Can frequent flyer credit cards benefit expats?
One of the big expenses of expat life can be the travel costs associated with going back home to see family and friends, or flying them out to visit you.
After all, adjusting to life in a new country and to new cultures can leave one feeling isolated, so wanting to see loved ones as often as possible is a natural inclination.
Depending on where you choose to relocate to, there may be times of the year when you would prefer to be at home.
For example, Middle Eastern countries like Dubai and the rest of the UAE, Libya, Qatar and Egypt can become unbearably hot in the summer-time for those not accustomed to the climate.
During the summer months, Dubai can reach temperatures in the mid-40s, rising even higher as you go further inland.
Other events like Ramadan, the Islamic month of fasting, might be a culture shock for expats, given the restrictions on eating in public during daylight hours.
Of course air fares aren’t cheap, and if you’re going to be travelling back home a few times a year, or booking flights for friends and family to visit you, you might consider signing up for an airline credit card to get something back for the money you spend.
Using frequent flyer credit cards can earn their users rewards for each time they spend on them, but rather than cash rewards, you earn ‘miles’ which can be redeemed when booking flights.
For an expat, this could mean a ‘free’ flight back home using the miles they accumulated on previous journeys. Some of the cards also have perks like access to airport lounges, making the routine flights more comfortable.
As an example, one leading card rewards its users with 20,000 destination miles when spending £250 on card purchases within 90 days of the account opening. (Correct at time of publication)
With a flight from Dubai to the UK clocking in at around 3400 miles, and Egypt to the UK at around 2400 miles, the free miles in this deal could make it very attractive for UK expats in these countries.
On the negative side though, an airline card – like any reward credit card, is only worth considering if you are able to pay off your balance in full every month. If you are not likely to be able to, then the interest you are charged will probably outweigh the value of the miles you collect.
Other things to consider are any time restrictions on the miles you earn. If you’ve earned enough miles for a flight back home, but the miles must be used by the end of the year – you might consider whether your new employer, for example, will allow you more holidays.
If you are looking for an alternative, cashback cards are more flexible as they give you a percentage of all your spending back, and you are not restricted to how the ‘miles’ are spent.
In summary, there are potential benefits to using an airline credit card as an expat, like saving money if you plan on flying home frequently, but there are a lot of things to be aware of, not-least your ability to pay off your balance each month.
Kevin Mountford, head of banking at moneysupermarket.com said: "The decision to borrow should never be taken lightly and consumers need to be careful that they don't fall into a debt trap - they should never spend more on their card than they can afford to pay back.
“However, used responsibly, a credit card can be safe and a convenient way to pay for large transactions such as holidays and, provided they choose the right product could even generate some rewards to enjoy abroad.”
- by Mark Hooson
After all, adjusting to life in a new country and to new cultures can leave one feeling isolated, so wanting to see loved ones as often as possible is a natural inclination.Depending on where you choose to relocate to, there may be times of the year when you would prefer to be at home.
For example, Middle Eastern countries like Dubai and the rest of the UAE, Libya, Qatar and Egypt can become unbearably hot in the summer-time for those not accustomed to the climate.
During the summer months, Dubai can reach temperatures in the mid-40s, rising even higher as you go further inland.
Other events like Ramadan, the Islamic month of fasting, might be a culture shock for expats, given the restrictions on eating in public during daylight hours.
Of course air fares aren’t cheap, and if you’re going to be travelling back home a few times a year, or booking flights for friends and family to visit you, you might consider signing up for an airline credit card to get something back for the money you spend.
Using frequent flyer credit cards can earn their users rewards for each time they spend on them, but rather than cash rewards, you earn ‘miles’ which can be redeemed when booking flights.
For an expat, this could mean a ‘free’ flight back home using the miles they accumulated on previous journeys. Some of the cards also have perks like access to airport lounges, making the routine flights more comfortable.
As an example, one leading card rewards its users with 20,000 destination miles when spending £250 on card purchases within 90 days of the account opening. (Correct at time of publication)
With a flight from Dubai to the UK clocking in at around 3400 miles, and Egypt to the UK at around 2400 miles, the free miles in this deal could make it very attractive for UK expats in these countries.
On the negative side though, an airline card – like any reward credit card, is only worth considering if you are able to pay off your balance in full every month. If you are not likely to be able to, then the interest you are charged will probably outweigh the value of the miles you collect.
Other things to consider are any time restrictions on the miles you earn. If you’ve earned enough miles for a flight back home, but the miles must be used by the end of the year – you might consider whether your new employer, for example, will allow you more holidays.
If you are looking for an alternative, cashback cards are more flexible as they give you a percentage of all your spending back, and you are not restricted to how the ‘miles’ are spent.
In summary, there are potential benefits to using an airline credit card as an expat, like saving money if you plan on flying home frequently, but there are a lot of things to be aware of, not-least your ability to pay off your balance each month.
Kevin Mountford, head of banking at moneysupermarket.com said: "The decision to borrow should never be taken lightly and consumers need to be careful that they don't fall into a debt trap - they should never spend more on their card than they can afford to pay back.
“However, used responsibly, a credit card can be safe and a convenient way to pay for large transactions such as holidays and, provided they choose the right product could even generate some rewards to enjoy abroad.”
- by Mark Hooson
