We’ve all seen and heard the offers, on the airplanes, in the airports, and in magazines – sign up for a credit card, use it once, and get a free flight. It’s incredibly tempting, because who doesn’t want free travel perks, especially for doing something you already do (i.e., using your credit card). So, what’s the catch?
If you are someone who maintains a balance on your credit card, then don’t consider it, not for a minute, not at all. These travel perk credit cards typically have a higher interest rate than other credit cards. In addition, if you are someone who is trying to pay down your debt, it really is counterproductive to open another card. In fact, you’ll notice these cards even offer additional incentives to transfer existing balances. They offer those incentives because ultimately, the extra interest they earn on these higher balances more than pay for the incentives. Instead of paying high-interest rates in exchange for free tickets, consider paying off your balance quicker by finding a credit card with the lowest interest rate available, and then use your savings to purchase your own tickets. You’ll be able to pick and choose your dates, and will have much more flexibility and less debt!
Airline Rewards: Those Who Should Consider Travel Rewards Credit Cards
Families who pay off their cards every month
Most credit cards with worthwhile rewards have a higher interest rates than other cards. If you pay off your credit card balance every month, then you won’t need to worry about the interest rate. In fact, if you do pay off your card every month, you deserve rewards!
Families that travel frequently
There are lots of reward cards, and not all of them offer travel rewards. Only families that actually travel frequently should consider using a travel reward cards. Otherwise, you can likely find something that works better for you.
Brand Loyalty Matters
Its seems that almost every major travel brand out there has a travel rewards card, so before you choose a card, think about which hotels and airlines you use the most. Reward points for a hotel chain or airline you don’t frequent are pretty much useless. Plus, with some cards offering additional perks, like free checked bags, it’s best to choose one that you’ll get the most value from. If you aren’t brand loyal, then consider a more general travel reward card, such as one from a travel website, or a general Membership Rewards card from American Express. But, before signing up for a travel rewards credit card, definitely take a look at the terms and conditions, and make sure that you are getting the best deal possible.
Photo credit: Andres Rueda on Flickr