Air Miles Credit Cards

What is an air miles credit card?

Also known as a frequent flyer credit card, you can use an air miles credit card to earn points per $1 on your everyday spending. You can then redeem your points for flights, upgrades, accommodation and more.

Many air miles credit cards in Australia come with perks like airport lounge passes, complimentary insurance and even flight vouchers or travel credits. And if you get a new card, you could also enjoy a big bonus points offer.

How do air miles credit cards work?

Air miles credit cards earn frequent flyer points or miles when you use them to make payments. You'll typically earn between 0.5 and 2 frequent flyer points for each $1 of eligible spending on an air miles credit card.

These points or miles are added to your linked airline loyalty account, and you can then use them to get reward flights, upgrades, accommodation and other rewards.

What is an "eligible transaction"?

The eligible transactions that earn points or airline miles usually include most of your everyday spending on things like dining, fashion, supermarket shopping, petrol and entertainment. But transactions that don't usually earn points include:

• Cash advances
• Balance transfers
• BPAY payments
• Card fees and charges
• Refunded purchases

If you're not sure whether a transaction will earn points, you can also check the terms and conditions or ask the credit card company.

How to compare air miles credit cards

Points, reward flights and other perks add to the appeal of these cards, but they also come with costs. So when you're looking at air miles credit cards, these are the key features to look at:

• Bonus points offers. These cards often have introductory offers that give you a way to earn thousands of bonus points. Usually, you'll need to meet a spend requirement to earn the points (such as spending $3,000 in the first 90 days). As long as this spend requirement lines up with your budget, these bonus points offers are an easy way to earn a lot of points quickly.
• Earn rate. This term refers to the number of frequent flyer points or miles you earn per $1 spent. Note that credit cards with higher earn rates also usually come with higher annual fees and interest rates, so you should weigh these up when deciding.
• Points cap. Some cards limit the number of points you can earn in a month or year. For example, a card may have a points cap of 50,000 points in a year, meaning you won't be able to earn more than that no matter how much you spend. Or, you could earn 1 point per $1 spent up to $5,000 in a statement period, then 0.5 points per $1 for the rest of that monthly statement period. If you think you'll spend less than the points cap, it probably won't affect you. But if you think you'll spend more, compare cards with higher point caps so you can find one that works for you.
• Annual fee. Credit cards with airline rewards and perks typically have higher annual fees than more basic cards. Ideally, you should get more value from the rewards and other benefits than what you pay for the card. If you want to check whether a card will give you more value, you can calculate the value of your points, as well as any other perks you'll use.
• Interest rates. Air miles credit cards often charge higher purchase interest rates than other cards. These cards are best suited to people who can pay off their balance in full and avoid interest each month.
• Card perks. Air miles credit cards can come with a variety of complimentary benefits such as free travel insurance, airport lounge access, airport transfer services and personal concierge services. If you use these benefits, they could help justify the card's costs. But if you don't use them, they won't really add any value.

How to redeem your air miles

You can redeem frequent flyer points or miles directly through your airline loyalty program – either online or over the phone. Each loyalty program has a slightly different process but, to give you an idea of the process, here are the basic steps you'll usually follow when you redeem air miles online.

1. Go to the airline loyalty program's website and login with your account details.
2. Check how many points or miles you have earned so that you know what rewards you'll be able to redeem.
3. Search for the reward that you want and follow the prompts to redeem it.

Keep in mind that a lot of frequent flyer programs give you the option of using a combination of points and cash to redeem rewards – including flights – if you don't have enough points for the reward that you want.

Types of air miles rewards

The rewards you can get with air miles or points will depend on the loyalty program. But usually it includes:

• Flights. You can redeem your points for flights with the relevant airline and its partners. If you have a flight booking, you may be able to use your points to upgrade your flight to a higher flight class.
• Hotels, car rental and travel packages. You can often use your points to pay for accommodation with partnered hotels, car rental and travel packages that include flights, hotels and activities.
• Products from a rewards store. Use your points to shop at the online store, with rewards ranging from clothing, jewellery, homewares, electronics and toys.
• Shopping and gift vouchers. Most frequent flyer programs have large retail partners, so you can exchange your points for store vouchers either to be used online or at their bricks-and-mortar outlets.

As a general rule, always make sure your air miles credit card gives you more value than it costs. A simple way to calculate this is by adding up the value of rewards you’d receive in a year and comparing that with the fees. While air miles credit cards may be rewarding for some people, they’re not for everyone. Consider your spending habits, lifestyle and rewards goals before deciding if an air miles credit card is right for you.