What's the point of an airline credit card?

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JetBlue Virgin Atlantic Partnership

If you use a credit card regularly, have you considered getting one that could help pay for a holiday – or at least your flights?

It might take a while – we're probably talking about a break in 2017 – but an airline card could make a hefty contribution towards a future trip.

First things first, though: using a credit card is a serious financial commitment, and you should never get into debt purely to obtain rewards or benefits. The benefits should flow from normal card usage.

So here's how airline credit cards work...

Redeemable points

With an airline credit card, you earn points on your spending which are redeemable against the cost of a flight.

Linked to named airlines such as Virgin Atlantic or British Airways, these cards offer Avios points (the replacement for Airmiles). In addition to flights, they can be used to help buy hotel stays, ferries and car hire.

Typically, 20,000 points would get you a return flight from Manchester to Moscow. With 9,000 Avios points you could pay for a return flight from London to Berlin.

One of the leading airline cards is the American Express British Airways Premium Plus, but note the chunky £195 annual fee.

You get: 25,000 bonus Avios when you spend £3,000 within the first three months, as well as a companion voucher each year when you spend £10,000 on the card. This allows a partner or friend to travel with you at no extra cost.

In addition, you'll get three Avios points for every £1 spent with British Airways and 1.5 Avios for every £1 you spend elsewhere.

You pay: As noted, the card has a hefty £195 annual fee, so it's only going to make sense if you're going to spend enough to outweigh what it costs you.

Also be aware that, if you don't clear your balance in full each month, you'll be charged interest at a rate of 22.9% pa (variable). The card has a representative rate of 76% APR (variable)*.

For regular Virgin Atlantic customer, the Virgin Atlantic Black Credit Card will be of interest.

You get: This account functions with two cards – an Amex credit card via MBNA and a Visa card.
You get two Flying Club miles for every £1 spent with the Amex card and one mile for every £1 spent using the Visa card.

And you'll get 18,500 miles when you make a purchase within the first 90 days of opening the account.

You pay: The account has a £140 annual fee and the cards have an interest rate of 22.9% pa (variable) if you don't clear the balance every month. The card has a representative rate of 57.4% APR (variable)**.

Those who'd prefer to pay no annual fee can consider the American Express British Airways credit card. Here, you get one Avios point for every £1 you spend and 9,000 bonus points if you spend £1,000 or more in the first three months of having the card.

Again, the card charges 22.9% pa (variable) and has a representative rate of 22.9% APR (variable)***.

Another option is TSB's Avios credit cards.

Here, you get one Avios point for every £1 spent on the Avios American Express card and one point for every £5 spent on the Avios Mastercard.

You can double your points on eligible spending overseas.

The interest rate here 17.95% pa (variable), and the cards have a representative rate of 17.9% APR (variable)****.

*Representative Example: If you spend £1,200 at a purchase interest rate of 22.9% p.a. (variable) with a £195 annual Fee your representative rate will be 76% APR (variable).
** Representative Example: If you spend £1,200 at a purchase interest rate of 22.9% p.a. (variable) with a £140 annual Fee your representative rate will be 57.4% APR (variable).
*** Representative Example: If you spend £1,200 at a purchase interest rate of 22.9% p.a. (variable) your representative rate will be 22.9% APR (variable).
**** Representative Example: If you spend £1,200 at a purchase interest rate of 17.95% p.a. (variable) your representative rate will be 17.9% APR (variable).
All credit cards are subject to status and terms and conditions. Over 18s, UK residents only. Terms and conditions apply. See MoneySuperMarket.com for further information.