Mileage Credit Cards - Are They a Good Deal?

"Money can’t buy happiness, but it can buy marshmallows, which are kinda the same thing."

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For years I resisted getting a credit card from the airlines because they have an annual fee.  I hate paying a fee to a credit card company, almost as much as I would hate paying interest, which I don’t pay because I pay my credit cards off as soon as I use them.  But I have, in the past year, changed my mind and acquired an airline credit card that gives me miles when I use it. 

Why, you may ask, would I do that?  I was enticed in with the promise of 25,000 miles plus another 5000 miles if I added another name to my account.  That is enough for a free ticket or an upgrade to first class.  And, there was no fee for the first year.  So I went for it.  And now I have decided to keep it, even though the fee will be coming due next month.  Why am I doing that?  Because I have found that there are some advantages to me having the card, and I have decided those advantages are worth the $95 a year fee.

United's Visa Card

So what are those advantages?  Each card is different, so you need to look at what the card is offering you.  For me, it is free checked baggage for your first bag each, priority boarding and passes to the United Club at the airport.  The pass is just two passes per year, which got us into the United Club in October when we were returning from our St. Lawrence River cruise.  The cruise line got us to the airport in Boston at around 11AM and our flight did not leave until 3PM.  Having passes to the Club room was so much more comfortable for those hours of sitting and waiting.  We had drinks and snacks and WiFi connection, television and comfortable chairs.  That alone was worth the credit card fee.

First Class seats make into a bed

Since we took several trips this year and we flew on United Airlines each time, the amount we saved on baggage fees paid for the fee.  The airlines charge $25 per bag and my husband and I each checked one bag.  We made 2 round-trips on United, and since we would have paid the fee each direction, we would have paid a total of $100 in baggage fees.  The annual fee is $95, so just with that benefit we came out ahead.  We also got the other benefits I talked about above, and we earned miles on all of our purchases.  We earned double miles when purchasing our United tickets using the card.  I was able to upgrade to a first class seat on our trip to Scotland because of the bonus miles I received when I signed up, and that was well worth getting the card.

So, is a mileage card right for you?  I know that some people love having these cards, and use them for everything.  But when looking for a card, make sure you compare the benefits and fees.  There is a huge difference between standard cards which have annual fees of $40 - $95, and premium cards which can charge up to $450 a year.  The premium cards do provide more benefits, but you need to decide whether those benefits are worth that price to you.  Myself, I cannot see paying that much for a credit card.

Also, different cards have different benefits.  If you travel overseas regularly, the British Airways Visa Signature card might be a good deal for you, as this card has no foreign-transactions fees.  Those fees can add up if you use your card for purchases overseas.

Travel and Leisure magazine recently had an article about the mileage cards and they suggested that if you are going to get a card, that you shouldn’t settle for the advertised offer.  Ask them for more bonus miles when you sign up.  25,000 miles is standard, but they suggest asking for 50,000.  I don’t know if it will work, but it would certainly be worth trying.

 

So, only you can say if having a mileage credit card is right for you.  It depends on how much traveling you do, and if paying the annual fee (which all of the mileage cards have), is worth it to you.  But whatever you decide, use it wisely and don't go into debt.