Ask an Expert: Are Airline Credit Cards Always the Right Way to Purchase Airfare?


What's Hot


2 Types of Black Marks Might Vanish From Your Credit File SoonBorrow

This Free Software Brings Old Laptops Back to LifeMore

6 Ways the Obamacare Overhaul Might Impact Your WalletInsurance

21 Restaurants Offering Free Food Right NowSaving Money

7 Dumb and Costly Moves Homebuyers MakeBorrow

House Hunters: Beware of These 6 Mortgage MistakesBorrow

Beware These 12 Common Money MistakesCredit & Debt

Obamacare Replacement Plan Gets ‘F’ Rating from Consumer ReportsFamily

Where to Sell Your Stuff for Top DollarAround The House

30 Household Uses for Baby OilSave

25 Ways to Spend Less on FoodMore

Nearly Half of Heart-Related Deaths Linked to These 10 Foods and IngredientsFamily

The True Cost of Bad CreditCredit & Debt

17 Ways to Have More Fun for Less MoneySave

14 Ways to Maximize Your Social Security ChecksGrow

10 Ways to Save When You’re Making Minimum WageSave

Boost Your Credit Score Fast With These 7 MovesCredit & Debt

7 Painless Ways to Pay Off Your Mortgage Years EarlierBorrow

The Most Sinful City in the U.S. Is … (Hint: It’s Not Vegas)Family

10 Companies With the Best 401(k) PlansGrow

8 Ways to Take Control of Your Finances — and Be HappierGrow

This Scam Now Tops ID Theft as the No. 2 Consumer ComplaintFamily

5 Surprising Benefits of Exercising Outdoors in WinterFamily

14 Super Smart Ways to Save on TravelSave

New Study Ranks the Best States in the U.S.Family

Thousands of Millionaires Moving to 1 Country — and Leaving AnotherGrow

The Rich Prefer Modest Cars — Should You Join Them?Cars

Strapped for College Costs? How to Get the Most From FAFSABorrow

6 Overlooked Ways to Save at Chick-fil-AFamily

Secret Cell Plans: Savings Verizon, AT&T, T-Mobile and Sprint Don’t Want You to Know AboutFamily

6 Healthful Treats for Your DogFamily

Ask Stacy: What’s the Fastest Way to Pay Off My Mortgage?Borrow

7 Free Sources of Manufacturer Coupons You Can Find OnlineSave

Ask Stacy: How Do I Start Over?Credit & Debt

8 Ways to Get a Good Price on a Shiny New AutoCars

You’ll Soon Pay More to Shop at CostcoSave

10 Ways to Save When Your Teen Starts DrivingFamily

Fixing Your Credit? Do These 5 Things, Avoid These 3Credit & Debt

A cash-back credit card with a bonus offer may be a better option, depending on your future travel plans.

This post comes from Jason Bushey, a personal finance blogger and credit card analyst from Creditnet.com.

I recently received this question from a Money Talks News reader:

I’m looking to save some cash on airfare for an upcoming summer flight. Would you recommend paying with an airline miles credit card, or are there other cards available that can save me even more? — Kevin S.

My response

Kevin’s question is a good one, since so many cash-back credit cards now offer bonus cash-back opportunities of $100 or more within the first three months. We touched on the topic of paying for big purchases with a cash-back bonus card a few weeks ago, but when it comes to airfare purchases consumers now have a choice to make – cash back now or miles later.

Here are some pros and cons to consider:

Cash-back credit cards

If you sign up for a $100 bonus cash-back credit card to purchase airfare, there’s a decent chance you could qualify for the bonus simply by using it to book your ticket(s).

Cash-back cards like the Capital One Cash Rewards and the Chase Freedom card offer $100 when you spend $500 or more in the first three months after you open the account. Thus, you could save yourself $100 plus the advertised ongoing cash back (1 percent for each card) just for making a single purchase with your new card, depending on flight costs. That’s obviously a pretty good deal.

That said, while the one-time bonus can net you some serious savings initially, the ongoing savings opportunities on airfare are pretty limited. Sure, you could apply the cash back you’ve accrued to your next upcoming flight. But after that initial bonus it’s tough to earn a significant amount of cash back in a short amount of time, so the opportunity for a free flight down the line is pretty slim unless you spend, spend, spend with your new card.

Frequent-flier credit cards

The ongoing opportunities for free and discounted flights with an airline miles credit card are where consumers see the real benefit of using this type of rewards card.

There are two trains of thought when it comes to miles cards — co-branded airline credit cards and general miles credit cards. Which is best for you depends on the type of traveler you are — loyal to one brand or a bargain hunter most interested in finding the cheapest flights. That said, both can save you substantially in the long run if you travel often.

The thing about miles cards is that they don’t net you savings on your initial ticket purchase.  The savings will be realized on future flights. This is the biggest difference between miles credit cards and their cash-back counterparts.

For instance, the Chase United MileagePlus Explorer Card offers double miles on United purchases. Plus, sign-up bonus opportunities may be available. In Chase United’s case, you get 30,000 bonus miles when you spend $1,000 in the first three months.

Airline cards have additional VIP benefits like free checked bags and airport lounge access that make staying loyal to your favorite airline worthwhile.

One final perk that can give airline cards the nod over cash-back cards in the long run is the value of miles. They vary based on the card, but are often worth more than cash back.

Cash back is almost always worth 1 percent (or 1 cent), whereas the value of a mile is usually worth more, often in the 1.5 percent to 2 percent range. So theoretically it should take less time and money to earn ongoing travel rewards than with a cash-back credit card.

The final verdict

If it’s immediate satisfaction and savings you’re in search of when booking your summer flight, then there is a case to be made for taking the $100 cash-back offer. But if you’re a frequent flier who could benefit from a miles credit card that yields substantial rewards over time, then the miles credit card is still the way to go.

Stacy Johnson

It's not the usual blah, blah, blah

I know... every site you visit wants you to subscribe to their newsletter. But our news and advice is actually worth reading! For 25 years, I've been making people richer without making their eyes glaze over. You'll be glad you did. I guarantee it!

💰🗣📰

Read Next: 5 Easy Ways to Save on Your Cell Phone Bill

Check Out Our Hottest Deals!

We're always adding new deals and coupons that'll save you big bucks. See the deals to the right and hundreds more in our Deals section.

Click here to explore 2,041 more deals!