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Airline Mileage Credit Card – An Introduction

Airline mileage cards, like their nomenclature suggests convert money spent using credit cards to air miles. Airline mileage cards are usually a co-branded product, and involve an airline or a consortium of airlines working together with a credit card company. You redeem points earned on purchases made using the credit card on airfare.

Airline mileage cards are no different from ordinary credit cards, except for offering customized airfare offers. Airline mileage cards offer benefits like:
  • Points earned on money spent, which you can redeem for other services like airfare, hotel expenses, restaurants, etc
  • No annual fee
  • No introductory APR (Annual Percentage Rate) for an initial pre-specified period
  • Lower APR rates, than usual, after the intro APR period expires
  • Balance transfer facility
  • Quarterly and annual account summaries
  • Lost/Stolen Card Reporting

However, increasingly many credit card companies impose a conversion fee or a transaction fee on transactions made outside of the US. This fee may very between 2-4 % of the cost of the transaction made. This transaction fee will usually be a part of the small print you sign on while accepting the card. If you travel extensively outside of the US, and use your credit card to make payments, you will actually be losing a lot of money. So if you are planning to opt for an airline mileage card, to convert money spent while traveling abroad into air miles, call up your credit card company and ask them the following questions:
  • Is there a conversion fee, and if so how much?
  • What are the airline restrictions?
  • Does travel have to originate from the U.S.?
  • Are there any other fees imposed, besides the conversion fee?
  • How many miles are accrued for every dollar you spend?
Visa itself imposes a 2% conversion fee on all its member banks. Member banks impose their own fees ranging from 0 – 2.5%. Cumulatively, you might end up paying a conversion fee of as much as 4% in some cases. Mileage cards attached to specific airlines may restrict your travel to a very limited number of airlines (itself and its partners) and may still charge a conversion fee. That is a double whammy.

So research online and get the best airline mileage credit card deal around, using all the pointers provided above.

Click here to check out the most popular Airline Mileage Credit Cards

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