Everyone who has flown on a prominent airline in recent years has experienced the airline credit card pitch. It is usually one of the last parts of a flight and occurs when a person is about to get off of the plane. Everyone on the flight receives an application for a credit card and hears a pitch about all of the potential benefits of such a card. There are usually at least one or two people who will sign up for the card every few flights. While this type of sales tactic works on some people, Grand Canyon Advisors suggests that everyone should stop and take a second look at their financial situation before agreeing to such a card.
The airline credit card system
Airlines make a considerable amount of money off of rewards credit cards. The rewards credit card system often has considerable annual or overdraft fees. There may be a high-interest rate that kicks in as soon as a person fails to pay off the entirety of their balance on time. In return, the card often offers access to points and the ability to rack up free flights over an extended period of time. This combination makes the card only beneficial to a small slice of users but extremely profitable for the airlines.
Therefore, they rely on the sales gimmick of offering the ability for potential customers to sign up for the card right after the flight. People are sometimes tired and stuck in a position where they are forced to listen to the sales pitch. They hear about all of the positives of the card while all of its many negatives are downplayed or not even mentioned. The airline counts on people making impulse purchases in that situation.
There are a number of problems associated with signing up for one of these credit cards. As the team at Grand Canyon Advisors argues, signing up for a credit card should never be a decision taken at the spur of the moment. A person may not be able to meet the credit obligations that they already have. They may be unwise with money and prone to overspending if they have a considerable credit limit. Some people sign up for airline credit cards when they only fly a few times every year. The annual fees are much more than any savings that the person may have with their flights.
What to do
Anyone who is considering an airline credit card should wait until they return home from their flight to make any decisions. Once they are home, they need to research a wide variety of cards and pick the card that is best for their needs and situations. According to Grand Canyon Advisors, frequent flyers will sometimes see the need for such a card with certain airlines. Other flyers should lean towards cards with high cash rewards and no annual fees. In a large number of cases, individuals should stick to paying off their current credit card debt and should not worry about incurring any sort of fees from a new card.
Airline credit cards are sometimes good deals that make sense for a person’s financial well-being. They are particularly attractive for frequent flyers who make a trip that only one airline facilitates. But the airline sales tactics should not work on the vast majority of consumers. No financial decision should be made after a potentially long flight in the seat of a plane