Generic miles card vs. airline-specific rewards

Either could be best, depending on schedule, flight and cost

By Cathleen McCarthy

Cashing In

Cathleen McCarthy is a journalist whose articles on travel, commerce and consumer topics have appeared in dozens of publications. She writes "Cashing In," a weekly column about credit card rewards programs, for CreditCards.com Ask a question. 'Cashing In' archive

Dear Cashing In,
I have some questions about using points from a credit card for travel. I do have a card through US Airways, and have used the points from it for traveling on US Air. I understand how that works. Here is what I don't understand:

1. If I get a general credit card for traveling (such as Capital One, American Express, etc.), do the points I accumulate spend on ANY airline?
2. Does the airline honor those points in the same way they honor points from their own airline cards (i.e.: blackout days, number of points needed for flight, etc.)?
3. Is there any disadvantage of using one of the cards like the Capital One card instead of a card authorized by the airline?
4. What is the process of using these generic points for booking a flight? (With the US Air points, I just enter my US Air member number and its site guides me through the booking.)
5. If I get a card that waives the annual fee for a year, is it a good idea to use it for a year and then cancel the card? Do I lose my points if I do that? I would really appreciate a basic primer on this. I'm sure it isn't rocket science, but it is confusing to a newbie.  -- Nancy Mac

Dear Reader,
The miles you're earning and redeeming now are awarded by the airline to redeem on future flights. Generic miles will work on any airline because they're more a cash-substitute than a loyalty reward.

Generic travel rewards are often called "miles" -- the Capitol One Venture card you refer to is an example of this -- but they're really points that you can spend on flights, as well as hotels and car rentals. Venture offers two "miles" per dollar spent but redeeming those miles has nothing to do with the tiered fares you choose from when you redeem your US Airways points (25,000 miles, 40,000 miles, etc).

Venture miles are points you can redeem on travel expenses, with 100 points valued at a dollar. So, a $400 flight would require 40,000 points or Venture miles. One advantage of generic miles is that you can redeem them for other travel expenses beyond flights, and when you do redeem for flights, you can use your miles on any airline.

Whether redeeming generic miles for flights is a better value than using frequent flier miles earned on a co-branded card, like your US Airways card, depends on the cost of the flight. As a rule of thumb, the cheaper the flight, the more bang you'll get for your generic miles -- the exact opposite of using frequent flyer miles.

Let's say you're contemplating a flight from Athens, Ga., to Portland, Ore., in mid-October. As it happens, US Airways flies this route so you have the option of using your US Airways miles (and charging it on your US Airways card for double miles). If you nabbed this fare for 25,000 frequent flier miles, you'd save yourself $800. If were using a Venture card, that same flight would require 80,000 miles (100 points per dollar). In that instance, I'd say you're better off using your US Airways card.

Let's look at how this plays out on a cheaper flight. Fares between Pittsburgh and San Diego are coming in at $348, which means you could purchase a round-trip fare for 34,800 Venture miles. Given you earn miles twice as fast on a Venture card -- two miles per dollar charged vs. one mile per dollar on your US Airways card -- I'd say you're better off using generic points here, rather than blowing 25,000 to 40,000 (depending on seat availability) US Airways miles.

The process for purchasing flights (or hotel stays or car rentals) with generic miles is as simple as charging something online using a credit card. You purchase your flight and flag the charge for reimbursement from your award miles. It's not complicated, and it's certainly more flexible than using airline miles.

Because your points are viewed as currency, and redeeming them isn't dependent on available award seating (or lack thereof), no blackout dates apply. Your points don't expire as long as you keep your account open -- but be careful about canceling a generic miles card if you have unused miles.

See related: Determining value of rewards redemption

Gary Foreman, "New Frugal You"

Sally Herigstad, "To Her Credit"

Cathleen McCarthy, "Cashing In"

Jane McNamara, "Let's Talk Credit"

Elaine Pofeldt, "Your Business Credit"

Erica Sandberg, "Opening Credits"

Published: October 9, 2012

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