When I cover credit cards that earn frequent flyer miles, most recently in May, I generally lump the bank-buys cards together. And while the differences between bank-buys and airline cards are fundamental, there are substantial differences among individual bank-buys cards, as well. As one reader asked, "Which bank credit card gives you more points/credits per dollar spent?"
The fast and direct answer is that the highest-paying card I could find that you can use for air tickets is Capital One's No Hassle Premium Miles Rewards, which earns 1.25 miles per dollar charged to the card. Some other cards offer the same or even higher earnings, but only for limited kinds of charges.
Points per dollar, however, is not the complete answer to the broader "best card" question. Before you can decide which is absolutely the best card, you have to look at the reward side as well as the earning side, plus all the other credit card basics such as APR, annual fee, credit qualification, and such.
Clearly, I can't begin to provide a single "one card fits all" answer. Instead, I'll summarize the earning and reward features of some of the more popular cards. I'll have to leave it to individual travelers to sort out the rest.
As I've noted before, quite a few banks issue MasterCard and Visa cards that accumulate credit (miles or points) in an account with the issuing bank. When you get enough credit, you buy a ticket—or the bank buys one for you—on just about any airline, and without regard to individual airlines' limitations on seats they allocate to frequent flyers. But the bank miles are completely separate from any airline miles you earn by flying—you can't combine them.
A bank-buys card is generally better than a card that earns airline miles (1) when you earn most of your miles through the card rather than by flying and (2) if your primary interest is in "free" flights in economy class. On the other hand, bank-buys cards are virtually worthless if you like to use your miles for upgrades or seats in a premium cabin.
These days, most bank-buys cards offer a wide range of rewards other than travel, including merchandise and various services. My report here, however, is limited to travel rewards— a question that is complicated enough as it is.
The most common formula for bank-buys cards is that you earn one point for each dollar you charge to the card. (Although a few banks once called their credits "miles," many now refer to them as "points.") The cards pretty much universally exclude some charges, such as financing fees, balance transfers, cash withdrawals, and such, but they award points for just about everything else.
A few cards offer premium earnings above the one point per dollar formula:
- As noted, Capital One's No Hassle Premium Miles Rewards card gives 1.25 miles per dollar. (A Capital One card limited to "professionals" earns two miles per dollar, but that isn't available to everyone.)
- Citibank's Citi PremierPass Elite-level card operates under a complicated formula: You earn the usual one "purchase" point per dollar, but you also earn one "flight" point for each mile you fly when you use the card to buy your ticket. For each purchase point you earn, you can transfer one flight point into your purchase account, in effect offering two points per dollar on lots of purchases. As far as I can tell, other Citi cards just earn the usual one point per dollar.
- Discover's Miles card awards two cents per dollar for travel and restaurant purchases; one cent per dollar on all other charges.
- Orbitz sponsors a card issued by Juniper Bank that awards two points per dollar for travel purchases on the Orbitz website (with the usual one point per dollar on other purchases).