“Dedicated” and
“Open” frequent flyer reward programs
We need to
distinguish between Dedicated and Open frequent flyer reward
programs.
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Dedicated
programs are those programs in which the frequent flyer miles
can only be redeemed on one airline and its subsidiaries. A
good example of this is the Rapid Rewards Visa® Signature Card
discussed in the previous chapter, which earns you flights only
on its airline.
Open frequent
flyer reward programs offer rewards that can be used either on
most major airlines, if you use the credit card issuer’s
preferred travel agency partner, or a large selection of
participating airlines. In most cases there are redemption fees
that must be paid when obtaining your free flight.
How do you
decide which is best for you?
The answer
depends upon a couple of issues. The first is how much risk you
are willing to assume, and the second issue revolves around
whether or not the airline you frequent the most has its own
dedicated frequent flyer reward program. Let’s look at the
risks first.
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