What Is an Airline Credit Card and How Does It Work?

You may never pay for checked baggage again.

A savvy businessman in a blue suit enjoys the sumptuous buffet at an exclusive airport lounge, which his airline credit card has given him access to.
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Whether you fly often for work or because you simply love to travel, it can make sense to pick up a co-branded airline credit card. Unlike cash-back credit cards and general rewards credit cards, airline cards are co-branded with a specific airline and their frequent flyer program. This means you can qualify for airline-specific perks and earn bonus miles for each dollar you spend on your card. 

Some airline credit cards even offer a “fast track” to elite status that can benefit anyone who wants airline perks like priority boarding or complimentary upgrades to a premium cabin. And who doesn’t want that?

How Do Airline Credit Cards Work?

Airline credit cards work in conjunction with a frequent flyer program, meaning you’ll earn miles with the airline’s program when you use your credit card to make purchases. Most airline credit cards offer more points (usually 2 miles per $1) for purchases made with the airline and only 1 mile per $1 spent on other purchases. However, some airline credit cards offer other “bonus categories” that dole out more rewards, like spending at gas stations or restaurants. 

So yes, you can use your airline credit card to earn miles on airline purchases, but you can also use your card to earn miles when you pay for bills, groceries, gas, and other miscellaneous purchases. This makes it easy to earn a lot of miles if you have plenty of ongoing expenses you can cover with plastic.

Another initial benefit of airline credit cards is the fact that, most of the time, you’ll earn a big sign-up bonus if you can meet a minimum spending requirement. Most airline credit cards give you 30,000 to 60,000 miles if you can spend, say, $1,000 to $3,000 on your card within three months. 

That’s just a range of miles you can earn and these offers change all the time. However, you can see how earning an initial welcome bonus could give you a leg up when it comes to earning free flights. 

Of course, if you can’t pay off your credit card balance every month, these seemingly “free” perks and flights can start costing you a lot of money in interest. That’s true for every credit card, but especially true with rewards cards, which generally feature higher APRs. 

Airline Credit Card Perks 

Now that we’ve discussed how you can use an airline credit card to earn miles with your favorite frequent flyer program, let’s break down all the other benefits you can get.

For starters, some airline credit cards give you airline-related perks such as priority boarding, a free checked bag, or entry into the co-branded airport lounges around the globe. As a general rule, however, the more benefits you get, the higher the annual fee.

As an example, the Delta Reserve Credit Card from American Express grants you automatic entry into Delta SkyClubs, which normally costs $545 per year or more, plus complimentary upgrades, a free checked bag, priority boarding, and more. On the flipside, you’ll have to pay a $450 annual fee.

If you want fewer perks, there are plenty of airline credit cards that will set you back as little as $75 per year—and some even waive the annual fee for the first 12 months. 

Using an Airline Credit Card to Earn Elite Status

So, an airline credit card can help you earn miles on your spending and qualify for special frequent flyer perks, but what else? The next layer of benefits involve elite status, which may not be important to consumers who don’t fly very often. 

If you do travel a lot and want to pursue elite status with an airline, however, here are the key points you should know.

  • You can get more miles: Elite status with an airline can help you earn more miles on airfare purchases since many offer a higher earning rate for their elite members. For example, earning AAdvantage Gold status with American Airlines means you’ll earn 40% more miles on airfare than non-elite program members do.
  • You can get more upgrades: Picking up an airline credit card can also help you qualify for elite status perks like complimentary upgrades, preferred seating, priority wait listing, waived baggage fees, priority boarding, and more. 
  • You may need to spend more: Requirements to earn elite status vary by frequent flyer program, but they normally include a minimum spending requirement along with a minimum flight requirement such as miles flown or flight “segments” flown. 
  • You may get a boost toward status: Some airline credit cards give you a “boost” toward elite status, such as bonus miles to use toward your mileage requirement. You may also get a spending requirement waived with the airline if you spend a minimum amount on your credit card each year.

    Should You Get an Airline Credit Card?

    If you’re trying to decide between an airline credit card and a general rewards credit card, that can be a tough choice. General rewards credit cards tend to offer more flexibility in how you redeem your rewards, but they won’t give you the airline perks you can get with a co-branded airline credit card. And both offer valuable signup bonuses that can help you earn a free flight (or two) right away.

    Either type of rewards card can benefit you, so it’s up to you to decide which credit card perks and benefits you want the most. And if you can’t, you may have to pick up an airline credit card and a general rewards credit card so all your bases are covered.