Travel Rewards: Getting Grounded in Reality
Airlines move focus to how much you pay, not how far you fly.
If you love to earn frequent flier miles, then a new airline trend isn’t going to lift your spirits. According to a report from Wired, Frequent Flier programs with most major airlines are already a thing of the past. And the few programs that remain may be departing soon.
“Since 2015, American, United and Delta Airlines have each changed the basis of their rewards programs from miles flown to money handed over. You get points based on what you pay, not how far you go.”
Essentially, major airlines are reacting to the consumer trend of price-shopping for the cheapest flights. As customers use online comparison sites to score a great deal by shopping early, airlines are losing revenue. Travel rewards programs based on how far you go simply aren’t profitable. So now airline reward programs are opting to reward customers based on how much they spend instead.
“The thing that matters most to an airline is how profitable each customer is – and customer that pay a higher fare are always more profitable,” says travel analyst Vinay Bhaskara. “A program that rewards passengers that pay a higher far with more points is rewarding the airlines most valuable customer.”
The right strategy to maximize travel rewards
Although airlines are changing frequent flier programs to make it harder to earn points, experts still recommend to sign up. After all, earning a limited amount of reward points is better than none at all.
“If you’re flying somewhere, you might as well earn miles,” says Brett Snyder of Cranky Concierge. “If over time you collect enough of them, great. If not, oh well.”
In other words, sign up for frequent flier reward programs with an airline whenever possible. However, recognize that you may need a travel rewards credit card to maximize the rewards you earn. According to the experts, travel rewards credit cards are the way of the future for earning points on air travel.
Still, Wired offers a good warning:
“Don’t rack up credit card debt in the name of point foraging: A free flight to South Korea isn’t worth bombing your credit score.”
These tips can help you earn travel rewards effectively without risking debt problems:
- If you want to get a travel rewards credit card, aim for a card with the most flexibility in how you earn and spend points; also make sure to pay attention to fees.
- When you make charges on the card to earn rewards, understand high interest charges will quickly offset any points you earn.
- So with that in mind, always pay off your travel rewards credit card balance in-full at the end of every month.
This strategy minimizes interest charges so you get the most out of your rewards. For more tips on how to get the most out of credit card reward programs, visit Consolidated Credit’s Credit Cards 201 Guide.