and mobile wallet spending and 1 point per dollar on all other eligible net purchases. You can make mobile wallet purchases at many online or brick and mortar businesses whereas most cash-back cards earn only 1 to 2 points per dollar spent.

Increased Upside Potential

Travelers who are willing to put some time in to learn program nuances can redeem their points for outsized value, even without choosing premium travel experiences. Strategies like comparing airline award charts or adding in stopovers can increase the value of your points. Other tactics, like booking a single, longer hotel stay and taking day trips rather than booking two shorter stays, also stretch your rewards.

When you book with cash, the opportunity for upside is limited by market rates. With points, leveraging redemption sweet spots can stretch your hard-earned rewards farther.

Home Equity Line of Credit

You might be able to use a portion of your home’s value to spruce it up or pay other bills with a Home Equity Line of Credit. To find out if you may be eligible for a HELOC, use our HELOC calculator and other resources before you apply.

Chase Sapphire Reserve® : Best for airline credits

Here’s why: The Chase Sapphire Reserve® features an annual $300 travel credit that is much more flexible than the travel credits offered by many competitors.

While some other premium rewards credit cards limit the use of their travel credits to incidental costs like checked bag fees, the Chase Sapphire Reserve® allows you to purchase such things as airline tickets and hotel stays.

Using the travel credit to help pay for a flight is a great, straightforward way to help offset the $550 annual fee.

Check out our review of the Chase Sapphire Reserve® to learn more.

How we picked the best airline credit cards

To find the best airline rewards credit cards, we started by thinking about the different features travelers might enjoy. Instead of looking at the best card from each airline, we decided it would be more useful to show you the cards that excel at offering different features like award flights, first-class upgrades, companion tickets, lounge access, travel credits and more.

From there, we searched for the best credit card in each category, with a mix of co-branded airline cards and more flexible options to show you the range of choices available.

JetBlue Credit Card

Sign-up bonus: 10,000 bonus points after you spend $1,000 in the first 90 days of account opening.

Rewards: 3 points per dollar on all JetBlue purchases; 2 points per dollar at restaurants and grocery stores, and 1 point per dollar spent elsewhere.

Why you should consider it: Both the JetBlue Card and the JetBlue Plus Card are great products. If you don’t mind paying a $99 annual fee, the JetBlue Plus offers several extra benefits, including a higher welcome offer, an anniversary bonus, redemption refunds, statement credits and a shot at Mosaic status.

If the majority of your spending is on non-JetBlue purchases and you prefer a card with no annual fee, you might as well get the regular JetBlue Card since it earns the same number of points on non-airline spending.

The information for the JetBlue Card has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.

Foreign transaction fees: None.

Cash back vs. miles credit cards: Which one should you get?

Ultimately, deciding between a cash back and miles credit card will depend on your preferences and travel habits:

For frequent travelers who tend to stick with the same airline or hotel chain, a co-branded miles card will be the most beneficial option. For regular travelers who still want to earn miles but don’t want to be tied down to a specific brand, a general travel rewards card can be a great choice. If you’re not a frequent traveler but still want to earn rewards on your spending, a cash back credit card can be a perfect fit for your needs.

It’s worth noting that depending on your credit, you don’t need to limit yourself to a single type of rewards card. It can be extremely beneficial to own both a cash back and miles card at the same time as long as you use them responsibly.

Best for simple rewards: Cash back

For consumers looking to simply earn a percentage back on all their spending, a cash back card is the way to go. You won’t have to worry about figuring out how to maximize the value of your rewards; you know you’re earning in cash, so the value of your earnings is straightforward.

Some cash back cards offer bonus spending categories, so if you want to get the most bang for your buck, make sure you use your card for all the spending you do in those higher earning categories.

