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Travel Credit Cards – Rewards Explored

Travel Credit Cards – Rewards Explored

Travel reward credit cards offer an enticing combination of travel plus rewards. Such cards are popular and nowadays advertised in airports, on TV, in magazines, etc. However, all this may not be sufficient to understand the concept of travel reward cards and how to use them well. Redemption fees and the money worth of points may after all render the card expensive. This article aims to make clear some of the offers and issues that usually accompany travel credit cards and how best to use them.

Frequent Flyer Miles

Most well known airline branded travel credit cards offer a specific number of points with purchase of flight tickets. Other lesser known cards that are not branded with a particular airline offer a money equivalent for the points (e.g., $0.01 for a point). This can be redeemed in the event of a travel purchase. However, one offer cannot be compared to the other as miles are sometimes worth more in case of specific airlines ($0.02 or $0.03). They may also have more stipulations such as travel-by dates and seat restrictions. Generic miles, on the other hand, are more valuable. It is important to be aware as to how the ‘miles’ work on your travel credit card.

Availability of Seats

Some companies are infamous for their offering too few award seats for those who want to redeem their frequent flyer miles in spite of many seats that are still available for purchase. The result is that the points expire without any use to the frequent flyer. On purchase of cards that use frequent flyer miles, it is important to learn as to how to redeem them and ascertain how easy it is to redeem them. Message boards, forums, articles, and card reviews may be of help in this regard.

Bonus

Some credit cards help you earn enough points for a free flight soon after the very first purchase of tickets. Nevertheless, to get the bonus, a minimum amount of extra money may have to be spent. For some cards as much as $5000 has to be spent in three months. It is important that the customer is aware of this amount when buying the card. The amount should be one that the buyer can afford.

Interest Rates

Balances on travel credit cards carry a high percentage of interest. According to studies, average APR on airline travel credit cards is as much as 14.63 percent. Travel credit cards are always advised for use by those who pay their travel bills in full. For those who are likely to maintain a balance on their credit cards cheaper credit cards with lower interest rates are advised.

Redemption Fees

Whatever be the type of travel credit card that is owned, redemption and booking fees need to be paid for realizing awards. The basic government airfare taxes and fees have to be paid. Some companies also impose an additional redemption fee. It should be realized at this point that the customer is paying to use his points or flyer miles. Redeeming the points for a flight at the last minute usually carries a redemption fee (sometimes it is as high as $100). When buying travel credits cards it is a good idea to read the fine print that gives information about redemption fees if any. Any offer of savings (as an example, free checked luggage) that come on using the card may offset the redemption fee that is paid.

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