Consumers happily exchanging credit card debt for airline miles

In recent months, lenders that issue airline-branded cards have stepped up offers of bonus frequent flyer miles in exchange for consumers taking on more credit card debt. Americans have been happy to oblige them.

According to a report in the New York Times, more airlines are doling out bonus miles as an incentive for a number of things, such as opening a new account (which will net 30,000 miles with a new American Airlines Citi AAdvantage card) or using the card to pay for a flight (triple miles with United Airlines Mileage Plus).

The reason airlines are doing this, the report said, is that consumers have come to expect such rewards for their purchases, and not offering them might lead Americans to seek out more attractive deals elsewhere.

However, according to a recent report from Marketwatch, this keeping up with competitors is paying off for airlines pretty much across the board. Many of the major carriers in the U.S. posted profits in the second quarter of 2010, led by Southwest, which had its best quarter ever.