Credit card Guides

Airmile credit cards - A comprehensive guide

If you’re a globe trotter who spends a lot on their credit card you could earn free flights using an Airmiles credit card to earn points that can take you around the world.

But before you rush out and sign up, there are a few things that you should take into account, such as how much you will have to spend in order to actually get anywhere.

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Virgin Atlantic credit card

	3,000 Flying Club miles upon first spend with the Virgin Atlantic Credit Card

A Word of Caution

Shopping around, and looking for the deal that works best for you can be a tedious task so we’ve put together a guide to the best Airmiles schemes. compare airmiles credit cards

However, it should be noted that no reward scheme is worthwhile unless you can pay your balance off in full each month, otherwise the interest will always outweigh the reward. But if you do manage to avoid the interest, then you will essentially earn by spending – just be careful not to use it as an excuse to buy a few more pairs of shoes or a new iPod.

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What are Airmiles?

Airmiles work like a point scheme, where you rack up mileage that you can then exchange for flights to different destinations. These are usually accrued by spending using an Airmiles card, or a credit card that offers an Airmile reward scheme.

There are quite a few different options available, and it can be quite difficult to work out the actual worth of points, but this guide will highlight what you need to look out for when choosing a new card.

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What are the benefits?

Use your card. The best way to profit from frequent-flyer and Airmile reward schemes is to use your credit card for as many transactions as possible each month, while having a direct debit set up to pay the balance in full. You can even pay things like your mortgage in this way to maximise the amount of points you earn without having to pay any charges.
Free flights. You have to be very disciplined and responsible with your finances, but provided that you don’t slip up, or incur any hidden charges, you will essentially get flights for free.
Redeem and pay. You should also check out whether or not you can pay cash to go further than your accrued points allow. Most schemes allow this, but some, like British Airways, apply restrictions, such as where you can fly to.
Discounts. Some cards also offer discounts at partner stores.

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What are the disadvantages?

Hidden charges. A survey conducted by consumer watchdog Which? in October 2006 showed that many people have had difficulties with these schemes. One of the main customer complaints was the fact that there are often hidden costs when claiming “free” flights. This occurs when the flight itself is free, but any applicable taxes, fees and surcharges are on top.
Cost of accrual. Which? also found that many people had never claimed a flight because of the sheer amount of money they would have to spend to do so.
How you spend. You should be careful about how you use your card too. Even if you pay the full balance each month, cash advances and things like online gambling, where money is taken instantly from your account are classed as “instant cash transactions” and interest starts to add up as soon as you make a transaction.
Transfer fees. Also, although many of the cards offer interest-free periods, these are almost entirely subject to a fee. This varies from a set fee of around £50, to a percentage of the balance transfer, typically around three per cent. £7,000 at this rate would have already cost you £210. Check out 0% balance transfer credit cards.
Fees. Most cards don’t apply an annual fee any more, but you should double check, as this could influence which card you go for.
Being loyal. You should also look into their loyalty system. Some cards give you more points if you spend your money in certain shops, encouraging you to spend with them. For example, the Airmiles Mastercard gives one Airmile for every £10 spent in their partner stores, but you have to spend twice that elsewhere to earn the same one point. So think about where you’re most likely to spend when choosing your card.

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