Welcome back to our Best Credit Cards in America series. We are pleased to announce that we will now be issuing awards each month in one of twelve categories. This month, we are presenting awards for the Best Credit Cards that offer Airline Miles.
The prospect of a free flight is so alluring that airline affiliated credit cards have always been some of the most popular reward cards offered. In addition, this category includes cards that earn points that can be redeemed for airline miles at a rate of 1:1 or better. This year, we narrowed down the field to cards that award miles with airlines that provide service to most major cities, either directly or through their partners. I am also setting a ceiling of $200 for an annual fee as I will be issuing an award for Best Premium card among those with annual fees above $200.
So how are these awards chosen? Starting from our existing formula that takes into account dozens of factors, I am weighting each score to represent the needs of a travel rewards card user. Accordingly, I am emphasizing the value and flexibility of the credit card and the program it earns points and miles in. But in addition to mileage rewards, I am also taking into account additional non-mileage perks and benefits such as checked baggage fee waivers. Finally, I am subtracting points for excess fees and restrictions.
Like all reward cards, those that offer airline miles should only appeal to cardholders who pay their balance in full each month. This can include cardholders who never carry revolving debt, as well as those who avoid interest by keeping a separate card for company reimbursed business travel only. Therefore, interest rates are not a consideration with these products. Those who tend to carry a balance have always been best served by eschewing rewards and using a low interest card or one with a 0% APR promotional balance transfer offer.
The Chase Sapphire Preferred card represents both the beauty and the brains of this category. Made from an incredibly durable and attractive plastic-metal sandwich, this card even feels different than its competitors. But it is the flexibility and value of Chase’s Ultimate Rewards program that remains unbeatable.
Why it won:
The rewards: New applicants can earn 40,000 Ultimate Rewards points after spending $3,000 within three months of opening an account. Cardholders then earn one point per dollar spent on most purchases, double points on travel and dining expenses, and triple points when they book their travel through Chase’s web site. These points can then be transferred instantly to points with Southwest airlines or miles with United, Korean or British Airways which are partners of Delta, US Airways and American, respectively. Therefore, cardholders have access to award seats on all major carriers in the United States. As a backup, travel on most airlines can be booked directly with points at a rate of 1.25 cents per point. This option means that the sign-up bonus can be worth $500 in airfare, hotels, car rentals, or cruises. Finally, cardholders receive a 7% points bonus each year when they renew their card.
The costs: This card has an annual fee of $95, but it is waived the first year. It also features no foreign transaction fees on purchases made outside of the United States.
Why it won:
The rewards: Like the Sapphire Preferred, the Starwood Preferred Guest card is an incredible way to earn airline miles, even though it is not co-branded with an airline. In fact, its strength is that it earns points in the Starwood hotels program that can be transferred to over thirty different carriers around the world. And when cardholders transfer 20,000 points to miles, they get a 5,000 point bonus. Therefore, each dollar charged earns 25% more miles than you would have with most airline credit cards. Finally, points can also be redeemed for any standard hotel room at Westins, Sheratons, and other Starwood brands with no blackout dates or capacity restrictions. New cardholders earn 10,000 Starpoints after their first purchase and an additional 15,000 Starpoints when they spend $5,000 in the first 6 months of opening a new account for a total of 25,000. Unfortunately, there are no categories of spending, other than at Starwood hotels, that allow cardholders to earn bonus miles.
The costs: There is a $65 annual fee that is waived the first year, but American Express charges a 2.7% foreign transaction fee on all charges processed outside of the United States.
Why it won:
The rewards: While the Sapphire and Starwood cards dazzle travelers with their wide array of point transfer options, the Southwest Airlines Rapid Rewards Premier card achieves greatness by offering outstanding value and incredible simplicity. Cardholders earn 25,000 bonus points after spending $1,000 in the first three months of opening an account, although some offers specify 50,000 points. Each point is worth about 1.75 cents towards their “Wanna Get Away” fare class, available on most flights. Without having to find scarce award seats, families and other groups can easily redeem points for several seats on any flight. And since Southwest never charges change fees and or luggage fees on your first two checked bags, passengers have no need for the perks offered by other major airline’s co-branded credit cards.
The costs: This card has a $99 annual fee, and some offer waive it the first year. Upon renewal, cardholder will receive 6,000 bonus points worth just over $100. And thankfully, Chase recently eliminated foreign transaction fees on this card.
If you’re interested in learning about other airline miles credit cards, you can research and compare more of them here.
At publishing time, the Chase Sapphire Preferred and the Starwood Preferred Guest Credit Card from American Express are offered through Credit.com product pages and Credit.com may be compensated if our users apply for and ultimately sign up for these cards. However, this relationship does not result in any preferential editorial treatment.