Written by
Frank Ascot, Business expert
, 2 May 2018

The first frequent flyer scheme started with United Airlines in the 1970s, and now most long distance airline carriers have one. The schemes have changed over time, but they’re essentially designed to spur loyalty towards a single airline or airline group. Loyalty has been tested in another manner too, some have stacked up so many miles that they have been called into the combined assets pool during divorce proceedings. Points (or "miles") are earned mainly based on flights taken or distance flown, which can be then be used as a currency to pay for future flights. Also though in recent years airmiles companies have partnered with other relative partners to allow point collectors to top up their miles in other ways – through Sainsbury’s Nectar Card and American Express Credit Cards for example.

Make sure to fill your travel detail completely and correctly to claim maximum discount on every flight ticket. BA Avios, Virgin/Delta and the Virgin Flying Club are three of the most sought after UK points schemes. You can combine any miles you earn from spending with those you earn from flying, or through other credit card reward schemes, such as converting Tesco Clubcard points.

If you are new to the schemes you need to be aware that when you've collected enough miles they can be converted into flights (though you still need to pay travel taxes and charges) but that availability is much more limited than when paying for flights. You need to ensure you're flexible when booking therefore

Credit cards and Airmiles - they work best for high spenders

Higher spenders can take advantage of the perks that some credit cards have, such as companion tickets and big intro bonuses, especially if you're willing to pay an annual fee. For example, the BA Premium Plus Amex below gives you a companion ticket if you spend £10,000/year on the card, but you need to pay a huge £195 annual fee. The BA Amex is the fee-free version, though you'd need to spend £20,000/year to get a companion ticket.

Clearly these cards do work better if you're a high spender, but they also only work well if you'll use the points you earn through them. If you don't but want to get something back from your credit card, you may want to consider a cashback credit card.

The best schemes are Amex-only, which is more limited

All the top cards for points chasers are American Express, which isn't as widely accepted as Visa or Mastercard.

Choose the right frequent flyer scheme for you

The British Airways Avios scheme is one of the most popular and can be great value. Yet if you never fly BA or aren't likely to start flying where BA flies to, it's unlikely to be worth getting a credit card earning Avios points. You might be better off with the Amex Gold which offers points for a variety of schemes.

Use these cards for ALL spending to max your point-earning potential

These cards are designed to encourage you to spend but obviously we'd never want you to spend more than you need. Instead, use the card for all normal day-to-day purchases. Then set up a direct debit to repay in full each month, avoiding the potentially high 25%+ interest rates incurred for missing a payment and you'll soon see the miles adding up.

You could max it even further by using the card for expenses if you need to reclaim them at work. This can be a powerful way to earn more miles at no cost to you, provided you can cope with paying the bill in full each month. Check with your employer though if they are happy to use the appropriate card. Consider too what aspects of your expenses could be classes as a taxable benefit as getting this wrong could over-ride the upsides of the points collected monthly.

Do you need other credit soon

You need to weigh up whether getting a premium credit card is going to harm other more important credit applications if you require more substantial credits limits in the not too distant future – multiple searches on your credit file can damage your chances of getting future credit including maximising a Mortgage application.

Section 75 consumer protection

If you buy something costing between £100 and £30,000, here or abroad, and pay on a credit card, the card issuer's equally liable with the retailer if something goes wrong. This protection only applies to credit cards, not debit cards or any other plastic, but it's hugely important.

The practicalities are that if you ordered and paid for something and the retailer went under before delivering the goods you'd still be able to claim your money back from the card company. It’s worthwhile, for example, booking your holiday with a credit card as this will ensure that you holiday obligations are fully met whether through the Travel Agency you booked with or via the Credit Card protection.

Written by
Frank Business expert
, 2 May 2018