Airline-branded credit cards have been around for decades. While they're handy for people like frequent business travelers who can accrue a lot of miles that can be redeemed for free flights, they never had the reputation of being a great deal for those of us who don't know the fastest way between Terminals A and B.
By and large, most partner-branded airline cards (that is, ones with a particular airline's logo on them) came with relatively high annual fees and didn't offer as much in terms of rewards as more general points-based or cashback reward cards. It's notoriously difficult to wrangle a free flight on a popular route or date, and the airlines have increased the number of points needed for a freebie over the years. Sure, you could also buy merchandise with miles in some cases, but those goodies and gadgets are often marked up to a much higher value than what you'd pay for them in a store.
Now, though, the proliferation of airline fees makes these cards look like a better deal, and card issuers are taking advantage of that.According to this article, offers for rewards cards that give users points or miles were up by 30% in the third quarter of 2010 versus a year earlier. A big reason for the renewed push is that the cards have begun to offer users a break on the myriad of fees airlines charge, especially for the much-maligned checked-bag fee, which could cost a family of four up to $200 round trip in addition to the cost of their tickets.
"The fact that they're allowing you to waive fees does make theses cards more enticing because these fees have become such a big issue, especially baggage fees," Curtis Arnold, founder of the site CardRatings.com, tells WalletPop. In addition, he adds, many airline cards will waive the annual fee for the first year.
What's more, competition among banks for creditworthy borrowers has increased, Arnold says. For consumers, this translates into generous sign-up offers that can come close to covering the cost of a free ticket.
So if you plan to travel by air this summer and want to shave some of your costs, take a look at these new cards. Don't just look at offers you get in the mail, though; go online and do your own research to find the best airline card that fits your needs.
If you travel frequently but don't stick with the same airline when you book your trips, Arnold suggests looking into a generic travel rewards card like the Capital One Venture card, which lets you earn points that can be redeemed for a ticket on any airline.
Airline Credit Cards Look More Appealing in Light of Fees