Airmiles are now called Avios and you can collect the reward points in different ways including on a credit card. You will get the reward points awarded as you spend money on the credit card. Many people think that this type of reward card are well worth getting, but this can depend on how you use the card and the rewards.
You will obviously only benefit from Avios rewards if you fly and you know that you will be able to spend them on the flights that you make. Make sure that if you do have a card that you remember to use the rewards when you fly or that you can use them for the type of flights that you book. It can be worth reading the terms and conditions just to check.
The reason for being so sure is that you might be able to do better with other types of cards. Reward cards vary in the rewards that you get. Some allow you to collect points and some even reward you with cash. The amount that you get will be very small compared with the amount that you have to spend to get it and so it is a good idea to compare them and see whether there is a different type of card that might be better for you to use.
It can be tempting to spend more money on the credit card because you can see the points accumulating. Try not to do this though as the amount of reward that you get is tiny compared to what you have to spend. If you didn’t spend the money at all and put that in a savings account towards your flights you would be a lot better off.
It is also worth noting the interest rates. You will probably notice if you do compare the rates that the cashback, points and Avios cards are higher than some cards that do not offer rewards. This is because the rewards cards need to finance the rewards with something and they do so by charging more money. If you always pay off the full balance each month and therefore pay no interest then this will make no difference to you at all. However, if you only pay off the minimum balance or do not pay off the full balance then you will be paying interest on the card. It is worth checking how much this is and then calculating how much you are paying for those rewards that you are getting. You will see that you are paying more in interest than you are receiving in rewards and so it could be well worth switching to a card which has a lower interest rate.
Even if you do pay off all of the balance each month it could be worth considering whether a rewards card is best for you. If something happens to stop you being able to repay the card for some reason, then you may end up paying more than necessary. You could lose your job, have extra high expenses or some other change of circumstances which could lead to you not having enough money to pay back the card. It could even be worth keeping enough in a savings account to cover the cost of a card repayment to make sure that this does not happen and that you will not have to pay that expense interest unnecessarily.
It can be so easy to think that you are really benefitting from having an Avios rewards card or a similar card. However, it is really important to understand how much that card is actually costing you and that this could be more than the value of the rewards. So calculate how much you are paying for the card each month and then work out how much you are benefitting from it and if you are paying more, then consider swapping to a different reward card or a different type of card entirely that has a lower interest rate and therefore will be cheaper for you. It may take a bit of time to do this but it could be really worth it and you may even save so much money that you will be able to start paying back what you owe on the card and get yourself out of debt.