Sample rewards earned in the first year

Apply NowOn Chase’s Secure Website Chase Sapphire Preferred® Card Apply NowOn Citibank’s Secure Website Citi® Double Cash Card – 18 month BT offer Earning rateThe Chase Sapphire Preferred® Card earns 5x on travel purchased through Chase Ultimate Rewards®, 3x on dining and 2x on all other travel purchasesEarn 2% on every purchase with unlimited 1% cash back when you buy, plus an additional 1% as you pay for those purchases.Sign-up bonusEarn 80,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That’s $1,000 when you redeem through Chase Ultimate Rewards®.No bonusAnnual fee$95$0First year value$2,480$400

Our valuations are based on an assumption of $20,000 annual spend, with $3,000 spent on travel through Chase Ultimate Rewards®, $2,000 spent on all other travel, $5,000 spent on dining, and $10,000 on everything else. We value Chase Ultimate Rewards® points at 2 cents each.

Cons of Airline Credit Cards Explained 

And here’s why you might consider another kind of travel rewards card.

Potentially Limits You to One Airline

With a general travel card, you can typically book flights on a wide variety of airlines. When you choose an airline card, you commit to flying with just one carrier when using that card—though you can use rewards earned on some cards to purchase flights on partner airlines.

Less Lucrative Sign-Up Bonuses

General travel cards, such as the Chase Sapphire Preferred and the Capital One Venture, tend to offer plusher bonuses to new cardholders than airline cards. A few airline cards stand out for their generous sign-up bonuses, though, like the British Airways Visa Signature, the Delta Reserve Credit Card, and the Hawaiian Airlines World Elite Mastercard.

Fewer Opportunities to Earn Bonus Miles

Many airline cards also sharply limit the kinds of purchases that earn bonuses, making it tough to stock up enough miles to earn a free flight. For example, many airline cards only offer bonus points on airline purchases. Others are slightly more generous and offer a limited number of miles on everyday purchases, such as dining, groceries, or gas. 

Complex Reward Redemption Process

One of the biggest downsides to an airline credit card is that it can be a pain to book rewards travel through an airline’s loyalty program. Some airlines impose travel blackout dates, restricting when you can travel. Others limit the number of rewards seats that are available, making it harder to find an open seat. 

You also can’t count on an airline card’s rewards program staying the same: A number of airlines have retooled their loyalty programs in recent years, causing the miles frequent flyers earn to be less valuable when booking a flight with the airline. 

Annual Fees

Most airline credit cards charge an annual fee, often ranging from $75 to $95 a year or more. (Some waive the annual fee the first year.) A few luxury airline cards even charge upwards to $550 yearly in exchange for premium benefits. There are a handful of airline cards that don’t charge an annual fee, but they don’t offer as many perks, either. 

Travel Rewards Card Limitations

Travel rewards cards have terms and conditions just like any other type of credit card. And it's important to understand how those guidelines work when weighing whether travel rewards cards are right for you.

Say you get a travel rewards credit card and plan to use it all year in order to rack up points for a vacation. Be aware that airlines and hotels may limit availability for cardholders wanting to redeem travel rewards. For example, there may be blackout dates on when you can and can’t book rewards travel. Peak days and seasons vary among travel brands, so a travel rewards card may not be worth it if you cannot use the rewards points or miles when you need them.

Note Even if a rewards credit card states that there are no blackout dates in your cardmember agreement, there may still be other restrictions or limitations on how you can redeem travel points or miles.

On the other hand, a travel rewards card may be the best option for a person who travels frequently. People who fit this category fly and stay in hotels year-round and usually take advantage of slow travel days and seasons to get the most out of their rewards. So as you consider the pros and cons of travel rewards cards, be sure to consider your individual travel patterns.

The Bottom Line

A travel rewards credit card may be worth it to you, depending on how frequently you travel, whether you can afford to charge the amount required on the card to qualify for rewards, whether you earn enough rewards value to justify any annual fees and whether you can pay off the card balance on a monthly basis.

Travel rewards cards typically benefit people who travel often for work or leisure and can afford to charge enough on the credit card required to earn significant points or miles from one-time bonuses and ongoing rewards. Just be sure to pay attention to the APR and fees. You can also compare bonus incentives from different issuers to determine whether travel rewards credit cards are worth it based on your individual spending patterns.

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