Airline Miles Credit Card – 3 Tips to Maximize Your Benefits

Airline miles credit cards and other cards that offer reward bonuses are becoming more popular for consumers nowadays, since mortgage equity loans have dried up. Air miles rewards cards are a great way to save money on vacations and business travel. However, with every winner there is a loser. The credit card companies have to pay for the rewards they dole out somehow; unfortunately, only a few card holders get to be the winner and it´s the losers that end up paying for their rewards.

Choosing the right airline credit card doesn´t have to be a frightening experience. By considering these three points you can easily and comfortably save a ton of money. Here are the highlights:

Which class of airline card do you need? - There are airline specific frequent flyer cards and bank issued air miles rewards cards – and the differences are huge. In a nutshell, airline cards reward you for the miles you travel and bank sponsored cards reward you for the amount that you charge on the card. With airline cards you will earn miles much faster than bank sponsored credit cards if you travel frequently (five to ten times a year). However, these are the cards that have "blackouts" and restrictions that you must contend with.

Bank issued credit cards will give you miles or points that reduce or eliminate the cost of airline tickets, based on your accumulated purchases. For example, by using the Capital One® No Hassle Miles (SM) Ultra-For Professionals card you can rack up two miles for every dollar spent on the card. With this card you aren´t bound to a specific airline or restricted by blackouts when you decide to travel.

Do not carry a balance! – Airline credit cards are designed to heavily penalize people who carry a balance from month to month with higher rates and fees. This is because most card holders will put a business trip or vacation on the card and pay that expense off throughout the year. By doing this you are almost assured to negate any savings that the card gave you by using it. You are the proverbial loser. If you do need to put vacation or travel expenses on the card for an extended amount of time, you should transfer the balance to a lower interest card while you pay down the balance.

Use it or lose it – Airline cards must be managed and used regularly to take advantage of their benefits. Most of the credit cards that are sponsored by a specific airline have a "use it or lose it" policy; this is why they are classified as "Frequent Flyer" credit cards. Also, most of these cards will carry a hefty annual fee, so if you´re not using them you should be losing them. When you carry one of these cards, managing your benefits is not an option.

The exception is bank issued credit cards. They will waive their annual fees on some cards for applicants who have exceptional credit. One way to take advantage of the bank issued cards is to use them for day to day purchases like groceries, gas, and even utilities. Some banks are even accepting payments with credit cards. By doing this you will easily rack up enough air miles to get a seat or two on your favorite airline each year.

This class of credit card usually will not have an expiration date on their miles rewards, so you are free to take as much time as you need to earn the tickets. It´s easy to see why airline miles credit cards and other cards that offer reward bonuses are becoming more popular for consumers. By choosing the right card for you, you are sure to save money on vacations and business travel.

Aubrey Clark is an Author and editor for Direct Banc, which features a credit card with airmiles directory. Aubrey is a financial expert who has spent over twenty years working and training in financial markets. He current project is an airline miles credit card tutorial for business travelers.