By now, credit card companies were supposed to have ended the golden age of generous travel rewards.

Before major provisions of the CARD Act took effect in February, some analysts feared that the new regulations would cost card issuers so much money that they would be forced to pare back rewards. But after six months, that largely hasn't happened.

Issuers of some of the most popular reward cards -- frequent flier cards -- say they're looking for ways to improve the cards and are still seeing strong interest from people interested in earning free flights.

David Gold, senior vice president with Chase Card Services, says his company has seen healthy growth in some of the frequent flier cards it offers, such as the Continental Airlines OnePass Plus card, even as customers are expecting more from their cards.

"With Continental, our cards are doing very well," he says. "Over the years, the frequent flier mile has been pretty valuable. The value is there."

Analysts say the blank_page Credit CARD Act has had little direct effect on frequent flier cards. That's because those cards -- typically held by wealthier customers with higher-than-average credit scores -- tend to rely less on interest rates and late fees than other cards. Instead, issuers of airline cards tend to make money on them from annual fees and heavy card use.

Still, the sector has come under pressure in recent years with the increased popularity of other kinds of rewards, and by the perception that airlines heavily restrict the availability of free tickets and make them hard to redeem. A 2009 survey by Aite Group found that just 47 percent of respondents were interested in points toward a free plane ticket, behind such other categories as cash back, rebates on groceries or gas, and points for merchandise and gift cards.

A May 2010 study by IdeaWorks, a loyalty consulting firm, found awards from airlines can often be hard to use. Award seats on Delta and US Airways were unavailable on more than 85 percent of flights sampled, according to the study, while they were unavailable on other major U.S. airlines 25 percent to 45 percent of the time.

Because of those challenges, interest in plane tickets as a reward has become more segmented. The main target for airline reward cards tends to be people who are already members of an airline's frequent flier program.

That means that issuers are battling over a relatively small number of customers, says  Ron Shevlin, a financial services analyst with Aite Group, a research and advisory firm.

"From a new acquisition and growth perspective, it's challenging," he says. "It's not easy to get them to switch."

For those interested in plane tickets, though, that competition could lead to better rewards. For instance, Continental and Delta Air Lines have recently added a free checked bag as a perk to having a card in their frequent flier programs. And most major airlines offer "platinum"-style cards that allow access to airport lounges, although these typically have a much higher annual fee. Other perks typically include expedited boarding and ticket discounts, plus big mileage bonuses just for signing up.

After the CARD Act was passed, "the immediate knee-jerk reaction a year ago was: 'We'll have to cut back on rewards programs,'" Shevlin says. "What card issuers finally came around to realizing was that was the wrong reaction. ... We'll continue to see a lot of this rejiggering of reward programs and card features."

People who use airline cards say they see value. Until last year, Bryan Sidensol, 34, of San Carlos, Calif., used a debit card because he didn't like the hassle of keeping up with credit card bills.

But when he looked at the details of the Southwest Rapid Rewards Visa Signature Business card, offered by Southwest Airlines and Chase, he found the payoff too tempting to pass up.

"I was throwing money away by not using a credit card to earn free flights," says Sidensol, who runs an e-commerce site that sells baseball equipment. He tries to charge as many business expenses as he can onto his card -- typically purchases from equipment manufacturers -- and in return averages two or three free round-trip flights a month. Because that's more than he can use, he's able to do things like fly a couple buddies to September's UCLA-Texas football game in Austin.

"It seemed to be more valuable than a cash-back card or another travel program," he says.

If you are interested in an airline rewards credit card, consider this advice:

Concentrate on earning rewards on one airline. Resist the temptation to sign up for multiple cards, especially if you don't travel much.

"It will take you longer to get anywhere if you play the field too much. So, concentrate on one card," says Randy Peterson, editor of Inside Flyer Magazine.  " ... The more plastic you have, the more you dilute what your earnings could be."

In addition, applying for too many cards could hurt your credit score.

Understand that rewards for free flights are not always easy to redeem. With a frequent flier program, you'll have the most success if you're flexible on dates and destinations. For instance, using frequent flier miles to go to Hawaii over Christmas can be hard to do. Most card issuers offer other travel reward cards with awards that are easier to redeem and link the number of miles or points to the price of the ticket.

Examine other ways to earn miles. Most frequent flier programs have partnerships with other vendors, such as car rental companies, hotels and even restaurants. That gives you a chance to earn more miles.

Watch out for expiration dates. Airlines have recently started cracking down on accounts that are inactive for two to three years. Make sure you know the expiration policy. If you've charged enough miles to fly to the 2016 Olympics in Brazil, but are no longer using the card, beware that your miles could expire before you're able to buy the ticket.

Pay your bills on time. Some issuers revoke your points if you are more than 60 days late with a payment, so be sure to make payments by the due date.

The biggest U.S. airlines all offer credit cards in conjunction with banks, which are known in the industry as "co-branded" cards. The programs are similar in that they all have annual fees, seek customers with good to excellent credit and offer the allure of a free flight (or close to it) just for signing up and using the card, along with other minor perks (such as discounted companion tickets). Most also offer premium cards that have more perks (such as upgrades and club lounge access) but higher annual fees. 

 

Airline. Parnering bank. Name of basic card. Annual fee. Main benefit(s).

AirTran Airways. Barclays Bank. AirTran Airways A+ Visa. 10 bonus credits after $750 in purchases (8 needed for one-way coach ticket).

Alaska Airlines. Bank of America. Alaska Airlines Visa Signature. $75. 25,000 miles upon approval.

American. Citi. Citi Select/AAdvantage American Express or Citi Platinum Select / AAdvantage World MasterCard. $85. 30,000 miles after $750 in purchases.

Continental Airlines. Chase. OnePass Plus card. $85/year (waived first year). 25,000 miles after first purchase. Waives fee for first checked bag.

Delta. American Express. Gold Delta SkyMiles. $95. 20,000 miles after first purchase. Waives fee for first checked bag.

JetBlue. American Express. JetBlue Card. $49. 10,000 points after first purchase (one-way awards start at 5,000 points).

Southwest. Chase. Southwest Rapid Rewards Visa. $59. 16 bonus credits after first purchase (16 credits needed for round-trip flight). 

US Airways. Barclays Bank. US Airways World MasterCard. $49. 5,000 miles with first use, another 5,000 after $750 in purchases.

United Airlines. Chase. Mileage Plus Signature Visa. $60. 25,000 miles after $250 in purchases.

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