Tags: airline | reward | cards | MarketWatch

MarketWatch: Airline Rewards Cards Are Sinking in Value

By    |   Tuesday, 04 March 2014 12:22 PM

Airline rewards cards are not what they used to be, and consumers may want to consider switching to other types of cards due to the devaluation of frequent-flier programs, MarketWatch reported.

Delta, Southwest and United are among the airlines making mileage changes that render the cards less attractive.

“Miles are being devalued across the board,” said Anisha Sekar, a credit card analyst with comparison site NerdWallet.com.

Odysseas Papadimitriou, CEO of CardHub.com, said among the reasons are that air travel is already a low-margin industry, and that there is a surplus of unused points already in circulation.

Charles Tran, founder of CreditDonkey.com, said many travelers simply do not get enough benefits from branded airline cards to justify them.

“Unless you’re a frequent international premium class flier, general travel reward credit cards tend to be more lucrative, and easier to redeem,” Tran said. “With airlines constantly devaluing miles and limited award seat availability, credit cards with travel rewards often offer the flexibility to just redeem the miles/points toward any travel.”

MarketWatch said the credit card experts it contacted recommended the Barclays Arrivals Card as an alternative to branded airline cards. Among its features, the Barclays card offers 40,000 bonus miles when you spend $3,000 in the first three months, and users can earn two miles for each dollar spent and 10 percent miles back.

MarketWatch suggested consumers may also want to consider the Chase Sapphire Preferred Card, which has a similar 40,000 bonus mile feature, plus double points on travel and dining and no foreign transaction fees.

The Capital One Venture Rewards card also got high marks.

Sekar suggested that consumers who do not travel much may want to consider cash-back cards instead.

In a separate credit card analysis, CBS MoneyWatch investigated which credit cards offer consumers the best hope for security and protection from fraud or theft. CBS said a study from Javelin Strategy & Research showed among the best in that category were cards issued by Bank of America, USAA and Wells Fargo.

In a column for re/code.net, veteran technology writer Walt Mossberg suggested the future for digital payments may include something other than plastic credit cards. Mossberg said a new startup, LoopPay, a smartphone-based digital wallet that does not require modifying either consumers’ phones or the card readers used by businesses, may hold promise if it can work out some technology kinks.


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Airline rewards cards are not what they used to be, and consumers may want to consider switching to other types of cards due to the devaluation of frequent-flier programs, MarketWatch reported.
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Tuesday, 04 March 2014 12:22 PM
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