Many airlines offer their own branded credit cards to their customers, and some of these cards offer enhanced frequent flyer points. For frequent travellers, these cards can be useful.
Frequent flyer programs are a means of attracting business travellers to restrict their flights to a particular airline, and they are often called airline loyalty programs for that reason. Most airlines do not manage to fill up all the seats on a flight, even on some busy routes, and the cost of an extra person or two on the flight doesn’t affect the airline’s profit margin significantly.
Frequent flyer programs are a way for the airline to offer these low-cost or no-cost flights and enhance customer loyalty. Unfortunately, this means there are some popular flights that aren’t open for frequent flyer points redemption. These low-cost flights can also be used as an inducement for flyers to register with the airline, allowing their flights to be logged and their behaviour tracked.
The frequent flyer programs work in a similar manner to credit card rewards programs. The credit card companies keep track of their customer’s behaviour and reward their purchases with points at a certain level for each dollar spent. Airline credit cards attached to an airline loyalty program are a natural extension of the original frequent flyer programs.
Airline credit cards outsource their payment processing, administration, and credit checking to a bank or other financial services provider. The airline handles branding and marketing, and often market the credit card to their loyalty program membership.
The airline offers the same reward, underused airline seats, just as it would with a frequent flyer program. However, the credit card also provides other rewards for spending, such as electronic gadgetry or gift cards, making the credit card more flexible than the loyalty program alone. However these credit cards tend to carry higher fees and interest rates. They’re best suited for people who are frequent travellers, who like travelling on the same airline, and who pay off their credit card balances in full every month.
