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Four Ways to Earn Travel Rewards With Credit Cards

On Frequent Flyer Miles
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Editor's Note: This story was originally published on April 4, 2006. To see the most recent SmarterTravel articles on related topics, please click on any of the following links: credit card, frequent flyer, On Frequent Flyer Miles, Tim Winship.

When airline mileage programs debuted 25 years ago, no one could have foreseen that there would come a time when almost half of all frequent flyer miles would be earned for activities that have nothing to do with travel. Nor would anyone have guessed that most of those non-travel miles would derive from charges on program-affiliated credit cards. But that is exactly where things stand today.

Whether you spend half your life at 30,000 feet or are an earthbound shop-'til-you-drop type, there's a card out there with your name on it. There are cards linked to a single airline or hotel program, multi-program cards that award points redeemable for credits in a range of participating airline and hotel programs, and bank cards with their proprietary travel rewards programs.

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Options abound. The trick is finding the right card among the ever-growing mountain of cards that have a travel rewards component. To help narrow the search for that elusive perfect card, I'll outline the available types of rewards cards and profile one representative card from each category.

Airline cards

Credit cards linked to individual airline programs are the original travel rewards cards. And although today's consumers have many alternatives, these cards remain the most popular.

Best for:

Airline cards are the right choice for those who focus their mileage earning in a single airline program. In the past, those people were business travelers first and foremost. Today, airline programs have been embraced by hardcore frequent buyers and most other segments of the consumer universe as well.

The key drawback to airline cards is the drawback of the airline programs themselves: limited award availability.

Example: AAdvantage World MasterCard

While airlines and card issuers are generally mum on specifics, it is widely understood that the credit card issued by Citibank in conjunction with American's program, the AAdvantage World MasterCard, is the king of the rewards cards hill, with more cardholders than any other card in its category. American's program is the world's largest, as measured by its membership, so it makes perfect sense that the affiliated card would also dominate its rivals.

Cardholders earn one mile for every dollar in charges, which is typical of airline cards. The Platinum version of the card carries a hefty $85 annual fee, which is waived for the first year. The annual percentage rate is variable—the prime rate plus 9.99 percent, currently 17.49 percent.

The various airline cards tend to be cut from the same cloth, differing more in the sign-up bonuses offered to new customers than in any substantive respects. The single distinguishing feature of the AAdvantage card is that cardholders receive discounted awards on select flights.

Other cards in this category

Continental Airlines MasterCard from Chase; Delta SkyMiles Credit Card from American Express; JetBlue Card from American Express; Southwest Airlines Rapid Rewards Visa from Chase; United Airlines Mileage Plus Visa from Chase; etc.

Hotel cards

In the past five or so years, as hotel rates have steadily increased and airfares have declined or remained flat, the value of participating in a hotel program has been on the rise. So it makes more sense than ever to augment one's mile earning via an airline card with a card that earns points in the traveler's primary hotel program.

Best for:

While the Starwood card profiled below might actually be a candidate to replace an airline affinity card or even a multi-program card, in most cases hotel cards play a backup role to airline cards, just as hotel programs supplement rather than replace airline programs.

Example: Starwood Preferred Guest card

Among hotel cards, the Starwood Preferred Guest credit card issued by American Express is a standout.

Cardholders earn one Starpoint for every dollar charged to the card and three Starpoints for every dollar charged at Starwood hotels. The card has a $30 annual fee, which is waived for the first year. The annual percentage rate is variable—the prime rate plus 9.99 percent, currently 17.49 percent.

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