Beware 'loyalty' airline credit cards, says Which?

Airline "loyalty" credit cards may tempt their users with promises of vouchers, days out and even free flights, but consumers are today warned to scrutinise the small print, which could hide huge extra costs. The rewards-based cards, increasingly offered by airlines and large travel companies, are not as good value as they may initially seem, consumer group Which? says in the October issue of Which? Holiday published today. The cards earn points when used for purchases, which can then then be exchanged for vouchers, flights and days out. Airlines including bmi , British Airways , Flybe , Ryanair , Virgin Atlantic and holiday company Thomas Cook all offer cards where customers can redeem the points they have built up for flights. However, when Which? Holiday compared cards from these companies they found that some of the "free" flights offered did not include taxes and charges, which often cost more than the flight itself. The amount you need to spend in order to earn enough points for a free flight also varies enormously, the research found. Spending ranged from between £1,500 for a return flight to Paris with Ryanair, to £59,000 for a flight to Cape Town with Thomas Cook. With Ryanair, in addition to paying the taxes and charges you also have to pay check-in and luggage fees. To get the free flights you have to pay the difference using your Ryanair credit card, for which the airline then levies a further charge. Thomas Cook levies a 2.5% charge (capped at £50) on credit card purchases. A spokesperson for Thomas Cook UK & Ireland said: "We aim to keep our credit card fee as low as possible. Our charge covers the fees levied by card issuers and administration costs that enable us to accept credit cards." Some cards also charge an annual fee, as high as £150 in the case of British Airways' Amex Premium card and £60 for Virgin Atlantic's Black Amex card. There are currently some generous one-off special deals, however. For example, people who apply for the Flybe Spend & Fly Mastercard before 31 October and use it once or more before 31 December will get two bonus return flight vouchers. The voucher has to be used within 12 months and can be used anywhere on the Flybe network. All the cardholder has to do is pay the taxes and airport charges. Rochelle Turner, head of research from Which? Holiday, said: "It is important to keep your eyes wide open when signing up to these accounts. They may sound tempting at first, but detail is in the small print. The 'rewards' might not be as great as you think and you'll be paying a much higher rate than on other cards if you were to use them abroad." The credit cards are also not particularly good value for money when used by holidaymakers, and could see customers rack up large bills. None of the cards investigated by Which? are deemed to offer a competitive rate for use abroad.