Star Alliance Credit Cards: Should You Get One?
- July 12, 2018
- Posted by: Jeff Gitlen
- Category: Credit Cards
Star Alliance is a global airline partnership consisting of 27 airlines that fly to over 1,300 destinations throughout the world. And some alliance members have partnered with American banks to offer co-branded credit cards that offer the benefit of earning miles for your everyday purchases.
These miles can then be used on all Star Alliance partner airlines — which may give users the most flexibility when it comes to booking travel using credit card reward miles.
Of course, even the best credit cards have advantages and disadvantages. Read on to learn more about Star Alliance credit card offers.
What Are Star Alliance Credit Cards?
Multiple airlines in the Star Alliance have credit cards allowing consumers to earn miles that can be used on Star Alliance partner airlines. The partner airlines include:
- Adria Airways
- Aegean Airlines
- Air Canada
- Air China
- Air India
- Air New Zealand
- All Nippon Airways
- Asiana Airlines
- Austrian Airlines
- Brussels Airlines
- Copa Airlines
- Croatia Airlines
- EVA Air
- LOT Polish Airlines
- Scandinavian Airlines
- Shenzhen Airlines
- South African Airways
- Swiss International Air Lines
- TAP Air Portugal
- Thai Airways
- Turkish Airlines
- United Airlines
In order to apply for a particular Star Alliance credit card, you must be a resident of that country. For Americans, that means applying for a Star Alliance credit card with an airline that has partnered with a bank in the USA.
The benefits of a Star Alliance credit card will vary based on the card chosen. Many programs offer two miles for every dollar spent on tickets purchased through that airline, such as the United Explorer and the World Elite Mastercard.
Because travel credit cards typically offer more benefits than regular credit cards, they generally have higher credit requirements. That means applicants with low credit scores or high debt-to-income ratios might not be approved for a Star Alliance credit card.
Checking the Rates and Fees Before You Apply
The costs of a card will vary depending on the Star Alliance credit card chosen. Because there are numerous options available, comparing two popular cards may be helpful.
For example, the United Explorer Card is offered through a partnership with United Airlines and Visa. Cardholders earn two miles for every dollar spent on tickets purchased through United, as well as for restaurant purchases and hotel stays. All other purchases receive one mile per dollar spent. There is no annual fee for the first year, with a $95 annual fee after the introductory year. The APR for this card is currently between 17.49% and 24.49%.
The Barclays Lufthansa Miles & More World Elite Mastercard offers two award miles for every dollar spent on tickets purchased from all airline partners, and one award mile for every dollar spent on all other purchases. The annual fee is $89, and the APR is currently between 16.99% and 25.99%.
Choosing a Star Alliance Credit Card With the Best Benefits
The major advantage of a travel reward credit card is the ability to earn miles towards travel. Specifically, the two cards described above have generous benefits for its members. The United Explorer Card waives your first checked bag fee on United Airlines. It also gives users the ability to book award seats not listed on United or other partner airline’s websites. Cardholders also get 40,000 bonus miles if they spend $2,000 in purchases in the first three months.
With the Miles & More card, not only can the miles earned be used at any Star Alliance airline, but with 13 additional European airlines that use the Miles & More frequent flyer program. This credit card also offers two complimentary Lufthansa business lounge vouchers each year, and one free companion ticket benefit each year.
Watch for the Downsides
While these Star Alliance credit card offers are fantastic, there is a significant downside: high interest rates. In pursuit of free travel, it may be easy to rack up credit card debt, particularly for an incentive like 40,000 bonus miles with the United Explorer card. But if you are not able to pay off your credit card debt early, you could be paying as much as 25 percent interest on your credit card debt. The value of your “free” travel will soon disappear and you may wind up in a financial hole.
While both the Miles & More World Elite Mastercard and the United Explorer Card have relatively low annual fees, other Star Alliance credit cards have significantly higher annual fees, as much as $450. Unless you are a savvy traveler and adept at handling your finances, it may be difficult to make that type of annual fee worth it.
A Star Alliance credit card might be a great deal for many consumers interested in a travel credit card, as it allows cardholders the freedom to use their miles on 27 different airlines. However, interest rates and annual fees may quickly eat up the benefits of these cards, so potential cardholders should be wary and check the terms of the deal before signing.