To open a credit card that offers airline reward points or not? Frankly, for most people, the of amount of money spent in order to earn substantial airline miles is likely not worth it. Moreover, the problem with determining, quantitatively, at least, if a credit card with airline reward points is worth it hinges on the lack of absolute value assigned to a mile. What a mile is worth varies by airline as well as other factors, and can end up being anywhere from half a cent to ten cents a mile, which complicates the question of whether miles or cash are preferable as a reward. The lack of clarity surrounding the points-to-miles conversion is enough to discourage credit card holders from jumping at airline mile redemption incentives in favor of more cut-and-dried cash-back rewards. That said, a credit card with airline reward miles may be worth it if…
1. If You Pay Your Balance off Monthly
Many people sign up for rewards-based credit cards assuming that they will acquire more rewards than they will debt, but the short and sweet truth of it is that it is incredibly easy to rack up loads of debt under the justification of earning reward miles. So, point blank, if you’re not in the position to pay off your balance every single month, then airline miles are not worth it. On the converse, if you can pay off your balance monthly, then you have the added bonus of building good credit on top of obtaining lots of miles.
2. If You Have Elite Status
If you already have elite status, then it’s very likely worth it to keep your card with reward miles open. Major airlines make it easier for elite passengers to redeem their miles and thus the value of your miles is inherently increased.
3. If You Appreciate Upgrades
Remember that airline points can be exchanged for upgrades, not just miles, so if you’re a frequent enough flyer, a reward points card may be best for you. You can use points to upgrade seat class, to check baggage, to buy on-board wifi or meals, or even to book hotels or rental cars, depending on your flight package options.
4. If You Do Not Have School-Aged Children
In theory, it would seem that a miles-reward card would make sense for those with children, since more general spending equals more travel opportunity for the whole family. That said, keep in mind that all families with school-aged children travel at the same time (around school breaks), making it decidedly harder to use points to book flights for those windows. Airlines often sell out anyway, and some even have black-out dates for busy travel times.
5. If Your Job Requires Frequent Travel
If you are fortunate enough to be a frequent flyer with a company credit card in your name, then a rewards card with miles is ideal for you. The cost of your flights will come out of someone else’s pocket, will accrue you a good deal of points, and will earn you miles in your name.
6. If You Own Your Own Business
Business owners tend to use their credit cards a lot, especially in the first year of operation. The thought process is obviously that debt accrued while establishing a business is an investment, so business account balances tend to be a higher than personal ones. If this is the case for you, it absolutely behooves you to open a credit line with reward miles.