As a longtime hoarder of frequent flier miles and owner of one such card, I am increasingly thinking they are NOT worth it. I've started to shift over to a card that does cash-back into my investment account.
The airlines are still scrapping for ways to stay profitable. Tweaking FF mile programs is an easy way for them to pull back benefits in non-obvious ways. For example over the last few years I've seen airlines erode the value of FF miles in the following ways.
- Increase the number of miles you need for free tickets.
- Add fees and surcharges to redeem FF miles.
- Reduce the number of available seats for FF award tickets (You did know that just because there is a flight and you have the miles, you aren't guaranteed to be able to get a FF ticket, right?)
It just makes sense to go with a program that gives you cash back. They can't monkey with the value of x% of your purchases without it being obvious, and the flexibility of money makes it much more valuable than FF miles. That is, you can buy a ticket with your awards cash on any airline, or spend it on something completely different. Plus you can get interest on cash in a bank account, but not for FF miles in your account.
If you fly a lot, the perks like VIP lounges, free upgrades, priority boarding, etc. may make it worth it. However, most of these perks have some caveat that you earn them through FLYING and not random credit card purchases. So you can probably get these just in the course of flying anyway.
Also, even though I still feel ripped off. It is pretty much insanely expensive to pay for an upgrade on a transatlantic flight. Miles are pretty much the only way to make it only slightly overpriced.
One other thing:
Paying an annual fee (which many of these cards carry) really makes these cards not worth it unless you are charging a ton of stuff on them and redeeming the rewards. Keep that in mind.