However, new credit cards with airmiles now offer much better returns on your money, and by just doing your normal everyday spending, you'll be able to book a break in no time at all.
The points system
Although some cards offer one point per £1 and others offer only one point for every £10 you spend, this doesn't necessarily mean that the first provides a much better return than the other.
You need to work out exactly what you would need to spend to get to your desired destination to be able to accurately compare airmiles credit cards, as they all require a different number of points for each country.
Think about how you use it
If you're not a big spender, make sure you go for one that has a good introductory offer or you might never earn enough points to get off the ground.
If you're sure that you will definitely clear your balance each month, you could start paying your bills and even your mortgage with new airmiles reward credit cards - just make sure that you don't use it for anything that's considered an "instant cash transaction" such as online gambling or with some banks, even buying gift vouchers as they carry higher interest rates - check with your bank to see what is and isn't considered an instant cash transaction.
Giving your airmiles a boost
The best airmiles credit cards have great introductory offers such as up to 20,000 bonus points if you spend a certain amount within three months of opening the account, so make sure that you check out the latest offers as well as comparing the standard spending and points systems for each card.
You should also find out whether or not you can top up your airmiles with cash. Doing this means that you should be able to collect a certain number of points - enough say for a trip to Europe - and then add cash to boost your ticket to take you to America.
Avoid the interest
While some cards will also offer zero per cent on balance transfers or purchases, you need to be very careful that you never end up paying interest. Because of the high returns you get with airmiles cards, some charge as much as 39 per cent interest, so you should make sure that you have a standing order set up to pay the full balance every month - or you'll have soon paid far more in interest than your free flight is worth.
There are many incentives for taking out a new credit card. Long term low interest rates are attractive. So too are 0% balance transfer and purchase rates, but these only last a short time. However, there are other rewards that last for the life of the credit card and that are attractive to most credit card purchasers. One of these is the air miles scheme.
What Are Air Miles?
The Air Miles scheme is a loyalty scheme that allows customers to collect points for everyday purchases from a number of high street and online retailers. Points can also be collected on travel, hotel bookings, currency exchange and travel insurance. These can be spent on travel to different destinations. Different points totals are needed for different destinations, depending on the distance from the starting point, the time of year and what deals are available. For example, going to Paris requires about 400 miles, while travelling to Sydney requires about 4,000.
How Can I Earn Air Miles With My Card?
Earning air miles with a credit card is very simple. First of all, sign up for a deal that offers air miles as a reward. There are several of these offered by different companies. Card companies that offer this reward scheme include Nat West, Royal Bank of Scotland, Cooperative Bank, Morgan Stanley and American Express. Some card companies offer their own travel schemes, such as the one done in conjunction with British Airways.
Some card companies require you to sign up separately with the air miles scheme. The advantage of this is that you can earn miles with other retailers even if you are using a different card. Once you've signed up, all you have to do is spend as usual to earn air miles.
Additional Travel Rewards
Many of the credit card companies that offer miles also offer other travel related rewards. These include travel insurance and other rewards to be applied to travel. Some companies do not offer this scheme, but offer an equivalent travel points scheme. This works on a similar basis to the air miles scheme.
Are There Other Incentives For My Air Miles Credit Card?
Since many air miles credit cards are issued by banks that issue other car companies, the same advantages may apply to new card holders. Some air-miles cards offer 0% on balance transfers and purchases for up to nine months. Others offer a low rate of interest on transferred balances for the life of the balance transfer. These offers will appeal to people who want to earn travel incentives and clear debt at the same time.
It's worth paying attention to the interest rate on the credit card. Some credit cards offer competitive interest rates which will appeal to most credit card users. However, others have high interest rates and some have balance transfer fees. Balance transfer fees are fees charged by credit card companies when people transfer balances to take advantage of preferential rates. The balance transfer fee makes credit card jumping less attractive and helps credit card companies to make some of the interest they would otherwise have lost. There are still credit cards without a balance transfer fee, so it's worth shopping around for these.
Both Stephanie Wendy & are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
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