subject: Why You Should Consider A Frequent Flyer Credit Card [print this page] As people look to make their dollars go farther and farther there is one way to achieve this goal both financially and literally. By switching to a frequent flyer credit card you can earn frequent flyer points, also known as air miles, and redeem the points for flights, upgrades and other perks.
Compared to cards that offer no rewards, or even those that offer cashback bonuses, a frequent flyer credit card can be a much better deal. The secret is in the cash value of the frequent flyer mile. Depending on what it is used for, a mile can easily be worth as much as 4 cents. This would equate to a four percent cashback bonus. Most airlines charge a price of between two-and-a-half and three percent to purchase miles, making the value less, but still more generous than a typical cashback bonus.
Some cards will also offer mileage bonuses for certain types of purchases. For instance, some will offer double miles on grocery purchases, or triple miles on purchases with the airline with which the card is linked. Some accounts come with two cards, one card issued with VISA and the other with Amex. Naturally, spending on the Amex accrues more points. These bonuses can also add up, increasing the value of the offer even more. Many of the every day, month to month expenses can be put through your credit card. Phone bills, car insurance bills, cable tv bills, broadband, fuel and groceries are all significant expenditures which can be turned into free travel at no additional cost by simply charging them. This is the 'secret' that many people who do not do a great deal of flying for business use to get access to the coveted free seat.
There are a few downsides to these frequent flyer loyalty programs. Most cards carry a hefty annual fee, although almost all cards on the Australian market have a annual fee anyway. Also, some loyalty cards will also carry higher interest rates than non-rewards cards, although by paying the card off every month, this charge can be avoided.
Finally, to take full advantage of the card, it is important that one can actually use the miles. Its best to go after a card that has uncapped earning potential and points that don't expire. Consumers seeking an international choice of destination should consider a card which either offers access to a number of airlines that you would choose to fly to. Otherwise, a credit card linked solely with a single airline will work fine, such as the Jetstar cards which lets you earn points for use on Jetstar flights only, or a card like the Singapore Airlines Westpac Gold Card which is tied to Singapore Airlines. These points, especially when combined with actual miles earned through flights, can add up very quickly.
Discipline is a must in order to pay off the credit card bill every month otherwise the interest rates applicable on your balance plus any penalty fees for paying late will negate the benefit of the rewards. Anyone with a good income and some discipline in the area of personal finance can do this. All that remains is to get one of the many frequent flyer cards available today.
