Many people think airline rewards cards are for frequent fliers. Yet nearly everyone flies and determining whether you’re a good candidate for such a card should be based on how valuable the free flight is compared to other potential perks. To determine this, compare the “per mile” or “per point” value of the card to other cards with similar terms annual fee and APR are key.
Or, if your card offers a variety of perks, compare it to the value of those. Many cards have a cap as far as maximum allowable airline ticket value so divide this by the number of miles or points required earning it. Is it advantageous? With a few tips, we’ll set you on your way to maximizing your airline rewards.It’s vital that the rewards cost a minimum to earn. If your interest rate is high and you aren’t paying off your balance each month, you’re paying interest. If your card also carries an annual fee, this must be factored into your expense, too.
Key to maximizing the value of your free ticket is to be sure it’s as close to free as possible, so try to pay off most or all of your balance each month. If you’ve been a good customer to your credit card, give them a call and ask for a lower interest rate or a reduction on your annual fee…many times they’ll honor the request if your track record with them is s myprepaidbalance ound.
There are times when a card with a larger annual fee is advantageous. Often, higher annual fee cards accumulate larger rewards. In the case of mileage cards, no annual fee cards generally earn at a rate of 1 point/mile per dollar spent but annual fee cards often earn twice that.
Think of an annual fee as an investment: if an annual fee is $70, that’s about 15-20% the value of an airline ticket, so you’d need to earn a ticket faster than 5-7 years to make that pay off. Look at your credit card spending from last year: was it more than $5,000? If it was, and you paid the balances off each month, the annual fee (if doubling your points/miles earning potential) is worth it.