Getting Mileage Out of Your Credit

Getting Mileage Out of Your Credit

Cards That Encourage High Flying and High Spending

By Kara Stefan


kara_stefanEver bought too much of an item just because it was on sale? Ever used a coupon to buy something you would have never purchased in the first place?

A growing trend today is to charge everything you can just to get frequent flier miles. Maybe that’s why the average consumer charges about $18,000 a year to a mileage card compared to $3,000 a year to a regular credit card.

The fact is consumers spend more–on average, six times more–with an airline mileage card than they do with non-mileage cards. For some happy shoppers, a mileage card justifies no-holds barred spending sprees all in the name of free air miles.

Others simply transfer payment of typical household expenses to a mileage card, such as mortgage, car, insurance, and medical payments. Unfortunately, even this more grounded strategy doesn’t always work. You may not have the discipline to stash money away for the impending credit card bill and come out short when it’s time to pay off the balance each month.

High Rates, High Fees
The perks of free airline travel do not come without a price. Most mileage credit cards come with annual fees upwards of $100 or more, and skyrocketing interest rates currently top off at 19%.

However, the credit industry has boomed over the last five years, thanks to America’s robust economy. And fierce competition among both airlines and credit card issuers has resulted in lucrative partnerships offering great deals to consumers.

A recent Consumer Reports Travel Letter named the MilesOne card (issued by Capital One Bank in Richmond, Virginia) as its best pick for mileage perks. The following table compares MilesOne with some of the other popular mileage credit cards on the market today.


MilesOne Capital One

AAdvantage Citibank

Delta Sky MilesAMEX

Mileage PlusFirst USA

Card Type






All major airlines

American and others

Delta and others

United and others

Minimum miles for free flight















Annual Fee





Guidelines for selecting a mileage credit card:

  • See if the card allows you to earn miles on both new charges and balance transfers.
  • Note the mileage you receive for each dollar spent: Most offer one mile for every dollar; some offer two miles for every dollar spent on airline ticket purchases from the partner airline.
  • Read the fine print for any exclusions, restrictions, or blackout dates.
  • Verify the number of miles that can be earned per year.
  • Confirm how long mileage credits are available before they expire.
  • Check out the interest rate to see if it’s a teaser; if so, find out the true interest rate and when it kicks in.
  • Make sure you choose a credit card affiliated with the airline(s) on which you prefer to travel.
  • Compare overall costs and your potential spending habits with mileage versus non-mileage cards–ensure you won’t come out ahead by just buying airline tickets on your own.
  • Beware severe penalties for late payments on mileage cards, ranging from late fees to not crediting air miles.
  • Be sure to pay off balances each month–consumers tend to charge more on mileage cards than with a regular credit card.
  • Check that the grace period is at least 20 days–with all the perks of a mileage card, sometimes issuers shorten grace periods to try and recoup expenses.

New Trend in Debit Cards
If you’ve sworn off credit cards but are tantalized by the idea of earning free air travel, you’re in luck. Debit mileage cards are beginning to sprout up for those with the discipline to spend only what they earn.

This spring, Continental Airlines has partnered with Chase Manhattan Bank to launch a debit card that credits mileage with each debit charge deducted from the customer’s Chase checking account. This card charges a $30 annual fee and credits one Continental OnePass mile for every $2 spent using the card.

Who knows? This new trend may combine the best of both worlds–allowing disciplined spenders with their feet on the ground to finally reach the clouds.