Airline credit cards have steadily been gaining popularity in the past few years. Airlines and other companies related to the travel industry benefit as customers utilize their services more frequently; brand loyalty is strengthened as well. Consumers with a good credit history again by obtaining greater value from their credit cards. Fundamentally, airline credit cards operate similarly; purchases charged to the credit card earn travel points for the cardholder, these points can be redeemed in various ways, for example contributing toward free travel, hotel stays, service at a car wash, etc. Four key features to consider while selecting an airline credit card are given below.
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The cost of credit is measured in terms of the annual percentage rate (APR). A good credit profile helps to obtain a low APR, i.e. prime + 4%. Most credit cards offer a “variable rate” plan in which the APR changes with certain economic indicators. The interest rates vary with the cards and are influenced by other offerings such as the grace period, annual fee, bonus points, etc. A cardholder who does not carry a monthly balance need not really worry about interest rates; however, people who do carry their balances forward can select from several airline credit cards that charge a low-interest rate. Some cards offer an introductory rate of 0% interest on balance transfers over a period of time, which is typically 12 months.
Preset spending limit:
The spending limit on airline credit cards can vary from a few hundred dollars to thousands of dollars. The minimum monthly payment is liable to increase with higher spending limits. Some cards allow users to spend over the credit limit, the amount over the limit, and the resulting penalty is settled in the subsequent month’s payment. Credit card bills can quickly balloon to unmanageable proportions. Therefore, inveterate spenders are well-advised to carefully consider the preset spending limit before settling on an airline credit card.One of the most important considerations in choosing an airline credit card — if not the most important — has nothing to do with the card. It’s where you live. If your local airport is dominated by a single airline — like Atlanta’s is by Delta, for instance, or Denver’s by United — then that airline’s card might be your only practical option. Other airports have more competition, giving you a choice of cards.The Delta SkyMiles® Gold American Express Card pays bonus rewards not only on Delta flights but also at restaurants worldwide and at U.S. supermarkets, making it the rare airline card that’s great for everyday spending. If your business has you on the road a lot, you’ll appreciate the airport lounge access on the Delta SkyMiles® Reserve Business American Express Card, which includes both Delta’s own Sky Clubs and American Express’s Centurion Lounges when flying Delta
Compatibility with other frequent-flyer programs:
It is important to check whether an airline credit card offers this feature; portability of miles points is desirable as it allows one the freedom to use the services of more than one airline for redeeming the points. By not being tied down to one airline, users have an increased number of destinations to choose from. Bank-sponsored airline credit cards offer greater compatibility with other frequent-flyer programs as compared to airline-sponsored credit cards that usually focus on a single airline.
Annual fees Airline Credit Card
Several airline credit cards do not charge an annual fee. Non-airline credit cards that allow users to accumulate miles are usually fee-free. The purpose behind fees is to try and defray the costs of the free miles and other freebies. The average annual fee for airline credit cards is around $ 70. Frequent fliers stand to gain more by using cards that charge a fee because with these cards the airline miles benefits are more as compared to free cards. Moreover, if the card is used for business-related travel, the annual fee can also be tax-deductible.