Best airline credit cards

If you’re a frequent flyer a credit card that rewards you with ‘miles’ each time you spend on it can be a hugely valuable and useful benefit.

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With Christmas only a few weeks away, many of us will put more on our plastic at this time of year than at any other, making it the perfect opportunity to boost the number of miles you clock up.

As with any reward card, however, it’s vital that you try to pay off your balance every month, otherwise the interest you are charged could quickly outweigh the benefit of the miles you have earned.

It’s also worth noting that there have been some changes among the cards on offer recently and one of the most well-known schemes, ‘Airmiles’ is undergoing a major revamp later this month. Here, we explain what is happening, and give a rundown of the leading credit cards for regular travellers…

Airmiles changes

With effect from 16 November, Airmiles will be merged with the British Airways Executive Club and Iberia Plus frequent flyer programmes and will be re-named Avios miles. Points collected under the British Airways and Iberia Plus schemes will also from this date be called Avios miles.

The number of Airmiles people have saved up will be multiplied by ten to align them with the Avios scheme, but the number of Avios miles you will need to get to your destination will also go up by about ten times as well.

Some destinations will be cheaper to get to, while others will become more expensive. According to the new scheme’s website, 70% of routes will require fewer miles.

You can still collect points in the same ways – through Tesco, Lloyds TSB, Shell, eStore and more.

But the biggest drawback of the revamped scheme is that passengers will now have to pay taxes, fees and charges on flights separately.

These use to be included when buying flights using Airmiles, but the group claims this isn’t possible any more due to increases in Air Passenger Duty tax, which in the UK is 8.5 times higher than the European average.

The effects will be particularly damaging for those who store up points for use on long haul flights. While these were previously free, long-haul flights will now cost as much as £500 in taxes, fees and charges.

However, you can book flights under the Airmiles terms and conditions until 15 December 2011 over the phone, and online until 14 November. As long as customers book by these dates, they will be able to choose a free flight up to December 2012.

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Top airline cards

For those who are still keen to collect Airmiles, then the Lloyds TSB Airmiles Duo account, which comes with two cards, currently enables you to receive one Airmile for every £10 spent on the American Express card, and one Airmile for every £50 spent on the MasterCard.

You collect double Airmiles when you spend on your card abroad, and you will receive 150 Airmiles for every £1,000 you transfer to the card.

There is no annual fee and the card has a representative annual percentage rate (APR) of 15.9% (variable). BMI, Easyjet, Flybe, Ryanair and Virgin also offer airline credit cards that allow you to collect miles as you spend, with the reward schemes varying according to each airline.

The recently re-launched BMI card, for example, operates in a similar way to the Lloyds TSB card in so far as it is two cards – an American Express Credit Card from MBNA and a BMI Visa Credit Card.

You earn 3 destinations miles for every £1 spent on bmi flights booked at flybmi.com and earn 1.5 destinations miles for every £1 spent elsewhere using the bmi American Express Credit Card from MBNA.

When you use the BMI Visa Credit Card, however, you earn 1.5 destinations miles for every £1 spent on bmi flights booked at flybmi.com and earn 1.5 destinations miles for every £2 spent elsewhere.

You can collect an additional 20,000 destinations miles if you apply for the BMI Credit Card and make card purchases totalling £250 within 90 days of opening your account.

This card has a representative APR of 16.9% (variable) and does not charge an annual fee.

The Virgin Atlantic Black Credit Card account also offers two cards, an American Express card that gives you two Flying Club Miles for every £1 spent and four miles for every £1 you spend direct with Virgin Atlantic and Virgin Holidays, and a Visa card that gives you one Flying Club for every £1 spent, or two miles for every £1 you spend direct with Virgin Atlantic and Virgin Holidays.

The cards have a 0% introductory offer on balance transfers for the first six months, subject to a 2% handling fee. There is a hefty £140 annual fee however, which bumps up the cards’ representative APR to 47.2% (variable).

On the plus side, you don’t just have to put your miles towards flights – for example, 30,000 Flying Club Miles will enable you to travel in Standard Premier to Paris, Brussels, Lille or Disneyland Resort Paris on Eurostar.

If you don’t want to pay an annual fee, Virgin also offers the White Credit Card account, again which comes with an American Express Card and a Visa Credit Card, but which offers less generous rewards.

With the American Express Credit Card you’ll earn one Flying Club mile for every £1 you spend and two miles for every £1 you spend direct with Virgin Atlantic and Virgin Holidays.

With the Visa Credit Card you’ll earn one Flying Club mile for every £2 you spend and one mile for every £1 you spend direct with Virgin Atlantic and Virgin Holidays.

This card has a representative APR of 17.9% (variable) and no annual fee.

Other alternatives

For those who tend to fly with British Airways more than any other airline, American Express offers two different cards which enable you to collect BA miles.

With the American Express British Airways card, you collect one BA mile for virtually every £1 spent.

It also gives you 3,000 BA miles when you spend £500 in the first three months and spend £20,000 on your card in any given year and you’ll receive a companion ticket when you redeem your BA miles for a British Airways flight.

This card has no annual fee and a representative APR of 19.9% (variable).

There is also the American Express British Airways Premium Plus card, which for a limited time is offering an 18,000 bonus BA miles sign-up incentive for card members who spend £3,000 in their first three months.

You collect 1.5 BA miles for virtually every £1 spent using the card, and if you spend £10,000 on your card in a year and redeem your BA Miles on a BA flight, you'll receive another ticket for a companion for the same flight and cabin.

You also get double BA Miles when you spend using the card on British Airways flights and BA Holidays. This card comes with a representative APR of 19.9% (variable) on purchases, but once you factor in the high £150 annual fee, the APR shoots up to a steep 50.1%.

Ryanair’s Credit card meanwhile entitles cardholders who spend £100 within the first 90 days after signing their credit agreement to a return flight. If you spend £3,000 during one a six month period, then you will receive a return flight for two people.  This card has a representative APR of 19.9% (variable).

Please note: Any rates or deals mentioned in this article were available at the time of writing. Click on a highlighted product and apply direct.

We’re free, independent and compare all UK credit cards, as well as offering exclusive deals you can’t get anywhere else. Contact MoneySupermarket.com at Moneysupermarket House, St David’s Park, Ewloe, Flintshire, CH5 3UZ. © Moneysupermarket.com Ltd 2011.

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