Avoiding The Dangers of Aggressively Maximizing Credit Card Airline Miles
Dreams of that much need vacation is made even more possible with airline miles credit cards but in order to earn you must spend and this is what most consumers do. The spending might be cautious at first as they maintain awareness of the high interest rates but before they know it they are caught making only the minimum payment on a card that has a huge balance and a high interest rate. Before you go all out trying to maximize the credit card miles that you earn pay attention to the points below if you plan to avoid these dangers.
Calculate The Airline Miles Credit Card Spending Requirements
Over and over people are told to read all the terms and conditions before they sign on yet so few people really do. It is important to have an idea of the amount that you will have to spend to earn a free flight beforehand so that you can determine if it makes sense to get the card. You can quickly do an average of this by first getting an idea of the amount of rewards earned. For instance most programs give 1 point for every dollar spent. Make sure that you understand what purchases are exempt so that you do not waste time trying to accumulate points by making invalid purchases.
Add any bonus points that you would receive to this calculation and once you have an idea you will be able to decide whether you should get a different type of reward card. It's amazing how many people play hit or miss with airline rewards by not knowing their goals and not having an idea of how much they have to spend to get there.
Understand The Program Restrictions
What are the terms of redemption of the rewards that you worked so hard to earn? Does the program include blackout dates? It is important to know these things since you might be planning to use the miles that you accumulated for an important trip only to be denied the opportunity to do so.
Stability of the Airline
The internet abounds with stories of people who spent years trying to accumulate miles on a program only to watch them disappear before their eyes as the airlines that the program was linked went out of business. It's sad but it happens and Consumer Reports know it well. This is why they advised consumers against a lot of airline credit cards because of the uncertainty of some airlines. If the airline goes under then your miles become useless. Avoid this by choosing a stable airline or an airline miles credit card that is not directly linked to one particular. This will ensure that your miles are safe until you are ready to make use of them.
The Expiration Dates
Without reading the terms and conditions of the card you begin spending to accumulate your miles. Two years into the program you finally decide to cash in those miles only to discover that more than half of your miles have expired. Gone! Just like that. Some programs do have expiration dates and some don't but you must know the difference and choose the right one. If you are already enrolled with a program that has an expiration date you should redeem your points on other perks so that you don't lose them.
The Interest Rates
This is to date the biggest danger of maximizing credit card airline miles. Too many people later confess that in the end the rewards were not worth the misery of being saddled with high monthly payments where the bulk of the payment represented the finance charges that they had to repay on their balance. In fact if you do the calculation you will see that if you carry a balance the penalties are worth a lot more than the rewards. The trick to avoid this is to pay off your balance monthly. Spend only what you are able to repay. If you are unable to manage this then get a low interest rate credit card rather than an airline miles credit card because the rewards just won't be worth it.