Generic miles card vs. airline-specific rewards
Either could be best, depending on schedule, flight and cost
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
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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:
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?
- 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.)?
- Is there any
disadvantage of using one of the cards like the Capital One card instead of a
card authorized by the airline?
- 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.)
- 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
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.
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 flier
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
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.
Whereas you can
cancel your US Airways card without losing frequent flier miles banked with the
airline, generic miles are handled by the bank issuing the credit card. Cancel
the card and your miles disappear. If you want to avoid the $59 annual fee of
the Venture card, you can always opt for the no-fee VentureOne, but that card
earns 1.25 points per dollar instead of two.
See related: Determining value of rewards redemption
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