A couple of years ago we saw the introduction of the American Airlines AAdvantage MileUp℠ Card, which is a no annual fee co-branded credit card being issued by American Airlines and Citi.
While there are lots of airline credit cards out there, historically we haven’t seen many no annual fee airline credit cards.
In this post I wanted to take a closer look at this card, particularly in light of current circumstances. While I realize that airline miles may not be a priority for everyone, a lot of people are looking to optimize their credit card strategy and switch to no annual fee cards, which is why this card could be worth considering.
What is the sign-up bonus like, how does this card compare to other American Airlines credit cards, etc.?
American AAdvantage MileUp Card Basics For July 2020
Generally speaking, I don’t recommend putting your everyday spending on an airline credit card, because I tend to think you’re better off instead going with a card earning transferrable points or cash back.
That being said, often it can make sense to have an airline credit card for the perks it offers. How does the AAdvantage MileUp Card fit into the equation — can you get big perks with no annual fees, or is this card simply not worth it?
Sign-Up Bonus: 10K Miles + $50 Statement Credit
The MileUp Card offers a sign-up bonus of 10,000 American AAdvantage miles plus a $50 statement credit after making $500 in purchases within the first three months from account opening.
While that’s not a huge bonus, it’s pretty good for a no annual fee card, and the spending requirement is reasonable.
Note that you’re not eligible for the bonus on this card if you have received a welcome bonus on this exact card in the past 48 months (however, having had another AAdvantage card doesn’t preclude you from getting this bonus).
Since this is a Citi card, there are some other rules to be aware of, like that you can apply for at most one Citi card every eight days, and at most two Citi cards every 65 days.
Redeem your American miles for travel on Etihad Airways
No Annual Fee
As mentioned above, the MileUp Card has no annual fee. Not only is the card free for the primary cardmember, but you can also add authorized users at no extra cost.
There are a couple of other things that make the no annual fee status of this card worthwhile:
- If you have a Citi AAdvantage personal card that you otherwise want to cancel, you can likely downgrade it to this no annual fee card, assuming you’ve had it for at least 12 months
- Having credit cards long term positively impacts your credit score, and holding onto some no annual fee cards long term is an ideal way to accomplish that
Earn 1-2x Miles Per Dollar Spent
The MileUp Card offers the following return on spending:
- 2x AAdvantage miles per dollar spent on eligible American Airlines purchases
- 2x AAdvantage miles per dollar spent on grocery store purchases
- 1x AAdvantage miles on all other purchases
Earn 2x miles on grocery store purchases
It’s noteworthy that this no annual fee card offers a better return on grocery store spending than virtually any other American Airlines credit card.
There’s no cap to how many miles you can earn through spending on this card. Do note that the card has foreign transaction fees, though, so you’ll ideally only want to use it for purchases within the US.
25% Inflight Savings
The MileUp Card offers 25% savings on food and beverage purchases on American Airlines flights when you pay with your card. Being able to save money for purchases you’d make anyway on American Airlines is pretty awesome.
Is The AAdvantage MileUp Card Worth It?
The AAdvantage MileUp Card is unique in that it has no annual fee and offers some potentially useful perks. Getting 25% back on inflight purchases, a solid sign-up bonus, and 2x miles on grocery store purchases, is pretty good.
However, in general, I’d note that:
- Airline credit cards are most worth having for the perks they offer, rather than the points you can earn through everyday spending, and you’ll generally find the most perks with premium airline credit cards
- While I wouldn’t necessarily apply for the MileUp Card, I do think it’s a great downgrade option from a card like the Citi® / AAdvantage® Platinum Select® World Elite™ Mastercard® (review)
- It could be worth getting this card if you want a no annual fee card that you can keep long term to help build your credit
Does It Ever Make Sense To Get A No Annual Fee Airline Card?
It depends on how you look at it. Sure, I suppose there’s a limited downside to having a no annual fee card for the modest welcome bonus, the 25% savings on inflight purchases, etc.
However, in general, it just doesn’t make sense to use an airline credit card that awards only a mile per dollar spent on a bulk of purchases. I value American miles at 1.5 cents each, so you’re much better off using another card, in my opinion.
On the most basic level, I tend to think a vast majority of people would be better off with something like the no annual fee Citi® Double Cash Card (review), which offers 1% cash back on every purchase, and then an additional 1% cash back when you pay for those purchases.
Assuming you value American miles at less than two cents each for everyday spending, then a card like that would be a no brainer.
Comparing MileUp Card & Other American Airlines Credit Cards
While it’s nice to have a new no annual fee option, I do think American’s premium credit cards are potentially worth paying annual fees on. Both the personal and business Citi AAdvantage Platinum cards offer generous welcome bonuses, with the first year annual fee waived. The details are as follows:
- The Citi® / AAdvantage® Platinum Select® World Elite™ Mastercard® is offering 50,000 AAdvantage miles after making $2,500 of purchases within the first three months; the $99 annual fee is waived for the first 12 months
- The CitiBusiness® / AAdvantage® Platinum Select® Mastercard® (review) is offering 65,000 AAdvantage miles after making $4,000 of purchases within the first four months; the $99 annual fee is waived for the first 12 months
Since I value American miles at 1.5 cents each, I value those bonuses at $750-$1,050, so that will cover a lot of annual fees.
These cards also offer perks that make them worth holding onto long term, including:
- Preferred boarding on domestic American flights
- First checked bag free on domestic itineraries for you and up to four companions on the same reservation
American MileUp Card Summary
It’s nice to see airlines issuing a greater variety of credit cards, including no annual fee cards.
On the plus side, the MileUp Card is a huge improvement over the old no annual fee Bronze Card that American used to issue, which only offered one mile for every two dollars spent. Furthermore, the card does offer double miles at grocery stores, making it one of the best airline credit cards for those purchases.
However, I generally don’t recommend using a card that offers only one mile per dollar on everyday spending, given all the other great cards out there. I get why they offer a card like this, as there are lots of brand loyal people out there who like using a credit card from a certain company, even if the value isn’t amazing.
The value from an airline credit card comes mostly from the perks the card offers, and that’s why I think a card like the Platinum Citi AAdvantage Card could make more sense, since the free checked bags and preferred boarding benefits add up quickly. If you get the card and find it isn’t worthwhile, you’ll generally be able to downgrade it after a year to this card.
If I were to get a Citi no annual fee card I’d recommend the Citi Double Cash Card, which is my go-to card for everyday spending.