Questions and Answers

Have a travel related question? Post it here, and I’ll do my best to answer it as quickly as possible.

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Chase reserve medical evacuation benefit

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Amex or JetBlue MasterCard

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Amex Platinum vs Chase Reserve

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Lyft Cash: No Longer Earns Chase UR Points

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Amex Plat-$50 offer for Best Buy & Home Depot

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Platinum Confusion – Marriott Brilliant Amex

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Miles & More European Credit Cards 50% Devaluation

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Timing about canceling one card and applying for another

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Can’t find Blue Business Plus

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Annual fee for Virgin Atlantic M/C

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Ask a Question

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Answers (2)

How Travel Cards Work

How Travel Cards Work

  1. Anonymous

    Dear Lucky and everyone,

    I need to understand how banks and credit card companies make their money by giving airline miles. And how the airlines determine how much miles to give out.

    I don’t know how this sound absurd but I will be deeply appreciative of a candid explanatory answer.

    Thanks everyone,

    Kenn

  2. Gaurav

    Airlines get money by selling miles to banks. They also hope that holding their card makes you a more loyal customer and may provide more data about your habits depending on their relationship with the issuing bank.

    Banks make money when you use your card through interchange fees to facilitate the transaction. They also make money if you carry a balance or miss a payment (most award cards carry very high interest rates). Banks make the determination of how many miles to give you based on their projected margins.

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