Credit Card Canada - Canadian Credit Card Reviews and Applications

Credit Card Articles

What is an Airmiles Credit Card

An airmiles credit card is a type of credit card that allows cardholders to collect bonus air miles. Persons who travel frequently enjoy the fact that frequent flyer miles or points can be earned for every trip they make. Miles add up, no matter if you travel abroad, within your state, or from one city to another. As long as you charge items on your credit card, you accumulate air miles.

It should be noted that programs and rewards plans differ. Some credit card companies offer 1 bonus point for every dollar in purchases while with others, cardholders earn 1 point for every $15 or $20 charged to the card. Points can be redeemed for various items, including free air travel and upgrades on flights.

Many major airlines, banks, and credit card companies feature airmiles credit cards. However, this type of card is not the best choice for everyone. Even if you travel frequently, you should not apply for an airmiles credit card if you do not normally pay your card balance in full every month. In addition, many credit card issuers require that you have excellent credit so as to qualify. You may want to check your credit rating before applying. Another thing to check is whether rewards points can be used on international flights, especially if you travel oversees/ abroad. Ask about their cost in points as well. In general, international flights are more expensive than domestic ones. Another pattern has emerged as well. An air mile is worth more if you use it to purchase first class and business class tickets on some of the expensive routes. The same is true when it comes to upgrades from coach to first and business class. An air mile is also worth more if used on international routes where competition is limited. At the same time, if you redeem your air miles for an expensive flight to a destination you never thought of flying to, it is not worth the money. Booking fees are another point to consider. They can actually reduce the value of your bonus points. Air miles rewards often go with fees for booking tickets. With fees reducing the value of your bonus miles, you may pay more for upgrades or flights than you actually expected.

If you consider applying for an airmiles credit card, you should know that most bonus miles go unclaimed for 5 and more years. Some industry experts claim that some 75 percent of air miles are never claimed. Others have estimated that half of the rewards miles are not redeemed in at least five years. In any case, signing up for a rewards plan does not make sense if you won’t be using the air miles. Even if you use the miles at some point, they do not deliver value during the time they sit unused. Unlike air miles, cashback can be used immediately as to add cash to your savings or facilitate debt repayment.

Another point to consider is that air miles cannot be used for child fares and may have route and date restrictions. If you want to book a leisure trip for yourself and your kids, you will have to book an adult ticket with the air miles you have collected. Then, you have to look for another booking services through which you can book adjacent seats for your children.

Most banks in Canada offer airmiles credit cards, including the CIBC, Bank of Montreal, Scotiabank, and many others. When looking for a credit card, it is important to check other terms and conditions (e.g. grace days, interest rate) and not only the rewards program offered.