Credit cards: How do air miles work and what are their benefits? | Mint

If you are a regular traveller and use airlines on a frequent basis for the purpose, the rewards that you earn on your credit card spends can be utilised for booking flight tickets. Card issuing banks offer free air miles for your spending in select categories, which can then be redeemed for booking flights. Though most high-end credit cards offer air miles based on your spending, it is better if you have a co-branded travel credit card for the purpose as it will offer you higher benefits.

What are air miles and how do they work?

Air miles are one of the major credit card reward categories—along with cashbacks and reward points. The air miles programme works just like rewards. You earn air miles based on your purchases, which would vary vastly depending on the card that you use and the category in which you spend the money.

In the case of regular credit cards, the option of converting your rewards into air miles is available in the online portal of the card issuing bank. After converting your rewards into air miles, you can transfer them to the airline of your choice from the list of eligible ones.

But do remember that air miles do not translate into the actual miles that you can travel. For instance, if you have accumulated 3000 air miles, it does not mean that you can fly 3000 miles for free. It is the airlines that set the ratio in which the air miles can be utilised for booking tickets.

Spending on travel will earn you more air miles than in other categories. Air miles work well with co-branded credit cards. They offer high air miles for travel spending with the ratio varying from 2 air miles for every ₹100 spent to 24 air miles for spending ₹150.

Co-branded credit cards, where the card issuer has a tie-up with a leading airline, offer complimentary membership to the airlines’ frequent flyer programme and a host of other benefits including free access to airport lounge, priority check-in, excess baggage allowance and low foreign exchange mark-up fee.

Which cards/spending are eligible for earning air miles?

Air miles rewards are not available on basic credit cards. You will not be able to earn air miles for spending on fuel, e-wallet loading, payments towards rent/property management, spending on school and education services, utility and insurance transactions.

Most credit cards that offer air miles would have a joining and annual fee, which is typically used for giving a sign-up bonus. The bonus would be in the form of air miles. Card issuing banks also reward customers for achieving a specified spending threshold. If you have a co-branded travel credit card, the reward would be in the form of a milestone bonus that would give you more air miles. You can also sign up to an accelerated rewards programme to get higher air miles.

How can you redeem your air miles?

If you have a co-branded travel credit card, you typically get a complimentary membership to the airlines’ frequent flyers programme. So, you can redeem your air miles directly while booking tickets on the airline’s website or mobile app. If you do not have membership, you should register for the same for redeeming the air miles.

For other credit cards, you can transfer the air miles to the airline of your choice and then redeem the same.

Here are some of the best co-branded travel credit cards that offer high air miles

Air India SBI Signature Card: https://www.sbicard.com/en/personal/credit-cards/travel/air-india-sbi-signature-card.page

InterMiles HDFC Bank Signature Card: https://www.hdfcbank.com/personal/pay/cards/credit-cards/intermiles-hdfc-bank-signature

Axis Bank ATLAS Credit Card: https://www.axisbank.com/retail/cards/credit-card/axis-bank-atlas-credit-card

Club Vistara IDFC First Credit Card: https://www.idfcfirstbank.com/credit-card/vistara-credit-card

Allirajan M is a journalist with over two decades of experience. He has worked with several leading media organisations in the country and has been writing on mutual funds for nearly 16 years.