The airline credit card surged in popularity decades ago because the holder could earn frequent flier miles with everyday purchases.
That was before budget airlines became such key players in the travel marketplace. It was also before airlines made earning and redeeming frequent flier miles more difficult.
Offers of 15,000 bonus miles for signing up with a card might appear attractive, but you'll still need to make quite a few purchases before reaching the first redemption plateau, which is often 25,000 miles.
Another sad reality: those 25,000 miles don't automatically buy a domestic round trip anymore. At peak periods and on popular routes, you might need twice that many miles to ensure your choices. Airlines are cutting back on flights, which means more planes are leaving full and there are fewer reward seats available on many routes.
Bank cards allow travelers to convert points or miles (the terminology varies) to currency and then shop among many carriers for the best deals. Others take their mileage money and seek reimbursements for hotel expenses, cruises, or car rentals.
Airline cards frequently charge an annual fee, too.
So long as there are business travelers who must deal with one particular route or airline, there will be loyalty programs and the airline credit card is likely to survive. But for the vacationer who typically doesn't accumulate as many miles and has fewer reasons to be loyal, is the era of the airline credit card over?
The short term answer appears to be affirmative. Mileage expert Tim Winship of FrequentFlier.com recently told IndependentTraveler.com that "the airlines are so desperate to squeeze every possible dollar from every flight, they're waiting until the last minute to free up unsold seats for award travelers."
Only budget travelers with the most flexible of schedules can afford to wait for such a last-minute answer.
By contrast, a traveler who uses reward cards that are not tied to the airlines can book the cheapest flight available and then use the card reward to pay the fare.
Shopping for an airline credit card is increasingly difficult. While it is still possible to look at APRs and annual fees, the terms for redeeming travel rewards now vary so widely that useful comparisons are difficult. Most card offers do not clearly communicate these terms. Most people don't fully understand the system until after they've committed to a card and an airline.
So use caution when considering an airline credit card. Don't sign up unless you can prove to yourself that the card fits your travel needs.
Most importantly, don't sign up unless you're confident you can pay the balance in full each month. Interest rates on these cards will sink you deeper into debt than you can imagine--something that can't be justified in exchange for booking a free flight.
