Video: Which airline credit card is the best?

  1. Closed captioning of: Which airline credit card is the best?

    >>> this morning on "today's" consumer, finding the right airline credit card . airfares have risen eight times this year so you may be looking for a card that offers miles and rewards. but before you sign up, we have important factors to consider. vera gibbons is here. you read the fine print so we don't have to. the first question is just how popular these kinds of cards have become.

    >> very. if you look the average cheapest round trip , $350 on fare compare. three years ago, it was cheaper. this is one way to do it.

    >> now, all of these cards are not created equal. it seems there are two categories. there are the cards that the airlines themselves offer and then there are these kind of general travel cards.

    >> right. it does get confusing because there are a lot of options out there. you have the generjennifer rigenera gene ric rewards card. c capital one venture and airline sponsor cards, where you're going to earn your points through your spending, through your airline purchases and through their partners.

    >> let's look at these side by side on some of these issues. starting with interest rates . is there a real difference between the airline cards versus the general cards?

    >> there is. generic is low, 12% on the low versus 14% on the affiliated cards. annual fee is another consideration as well p airline affiliated cards tend to have them. look at statistics from, 99.9% of the airline affiliated cards do generally come with a fee. that fee is generally $95, waived the first year. generic travel award cards, only 23% of those cards have an annual fee. that's something else to consider, your travel needs as well and your spending purchases.

    >> the airline might have bonus incentives.

    >> right. that makes it worth it, right, in many ways because you can really rack up the miles big time with airline affiliated card. 25,000 miles , 40,000 bonus mile it is you spend a lot.

    >> double miles sometimes.

    >> double miles if you use your card to pay for your airline ticket . promotional offers, southwest gives you 3,000 bonus miles each year on your card anniversary. you can really rack up the miles big time with airline sponsorsed card.

    >> perks with free upgrades or a free drink.

    >> people like those. the biggest perk that they like would be quite honestly the free checked baggage . that one piece of luggage checked for free. delta sky miles card, family of four using that card for air travel could save $200 round trip . that baggage fee waiver extends nine people on the same reservation. that's a popular perk and makes a annual fees more than worth it.

    >> using tips. you say crunch the numbers. what do you mean?

    >> you've got to sit down and look at how much you're going to earn for your spending. one point, 1.5, 2, how those points are converted. you also want to look at the annual fee, whether there's a zero percent introductory rate.

    >> your own personal credit feeds needs needs and habits. do you pay off the balance?

    >> huge one. everyone is fixated on the points, that's great. that's a priority. if you carry a balance month to month those cards are not for you. freebies, perks are blown out the window with interest rates .

    >> you say watch those expiration dates. because, why, sometimes they expire?

    >> right. if you don't keep them active they disappear. if you don't pay your bills on time they disappear. some cards charge you a reinstatement fee to get them back. i wouldn't use these for cheap airlines. one or two cents. spend it on a fare more than $300, ideally.

    >> and watch for blackout dates. thank you.

Image: Credit cards
Martin Moxter
Frequent travelers can reap rewards with the right plastic.
updated 8/29/2011 11:07:51 AM ET 2011-08-29T15:07:51

We know, you and your credit card have been through a lot together. You used it to buy your new laptop and your vacation to France, to pay the electricity bill and support your weekly Whole Foods habit. There have been good times, like the time your card covered your car rental insurance, or the time you got a $50 gift card in the mail from the company's rewards program.

But ask yourself, what has your credit card really done for you lately? Hiked its annual percentage rate, added mysterious fees, punished you for foreign transactions' on your trip to Mexico? Accept it: This relationship isn't going to work out. It's time to put your spending power into a credit card program that values your thirst for traveling.

Citi Gold/AAdvantage Visa Signature Card
Best for: Domestic travelers who often fly to the same destination.
So you visit your grandmother twice a year in Cincinnati and fly home to Santa Barbara on all major holidays? This Visa card features a Reduced Mileage Awards program that allows cardholders to fly to select AA destinations (for 7,500 fewer miles) on a round-trip ticket. If you spend just $750 on the card in the first four months, American Airlines will award you 20,000 bonus miles. You'll earn one AAdvantage mile for every dollar spent, and there are no blackout dates for travel. Annual fee after first year: $50.

Chase Sapphire Preferred
Best for: Globetrotters.
Let's say it together now: no foreign transaction fees. That means you won't be charged extra for using your card anywhere overseas, a crucial benefit for international travelers. The Chase Sapphire Preferred also lets you turn your points into miles with a 1:1 exchange into Continental/United Airlines and British Airways. The introductory offer is tempting: spend $3,000 in the first three months and you'll earn 50,000 miles. Annual fee after first year: $95.

Starwood Preferred Guest/American Express
Best for: Hotel connoisseurs and travelers to Latin America.
Always wanted to stay at the W Barcelona or the St. Regis New York? Starpoints earned on this card can be redeemed at over 1,000 hotels in nearly 100 countries. The first time you use your card, you'll earn 10,000 Starpoints, enough for a free night at a 4-star property You can also transfer your Starpoints on a 1:1 basis into more than 30 frequent-flier programs. Travelers to Central and South America win especially big with this card — Starpoints are instantly doubled if you transfer them into LAN's frequent flier program. Annual fee after first year: $65.

American Express Premier Rewards Gold Card
Best for: Big spenders.
Do you put more than $2,000 a month on your credit card? This program will triple your points when you buy a plane ticket and double your points when you spend on gas and groceries. Because the annual fee is on the steep side, this card is a much better deal if you rack up a lot of charges on your card each month. Your earned points never expire; use them on any airline, anytime, by reserving a flight through American Express Travel, or transfer them into your preferred frequent flyer program. Annual fee after first year: $175.

Continental Airlines OnePass Plus Chase MasterCard
Best for: Continental/United frequent flyers.
The Continental/United frequent flyer program is widely considered one of the easiest to use-it often charges fewer miles to qualify for a free ticket than other programs do and there are fewer blackout dates. The OnePass Plus offers cardholders a free checked bag on any flight in the system (Continental charges $25 for the first checked bag), flexibility to change your reward travel dates for free up to 21 days in advance of travel, and a 25,000-mile bonus when you make your first purchase. Annual fee after first year: $95.

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