There’s just no better feeling than slipping into that airline seat, heading out on a wonderful vacation and knowing all the while that you’re flying free. As expensive as airfare has become, the smart use of credit card air miles can be one of the best ways to boost your vacation budget. Credit card rewards points can be redeemed for not only free airfare, but also hotel and rental car discounts and other travel perks. Here’s how to get them, how to use them and how to fly free on your next getaway.
How Air Miles Work
According to the International Air Transport Association, the first frequent flyer program was established in 1981 by American Airlines. By the mid 1980s credit cards developed rewards programs for free flights – and air miles were born. With an air miles rewards program on your favorite credit card, every purchase earns you points, which translate into free miles of airfare. You want to leverage your rewards points for maximum benefit, and the first step is to wade through the multitude of offers. Here are some of the typical benefits and terms you’ll want to consider:
- Airline branded rewards cards – With these cards you’ll not only get free air miles, but usually additional perks like priority boarding and waived bag fees. The downside? You’re stuck using one airline, and that can be an issue when it comes to travel time flexibility and convenient connections between destinations.
- Earning miles – How your credit card accrues points/miles is an important consideration whenever you are choosing a rewards card – and the options can be over-the-top in complexities. Cards can offer from 1 to 2 miles (or points) for every dollar spent on your credit card. And points awarded for air miles can vary depending on your type of purchase: perhaps 2 points per dollar for travel and dining expenses, but only 1 point per dollar for all other purchases. Plus, you’ll want to make sure your points don’t expire and aren’t limited to a certain number of miles that can be earned.
- Restrictions – The best rewards cards let you use your air miles on any airline, anytime, with few restrictions and blackout dates. Some even allow you to use your points on travel expenses in addition to airfare.
Fees – Many cards will have an annual fee, so you’ll want to look for the best deal you can get, balancing the miles awarded with the fees charged.
- Discounts – Programs that offer air miles plus travel discounts can be especially appealing. Offers may include 20% off airfare, car rentals, hotels and cruises.
- Foreign transaction fees – Using your rewards credit card when traveling overseas can trigger an additional fee. This “foreign transaction fee” can be 2 to 3 percent of your purchase. And you don’t have to be out of the country to be charged: the fee is also levied on online purchases where the payment is processed by a foreign vendor. Try to avoid getting a rewards card that tacks on this nuisance of a charge.
- Redemption values – Redeeming points for miles doesn’t always translate into a 1 point = 1 mile transaction. Be sure to check with the card provider regarding their redemption policy so you don’t get hooked by last minute surprises when booking that vacation flight. You can easily look up how many cents a single mile is worth on any given card. That will help you decide whether using your miles for certain flights is actually worth the money you would have spent otherwise.
How to Earn Maximum Miles
No doubt, there are a lot of moving parts to air miles rewards cards. But to really get off the ground, you’ll want to maximize the miles you earn. Here are a few tips:
- Use the card! – The more purchases you make, the more points you earn. Just remember to pay off your balance each month to avoid interest charges – and don’t make a late payment! Missing a payment or incurring a late charge will not only hurt your credit score, but it will likely forfeit those precious points that you worked so hard to accumulate.
- Bonuses – You will find some rewards programs offering a bonus – say, 10,000 bonus miles when you charge anywhere from $500 to $3000 on purchases within a specified time, usually three months. These bonuses can get you the miles you need to get much closer to that well-deserved vacation.
- Look for off peak travel offers – It can pay big dividends to fly during the off-season. Being flexible with your travel times and dates can multiply the value of your rewards points. For example, American Airlines would normally require 17,500 air miles to fly economy class to a Caribbean destination during peak season, but you can choose instead an off-peak flight for only 12,500 miles. That saves 5,000 miles! You’ll also find better deals on hotels and many other expenses – not to mention getting to deal with fewer travel hassles – when leaving the crowds behind.
Now that you have an idea about all of the options available with rewards card air miles, you’ve got to pick a card. Pour a cup of coffee and prepare to take a little time to narrow down the contenders. Sometimes it’s best to take a sheet of paper and list the pros and cons of each card you’re considering. A good start in your selection process would be to check out our Best Travel Credit Cards article. We’ve assessed a series of cards you’ll be hard pressed to ignore when you see the upsides of each objectively laid out.
But for now, please make sure your seat back and tray tables are in their full upright position. And make sure your seat belt is correctly fastened, because we’re about to fly for free!