American Airlines’ Solid No Annual Fee Credit Card

Link: Apply now for the American Airlines AAdvantage® MileUp®

I’m rarely impressed by no annual fee airline cards. The way I view it, one of the primary benefits of airline credit cards is that they offer perks when flying with that airline, and typically no annual fee cards offer limited perks.

There’s one exception, though — the American Airlines AAdvantage® MileUp® has no annual fee, and is probably the best no annual fee airline credit card out there. I actually think there are several types of consumers where this might be the best American Airlines credit card, so let me explain why.

AAdvantage MileUp Card benefits & perks

First let’s cover the basics of the no annual fee American AAdvantage MileUp Card:

• The card offers a welcome bonus of 15,000 AAdvantage miles after making $500 in purchases within the first three months
• You’re eligible for this card (including the bonus) if you have any other American Airlines card; you just can’t have received a bonus on this exact card in the past 48 months
• The card offers 2x AAdvantage miles on grocery store purchases and American Airlines purchases, and 1x AAdvantage miles on all other purchases
• Your spending on the MileUp Card can earn Loyalty Points, which can help you qualify for AAdvantage elite status
• The card offers 25% savings on American Airlines inflight purchases when paying with your credit card

You can read a full review of the AAdvantage MileUp Card here.

Why American’s no annual fee card is worth it

I’m not suggesting that everyone should get the American AAdvantage MileUp Card, though I think it’s by far the most compelling no annual fee airline credit card. With American Airlines’ Loyalty Points system, credit card spending counts toward elite status:

• You earn one Loyalty Point per dollar spent, and it doesn’t matter whether you have a no annual fee card or a $450 annual fee card
• The card offers 2x AAdvantage miles on grocery store purchases, which is a useful bonus category you don’t even find on American’s credit cards with annual fees
• American’s premium credit cards largely offer perks like a first checked bag free, priority boarding, etc., but those perks are redundant if you have elite status, since you get those benefits anyway
• The 25% savings on inflight purchases can be useful for elite members who are purchasing something to eat or drink when in economy

Then there’s the general value of having no annual fee cards:

• It helps your credit score to have lots of cards and use them responsibly, so I always try to pick up as many decent no annual fee cards as I can, since those are going to be the cheapest to hold onto in the long-run
• This card can be a useful downgrade option if you have a premium personal Citi American Airlines credit card, and you decide you want to downgrade it to something less expensive

How do American’s premium credit cards compare?

The American AAdvantage MileUp Card is a great option for an AAdvantage elite member looking to earn Loyalty Points for their credit card spending. How do the two premium Citi AAdvantage personal credit cards compare?

The Citi® / AAdvantage® Platinum Select® World Elite Mastercard® (review) is the mid-range card in the portfolio:

• It has a welcome bonus of 50,000 AAdvantage miles after spending $2,500 within the first three months
• It has a $99 annual fee, waived for the first 12 months
• It offers 2x AAdvantage miles at gas stations, restaurants, and on eligible American Airlines purchases
• It offers a first checked bag free on domestic American Airlines itineraries, preferred boarding, and 25% savings on inflight purchases

The Citi® / AAdvantage® Executive World Elite Mastercard® (review) is the premium card in the portfolio:

• It has a welcome bonus of 70,000 AAdvantage miles after spending $7,000 within the first three months
• It has a $595 annual fee
• It offers 4x AAdvantage miles on eligible American Airlines purchases (After spending $150,000 on the card in a calendar year, cardmembers can earn a total of 5x AAdvantage miles on eligible American Airlines purchases for the remainder of the calendar year)
• It offers a 10,000 Loyalty Points bonus after reaching 50,000 Loyalty Points in a status qualification year. And another 10,000 Loyalty Points bonus after reaching 90,000 Loyalty Points in the same status qualification year.
• It offers a first checked bag free on domestic American Airlines itineraries, priority check-in, priority security, priority boarding, and a Global Entry or TSA PreCheck fee credit
• It offers a lounge access perk, in the form of an Admirals Club membership for the primary cardmember, and Admirals Club access for up to 10 authorized users. The first 3 authorized users will cost you $175 (total); each authorized user thereafter is $175.

People will prefer different cards in the portfolio depending on their spending profile and AAdvantage elite status. Personally, I think there are quite a few people who would be best off with the American AAdvantage MileUp Card. Alternatively, I think there’s value with the Citi AAdvantage Executive Card thanks to the lounge access perk.

You can always pick up one of the premium cards, and then 12 or more months later you should be able to downgrade to the no annual fee card, if you so choose. That way you can take advantage of the big bonus being offered along with the better perks, and see how valuable they prove to you.

Bottom line

The American AAdvantage MileUp Card is a surprisingly lucrative no annual fee airline credit card. Spending on the card can earn you Loyalty Points, which will help you qualify for AAdvantage elite status. On top of that, the card offers 2x miles on grocery store purchases, which is one of the better bonus categories on an American Airlines credit card.

If you ask me, this is the only no annual fee airline credit card that it can potentially make sense to spend money on.

What’s your take on the American AAdvantage MileUp Card?