Airline credit cards

Card companies offer reward schemes to encourage you to spend on their cards so they can earn interest from you. If you don't repay a reward card IN FULL, the interest cost will dwarf any gain you get.

Always set up a direct debit to repay the card in full each month, so you'll never pay interest.

Higher spenders can take advantage of the perks that some of these cards have, such as 'companion tickets' and big intro bonuses, especially if you're willing to pay an annual fee.

What is a companion ticket?

A companion ticket allows you to take someone else with you when you pay with airline points, under similar or the same conditions, for no extra points.

In other words, if you're flying premium to Miami, they come for free in the same class. However, you have to pay taxes and charges for both tickets.

For example, the British Airways Premium Plus American Express (Amex) card below gives you a companion ticket if you spend £15,000/year on the card, but you need to pay a huge £300 annual charge. This gets you a 'free' ticket for someone travelling with you in the same class when you use points to buy a seat. Though you still pay taxes and charges. 

The British Airways Amex is the fee-free version, though you'd also need to spend £15,000/yr to get a companion ticket, and on this card the companion ticket can only be used in economy class.

If your card offers companion tickets, it's worth waiting until you've got the companion voucher before spending your airline points as you get much better value from them. Though be aware they're usually only valid for a year or two.

They're a tool to get you rewards by using them like a debit card and clearing them each month, and we rate them based on that.

If you need to borrow as well, you're far better off focusing on getting the lowest interest rates – that'll save you much more money. See 0% credit cards for spending for more info.

And when it comes to withdrawing cash the rule is simple – never, ever, ever use these cards for cash withdrawals as you'll generally be charged a fee and interest, even if you pay the card off in full.

These cards are designed to encourage you to spend – but never spend more than you need to. Instead, use the card for all normal day-to-day purchases then set up a direct debit to repay in full each month and you'll soon see the points adding up.

You could max it even further by using the card for work expenses if you need to reclaim them. This can be a powerful way to earn more points at no cost to you, provided you can cope with paying the bill in full each month. Check it's fine with your employer though, and there's a chance it could be seen as a taxable benefit (though you'll still be up even if it is).

Can I add an additional cardholder to my account to boost points?

Yes, you can. By doing so, both your spending collects the points. This technique is particularly useful for cards that need you to hit a certain target to get a free companion flight.

Remember: with credit cards there's no such thing as a joint card – it's your card and you're giving them permission to spend on it. Any spending is yours to pay off, not theirs.

See Joint credit cards for what you need to watch out for.

Can I buy extra points?

You can with most schemes mentioned in this guide, so you can top yours up if you're short. Better still, if you're collecting airline points and also redeeming a companion flight, you'll earn points doing so, so in effect you get double the value.

Once you've joined your scheme, you can buy extra points at the Avios website or via British Airways.

With an Avios credit card, you do also have the option to part-pay, so you pay with a mixture of Avios and cash. 

From our research, we found it's generally cheaper to part-pay in Avios points on the flight-booking pages than buying extra points, especially as you can only buy points in 1,000 increments. However, Avios occasionally holds offers where it will add bonus points to any you buy, so check if one of these deals is on first.

You need to weigh up whether getting one is going to harm other more important credit applications you may have on the horizon – multiple applications mean multiple searches on your credit file, and in a short space of time these can damage your chances of getting future credit.

So if you think you'll need to apply for important credit soon, such as a mortgage, hold off applying as you'll need to spread out your applications.

Sign up to MSE's Credit Club and use our free tools to see how the financial world views you.

When you collect airline points, such as Avios or Virgin Flying Club points, you can redeem them for reward flights – though you still have to pay taxes and charges on top.

When we checked from London Heathrow, an off-peak economy return flight to Paris cost 9,500 Avios plus £35 in taxes and charges, while New York cost 26,000 Avios plus £420 – see our Avios tricks guide for more.

Under Virgin's Flying Club frequent-flyer points scheme, Heathrow to New York on an off-peak return flight in economy cost 20,000 Flying Club points plus £279 in taxes and charges, while Dubai cost 20,000 points plus £246 in charges.

To show you what you need for each destination, and what counts as peak/off-peak dates, see the Avios 'search and book' page (you'll need to log in to your BA Executive Club account) or Virgin's Flying Club reward flights page.

The availability of reward flights is much more limited than when paying for flights normally, so you'll have to go quick and be as flexible as possible.

Tactically, the ideal time to start checking is around a year before – this is when seats start to be released (see flight release dates). Though keep checking, as sometimes there are no seats available when a flight's launched, but extra seats are released later.

If you want to fly at peak times such as Christmas or school holidays, booking well in advance is usually essential. Use British Airways' search and book page to check for availability (you'll need to log in to your Executive Club account), or Virgin's reward flights calendar.

Unfortunately, it's usually not possible to transfer air mile points between different schemes, so once you earn points with a particular scheme you're stuck with it. 

Most schemes will allow you to transfer points to another member, however, though this can sometimes incur a fee and there can be limits on the number of points you can transfer per year.