Airline cards – best for travel

Some credit cards are designed to give Air Miles or other airline travel miles when you spend with them.  Although it's a common term to describe all these types of cards, Air Miles is actually a trade name and should really only be used to describe those credit card providers which have links with the official Air Miles scheme, which will be known as Avios from 16 November 2011 .

It was created in the mid-1980s in the UK and by mid 2011, there were eight million people signed up to the scheme, which allows you to collect 'miles' towards your flight by spending on the linked credit cards or shopping at one of the 100 or so affiliated retailers such as Tesco, Shell and online retailers.

The number of Air Miles you'll earn is not the same across all the credit cards linked to the scheme, so do check first. It's worth looking at any introductory offers as they often give you a bumper number of Air Miles in the first month or so.

Watch out for: Air Miles expire after two years and if you don't use your card in 12 months you could be charged a fee just to put them towards a flight. Parents who can only go away in school holidays often complain that it's almost impossible to use them during peak times. 

Some other airlines have copied Air Miles by also offering miles towards free or discounted flights for spending with their credit card. They also usually boost the number of miles you earn simply for taking out the card and using it in the early days. The best ones are nearly always offered through American Express which isn't accepted in as many places as MasterCard and Visa credit cards so don't rely on having just this card with you in case you're caught out.

There are also 'frequent flyer' programmes where you sign up to the airline's club and earn miles every time you fly with them.  Sometimes these can be built up in conjunction with the airline's own brand credit card.

Alternatively, you can get flights, money off trips, free days out or discounted holidays by using reward vouchers with a variety of loyalty schemes.  The conversion rate on vouchers is usually good for those looking for flights and cheap travel.

There are two ways to use voucher- based cards. Either choose a card that actually gives travel miles or one that lets you convert your points into money-off vouchers against a range of holidays.

Good for: Holidaymakers.  You can often reach your target quite quickly on a credit card and with the myriad of offers around –used wisely – they can be exchanged for a trip of much greater distance.

Flexibility. They can be put against the cost of any holiday

Bad for: Choice. The number of flights offered using the travel miles is limited and you may not be able to fly exactly when you want to. If you can only go away during school holidays you’ll have to grab your trip quickly or lose out as airlines can easily sell seats at these times.

Also, you are limited to the destinations and types of holidays offered by the travel company they’re linked with.

Travel vouchers earned via a rewards scheme often give you discounts off flights or holidays.