Put thirty thousand dollars of spending on a credit card earning one airline mile per dollar, and you earn thirty thousand miles, View from the Wing reported.
Put that same spending on a two percent cash back card and you earn six hundred dollars.
An airline credit card can save enough in checked bag fees to justify keeping it, but cost hundreds of dollars in rewards if you use it for your spending.
On an episode of Airlines Confidential, Ed Pizzarello favored flexible bank points while former American AAdvantage President Maya Leibman preferred the simplicity of airline and hotel cards. Leibman recalled something an unnamed former loyalty program president had told her: “people will pay anything for a free flight.”
Getting an airline card for benefits does not mean it should become your default payment method. Spending enough to earn a large bonus can make sense even when the card’s normal earning rate is not attractive.
Checked bags, boarding benefits, lounge access or an anniversary certificate can justify the annual fee. The card may belong in the sock drawer rather than your wallet if actual rewards for spend are not great enough.
If you use thirty thousand miles for a flight you could have bought for three hundred dollars, you have given up six hundred dollars to avoid paying three hundred dollars.
“You’ve given up $600 to avoid paying $300. That’s just dumb,” the report noted regarding the math behind domestic redemptions. Airline miles provide more value for premium cabin international awards than domestic coach ones because redeeming points yields higher-value flights.
Bank points do not require abandoning airline awards. You can keep points flexible on a Chase Sapphire Reserve or a Bilt Palladium Card and transfer them when you find the award you want.
American Airlines is now a Citi transfer partner. Citi sells both American’s credit card and a competing currency that can become American miles.
Spend on a Citi Strata Elite Card or a Citi Strata Premier Card and transfer to AAdvantage.
American’s cards earn Loyalty Points towards status and it is uncapped. Eligible employee-card spending can earn status credit for both the employee and the primary cardmember at the same time on a Citi / AAdvantage Business World Elite Mastercard.
Citi transfer partners now include American Airlines AAdvantage, allowing cardholders to move flexible points directly into the airline program.
* Why are premium international flights better for miles? Premium cabin international awards offer higher redemption value compared to domestic coach tickets, yielding better financial return per mile spent.
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