Why You Shouldn’t Get An Airline Credit Card

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There’s a big push from airlines for you to get their co-branded credit card. But is that the best thing for you to do? It depends. We’ll discuss their benefits and limitations and why ultimately, if you’re only going to pick one credit card, why you shouldn’t get an airline credit card.

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What are the benefits of having an airline credit card?

If you consistently fly one airline, it may make sense for you to apply for that airlines co-branded credit card. When you have the credit card for that airline, you’ll receive several benefits that are usually reserved for elite members of their frequent flyer program.

These elite member style benefits may include:

  • Access to the airline’s airport lounge clubs
  • Free checked bags for you and your companions
  • Priority boarding for your flight
  • Discounts on food and beverages during your flight
  • Dedicated phone numbers to the airline’s customer service
  • Bonus miles for spending with their airline
  • An easier path to higher elite status

But what if you’re like most travelers who only travel a few times a year and often look for the best deal instead of being loyal to a single airline?

Why you shouldn’t get an airline credit card

If you aren’t too concerned with flying a specific airline, then there are better options for your wallet that can still help you reduce your travel expenses and get you some pretty awesome perks.

Cash Back Credit Cards

Cash back credit cards offer the ultimate in flexibility. When you use your cash back credit card, you’ll earn some cash on every purchase that you make. Most of the cash back credit cards will provide a rebate of 1.5% to 2.0% on every dollar that you spend.

I use the Citibank Double Cash credit card because it earns 1% when I make a purchase and then gives me another 1% whenever I make a payment for a total of 2% cash back. Another good option is the Discover it card which provides 1.5% cash back on every purchase and doubles your rewards the first year making your total cash back 3% in year one!

With the cash that you earn, you can put it towards a travel fund that you draw upon whenever you find an airline ticket you want to buy. If you decide not to fly this year, the money can go towards a staycation, repairs around the house, paying off debt, or anything else that you can think of.

Bank Points Credit Cards

Credit cards that offer proprietary points are another excellent alternative to a co-branded airline credit card. Examples of these types of points would be Chase Ultimate Rewards, Citi ThankYou, and American Express Membership Rewards.

These bank points can be redeemed for cash, used to purchase travel, or transferred to an airline or hotel partner.

When you redeem bank points for cash, you’ll usually receive $1 for every 100 points. Although the cash can be useful, it is generally the least valuable option for redeeming these points.

If you purchase travel through the bank portal, you can redeem for a better rate. For example, if you have the Chase Sapphire Reserve credit card, you’ll receive $1.50 in value for every 100 points that you redeem. The standard bonus for the Sapphire Reserve is 50,000 Ultimate Rewards points, which can be redeemed for $750 in travel through the Ultimate Rewards portal. I’ve been able to redeem for flights, hotel reservations, and excursions during my vacations.

Transferring Bank Points

Bank points can also be transferred to one of many hotel and airline transfer partners. Many of these transfers happen instantaneously, although some can take several days. I recommend that you research your flight or hotel choices to ensure there is availability, then transfer the necessary number of miles or points.

Some airlines will allow you to place a ticket on hold while your points transfer.

Before transferring points to book an award ticket or hotel reservation, compare the cost in points to see which is the better deal. Keep in mind that some award flight redemptions will charge a portion in cash for taxes, fees, and fuel surcharges.

Redemptions are not the only areas where bank points credit cards offer more value and flexibility than an airline credit card.

Most of the bank points credit cards offer bonuses for spending on the cards in certain categories. Some cards offer bonuses that are better than using an airline’s co-branded credit card to buy a ticket on that same airline. For example, both the Chase Sapphire Reserve and Citibank Prestige credit cards offer 3x points when purchasing airline tickets whereas most airline credit cards offer only 2x miles.

Bank points credit cards can offer premium perks like Global Entry or TSA PreCheck membership reimbursement, access to Priority Pass lounges, and trip protection.

Hotel Credit Cards

You may think it is odd that a hotel credit card may be a better option than a co-branded airline credit card when it comes to purchasing flights. But there are some cards that hold great value when transferring points to an airline.

The American Express SPG card is another great option to earn airline miles. The Starwood Preferred Guest program provides a 5,000-mile bonus for every 20,000 SPG points that you transfer at a 1:1 ratio to airline miles. With this 25% bonus, you’re actually earning airline miles faster by using this card for everyday spend than you would with most airline credit cards.

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What credit card should you get?

When you’re looking for a new credit card that will save you money on future flights, you don’t necessarily have to get an airline credit card. There are many mileage credit card choices available that will provide you with better value, more flexibility, and greater options. Some of these credit cards offer valuable perks that rival what you would receive with an airline credit card.

For the best combination of flexibility, earning power, and value, I recommend applying for a bank points credit card like Ultimate Rewards. You can transfer to the airline of your choice while having the option of using the points as cash to purchase the ticket if you can find a great cash price. Plus, you’ll receive valuable perks, such as lounge access, no matter which airline you’re flying.

Lee Huffman

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Why You Shouldn’t Get An Airline Credit Card
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About the Author

Lee Huffman
Lee developed a passion for traveling as a boy, and now he explores the world with his wife & children using miles, points, & the latest travel hacks. He has been teaching others how to travel more, spend less, & live better since 2012.

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