Are frequent flyer credit cards worth it?

By   |   Verified by Andrew Boyd   |   Updated 30 Sep 2023

You may have heard that frequent flyer credit cards are not worth it. At Finty, we disagree. But how would we know? We’ve only earned and redeemed millions of frequent flyer points to fly ourselves, family, friends, and co-workers around the world.

Here’s why we are firmly in the camp that sees value in frequent flyer credit cards.

13 reasons why frequent flyer credit cards are worth it

13 reasons why frequent flyer credit cards are worth it

If you aren't convinced about the value you can get from a frequent flyer credit card, scroll down.

1) Premium seats are not just for the wealthy

Last time I checked, I was neither rich nor famous. But thanks to earning frequent flyer points — mostly thanks to a business credit card — I’ve travelled in business and first class so many times that it started to feel normal.

My personal preference — having tried a lot of them — is Singapore Airlines Business on their A350. For me, they have just the right combination of style and substance across their lounges, cabins, food, and crew.

2) They make travelling much cheaper (maybe even free)

Not only are premium cabins accessible, but they are also cheap to fly in when you book with points. Keep in mind that to buy one of these example flights would cost several thousand dollars.

Flight (one way business)AirlinePoints requiredTaxes and fees
Brisbane - SingaporeSingapore Airlines90,000 (Krisflyer)AU $117
Sydney - Hong KongQantas60,000 (QFF)AU $93
Sydney - Los AngelesAmerican Airlines80,000 (AAdvantage)AU $81

What’s better than cheap? Free! For example, say you have a credit card that earns Qantas Points. If you earn enough Qantas Points, you can use them to pay for the taxes and fees on a reward booking, meaning you can fly in business or first class without having to pay a single cent for the privilege.

3) Turn everyday expenses into a reward

Expenses that you would have incurred anyway can earn something of tangible benefit when you pay with a frequent flyer credit card. Everyone needs to buy groceries, fuel, and pay their bills, etc. You might as well get something for it.

4) Get higher airline status

There are very few frequent flyer credit cards with status credits, but they do exist. So, whilst you will not earn points when flying on a ticket redeemed with points, you will earn more points when flying on a cash ticket (plus enjoy other benefits if your credits take you into a higher status tier).

5) Use of dedicated check-in desks

Depending on the density of an aircraft’s seating plan, widebodies like the Airbus A380 or Boeing 777 could have as many as 450 economy seats onboard.

If you redeem your frequent flyer points for a business or first class flight, you can avoid the long queues and sail through check-in with ease at the dedicated business counter.

6) Get through security faster (on both departure and arrival)

This benefit is not particularly useful at Australia’s small regional airports, but you’ll appreciate it when flying internationally.

If you book a business or first class seat with your points, you can get fast tracked through security for departure and arrival.

Anyone who has arrived into a hub airport like Dubai on a busy day knows how much less stressful it is to transit when you have a Fast Track card — especially if you have a tight connection.

7) Lounge access

So you’ve sailed through check-in and security. Now what? If you redeemed your points for a business or first class ticket, you can go straight to the airline’s lounge where free food, drinks, comfortable seating and device charging stations awaits.

But there is another way into the hallowed spaces of the airport lounge. Several banks now issue credit cards with lounge access. The typical offer is for a certain number of passes, giving their holders access to lounges regardless of the class of ticket they are flying on.

8) Basic travel insurance

Most frequent flyer credit cards come with some level of travel insurance included. Would I travel on that alone? Probably not. But it can come in handy if you lose something, miss a flight, or are involved in an accident.

Credit card travel insurance is activated when you use the card to pay for the tickets and generally covers international travel, but some policies also cover domestic travel, flight delays, lost luggage, etc.

9) Helps to build your credit score

Responsible use and repayment of any type of credit card — including a frequent flyer points card — demonstrates good credit worthiness. This also goes for businesses using a credit or charge card.

10) One bill for all your transactions

This is less of an issue these days due to better accounting software. However, you could choose to put all your household bills through a card account as a way to manage bills. Small businesses can also use additional cardholders to manage expenses across trusted employees.

11) Improves household or business cash flow

Most rewards cards have up to 55 days interest-free. This feature is especially useful for businesses who have to manage their cash flow between paying suppliers and receivables.

12) Capital gains tax doesn’t apply to frequent flyer points

Thankfully, unlike many other stores of value, the ATO doesn’t tax individuals or business owners on their frequent flyer points.

13) You don’t pay fringe benefit tax on frequent flyer points either

This is another one for business owners and employees. Reward yourself — directors or employees — without incurring fringe benefit tax.

7 problems to be aware of

7 problems to be aware of

Like any other product, there are well-known problems with frequent flyer credit cards. Or, more accurately, there are well known-known problems using the points earned with a frequent flyer credit card.

1) Booking flights can be tricky (under certain circumstances)

Finding seats bookable on points, on the dates you want, on a non-stop flight, at short notice, can be difficult.

This can be mitigated by booking in advance. Having said that, I’ve been able to book long haul business and first class flights the night before leaving on several occasions, but that's generally only possible when flying solo.

2) Airlines can devalue points (abruptly and without warning)

Just as the government devalues the currency by printing more dollars, airlines can devalue their rewards program. This does not happen regularly, but it's annoying when it does.

Typically they do this by requiring more points for the same redemption, using dynamic pricing, or making it harder to accumulate a large number of points.

3) Points can expire (for some programs)

Airlines want customers to fly with them frequently, so they put an expiration date on points to encourage participation. Expiration terms differ between programs.

Thankfully they’ve also made it incredibly easy to keep your points from expiring. For example, spend one dollar on your frequent flyer credit card.

4) Paying with cash or bank transfer is generally cheaper

If a shop or business supplier charges a surcharge to accept a credit card — typically when using an Amex card — it will be cheaper to simply pay via bank transfer.

5) Frequent flyer credit cards have higher annual fees (compared to other cards)

Whilst it's true that frequent flyer credit card annual fees are on the high side, they come with a stack of benefits that offset the fee. Plus, there are entry-level frequent flyer credit card with no annual fee on the market.

6) Standard purchase rates are higher for frequent flyer credit cards

Like any credit card or charge card, you could let a balance accrue, fail to pay it off in full, and incur with interest.

7) If you don’t want to fly, the value of your points is very low

Redeeming your points for flights is the most valuable way to use them. If you would rather redeem your points for a toaster, you probably shouldn’t be using a frequent flyer credit card in the first place.