Travel credit cards offer some of the best rewards you can get by using a card. Just by using airline credit cards you can easily earn free flights, hotel stays, or vacation packages, saving you money on every vacation that you take.
In the past, co-branded airline credit cards — that is, credit cards associated with one airline — have been among the most popular travel cards on the market. Recently, though unbranded cards like the Chase Sapphire Reserve or the American Express Platinum have made waves in the travel card space, leaving the question: are co-branded airline cards worth having anymore?
Co-branded Cards are Restrictive, Unbranded Cards Are More Flexible
The primary reason that unbranded airline credit cards have outpaced co-branded cards is that they offer better redemption flexibility. With a co-branded card, you’re forced to use just one airline or its partners, if you want to redeem your miles. Unbranded cards have no such restriction.
Consider the Chase Sapphire Reserve card. The card offers a welcome bonus worth $750 when redeemed for travel, and you can redeem this credit with any airline that you’d like. There are no blackout dates or worries about maximizing the value of your points. You can even use the leftover points for booking a hotel or rental car.
On top of the sign up bonus, the card offers $300 in travel credit each year, redeemable on any airline, hotel chain, or even with public transportation systems.
By comparison, the Delta Reserve card offers a sign up bonus with a similar value, but you can only use the rewards on Delta flights. You’re tied to following Delta’s schedule, even if it isn’t the most convenient for you.
Unbranded Cards Have Generous Benefits
To go along with their flexibility, unbranded airline credit cards have generous perks that are suitable for any traveler.
An example of this is the American Express Platinum card. Cardholders can get a $100 credit towards TSA Precheck or Global Entry. These services let travelers speed through security and customs, no matter the airline they use. The card also comes with a free membership to Priority Pass, a network of airport lounges featuring free snacks and drinks and cushy chairs.
What Makes a Branded Card Worth Having?
The advantage that co-branded cards have other their unbranded competitors is that they have the option to be more generous when it comes to perks. Where unbranded cards have to pay for each perk they provide, branded cards can simply waive fees when cardholders fly with them.
Delta cardholders, for example, get free checked baggage and priority boarding when flying with Delta. Jetblue cardholders can enjoy discounts on in-flight purchases. If you have a Southwest credit card you can use in-flight WiFi for free and upgrade your boarding status a few times a year.
To successfully compete with unbranded cards and their highly flexible rewards and perks, co-branded airline cards must give customers a reason to be loyal to one airline. That requires these repeatable perks, like free checked baggage and discounts on in-flight purchases.
For most travelers, even the best co-branded credit cards won’t be the best deal on the market. Most people do not travel often enough to get significant value out of the perks co-branded cards offer. Avoiding one $25 baggage fee is nice, but you might value the flexibility of an unbranded card more than an extra $25. If you’re flying every month, then saving $25 on baggage fees twelve times a year is a huge benefit.
Travelers enjoy perks, but one of the top reasons to use a travel credit card is free travel. To compete with flexible rewards cards, co-branded cards also have to offer a better value when it comes to free travel. That means strong sign-up bonuses and ongoing rewards that outpace unbranded card’s earning potential.
Many airline cards offer additional miles when you use the card to book flights, but fall short when it comes to earnings in other categories.
Who Should Get a Co-Branded Travel Card?
Co-branded airline credit cards make sense for a very specific group of consumers: frequent fliers who are loyal to a specific airline or who are willing to be loyal to an airline.
Much of the value that co-branded travel cards offer is tied to recurring perks, like free checked bags and priority boarding. The only way to get more value from these perks is to fly more often. Benefits that reset annually, such as those offered by the Chase Sapphire Reserve, don’t rely on frequent travel. In fact, most consumers can get the full value of these benefits by traveling just once each year.
If you fly for business or simply travel multiple times a year for other reasons, then a co-branded airline card may be worth getting. Remember, the card’s perks are tied to that airline, so you won’t get full value from the card if you use a competitor. You’ll want to choose a card that is paired with an airline that flies the routes that you take. If you live near one of a particular airline’s hub cities, you should probably get a card from that airline since you’ll probably fly that airline more often than others.
The other scenario where getting a co-branded card can make sense is if you have a specific redemption in mind. For example, you might know that you want to take a flight from Boston to Orlando next summer and that a round-trip flight usually costs 25,000 points. You might want to apply for a JetBlue credit card to earn points that you can redeem toward the flight, even if you don’t plan to use the card for the long-term.
Frequently Asked Questions
If you’re considered applying for a co-branded airline credit card, these are some of the most frequently asked questions.
Are airline credit cards a good idea?
Airline credit cards can be a good idea for some travelers. While many people will get more value out of more flexible travel cards, people who travel a lot and who are loyal to a specific airline can get a lot of value out of co-branded airline cards.
Are credit cards with airline miles worth it?
Credit cards with airline miles are definitely worth it. Whether you have a card that earns miles with a specific airline or a card that offers generic miles that can be used with multiple airlines, the chance to earn free travel is a great one. You can earn free flights just by using the card, saving you a lot of money when you want to go on a trip.
Which airline has the best credit card?
It’s hard to choose the airline with the best credit card because that really depends where you live and where you like to fly. You might not live near an airport serviced by a select few airlines airlines, or other airlines might not fly the routes that you need to fly for work or in your personal life.
But as far as co-branded credit cards go, Southwest is an airline that has some of the best credit cards. Each card has a lucrative signup bonus and rewards cardholders with extra points on your cardmember anniversary. They also let you earn points toward the companion pass, which lets you fly someone else. virtually for free. If you earn enough points to qualify, you’ll a free ticket (you still pay taxes and fees) for a companion of your choice on every flight that you book for the rest of the year plus the next calendar year.
Even if you don’t want to book flights, you can redeem Southwest miles for gift cards, giving you a way to cash out your earnings to use them beyond just Southwest-related purchases.
How do miles work on credit cards?
When you earn miles with a credit card those miles are added to your frequent flier account with the partner airline. For example, if you have an American Airlines card, you’ll earn AAdvantage miles whenever you use it.
You can redeem airline miles for free travel with the airline. Each airline’s miles have different values and some airlines offer alternative redemption options, such as redemption for gift cards from partners.
Pros and cons of getting an airline credit card
- Earn free travel
- Perks whenever you fly with your chosen airline
- Earn airline status faster
- Perks don’t apply on other airlines
- Rewards are less flexible
- You must fly frequently to get the most value out of a card