When you want to travel more and spend less to do it, there is no better way than with miles- and points-earning credit cards. But if you want to earn points for free travel, are you better off with a general points card or an airline specific card? The answer may surprise you! Continue on to find out if a general points credit card is better than an airline specific credit card.
What are general points cards and how do they compare to airline credit cards?
Most credit card users or frequent flyers are familiar with airline credit cards. Airline credit cards offer an opportunity to earn miles for that airline’s frequent flyer program and often come with a few extra perks like free checked bags or priority boarding.
General points cards don’t have any specific airline’s name on them. They usually have a bank’s name, like the Chase Sapphire Preferred, American Express Gold, or the new Barclays Arrival Premier. These cards earn points in their member rewards programs.
Each type of card has its own benefits and perks so we’ll look at some of the main differences to help you understand which is better for your needs.
Which is better?: Point values
Airline points have a value that is usually around 1 cent to 1.7 cents per point. General points cards are usually worth around 1.6 cents to 2.2 cents per point under current valuations. That tips the scale generally in general points cards’ favor.
As a general rule, because of their flexibility, general card points are almost always worth more than any single airline’s miles.
Which is better?: Redemption options
Airline-specific credit cards are good for flights on that airline and partner bookings through that airline’s website or customer service department. Depending on the airline, that could be very restrictive or offer you lots of options.
For example, Alaska Airlines works with many domestic and foreign airlines as partners and you can book flights on those airlines with Alaska miles. The biggest airlines in the US are part of global alliances that also give you opportunities to book through international airlines.
General points-earning cards are not tied to one airline and its partners. Instead, you can book through a travel portal on virtually any airline (or hotel, cruise line, car rental company, and many activities and excursions).
But the biggest values and power come from transferring to partner airlines. With this ability, you can reach nearly any major alliance and get to any destination served by a major airline. Plus, you can redeem for cash back or shopping, but remember that you usually get a better value when booking for travel.
Which is better?: Earning rates
Every rewards credit card for travel offers some form of rewards when you make purchases. General points cards come in different tiers, and each card works a little differently. Here are a few examples:
The Chase Sapphire Preferred card earns 2x points per dollar spent on restaurants and travel, and the Chase Sapphire Reserve offers 3x points for those purchases. American Express Platinum comes with 5x points on some travel bookings. Depending on how you spend, one may be more favorable over another.
But, again, typically general points cards come out ahead of airline-specific cards.
When you might want an airline card anyway
I personally use a combination of airline-specific and general points cards. I use general cards for my everyday purchases and shopping, but keep the airline and hotel cards for times when I am traveling with those companies.
For example, I might earn enough miles and points to fly on United for free, but with the United credit card, depending on how I book, I get free checked bags as well. My American Airlines card gets me toward the front of the line when I get on the plane, and my Southwest card gets me free drinks. As long as I get enough value to cover the annual fees, those are worth keeping, as well.
Find the right card mix for your travel preferences
Like all personal finance questions, there is no right or wrong here. If you are only going to go with one card, you are usually better off with a general points earning card than an airline specific one. But if you are ultra-loyal and only fly one airline, you should probably have their card, too.
Also, remember that miles and points cards are only worthwhile if you pay them off in full each month. If you use them to get into debt, you end up spending more than you get in value from those miles and points. So, always use your cards with care no matter which way you decide to go.
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