Hard Landings with Airline Credit Cards

A Credit Article Contributed by Mark Mcclelland

* Who Offers Airline Credit Cards?

Airline affiliated credit cards are offered primarily by the three major credit card associations / issuers: MasterCard and Visa in association with the bank of your choice, and American express. And for which airlines, you might ask? The simple answer is that for all practical purposes, if it fly's, there's a card associated with it somewhere: American Airlines, Delta, Continental, US Airways, Northwest, Southwest, Alaska, America West, British Airways... and the list goes on and on.

Even those airlines that are flying a bit under the weather these days have affiliated credit cards. As a matter of fact, these low flying airlines are upping the benefits and bonuses fro using "their" card in order to entice buyers to part with more of their hard earned money.

And just within the past several months, most of the issuers have dropped the annual fees they were charging in an effort tot broader the appeal of their cards.

What's the Likelihood You'll Use the Benefits of Your Airline Credit Card?

If history is any guide, you're very unlikely to ever use any of those miles you've accumulated using your airline credit card. Just look at the statistics.

Frequent flyers alone have banked literally millions and millions of miles that they are unlikely to ever use. It turns out that only about a third of all frequent flyer miles are cashed in for free tickets or other benefits. And this is by those folks that could certainly benefit from using them the most.

Now lets look at all of those credit cards the airlines would have you believe are such a great deal. What do you think the odds are that you'll actually take advantage of those benefits? In all probability it'll be around 1 in 3 as well. That means that of all of the miles and points accumulated by credit card users, only one third will be used as well. Those aren't actually very good odds... you have better odds playing blackjack.

Are Airline Credit Cards Worth the Hassle?

Another REALLY negative factor is that airline affiliated credit cards have a tendency to charge 5 or more percentage points more than non-affiliated credit cards. And, if you do a bit of math you'll figure out that you're only getting about 1.5% back on your purchases in terms of equivalent mileage costs.

Add to that the rate at which airlines are going bankrupt, and the option any airline, bankrupt or not, enjoys of being able to simply cancel the reward program at any time, and the picture simply gets darker and darker.

Given the fact that you'll probably never use those miles, and that the interest rates the issuers are charging you for the "privilege" of accumulating miles on a carrier that may not be flying tomorrow, the short and sweet answer to that question is a resounding "no".

And truth be told here, it's actually quite difficult to find any information on the Internet that puts a positive spin on this topic altogether.