A recent study found that over 60% of Americans under the age of 30 (or “millenials” as we’ve been labelled) don’t have a credit card. The main reasons—or perhaps, theory—cited for this phenomenon is the fear of a tanking economy, growing student debt, and so on. Misuse of a credit card is a big problem and opens up potential for a lot of negative side effects—there’s no getting around that. But responsible credit card usage paves the way for a strong credit history which is something under-30s may be forgetting is required for buying little things like cars and houses.
Plus, a cash-only budget is completely restrictive when it comes to one major thing: perks. Most credit cards these days have some sort of points reward system which is redeemable for things like travel or merchandise. One of the most effective ways to accumulate and use points is for travel, using airline or hotel credit cards. If you’re passionate about traveling but need a little help hitting all of your must sees, an airline card could be a brilliant solution for you (and me—I just booked a roundtrip flight to Paris for just $87!). But when every brand has a card and they’re all claiming to be the best, how do you sort out what’s best for you? Below, are the tips we’ve learned over the years (and from the experts at the Travel Show) for choosing and using your travel perks card.
A Nice Warm Hub
There are a number of simple logistics that can help determine an airline program’s value for you. A big one is location. Find out what airlines have hubs at your local airport—those airlines will tend to have more flights and direct routes. For instance, Delta has a hub in Atlanta, which means most Southern flights will connect through ATL. But if you live in the Atlanta area, you’ll have a larger selection of direct routes from which to choose. While you’re at it, do a little research on schedules and routes. If you’re a big international traveler, don’t bother with a regional airline like Southwest. If you travel for business, an airline that flies to your frequent destinations would be a good choice—you can rack up some miles on the company dime.
While you’re in the business of researching routes and hubs, explore the main airline partnerships—oneworld, Star Alliance and SkyTeam—to see which airlines are partnering with each other. It’s helpful to know, for instance, that United partners with Air Canada, Lufthansa and Air India (among many other members of the Star Alliance) so that when you book travel you can find the best deals for using your miles, or collect more miles by flying on partner airlines.
Everybody loves perks—I once had someone tell me they “sold their soul” to a corporate job just for the perks. With airlines, you know all the perks up front, which helps make your decision. American offers a free checked bag and group 1 boarding to its card members. Southwest Rapid Rewards offers a companion pass when you reach a certain number of miles. Most airlines provide discounts on in-flight purchases. It’s important to identify what bonuses make sense for you and whether they’re realistic for your lifestyle. If you tend to travel solo, a companion pass is less appealing. The $100 American Airlines flight credit sounds better on paper if you’ll rarely be charging the $30,000 a year it takes to reach. Be realistic about what you need and what you’ll actually use.
Pick Your Plan
Check out how many miles you earn on specific purchase categories. Dine out a lot? Choose a card that has a higher rate of earn for restaurant purchases. Find out which airlines offer deals through other retailers. For instance, if you shop at Old Navy through American Advantage eshopping, you can receive 2 miles on the dollar, just by going through the American website first. Compare the different dining, shopping, and flying plans to figure out which card will fit your lifestyle to earn the highest rewards.
Search for Redemption
When you’re checking out the rate of earn, compare it to the cost of redemption. Accumulating 1,000 miles a month won’t get you too far if a one way ticket on your airline is 50,000 miles. Check out some average routes and how many miles it takes to fly them. Some itineraries can come as low as 12,500 one way, while other routes can be over 75,000. Look at where you may want to go and see how quickly those flights will add up.
It can be a little daunting, entering the world of travel rewards—credit cards are convoluted enough without adding all of these mileage questions. But once you have a handle on it, an airline card can be one of the most efficient ways to book travel and start knocking some new countries off your bucket list!