Miles earning credit cards have been around for decades, and more have flooded the market in recent years. These cards are attractive to anyone who travels, offering rewards programs in the form of bonus miles that can give you free flights, discounts on purchases, and lucrative upgrades to make your travel accommodations that much more enjoyable.
But, right away when you start looking into the different options, you’ll already hit a stumbling block. You’ll notice several cards that seem to be the same but are clearly different based on some of the benefits and terms and conditions attached to the cards. After a little bit of digging, you’ll be able to separate most miles credit cards into two categories: co-branded cards and generic miles credit cards.
Co-Branded Cards Vs. Generic Miles Credit Cards
Both co-branded credit cards and generic miles cards allow you to build up a balance of air miles when you make purchases (though the categories may vary from card to card). These miles can be exchanged for flights and sometimes, hotel reservations. So, you’re basically paying for airline tickets with rewards miles that you earned for purchases you were making anyway. That means these flights are yours for free! Since both co-branded credit cards and universal or generic miles cards can award you with free flights, what’s the difference between the two?
Co-branded cards are the result of a contract between two companies. Basically, an airline carrier and a financial institution have teamed up to give you the convenience of a credit card along with the unique perks of a specific airline. If you’re from the old generation, you might call these frequent flyer programs. Despite the name being changed, along with how you can earn miles and what you can do with them, the essence is the same. These co-branded cards (airline credit cards), can be used like any other credit card to make purchases on credit. What’s different about airline cards is that they offer rewards programs in the form of miles rather than generic rewards points that a regular credit card would offer.
Generic or universal miles credit cards do the same thing. You can use these credit cards to make purchases in stores, etc. and get rewarded with miles according to the rewards program of that card. So far, both credit cards look and act exactly the same. The only difference between them is that with an airline credit card (aka co-branded), the miles that you rack up can only be used on a specific airline carrier or its partner companies. For example, the Delta Reserve card rewards you with miles for purchases, but you can only use those miles for flights on Delta or other partner airlines. That being said, Delta partners with tens of airlines to give you a lot of options including Virgin Atlantic, Air France, and Alitalia.
Universal miles cards, on the other hand, can be used for a much broader range of things including more airlines, more travel expenses, and fewer restrictions. (More detail about this below.)
Sharing Is Caring
Probably the most important feature in an airline card, whether it’s generic or co-branded, is how you can redeem your miles. Without a doubt, a card that can transfer its miles to be used for other expenses is significantly more valuable than a card that only lets you use its miles for booking flights with a single carrier. For example, you can use the miles that you earn on your Capital One Venture credit card towards flights, hotels, car rentals, and more. These miles (really just points in disguise) can be used for any airline, so you have a lot more options. Venture miles are valued at 100 miles per dollar. So, if you wanted to pay for a $500 ticket, you’d need to have 50,000 miles saved up. Considering the fact that you get 50,000 miles when you sign up, that shouldn’t be too difficult!
Another excellent example of this is the Chase cards. With the Chase credit card miles, you can use miles to book directly with Chase, or you can transfer the miles to one of 11 partner airlines and hotels at an incredible 1:1 transfer rate. Chase partners with some of the biggies in the industry including British Airways, Southwest Airlines, and United, so you can fly just about anywhere with these miles.
Across the board, the Chase travel rewards cards give you a great transfer rate that you can use on loads of different airlines. I’m particularly fond of the Chase Sapphire Preferred card because it gives you 2.5% on travel and dining purchases every day along with impressive travel benefits. It’s also got a 50,000 point signup bonus. Basically, it’s the most valuable universal miles card out there.
As stated, generic miles cards certainly offer you more bang for your buck for two reasons:
- You can use them on any airline, you’re not limited to a specific brand
- You can use the miles to cover other travel expenses including car rentals, hotel reservations, and more
When a Co-Branded Credit Card Is a Better Choice
Alternatively, if you use a co-branded card like the Southwest Airlines Rapid Rewards card, you may earn more points, but you have to use them on Southwest. That being said, there is still value to a co-branded miles credit card, particularly if you typically travel with the same airline. If that sounds like you, you’ll get a ton of value out of a co-branded card because you’ll be able to trade in all the miles you rack up for free flights, upgrades, and other airline-specific perks. In fact, the real value of miles depends on how much the flight costs more than anything else.
Miles Cards Deal Breakers
No matter what kind of card you opt for, here are a few things to consider when comparing one miles credit card against another:
- The good news about airline cards is that you can usually get a great one for less than $100 a year. The AAdvantage Aviator Red World Elite Mastercard, the Gold Delta SkyMiles card, the Southwest Rapid Rewards Premier card, and the JetBlue Plus card all come with $95-$99 annual fees. Of course, there are the premium cards like the Citi AAdvantage Executive World Elite Mastercard, but those are the exceptions rather than the rules. What’s more, there are also great airline credit cards that come with $0 annual fees like the JetBlue card. So, if you’re looking to rack up rewards points without spending more, these are excellent options.
- The sign-up bonuses that come with these cards are usually pretty juicy, but you can’t just compare numbers to get the best deal. In fact, this is one case where size doesn’t necessarily matter. Earning 30,000 bonus miles from Alaska Airlines is great, but if you can’t use it for anything other than a trip to Alaska, your miles are going to lose value fast. (Truth is, Alaska Airlines partners with some big names like American Airlines and British Airways, so you aren’t really boxed in, but you get the idea.)
- How many miles you earn per dollar in specific categories makes the biggest difference for most people. It’s common practice to give a higher earn rate for spending with the branded airline (like the Southwest Rapid Rewards card), but most of these co-branded cards offer a pretty low rate (1x mile per dollar spent) on other categories. So, when you find a card that offers a bigger earn rate on the categories you spend in more frequently, you know it’s a good deal. The Citi AAdvantage Platinum card offers 2x miles per dollar spent on eating out and gas station purchases, and the JetBlue Plus provides 2x points for grocery store and restaurant charges.
- Look at what else you get from the card. There are some pretty impressive fringe benefits you can pocket from the right airline miles credit card. For example, the Alaska Airlines Visa Signature credit card offers you a companion flight for just $99. That’s amazing! Another nice bonus that some airline cards offer is an anniversary bonus. This rewards you with extra miles on the anniversary of opening the account. Southwest Rapid Rewards Premier Business card delivers 6,000 extra points every year, JetBlue plus gives you 5,000, and the Southwest Rapid Rewards Plus card tacks on another 3,000 miles to your account.
- The companion ticket that I mentioned already is one of the biggest perks available, and it’s also one of the rarest, so if it is offered by one of the cards you’re considering, give that card higher preference. As mentioned, the Alaska Airlines co-branded card offers companion tickets for just $99, and the Platinum Delta SkyMiles and Delta Reserves cards all have a similar offer. The most impressive companion offer, though, is from Southwest. With the Southwest Premier, Southwest Plus, and Southwest Premier Business cards, you can qualify for the coveted Companion Pass. This benefit allows you to fly with a partner for free for an entire year! The British Airways Visa card has a similar offer.
Make the Most of Your Spending Every Day
Both types of cards can get you perks like priority check-in, free checked bags, lounge access, discounts, and upgrades. So, decide what type of traveler you are, and rack up big rewards miles for free flights fast!
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