In this article, we’re going to discuss how Air Miles work and how you can start collecting these, so you’re able to enjoy cheaper air travel. It will also help you understand one of the options available when you’re getting your first credit card.
What Are Air Miles?
The term “Air Miles” is a commonly used marketing technique by banks to entice their audience into using the credit card they’re promoting. As you’re able to tell from the name “Air Miles”, it’s related to air travel. They are rewarded to the user each time they make a transaction on the credit card, and they can accumulate over time to purchase such things as a flight ticket.
For example, this type of loyalty benefit may offer you 1 mile for every £1 spent on the card. However, it’s the “miles” that can be misinterpreted. Although it may seem like one pound = one mile of air travel, this isn’t the case.
How Do Air Miles Credit Cards Work?
Let’s say you wanted to fly to Barcelona from any London Airport. Although London to Barcelona is roughly 900 miles, you may have to collect 1000-1200 Air Miles to have access to a somewhat free flight ticket (Remember, you’ll have to pay tax and fees on the ticket).
The amount of Air Miles you’ll receive per transaction or amount spent on the card will vary, and you’ll need to find this out before opting in for an Air Miles credit card.
If you’re an adventurer and love travelling, then an Air Miles credit card is for you. Unlike frequent flyer programs that some airlines offer, you are only able to accumulate these when you fly with them. If you’re not a frequent flyer, this can take years before you’re able to reap any benefits from it. However, with an Air Miles credit card, you can earn these rewards by just using their card for everyday purchases.
Because it’s such an exciting offer, this scheme is massively used within the credit card industry. The system is easy to understand and use. Simply, apply for a credit card that offers Air Miles and start making transactions on that card within your everyday life to start earning.
TOP TIP: Frequent flyer programs
If you’re a regular flyer, you’re able to benefit highly from joining a frequent flyer program as well as owning an Air Miles credit card. Here you’re able to combine both discounts by purchasing your repeated flights with your Air Miles card.
How To Collect Air Miles On A Credit Card
The key to getting discounted travel through using Air Miles really depends on your strategy behind it. Below we give you exclusive tips on how you can maximise your potential Air Miles.
1. Check for welcome bonuses
Like all credit cards, you tend to receive bonuses each time you sign up for one. Some may include free interest for 18 months. But in this case, we’re looking for credit cards that offer a certain amount of Air Miles for signing up to their cards.
This can be manipulated very well, as here you’re able to find various cards within the industry that offer this type of bonus, and you’re able to sign up for each of them. However, of course, it’s not as easy as that. You’ll have to meet specific spending requirements, but it can be gratifying if you can comfortably afford them.
2. Read through the Bank’s policies
Be smart with your spending and read through the Air Mile pointing system that is associated with your card. Some transactions may offer you more rewards than others. For example, you may earn more miles if you purchase goods from a specific supermarket and so on. Understanding this can undoubtedly boost your possible Air Mile rewards.
3. Rinse and Repeat
Lastly, rinse and repeat the process for the best results. With some Air Mile credit cards, there is a loophole. This gap is typically around the sign-up process. Although you’ll have to reach a minimum spending requirement, after you’ve hit this and received your points, you’ll be able to cancel the credit card and repeat the procedure.
Although this can be time-consuming, if you really want to start racking up your Air Miles for discounted travel, it’s more than worth it.
Air Miles vs Cashback Credit Cards
The main difference between Air Mile credit cards and cashback types is the overall flexibility they provide to their users. In theory, both work similarly and operate on a spending reward system. Simply make a purchase with a credit card and receive a “thank you” reward in the form of Air miles or cashback.
As shown in this article, Air Miles is associated with air travel. By collecting this reward, you’re able to gather enough points (Air Miles) to redeem nearly “free” flights (I say “nearly” because you’ll have to pay hidden fees and taxes). The reward’s value will depend on your credit card’s policy.
This type of reward system is relatively flexible, and you’re able to claim physical money back instead of being restricted to Air Miles. For example, you may opt-in for a credit card that gives you 2% cashback on all Tesco purchases. For each item you buy from Tesco, you’ll receive 2% of your money back. Each credit card will differ from the amount of cashback you’ll receive from a specific store.
You can find out more about what cashback credit cards are here.
Is Cashback Or Air Miles Better?
To be honest, both are beneficial and can offer you excellent saving benefits. But it really depends on your needs. If you’re a traveller, then selecting a credit card with an Air Mile reward system will be more beneficial than the cashback type.
Typically, because an Air Miles credit card has strong partnerships with widely used airlines, you’ll receive more discount than if you were to get cashback from them. If I were you, come up with a plan on how you’d like to spend/receive your rewards and work out what would be more useful for you.
Lastly, always take the APR and interest rates into consideration when choosing your card.
James Banerjee is a Senior Account Manager who graduated from the University of Kent in 2014. He works in SEO on clients such as HSBC UK and Nestle and he has a keen interest in personal finances and money-saving advice.