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Airline credit cards and travel rewards credit cards both offer cost-saving and trip-enhancing features that frequent travelers love. But which card should you pick? Choosing between an airline credit card and a travel rewards credit card comes down to weighing the pros and cons of each and selecting the right one for your situation.
What Is an Airline Credit Card?
An airline credit card offers rewards and flight benefits for use on future flights with that airline. Each purchase earns a specific amount of rewards, with the highest rewards earning coming from airline spending. Earning rewards can also raise your status in the airline's frequent flier program, which gives you access to exclusive benefits and service.
You can redeem rewards for free flights, seat upgrades and other flight-related perks with airline credit cards. Additionally, they often offer benefits like free checked baggage and priority boarding.
Pros and Cons of Airline Credit Cards
Pros
- Earn rewards with your preferred airline
- Earn status in a frequent flier program
- Access airline-specific benefits such as waived baggage fees and airline lounge access
- Complimentary seat upgrades when available
- Discounted or complimentary companion tickets
Cons
- Need to restrict flight bookings to one airline to get significant value
- Limited access to travel benefits like trip cancellation insurance
- Rewards can only be redeemed with the airline or one of its partners
- Potentially high annual fees
When to Choose an Airline Credit Card
An airline credit card is a great choice if you have a preferred airline. Perhaps you live near a particular airline hub and flight options are more convenient. You can also benefit from airline perks, even if you only fly a few times each year. For instance, waived baggage fees and priority boarding offer significant time and cost savings for family vacations.
Opting for an airline credit card isn't ideal if you prefer to book flights based on price or factors other than airline brand. Another travel rewards credit card might offer better earning potential in that case.
What Is a Travel Rewards Credit Card?
A travel rewards credit card helps you earn rewards for flights, hotel stays, rental cars, cruises and more. These cards offer rewards on everyday purchases and often more on travel-related purchases. Additionally, travel credit cards typically provide travel-related perks and protections including trip cancellation and baggage delay insurance.
Pros and Cons of Travel Rewards Credit Cards
Pros
- Flexible redemption options
- Access to travel protections
- No foreign transaction fees
- Potentially high welcome bonus for new cardholders
Cons
- Minimal to no airline-specific benefits
- Can't be used to earn frequent-flier status
- Premium benefits available only with high-fee cards
When to Choose a Travel Rewards Credit Card
A travel rewards credit card is the better option if you travel frequently and aren't committed to any particular airline or hotel brand. You'll have more flexibility in your travel options, for instance, if price or departure time are more important to you when booking flights.
Because you're not devoted to an airline brand, you'll have more opportunities to earn and redeem rewards on a wide range of travel including flights, hotels, car rentals and more. Travel rewards can often be redeemed for a statement credit or transferred to another airline or hotel loyalty program, sometimes at a 1:1 value.
Alternatives for Airline Credit Cards and Travel Rewards Cards
After exploring the pros and cons of both types of credit cards, you may decide neither card is right for you. Fortunately, there are some alternatives that can help you save money and access travel perks.
- Build travel into your savings plan. Prepare for upcoming travel by saving throughout the year. You can use a sinking fund to direct money specifically for travel. A high-yield savings account can help you earn higher interest as you save. Having money set aside provides a travel spending budget and prevents you from having to rely on a credit card.
- Use a cash back rewards card. Cash back credit cards offer cash rewards on a percentage of your purchases. Once you have enough rewards saved up, you could offset your travel purchases by redeeming for a statement credit or deposit to your bank account.
- Join airline and hotel loyalty programs. You can rack up miles and points directly through loyalty programs without having to use a credit card. With enough points, you can still earn status and access to a variety of program benefits. Make sure to use your loyalty reward number when you book so you get credit for your flights and stays.
- Join a travel membership program. For a few bucks a month, a travel membership like AAA allows you to take advantage of discounts on hotels and rental cars and access trip planning resources like travel insurance.
The Bottom Line
When you're deciding between an airline credit card and travel rewards credit card, consider whether you have a strong airline preference or enjoy flexibility in using rewards. Both cards offer attractive features. It's most important that you get the most value without overspending or compromising your travel preferences.
One thing to keep in mind is both airline and general travel rewards credit cards usually require good to excellent credit. To find out where you stand and learn how you might improve your score, get your credit report and score for free from Experian.