Your Guide to Choosing & Using Frequent Flyer Credit Cards

If you are interested in applying for a frequent flyer card, there are a few things to keep in mind. First, you will need to make sure that the points/miles you earn can be transferred to your airline of choice. Next, it is also a good idea to pick a card that has not only a low introductory interest rate, but also a low rate after that initial welcome period. This keeps all your costs down and you can still enjoy the benefits that this type of card can offer.

Specific Types of Frequent Flyer Credit Card

• Airline credit cards – a selection of card offers linked to various airlines
• Emirates Skywards credit cards – learn more about earning Skywards points with a credit card
• Jetstar credit cards – compare credit cards that allow you to earn Jetstar Dollars for use on Jetstar only.
• Qantas Frequent Flyer credit cards – Compare credit cards linked directly to the Qantas Frequent Flyer program and earn points for cheaper Qantas flights, upgrades to business class or first class and other travel perks.
• Singapore Airlines credit cards – view and sort the credit cards that are linked to Singapore Air so you can earn KrisFlyer Points
• Virgin Australia credit cards – compare the credit cards that allow you to earn Velocity Points for redemption on Virgin Australia.

Choosing a Frequent Flyer Card: FAQ

Q: Is a frequent flyer credit card suitable for me? A: If your lifestyle involves plenty of travel, catching flights and purchasing travel-related products and services such as hotels and rentals, a frequent flyer credit card could be a great choice. It is also important that you are the type of cardholder who spends often; you get the most out of your membership by making purchases and earning points.

If you are likely to overspend, don’t always clear the balance in full and have an ongoing debt on your credit card account, a frequent flyer points credit card is probably an unsuitable choice. If you’re regularly paying interest the cost of using your credit card outweighs the benefits of the program. Obviously, if you don’t travel often, and use your card infrequently then this type of credit card is a bad choice.

Note that in order to qualify for a frequent flyer program you need to earning above a certain annual income, specific to each credit card, and have a good credit rating.

Q: How do I earn points? A: The way you earn air miles varies between different frequent flyer membership programs, but they generally function in the same way as other types of rewards scheme: you earn points each time you use your card. Typically, there is a flat rate of earning for every dollar spent on you credit card and a bonus rate for purchases with the program’s partners such as affiliated airlines, hotels, retail outlets and numerous other companies.

Different credit cards earn points at different rates within the same program – prestigious gold and platinum cards often earn more points than standard cards – and you maybe able to earn bonus points during introductory offers. It’s common for a bank to issue two cards for your account, an American Express and Visa / MasterCard, with the AmEx having the higher earn rate of the two.

It’s important to study how and where points are earned on the linked frequent flyer program when applying for a new credit card to make sure it fits in with your existing spending habits.

Q: What restrictions are applied? A: Each frequent flyer program has its own set of rules and regulations regarding points capping and expiry; always study the terms and conditions before applying. It is common for standard credit cards with frequent flyer points to have a capped number of points that can be earned. Many credit cards for frequent flyers operate with a tiered rewards system where the more you spend, the less points you earn.

Q: How do I spend my points? A: The points you earn can be redeemed for flights with affiliated airlines, e.g. redeem Qantas Frequent Flyer points for flights with Qantas, British Airways and American Airlines, among others. You can also use your points in exchange for hotel accommodation, resorts and holiday packages, car rentals, entertainment and leisure services, retail products and many other options. Frequent flyer programs usually allow you to pay partly in points and partly with money, so you don’t need to wait until you have enough points to achieve your rewards.

Your credit card’s frequent flyer program should provide access to an online store where you can check your balance, browse for products and services and discover the latest special offers.

Q: What are the benefits? A: The most obvious benefit is the opportunity to earn points by spending, earning rewards points and redeeming them for rewards. Membership also opens doors to other benefits such as concierge services, access to airport lounges, priority airport check-in, complimentary upgrades along with a rolling program of special offers and discounts. Credit cards for frequent flyers usually feature insurance policies including travel insurance and purchase protection.

Q: How much does it cost to join a frequent flyer program? A: If you’re a newcomer to the world of earning points with airlines then you need to enrol to become a member of that program.

• Qantas Frequent Flyer: There’s a one-time fee of $82.50 to join. Keep your points and your account active by earning points or spending your points once every 18 months.

• Velocity Frequent Flyer: It’s free with no cost to join. Keep your membership active by earning points or spending your points once every 36 months.

• Singapore Airlines KrisFlyer: Free. There’s no cost to become a KrisFlyer member.

It’s also worth noting that these fees are often waived if you sign up to a credit card linked to a particular frequent flyer program.

Q: What features should I consider when comparing cards? A: You should examine all the credit card features and the details of the frequent flyer program when comparing and selecting a new card.

Program partners: The program should involve airlines, hotels, retailers and other companies that you regularly spend with using your credit card and offer the opportunity to redeem the points for rewards you want to use. If you have to change your spending habits, you’ll probably struggle to earn many points at all. If you can’t redeem those points for things you want, then why bother in the first place?

Earn rate (points per dollar spent): The value of the points you earn is very important. You should take the time to see how points are earned and the number of points needed for rewards to judge how much value for money the program really provides. For example, a card may offer 3 points per dollar, but the real value of each point may be lower. Consequently, you have to earn more points. The converse is also true.

Introductory offers and sign up bonuses: Banks attract new customers using introductory offers with the chance to earn bonus points during an introductory period, typically several months. Introductory offers can be a great opportunity to quickly earn rewards, but you should always examine how the program changes when the offer ends. Banks also often run sign up bonuses where you are rewarded with points upon approval.

Extra benefits: Frequent flyer points credit cards usually feature other benefits alongside the rewards program, including travel insurance and purchase protection. Ensure these provide the cover you need and any other perks fit in with your lifestyle. In terms of travel insurance, the level of cover can be dramatically different from one card to another with some offering cover for you and your family internationally and domestically, while others only offer cover for you while overseas. Always check to see exactly what cover you get.

Interest rates: As with any credit card, one of the most essential features to look at is the interest that is applied to the account, including purchase and cash advance rates. You want to use your credit card for everyday purchases, not just during travel, so it should feature a competitively low interest rate. Assuming you travel regularly, it would also be worth taking note of foreign exchange fees and foreign transaction fees.

Annual fees: Many of these cards feature a significantly higher annual fee than standard credit cards. You should calculate how this balances with the credit card’s other features to make sure that the cost of using your card doesn’t negate the benefits.

Q: What’s the best way to use a frequent flyer credit card? A: To get the most out of your card, you need to be spending often and earning plenty of points. Look to see what regular payments you can move to your credit card – including weekly groceries, fuel payments and direct debits for bills – so that you can earn points on your normal payments.

You should be careful to not overspend, and always try to pay your monthly balance in full. If you have an ongoing debt on your account you’ll start paying interest, which can quickly nullify the benefits of the frequent flyer program.

Also take note that cash advances, buying foreign currency, balance transfers, gambling payments and other types of transaction are usually exempt from the rewards scheme and earn no points. Familiarising yourself with all the relevant terms and conditions, rules and regulations and using your card wisely helps you enjoy the very best benefits of the frequent flyer program.