Air mile credit cards are travel-centric cards offering value-back in the form of air miles, which can be used to avail free flight tickets or class upgrades.

Most such cards are co-branded with popular airlines but some cards also come with ‘miles’ as reward currency, which can be redeemed across multiple airline and hotel partners. Besides, some premium reward credit cards also allow reward point conversion to air miles, offering good value to frequent travellers.

Generally, the cards fall in the mid or premium segment, thus charging comparatively high annual fee and requiring more stringent eligibility conditions.

How do they work?

With the card, you earn air miles every time you make purchases using your card. Some cards may also offer reward points that can be transferred to popular airlines’ air miles. Co-branded airline cards directly offer benefits in the associated airlines’ miles currency. For example, Indigo HDFC Credit Cards offer 6E Reward Points instead of general air miles.

The earning rate varies from card to card and may also vary depending on the type of purchase. For example, on travel-focused cards, spending on flights, hotels, or other travel-related expenses might earn more miles than retail shopping. Most cards also offer substantial bonus miles under activation and milestone programe.

Redemption

An important point to note here is the air miles you earn are not equivalent to actual travel miles. Different airlines and frequent flyer programmes have varying redemption rates. (see image). Some airlines offer more value per mile than others, often depending on the routes, demand and availability. Depending on your journey, you could set off the entire fare for a shorter journey or only get a discounted fare.

You can redeem accumulated air miles to substantially save on flights or upgrade, like moving from economy to business class. This can be done via credit card issuer’s travel portal or the airline’s website.

Cards not partnered with an airline would allow you to transfer accumulated miles to frequent flyer programmes of multiple airlines, and even some hotel loyalty programmes. This can give greater flexibility in using miles and potentially offer better redemption values.

Choosing the right card

Consider airline preferences. Since most cards are co-branded with popular airlines, brand loyalty will play a major role when choosing one. You can find credit cards co-branded with Vistara, Air India, Indigo, Etihad, British Airways, Qatar Airways and Spice Jet. Consumers who prefer flying with one of these carriers will be able to derive maximum value out of a co-branded card.

On the other hand, travellers who look for maximum saving irrespective of an airline brand should consider getting an airline-agnostic card such as Axis Atlas or SBI Card Miles. These cards also provide air miles in place of reward points but are redeemable across travel partners, including airlines as well as popular hotel chains.

In this case, the transfer/redemption ratio may also vary across different travel partners. For example, SBI Card Miles ELITE offer a 1:1 redemption ratio for Air Asia or Etihad Airways but if you choose to redeem with Turkish Airlines or Qatar Airways, the redemption ratio reduces to 2:1. Hence, it is important to consider the value you would get across airlines.

Fineprint

Secondly, you should read the terms and conditions related to air-mile redemption. With some cards, you may not be able to set off the entire flight fare against the earned points or miles. There could be certain limit to it. Some cards may also have spend-based conditions on air miles earning or redemption, which is an important consideration.

Additional benefits

Travellers who seek substantial savings through additional benefits like airport lounge access, low forex mark-up fee, etc. can consider getting a premium credit card. With most such cards, they would be able to get excellent redemption value on point to mile transfer along with added advantages like airport lounge access.

The cards are best-suited for frequent travellers, who can maximise benefits by putting travel spends on the cards, accumulating miles and redeeming them for future journeys.

However, consumers looking to save on categories beyond travel should consider all-rounder cards offering good value-back on multiple categories like shopping, dining, etc. or premium cards that come with a higher reward rate across all spends.

Some cards also offer reward points that can be transferred to airlines’ air miles. Co-branded airline cards offer benefits in associated airlines’ miles currency

Travellers who seek substantial savings via additional benefits like airport lounge access, low forex mark-up fee, etc. can consider getting a premium credit card

(The writer is chief business officer, credit cards, Paisabazaar)

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