3 Unexpected Reasons Why Airline Credit Cards Beat Cash Back Cards


Trying to decide on which credit card to apply for next? Some people love cash back credit cards, because it feels good to get an immediate discount on everyday purchases. But if you love travel, want to save money on airfare, get free hotel stays, and improve your travel experiences, the best travel rewards credit cards can be an even better deal.

Here are a few reasons why airline credit cards can be an even better deal than the best cash back credit cards that pay 2% unlimited cash back.

1. Get travel perks for your next flight

The best airline credit cards can give you a free checked bag for your next flight. Since airline checked bag fees are now in the range of $35-$40 (or more) for domestic flights, using an airline credit card to book your next trip could help you save $70-$80 on every U.S. roundtrip. If you fly four times per year, that’s an annual savings of $280-$320!

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Some premium airline credit cards can give you extra special VIP travel perks, like free airport lounge access. The best of these high-level travel perks tend to come from cards that charge a higher annual fee, like $550 or more. But the extra value you get can make these airline credit cards worth paying for, if you’re a frequent-flying adventurous traveler who loves to travel in style.

2. Earn frequent flyer miles to get “free” (extremely cheap) plane tickets

Along with the immediate value of perks like free checked bags or airport lounge access, perhaps the best reason to apply for an airline credit card is that it gives you a faster way to earn frequent flyer miles. Some airline credit cards let you earn bonus frequent flyer miles when you use the card to book flights, such as an extra 5x miles on the airfare, when you’re a member of the airline’s frequent flyer program.

Other travel rewards credit cards make it easy to earn points from your everyday spending that can then be transferred to partner airline frequent flyer programs. For example, with the right travel rewards card, you could earn 50,000 points from your monthly spending, and then transfer those points to a partner airline program and convert them to 50,000 frequent flyer miles.

By racking up frequent flyer miles with airline credit cards, you can build up a special “savings account” to be spent on travel. And sometimes, booking flights with miles (or points) can give you a better deal than an equivalent amount of cash — I recently booked a flight on Southwest Airlines with 33,000 Rapid Rewards points that would have cost me $500 in cash.

Keep in mind that booking award flights with frequent flyer miles is not technically “free” — there are still a few costs you’ll have to pay with cash. But airline credit cards can open a new world of saving money on travel!

3. Travel rewards can be worth more than money

If you’re passionate about travel and you want travel to be at the center of your life, travel rewards credit cards can elevate your experience. Travel is one of my favorite hobbies and lifelong learning experiences, and I never regret spending money (or credit card points) on getting out of the house or leaving the country altogether.

Vacations I’ve taken with my family are some of my happiest memories and were worth paying for — those travel memories are priceless, and are worth more than some small percentage of money I could’ve gotten from a cash back credit card. Travel rewards credit cards can help you buy more joyful moments and powerful memories.

Bottom line

There are some excellent cash back credit cards available right now, and if you like the feeling of saving 1%-2% (or more) on everyday purchases, go ahead and use those cash back cards. But if cash rewards don’t feel as exciting as converting your everyday spending into inspiring travel experiences, travel rewards credit cards and airline credit cards could be a better deal. Whether it’s cash back in your bank account or fun perks on travel, the best credit cards should help you live a more enjoyable, varied life.

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