What are the differences between airline miles vs credit card rewards points?

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Answered by: Megan, An Expert in the Air Travel - Airline Mileage Programs Category
Most of us don't think about whether airline mileage programs are any different from our bank's credit card that offers us travel rewards points. On the other hand, air travel can be so expensive and many of us just want to cut down our costs any way we can. So it is important to understand what we are getting from various travel reward programs so we can make informed decisions about how best to purchase those tickets to our dream vacations. How do we know when to use airline miles vs credit card rewards points?

Nearly all airlines offer some type of mileage program. Delta has SkyMiles, Southwest has Rapid Rewards, United has MileagePlus, American has AAdvantage, and so on and so forth. These mileage programs are offered directly through airlines. But then there are credit cards like the Chase Sapphire card and the Capital One Venture card that give us points we can redeem for airline tickets as well. These are not offered directly through airlines. Now, we wouldn't think this would make any difference. Points or miles - either way we are cashing in rewards towards an airline ticket that we now don't have to actually pay for with real money.

However there are definite pros and cons to each type of reward program. The problem with using airline miles is that the airlines are offering the miles to you directly - meaning that no one is paying them real money for the ticket. And let's face it - no large company wants to give things away for free unless the absolutely have to. This can have a number of implications, depending on the specific program in question. The airline may have some sort of capacity control system in place that limits the number of seats that can be purchased with frequent flyer miles. Or maybe they impose blackout dates that don't allow you to purchase flights on certain days with your frequent flyer miles. And of course it's hard to use your Delta SkyMiles if the only flight that works for your schedule and travel cities is with American Airlines. The flexibility we have with airline miles can be very limited.

A lot of these issues can be avoided with credit card-specific reward points. With these transactions, we redeem points given to us by the financial institution as a reward for using their service, and the institution turns around and buys these tickets for us. What this essentially means is that the airline cannot differentiate between a point redeemer and a regular customer - because they are seeing the money either way. Therefore, a lot of these restrictions mentioned above do not apply. We can use our credit card reward points for any flight with no blackout dates no matter how else anyone else on that flight purchased their tickets.

This seems a lot more ideal, but there are some pros to using straight airline miles. Booking directly through an airline can create a much more seamless experience. If we're booking through a third party like our credit card rewards travel program, we can run into some problems. Airlines view these bookings as travel agency bookings and will require the customers to process any changes or cancellations through the credit card institution, even when when such a change may be necessary due to actions of the airline - such as a flight schedule change or cancellation. In these situations, third party travel agencies often have very limited ability and authority to do anything for their customers, which can lead to some tough situations where a customer is being given the run-around between the airline and the credit card company. Situations like this do not happen as often when tickets are booked through an airline directly. Also, travel agencies and credit card companies often do not have the ability to offer special fares such as bereavement rates.

What it all boils down to is that a frequent traveler should take into account their own specific habits when deciding between using airline miles vs credit card rewards points. Is the traveler someone who often travels alone and usually sticks with a single airline and is flexible about when and what flights they can take? Then an airline mileage program may be better suited for this traveler. Is the traveler just looking for the very best deal and is not brand loyal, and maybe needs to take a specific flight at a specific time and date? Then maybe a credit card rewards program is the best option. It all depends on the specific needs of the traveler.

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