Creditnet News Story
Consumers prefer frequent flier miles
Friday, August 20, 2010
By Linda McCarthy
When consumers choose a credit card that will offer them some sort of reward, they have a number of choices. However, one particular option still dominates the rest.
According to a report from the Wall Street Journal, consumers typically opt for a credit card that will pay them back in frequent flier miles, but often do so despite the fact that it offers them less value than other rewards programs.
"Travelers who buy frequent flier miles pay about 3 cents per mile, but redeem them for tickets at 1.5 cents each - or even less," the report said.
Several major airlines told the Wall Street Journal that they have seen massive upticks in mileage bonus programs. However, double- or triple-miles deals are often less cost effective than others. Getting double miles on a trip from New York to Los Angeles, for example, would cost an extra $81 one-way, but that's 3.3 cents per mile.
Consumers are looking for great rewards deals, but these cards also usually come with more fees or higher interest rates, meaning that it's important do some analysis to find how good of a deal these accounts are.
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