Prepare for Takeoff: Top Picks in Airline Credit Cards
By Allison Martin
It's hard to sit on a flight or walk down a concourse these days without being offered an airline-branded credit card: A Visa (V) or MasterCard (MA) with the airline's logo promising perks ranging from free checked bags to free flights.
Should you hop aboard? The answer depends on factors including the amount of travel you do, whether miles are transferable, you can earn enough perks to offset annual fees and whether you pay off your credit cards monthly to avoid finance charges.
The cards below offer some of the best introductory deals and perks available. As you check them out, however, don't focus solely on signup bonuses. Also think about how much you spend monthly. If it's enough to regularly accumulate free flights or other perks from an airline you're loyal to, sign up. But if you tend to fly whoever's cheapest, don't pull out the plastic often, or most important, regularly find yourself paying interest on unpaid monthly balances, wave goodbye to these cards. The annual fees and interest charges will quickly offset any potential perks.
1. Chase (JPM) Sapphire Preferred Card
This piece of plastic made the top of our list for one reason: transferable points. The Chase Sapphire Preferred card is ideal for travelers who are not loyal to a particular airline but want a way to earn free airfare and lodging. Points can be transferred at full value to a number of different airline mileage programs, including British Airways Executive Club, Southwest (LUV) Airlines Rapid Rewards, United (UAL) MileagePlus, and Virgin Atlantic Flying Club, to name a few. You can earn 40,000 points, the equivalent of $500 cash or one free round-trip ticket, if you make $4,000 in purchases within three months of activating the card. Authorizing a second cardholder on your account within that period will earn you an extra 5,000 points.
Of course, with airline credit cards, there's always and catch, and it's usually the annual percentage rate. The Chase Sapphire Preferred card has an introductory APR of 15.99 percent, which means you'll want to be sure you can pay off your balance in full each month, or the card could wind up costing you more than it gives back.
But if you're responsible, oh, does it give back. After the introductory period has passed, account holders continue to earn two points for every dollar spent on travel and dining and one point for every dollar spent on all other purchases. And unlike many other reward programs, there are no blackout dates or restrictions, and account holders receive a 20 percent discount when redeeming points for travel.
The card also comes with other perks: no foreign transaction fees, secure chip-and-pin technology that ensures it will be accepted everywhere you go when traveling abroad, and the annual fee is waived for the first year (it's $95 in subsequent years).
2. Delta (DAL) Gold SkyMiles Credit Card
Delta lets you to rack up points in a relatively short time and without much effort. Charge just $1,000 in the first three months, and you'll earn 30,000 points, the rough equivalent of $300 and enough miles to get you a round-trip ticket just about anywhere in the contiguous United States if you book your flight for Delta's "saver" days. You will also receive a $50 statement credit after you make a Delta purchase within this period.
Although it's co-branded with American Express (AXP), this card makes the most sense for frequent Delta travelers because double miles are accrued for each dollar spent on Delta purchases, and a single mile for all other purchases. Cardholders also get a free checked bag, priority boarding, a 20 percent discount on select in-flight purchases and discounted day passes to Delta Sky Club lounges. The card charges no foreign transaction fees, which makes it ideal for overseas travel.
Delta waives its annual fee ($95) for the first year. In subsequent years, the fee is easily recoverable: you'll save $100 on checked baggage fees after just two flights.
3. United MileagePlus Explorer Card
Like Delta, United also offers 30,000 bonus miles to new card members who make $1,000 in purchases in the first three months. And when you add a second authorized user, United will throw in another 5,000 bonus miles. If you frequently fly United, the points will add up quickly, because you'll earn two miles per dollar spent on United tickets, and one mile on all other purchases. Miles can be redeemed at any time because there are no blackout dates and they never expire.
United cardholders are also treated to a few perks, including the now de rigeur priority boarding and a free checked bag. Another perk: you'll receive two free United Club lounge passes annually, so you can kick back and relax in style and away from the airport crowds. The annual fee is waived the first year, and is $95 in subsequent years, not a bad price for the benefits.
4. British Airways Visa Signature Card
This card boasts one of the most impressive introductory offers around, because it enables you to earn 50,000 Avios (British Airways' mileage equivalent) by spending $2,000 within the first three months. Once this period has passed, you'll continue to earn 2.5 Avios for every dollar spent on British Airways purchases and one for every dollar spent on all other purchases.
If you really want to cash in and take full advantage, spend $30,000 each calendar year and you'll earn a Travel Together Ticket. (Best advice: charge recurring monthly expenses to the card and pay them off promptly to prevent interest from accruing.) Your Travel Together Ticket, good for you and a companion, is good for two years and, depending on your destination, might even cover first class tickets. An annual fee of $95 applies after the first year, but could prove worth it for those able to make the most of all the card's benefits.
5. Southwest Airlines Rapid Rewards Premier Credit Card
Southwest is known for its affordable airfare and exceptional customer service, so why not capitalize on the flight purchases you're already making with the airline by signing up for its co-branded Visa card? You only need to spend $2,000 in the first three months to earn 50,000 points. You'll also earn an extra 6,000 points just for holding onto your card for one year.
For every dollar spent with Southwest, you'll earn two points. All other purchases earn one. As with all the best airline credit cards, there are no blackout dates or other restrictions. Points also can be redeemed for car rentals, cruises, hotel stays, merchandise and gift cards, as well as airfare. The card also comes with no foreign transaction fees, up to two -- yes, two -- free checked bags, and exemption from itinerary change fees, which can set you back up to $150 at other airlines.
Unfortunately, there's a $99 annual fee, and it will appear on your first statement. But with two checked bags everywhere you go, it should be easy to recoup your investment.
Do you have experience with any of these cards? If so, let us know in the comments below or on the Money Talks News Facebook (FB) page.