For travelers, it’s the eternal question: do I get a credit card with generic travel rewards, or do I get a card that commits me to one airline? Both have their benefits and drawbacks, so we’ve put together a handy list of pros and cons to help you decide which is right for you.Travel Rewards CardsPros: More choice of airlines (and more choice overall). If you’re going to use points for a hotel, for example, often a general travel rewards card will have a wider selection to choose from. Annual fees are rare, and often lower when required. Better introductory rates. Can be used as a day-to-day credit card, to help rack up points.Cons: Points are not redeemed automatically: you’ll have to log in, see what you’ve collected, and decide how to use them. If points expire, you may not even see a warning that what you’ve collected is about to go away forever. Once the introductory period is over, travel card interest rates are pretty much the same as your typical credit card. The year of free interest can be worth it, but depending on the rate, it may not be worth picking the card for your wallet. Rewards can be changed at any time: your points may suddenly be devalued if the issuer changes the rules applying to them.Best For:Casual travelers, such as people who take frequent vacations, or short trips for work, and small businesses. The travel rewards card can be your “go-to” personal card to build up rewards that you can use later on.Airline CardsPros: Better bonus offers. Since you’re tied to one airline, and they want to keep your business, your points will be worth more and there will be more opportunities for “double points” and other redeemable items. The card works not just as a credit card, but as a frequent-customer card, meaning you get more goodies on the flight. For example, many airlines waive the baggage fee for the first checked bag for their cardholders. This can save you a lot of money if you travel a lot. Miles are claimed automatically. No logging in or converting points to miles!Cons: You’ll be limited to that one airline, which may not always be convenient, or even possible, to use. Beyond airlines, you can only use your miles at their partners for hotels, food, and so on. You will be paying an annual fee: 99.5% of airline-specific cards have an annual fee. You’ll need to examine how often you use this airline and how good the perks are in order to determine if the card is worth it. Restrictions may apply to flights: blackout dates, certain seats not available, and other annoyances.Best for:Heavy travelers with a home airport dominated by one airline. For example, business travelers in Atlanta will be well served with a Delta card, while Chicagoans should consider a Continental card. If you spend a lot of time in the air, the card will make your time on the ground just that much easier.Image Credit:
| Tags: Airline, Travel Rewards
Posted August 26, 2011 by Hanna Silver under Global Finance