What are Reward and Frequent Flyer Miles, and how do they work?
It was once common that air miles were generally earned by borrowers who spent a great deal of time in the sky. Whether a business traveller or simply a travel enthusiast, a person could earn air miles for every trip they planned.
In recent years, travel and credit card companies have collaborated to reach a whole new modern day consumer public, with provision of air mile credit cards, which can earn users many free travel rewards.
What Are Air Mile Credit Cards and How Do They Work?
To provide a clear idea of how such travel rewards work, it is useful to briefly consider how standard reward credit cards operate. With a standard credit card, an agreed credit limit is set at the application stage. Balances are repaid in monthly instalments and cardholders are subject to the normal range of fees and charges.
The primary difference with reward cards is that consumers are literally rewarded every time they spend money on their card, with the standard process being that users earn a certain amount of points with every dollar spent. Specifically what the card is used to purchase is generally irrelevant, although there are few restrictions. Whether engaging in weekly shopping or using the card to fill up on fuel or on occasion holiday gift for purchases, consumers will earn points.
Bonus points, which are an added feature, can also be available whenever a cardholder makes a purchase with a specific partner company, such as Quantas Airline Partners. For retail outlets and credit companies this can be a very beneficial arrangement, which offers both mutual promotion and great consumer deals.
Rewards points are redeemed in the form of a wide range of items offered by the credit card company, ranging from beauty products to household and electrical goods. The variety of rewards depends upon the specific credit card lender.
What is the relation with Air Mile Rewards?
Travel rewards credit cards work in virtually the same way except for slight differences in how points are earned and rewards redeemed. Travel points are earned every time the credit card is used for purchases and bonus points when a travel ticket is purchased. These types of cards partner with airlines to provide bonus points for booking specifically through them. Redeeming earned points with air travel is also an option and so the more a consumer travels with the use of the credit card, the more points are earned and the more money saved.