Credit cards are a convenient method of making purchases especially when you are low on funds. However, convenience can become expensive. Research has confirmed that people spend more on credit than they do on cash and that’s simply because they don’t have the cash to spend. Prior to applying for a credit card you should carefully consider why you want the card, compare credit cards and think about how you intend on making purchases. One of the reasons why people open credit card accounts is for the frequent flyer points; here are some ‘points’ to consider before getting one.
What are frequent flyer points worth?
The value of your frequent flyer points are determined according to the way you choose to redeem them. International flights, domestic flights and consumer goods all vary in their rates of return.
The problem with frequent flyer points is that you have to spend money to earn them, so if the amount you are spending is more than the free ticket you are trying to accumulate points for, it becomes counter-productive.
How are points earned?
There are many ways that you can earn points; these include using travel money cards or shopping with airlines.
It is difficult to work out how many points you will earn on a particular flight, because rates depend on the airline that you choose to fly with, whether you are taking an international or a domestic flight, your status credit and the fare and class that you choose among other things.
How to compare credit cards
There are several factors that you should consider when comparing credit cards. These include fees, credit card features and interest rates.
A simple way of comparing credit cards is to use the ‘key facts sheet.’ You can request them from the credit card issuers. The fact sheet will contain the following information:
- Late payment and annual rate fees
- Interest free period
- Promotional interest
- Frequent flyer miles
- Minimum payment
- Interest rates on cash advances and purchases
- Interest rates on balance transfers
Frequent flyer points are not equal, as you have read the amount that you will get is determined by different variables such as the airline that you choose to fly with. Therefore it is important to weigh up whether or not frequent flyer points should be on your list of priorities when you compare credit cards.