How to Know if an Airline Credit Card Is Right for You
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Credit cards co-branded with an airline earn airline miles or points on every charge. The base formula is one mile or point per each dollar charged to the card, but some cards add bonuses for some charges—typically for buying tickets and packages on a sponsoring airline. Those airline credits can be very alluring, so much so that co-branded airline cards, along with hotel cards, probably account for up to a quarter of the cards issued in the U.S.

What makes airline co-branded cards unique, and uniquely attractive, is that you can combine the miles and points you earn with an airline co-branded card with the miles and points you earn by flying into your airline's frequent flyer account. Also, airline cards often offer specific airline-related benefits in addition to the normal enhancements you find on almost all cards.

The Most Popular Airline Credit Cards

All the main U.S. airlines offer at least one co-branded card; some also issue several premium-benefit and premium-cost cards and "business" cards. This comparison will cover each airline's "base" card. Those cards typically carry an annual fee of $100 or less. Most award one mile or point equivalent per dollar charged, with double or triple credit for airfare and other airline charges. Most also offer big one-time new member bonuses, worth up to $500 if you meet a minimum-charge requirement. The APR on carried balances runs a bit under 16 percent. And they require good to excellent credit.

  • Citi / AAdvantage Platinum Select World Elite Mastercard, Delta Gold SkyMiles Credit Card from American Express, and United MileagePlus Explorer Card, as you might expect, march in lockstep: Cardholders get a first checked bag free for themselves and companion(s), plus priority boarding, and the cards impose no foreign transaction fees. All also charge a $95 yearly fee (Delta and Citi / AAdvantage both waive the fee for the first year). United adds two yearly passes to its United Club airport lounge system.
  • Alaska Airlines Visa Signature, $75 per year, and Hawaiian World Elite MasterCard, $89 per year, offer a free checked bag and no foreign transaction fees; Alaska adds one discounted companion ticket each year.
  • Allegiant's World MasterCard, $59 per year, awards one point per dollar on most purchases, triple on Allegiant purchases, plus priority boarding and a free beverage on each flight and a free companion airfare on some air/hotel and air/car packages.
  • Frontier offers a base card for $69 per year that includes an annual $100 flight discount voucher if you charge at least $2,500 during your card membership year.
  • JetBlue offers a no-fee minimum-benefit card; its Plus MasterCard, $99 per year, is equivalent to the other lines' base cards; it offers the free checked bag.
  • Southwest's base card, $69 per year, does not offer any comparable extras.
  • Spirit World MasterCard, $59 per year (first year is waived), offers no blackout dates on award travel and priority boarding.

Note: You can compare airline credit cards here.

The base cards all include the usual laundry list of general credit-card enhancements, most notably secondary rental-car collision coverage. But almost all comparable cards, including cash-back cards, provide the same cluster of enhancements. Here, we're looking on benefits that are unique to airline cards.

Airline Benefits

Credit card miles and points you can add to those you earn by flying sounds attractive. The allure of airline-miles cards, however, may exceed the benefit.

The most popular frequent flyer award is a long-haul domestic round-trip in coach. And on most airlines, that award requires 25,000 miles or point equivalent. To earn those miles on a credit card would require that you charge $25,000 to the card. But quite a few non-airline cash-back credit cards earn the equivalent of two percent cash return, meaning that $25,000 of charges would earn a cash value of $500.

Although you could spend that $500 on anything, you could buy a long-haul coach round-trip on many routes for $500 or less. And buying a ticket with cash means you don't have to worry about the difficulty of finding "free" seats on dates you want to travel, where the success rate can be as low as 46 percent (redemption rates vary between various airlines, of course). Also, when you fly on a paid ticket, you earn another 3,000 to 5,000 miles.

Southwest, with a generous award program for miles you earn by flying, about breaks even with its credit card. It earns one point per dollar on general purchases and two points on air tickets. A minimum-cost "Wanna Get Away" round-trip from Chicago to Portland this summer, for example, costs $400 to $500 or 23,000 to 26,000 points. A good cashback card would cover the likely cost of a paid ticket for $500 or less, and you'd earn another 3,000 points or so by flying on the paid ticket.

The math works out a bit better if you prefer to use your miles for premium travel. The most popular premium-travel award is a business class round-trip to Europe, which typically goes for around 100,000 miles, which would require $100,000 charged to an airline card. A good cash-back card would earn $2,000, but that's less than half the typical cost of a business-class round-trip to Europe. You can, however, occasionally buy a discounted business-class ticket for around that $2,000 price, although finding available business-class award seats to Europe can be a real challenge.

Airline Cards: The Take-Aways

If you fly only once or twice a year on any individual airline and are interested in earning a domestic coach round-trip, you're probably better off using a generous cash-back card and buying the ticket.

If you fly three or more times a year on one airline, the base card issued by the airline you fly the most is likely to be the best bet. The free checked bag offsets the annual fee, you earn multiple miles/points when you buy tickets, and early boarding and the other features make your trip a little easier.

If your focus is on premium class travel, you're clearly better off using a co-branded card from the airline you fly the most. Cash-back doesn't work well for premium travel.

If you fly a lot, you might even favor one of the big-three-line premium level cards or The Platinum Card from American Express. Their annual fees are a lot higher, but they offer a big bunch of benefits.

Consumer advocate Ed Perkins has been writing about travel for more than three decades. The founding editor of the Consumer Reports Travel Letter, he continues to inform travelers and fight consumer abuses every day at SmarterTravel.

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