I cringe when people tell me that they are into points and miles too because they use an airline credit card and they’ve earned a lot of miles. I really can’t fault these people though because this is simple for most people to understand. Spend money, get miles and then one day cash them in for a free flight. Sounds easy enough. Of course, like a lot of things in life, when something is this simple it’s often not the best option. That’s not to say that airline credit cards don’t have a place in your wallet. Most travel hackers have several airline credit cards. The issue is how you use them or looking at this another way, how you don’t use them. Sometimes credit cards have benefits that don’t even require you to use them. I know that might sound weird but you have to understand that there are some credit cards you should eventually get for the benefits and not for the earning potential.
Reminder: points are better than miles
If you’ve read through our courses, especially this 101 course, then you know that points are always going to be better than miles. It’s getting more difficult to get 2 cents per mile with airline miles these days whereas, it’s easier to get at least 2 cents per point with credit card points like Chase’s Ultimate Rewards. But let’s say you value airline miles and Ultimate Rewards at the exact same value. Even in that scenario, points beat miles all day long.
With miles, you are stuck with that airline. If that airline comes out with a new devaluation, you just lost a lot of value. In the summer of 2023, United devalued their miles. If your miles were worth $2,000 prior to this devaluation, they could be worth $1,900, $1,800 or something even lower than that. Also, when you travel you need to do more than fly. You need to stay somewhere and that’s usually much more expensive than the flight. Well all those airline miles aren’t going to help you get a good deal on a hotel. Sure you can use your miles to book a hotel but the redemption rate is going to be horrible. Again, the easier something is for you, the worse it will usuallybe.
Compare this to Ultimate Rewards. You can transfer those points to a number of airlines and hotel program. Heck, you could even use your points to book a cruise when Virgin Cruises has award space. It’s also much easier to get at least 2 cents per point. So with the same points, you can book flights, a cruise and a pre-cruise hotel. You can’t do that with miles! That’s why travel hackers focus on credit card points like Chase’s Ultimate Rewards or Amex’s Membership Rewards.
It’s a horrible way to earn miles
Airline cards like the United Explorer card earn 2x when you purchase flights or something else from the airline and then 1x on almost everything else. Maybe you’ll get 2x on restaurants or something like that. Either way, this is horrible. You can get 1.5x on everything with the Chase Freedom Unlimited. Other Chase cards can help you get 3x to 5x. This is so much better than airline cards.
So when you put it all together, cards like those in the Chase Trifecta can help you earn more points that are worth more. Here’s another way to look at it. With an airline card, $10,000 could get you $100 worth of miles that you can only use for that airline. Even a basic Chase strategy can turn that $10,000 into $500 worth of points that you can transfer to over a dozen different travel companies!
So why bother with airline credit cards?
Despite all of the above, you should still have a credit card but you have to use them carefully. There’s only a few scenarios where they should even be used. For this example, I’ll use the United Explorer card which is the type of airline credit card most people will have. There are obviously other airline credit cards and even other United cards. Most of the credit cards in this same class will have similar benefits. Keep in mind that they all will have an annual fee of about $95.
Sign-up bonus
The first and most obvious reason to get an airline credit card is for the sign-up bonus. For a reasonable amount of spending, usually about $3,000 in 3 months, you’ll get tens of thousands of miles. For the United Explorer card, the current bonus is 60,000 miles. You can usually get two domestic round-trip flights out of that. While this is not the primary reason to get this card, it’s still a nice benefit.
Free checked bags
This is probably the number one perk with these credit cards. You and one of your traveling companions will get free checked bags when the flights are booked with your United Explorer card. That alone could save you hundreds of dollars a year depending on whether or not you check luggage. If you do, the card will easily pay for itself. If you never do, you’ll have to decide if the other benefits are worth the annual fee.
2 free lounge passes
On the surface, these two passes easily pay for the annual fee as it would cost more than $95 to get two people into the lounge. However, that doesn’t mean that you should ascribe this type of value to them. If you’ve never been to an airline lounge, you’ll be underwhelmed. Don’t get me wrong, they are better than hanging out in the terminal with everyone else but I wouldn’t pay much for the privilege. The food and drink offerings are OK at best. But if you would have paid $50 to get some food and drinks at a restaurant, than these passes saved you $50. Still pretty good.
However, it can be difficult to use these one-time passes. You’ll often see signs that say “we are not accepting one-time passes at this time” outside the lounge. I often joke that these signs are there permanently. In the Simple Travel Hacks Facebook group, we’ve talked about how to get around these issues. It’s not foolproof but you can definitely increase your chances of getting in. Either way, you have to keep in mind that these passes can’t be used everywhere and you should not wait until they are about to expire. You cannot roll them over to the next year. You get two a year whether you can use them or not.
Discount on in-flight purchases
Airline cards may give you a discount on in-flight purchases. For example, the United Explorer card gives you 25% back when you purchase food, drinks or Wi-Fi with your card. If you’re the type to buy stuff on the plane, this will save you some money.
Free priority boarding
This is probably my favorite benefit. Overhead space has become difficult to come by and if you are towards the back of the boarding groups, you could find slim pickings. By getting boarding group 2 with the United Explorer card, you’ll be ahead of about half the plane.
Making Basic Economy much better
Basic economy is annoying because you’ll see this great deal on Google Flights and then it turns out it’s basic economy. So if you want to bring a bag, you’ll have to pay more money. You’ll also have to board last which is far from fun. However, with an airline credit card you’ll get priority boarding and you’ll get to bring a carry on bag and a checked bag with the United Explorer card. This is perfect if you don’t really care about getting miles or picking a seat.
There’s a few ways to calculate the value here but I prefer to look at what a regular ticket would cost and then subtract the cost of the basic economy ticket. One or two flights could easily pay for the card.
Better award availability
This is a great benefit. With the United Explorer card, you get expanded access to United’s economy saver awards otherwise known as a XN fare class. This could save you thousands of miles. One or two saver award bookings could easily pay for the annual fee.
Other benefits
Each card has their own benefits such as rental car insurance, Global Entry/Pre-Check reimbursement, no foreign transaction fees, etc.
Advice
If you have elite status with an airline, you might not need one of these cards. Some of the benefits will overlap. A lot depends on how much you value things like free checked luggage, lounge passes and saver award availability. Unless you have a bunch of flights coming up with checked luggage, these cards should not be a priority. You should instead focus on the Chase Trifecta first. Only once you are done with that should you consider using up a 5/24 slot with one of these cards. There are business cards that will give you a lot of the same benefits but they can be harder to obtain than the Chase Ink cards.
Conclusion
So hopefully you can see that these cards should NOT be used for earning miles outside of the sign up bonus. You can get benefits without even using it such as priority boarding and lounge passes. There are other benefits such as free checked luggage when you use the card to pay for the flight. You are only going to use these cards when using them will confer a benefit to you. You are much better off putting the spend on a card that earns transferrable points.