Rewards programs are a common incentive used by credit card issuers to reel in more applicants, and for travelers, frequent flier miles may work like a charm. Now, bonus mileage programs are becoming a trend in the industry, but analysts warn that not all credit card holders may be getting their money’s worth.
Bonus mileage programs allow card members to buy points directly from airlines, but as the Wall Street Journal reports, many travelers are paying twice or three times more than they would have otherwise for a ticket. The option to buy mileage directly from companies, however, has proven to be profitable for the industry. AirTran Airways, for instance, has reported a 40 percent increase in profit.
“Many folks are just crazy for more miles,” president of American’s AAdvantage frequent-flier program Derek DeCross tells the Journal. “Some people just really, truly want to have as many miles as possible.”
Mileage-driven consumers may feel more inclined to use their cards to rack up points, but this can easily result in credit card debt. Consumers should pay bills in a timely manner to avoid credit score damage.