Airline vs Flexible Points Credit Cards: Which Should You Choose?

Travelers in the know recognize that there is much value to be had from applying for a credit card that earns travel rewards. However, with so many travel-themed cards on the market, it can be difficult to choose.

For example, should you stick to earning points with your preferred airline, or should you earn them with a bank’s flexible points program like Chase Ultimate Rewards and then transfer them to an airline’s program from there?

In this article, I run through the difference between flexible points and airline-branded credit cards, and weigh up the pros and cons of both. My aim is to help you make a more informed decision about which credit card/s you hold in your wallet, and how to maximize value from them.

Flexible Points vs Airline-Branded Credit Cards: What’s The Difference?

Woman making a purchase on her phone with her credit card

A flexible points-earning credit card is one that earns points in the currency of the bank. The four most common flexible points programs in the US are:

Chase Ultimate Rewards (one of my two favorites)
American Express Membership Rewards (my other favorite)
Citi ThankYou Rewards
Capital One Venture Rewards

Popular examples of flexible points-earning credit cards are: the Chase Sapphire Preferred and Reserve, and American Express Platinum and Gold cards.

In contrast, using an airline-branded credit card means you will earn points with the loyalty program of one specific airline. For example, a Southwest credit card will earn Rapid Rewards points. (Even though Chase is the bank that manages Southwest’s credit cards, you will not earn Chase Ultimate Rewards points—you’ll earn Rapid Rewards points.)

The other major US airlines team up with banks to run their credit card programs: Delta with American Express; United Airlines with Chase; and American Airlines with both Citi and Barclays. However, again, if the credit card you use has the airline’s name or logo on it, then you are earning points with that airline’s loyalty program, not with a bank’s flexible points program.

When You Should Choose A Flexible Points Credit Card

In short: most of the time. There are four main advantages of earning flexible points:

You’ll earn more miles

Flexible points-earning credit cards are usually more generous when it comes to earning points in the first place. For example, the popular Chase Sapphire Reserve card earns triple points on all travel and dining purchases. Many travel bloggers value Chase Ultimate Rewards points at ~2 cents each, meaning you’re getting a ~6% return on any travel or dining expense.

Compare that to the Delta SkyMiles Platinum American Express card, which looks just as valuable on paper as it also earns triple miles on Delta flights (not all travel spending.) However, SkyMiles are only worth 1.3 cents per point, you’re actually only getting a 3.9% return (compared to the Sapphire Reserve’s 6%.)

You’ll get more value when redeeming them

This is probably the biggest perk of having a flexible points-earning card. You have much more flexibility in how you use them.

If you’re looking for simplicity, you can use your points for things like cashback and gift cards (usually 0.5-1 cents per point value.) Moving up the value chain, you could choose to use your points to book flights, hotels and car rentals through the bank’s travel portal (usually ~1-1.5c per point value.)

Furthermore, you can get the most value from your flexible points by transferring them to one of the bank’s many loyalty program partners. For American Express Membership Rewards, you can choose between 17 programs, including Delta SkyMiles, Singapore Airlines KrisFlyer and Virgin Marriott Bonvoy. You’ll usually get over 1.5c per point value using this method, but this option does require the most research and expertise of the three mentioned above.

Your points won’t expire

As long as you keep your card/s open, your points with the bank’s loyalty program will not expire. This is in contrast to some airlines’ loyalty programs, which have a fixed expiration date, like after 18 months of inactivity.

Reduce the risk of devaluation

This one is a bit more of an advanced concept. Think of an airline’s frequent flyer points as a currency. Over time, the value of a currency, like the euro, changes. Sometimes it goes up and sometimes it goes down.

Well, over time, the value of most airlines’ frequent flyer points will most often go in just one direction—down. This is because as more consumers earn more points, the points flood the market and become less valuable.

Airlines periodically ‘devalue’ their award charts (all of the major airlines have done this at least once in the past five years.) This means that they make award redemptions more expensive (it rarely happens in the other direction.)

For example, your redemption for a one-way Economy Class flight from the US to Europe may increase from 30,000 to 35,000 miles overnight. And, really, the airlines don’t need to give you much (or any) advance notice of this. If you have all of your points pooled with just United, then you’ve just taken a ~16% hit to the value of your points—without notice.

Compare that to keeping all of your points in a flexible points program, like Chase Ultimate Rewards. If United increases the cost of their redemptions overnight, that doesn’t directly affect you. You still have 12 other loyalty program partners to choose from.

Put another way, if you had $10,000 in cash and wanted to invest in the stock market, would you use all of it to buy Google stock? Or would it be better to spread that money across a number of companies, or, better yet, a mutual fund? Having a flexible points-earning credit card diversifies your risk, which is a key investment strategy.

When You Should Choose An Airline-Branded Credit Card

There are three main scenarios in which it does make sense to apply for an use a credit card linked to one specific airline, so let’s have a look at those.

Qualifying For Elite Status

This is the main reason. If you are looking to earn or requalify for elite status with a particular loyalty program, then getting a credit card linked to that airline may make sense.

For example, getting a Delta-branded American Express card may give you a leg up in qualifying for status with SkyMiles. However, I would only suggest this when looking to achieve Gold status or above. (At the lower Silver level, benefits are quite limited.)

Earning A Companion Pass

A big draw of getting a Southwest-branded credit card is being able to qualify for a Companion Pass. If this benefit is achievable for and useful to you, then it may make sense to get a Southwest card.

Save Money On Baggage & Inflight Fees

Some airline-branded credit cards will give you a free checked bag and/or discounts on inflight food and drinks. For example, the AAdvantage Aviator Red Mastercard from Barclays gives cardholders one free bag when flying on American Airlines. You’ll want to crunch the numbers on this one.

For example, this card has a $99 annual fee and a checked bag costs $30 on American Airlines. So you’ll just want to ensure that you will fly at least three one-way trips with American Airlines for each year you have this card in order to justify the annual fee.

Bottom Line

Compared to consumers in other countries, we’re really lucky here in the US because we have so many credit card options to choose from. However, the banks and airlines are really slick at marketing, so it can be hard to accurately compare different cards’ benefits to extract maximum value.

In short, most travelers will get more value from applying for and using a flexible points-earning credit card. These points are more valuable than specific airlines’ points. They also help to protect you from the devaluation of airlines’ award charts.

However, it may make sense for you to apply for an airline-branded card if you are chasing elite status, or trying to qualify for a companion pass. It also makes sense when you know you fly that airline frequently and can get value from benefits like free checked bags.

Finally, remember that you can always have a number of cards in your wallet. (I, for one, have 18+ credit cards open at any one time—and a credit score of over 800.) You may choose to have a combination of flexible points- and airline points-earning credit cards, marrying the best of both worlds. Just remember to always pay off your balance every month, as paying interest your purchase will negate the any rewards.

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