The small business owner has two basic choices when considering a mileage-based rewards credit card: an airline specific card or a generic card. As the name implies, an airline specific card is tied to one airline brand. Mileage points earned on these types of cards are limited to the sponsoring airline and its partners. A generic card allows you to convert points to mileage credits on any airline.
I recommend that my small business clients concentrate on one airline's frequent mileage program to accumulate sufficient mileage points for free or reduced-cost travel faster, but that does not mean that an airline specific card is equally advantageous.
While there may be only two types of cards, there are a myriad of options within each category. Deciding which card is best for your small business depends on a number of factors.
Frequency of Travel
Frequency of travel can definitely influence which cards are of the most benefit. Annual fees can run as high as $95 for cards that are tied to a specific airline, while many of the generic cards offer lower or even no annual fee products. If you don't travel enough to recover the annual fee, a generic card may be the way to go.
In addition to the frequency of business travel, take a look at how much your average business flights cost. The typical mileage point is worth a little over a penny. Flights costing $275 or less will most likely cost you more in mileage points than if you paid cash. Save the points for more cost-efficient rewards.
Benefits of Generic Cards
Generic cards are much more likely to offer introductory rates and bonuses than airline-specific cards. In some cases, generic cards will require fewer mileage points to earn a free ticket than the cards tied to a specific airline carrier.
Another benefit of a generic card is the ability to search for the best airline deal and earn mileage regardless of which airline you choose to fly. Many generic cards also offer no restrictions and no black-out dates. Airline-specific cards may not be so flexible and may limit the number of seats available for mileage redemption on a flight.
Benefits of Airline-Specific Cards
Cards tied to a specific airline carrier may offer exclusive perks, including: free first-class upgrades, free checked baggage, and quicker status promotions in the frequent mileage program of that particular airline.
In addition, airline-specific cards track a customer's usage and verifying mileage credits is relatively easy. Also, some generic cards charge a fee to convert points earned on a card to airline miles while airline-specific cards generally do not.
Some airline cards may admit the holder to exclusive airline lounges at certain airports. Many of these lounges provide business services like internet access, fax services, and a library of newspapers and business periodicals that can be especially beneficial on a work-related trip.
There are caveats with both types of cards, including:
Pay on Time
Be sure to pay your bill every month regardless of which mileage card you use. Companies can withhold mileage points and bonuses on delinquent accounts. In some cases, there may be a reinstatement fee imposed once the account is brought current.
ExpirationMake sure to read the fine print. Points may not last forever; and, if you won't rack up enough miles to earn a free flight before they expire, any mileage-based card may be no deal at all.