The Pros and Cons of Airline Rewards Cards

If you’re a frequent globetrotter and find yourself often using the same carrier, it might make sense to sign up for a co-branded airlines rewards card. That way, you can put all the money you spend during the year toward earning miles towards your next big trip.

But it’s important to consider all the features and challenges that come with airlines rewards cards, and whether a better alternative exists for you, before adding one of them to your wallet. Here are the pros and cons you should weigh.

Pro: Elite status

The elite level of airline loyalty programs requires more travel per year than even many frequent flyers can manage. Some airline cards automatically bestow elite status after you sign up for them, while others grant elite membership after you spend a minimum amount on the card. Either way, the perks from elite status take out some of the hassle associated with flying. You get to board early—ensuring your carryon gets a spot in the overhead bin near your seat. You also can get free seat upgrades—hello, extra legroom—and a higher rewards rate, including a bonus when you buy the flight with the airline rewards card.

Pro: Airport lounges

Premium airline cards with high annual fees generally come with unlimited free access to airport lounges that allow you to kick back in style before your fight or during a layover. Besides comfy couches and chairs, lounges typically provide Wi-Fi, food, drinks—sometimes including premium wines and spirits—among other amenities, all for free. Even if you can’t justify a higher-priced airline card, some lower-priced ones provide an annual one-time lounge pass, so you can feel like a VIP at least once a year.

Pro: Fee credit

Hate paying for checking a bag? Let your airline card pick up the tab. Some will waive, or reimburse for, incidental travel fees, such as checked bag fees, in-flight meals and beverages, and on-board Wi-Fi.

Pro: Companion ticket

Worth hundreds of dollars, this is the prized benefit of airline cards, since it allows a friend or family member to travel with you at no cost. Most cards with this perk offer only one ticket per year. Others require you to earn a specific number of miles to get a companion pass, typically limited to one per year.

Con: Flexibility (with exceptions)

It’s not all perks when it comes to airline cards. The biggest drawback among these cards is flexibility. You’re often stuck with one airline, so comparison-shopping for flights—either to find a better price, a more convenient route or specific destination—is largely limited to the brand on the face of your airline card.

There is some wiggle room. Some airlines are part of worldwide airline alliances, meaning you can use miles from your airline to book with another airline in the alliance. For instance, you can use American Airlines miles to buy a flight on British Airways because they belong to the same alliance. This is all well and good until you get to the booking process, which can be burdensome. There may be fewer seats to choose from on a partnered airline, and they may be harder to find without going to the partner website. In many cases, you will need to book flights on a partner airline by calling a customer service representative.

Con: Annual fees

Airline cards typically charge an annual fee. This isn’t a problem if you spend enough on the card each year to offset the fee. Generally, that threshold is $12,000. If you spend less, you might not earn enough reward to make up for the annual fee. When considering an annual fee, take into account any perks that translate into a dollar amount that can compensate for the fee, such as an annual credit or higher rewards rate for the miles you travel.

Alternative: Generic travel rewards card

If you’re not convinced that an airline card is right for you, but still want to earn rewards for travel, think about a general travel rewards card. You earn points for all purchases and can redeem them for cash back and statement credits as well as travel-related expenses like flights and hotel stays. You can even transfer points to hotel and airline loyalty programs with American Express Membership Rewards and Chase Ultimate Rewards.

There are generic travel rewards cards with and without annual fees, so it’s easy to find one that fits your budget. These card also typically offer a higher rewards rate for entertainment, travel and restaurant—the types of purchases you typically make on vacation—than for other purchases.

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