5 Reasons You SHOULDN’T Use Airline Credit Cards

Filed Under: American Express, Chase
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It always pains me to see people not maximizing their credit card spending. I’m not just talking about friends and family who have sub-optimal strategies, but even just being out-and-about I sometimes see the credit cards people use, and I can’t help but want to have an intervention.

Oh well, I guess any credit card is better than paying with a debit card or cash (assuming you’re financially responsible and can pay off your balance in full each billing cycle).

Why You Shouldn’t Spend Money On Airline Credit Cards

One of the most common mistakes I see people make for their credit card spending is that they use an airline credit card. Airline credit cards serve a purpose, but in general that purpose shouldn’t be that it’s your go-to card for everyday, non-bonused spending.

I understand how we got to this point, where so many people are using airline credit cards. Back in the day they were among the best rewards credit cards out there, but with the expansion and improvement of transferrable points cards, there are so many better options nowadays.

Let me give an example. I had a conversation about credit cards the other day with someone who lives in San Francisco:

“I use my American Airlines credit card for all purchases, and I try to always have at least a million miles with them. I just redeemed a lot of miles, so now I’m trying to earn them back.”
“What do you mostly spend money on?”
“Dining and everyday expenses.”
“And what do you try to redeem your miles for?”
“Well I like to go to Europe. I also recently booked a ticket to South Africa, but there were over $1,500 in fees, which seems ridiculous.”
“Is there a reason you’re focused on American over other airlines?”
“No, I’ve just had their card for a long time, so I have kept earning with them.”

As I’m sure many of you can imagine, I nearly had a heart attack hearing all of this. So hopefully this post is useful in helping the countless number of people in similar situations find a new strategy.

In this post I wanted to share:

  • Reasons you shouldn’t use your airline credit card for everyday spend
  • Under what circumstances you should have & use an airline credit card
  • What credit cards you should use instead

Let’s get started with five reasons you (generally) shouldn’t use an airline credit card for your everyday spending.

Airline Credit Card Points Devalue

Airline miles devalue over time. Hoarding airline miles is like saving money without earning any interest. The reality is that airline miles can devalue really quickly. Just to give one example, several years ago American charged 67,500 miles for a Cathay Pacific first class ticket between the US and Hong Kong. Now that ticket costs 110,000 miles. That’s an overnight cost increase of over 60%.


The cost of Cathay Pacific first class redemptions increased significantly

This isn’t just a one-off, but rather it’s reflective of an overall trend we’ve seen. If you collect miles with a specific airline and they have a devaluation, you have no recourse.

When you consider there’s an opportunity cost to your credit card spending, you shouldn’t settle for earning a currency that can so easily be devalued.

Airline Credit Cards Don’t Offer Flexibility

This is along the same lines as the above, though there’s an important distinction. Not only do airline miles devalue quickly, but they offer very little flexibility.

If you used a cash back card, you could spend that cash however you wanted whenever you wanted. That gives you a lot more flexibility.

If you used a card earning transferable points, you could transfer those points to all kinds of airline and hotel partners, which allows you to shield yourself from any particular program devaluation, and also maximize value with each redemption.

When one partner’s award chart devalues, that doesn’t hugely devalue your points. Furthermore, transferable points can also typically be redeemed as cash towards the cost of a ticket. You’re getting the best of both worlds.

Earning miles with one airline limits your flexibility

Airline Credit Cards Don’t Have Great Bonus Categories

Not only are you earning miles that devalue when using an airline credit card, but they also typically don’t offer great bonus categories. In other words, you’ll earn one mile per dollar spent on most purchases, and then there are a fairly limited number of bonus categories.

We have seen some improvement in this regard from airline credit cards, though you’re still typically earning at most two miles per dollar spent in select categories.

That pales in comparison to some of the bonus categories we see on other cards, including:

  • Up to 5x points on dining
  • Up to 5x points on airfare
  • Up to 4.5x points at supermarkets
  • Up to 3x points on gas purchases
  • Up to 3x points on travel
  • Up to 2x points on everyday spending

So there are much better options out there.

Other credit cards may offer more useful bonus categories

Airline Credit Cards Rarely Average A Return Of Over 2%

Deciding which credit card to use for spending is all about determining opportunity cost.

Earning some airline miles on a credit card is better than earning nothing, though on the most basic level there are plenty of cards that offer a return that’s equivalent to 2% or more. I’m going to go out on a limb and say that a vast majority of people using airline credit cards for their spending aren’t valuing those miles at over two cents each.

Why would you tie yourself into a specific points currency that you value less than 2% return on your spending that’s cash?

There are some great cash back cards out there, which are a good alternative

Transferable Points Have Transfer Bonuses

Not only do transferable points cards often have better bonus categories, but they sometimes even offer further bonuses when you transfer points.

This is something we’ve seen from Amex Membership Rewards, Chase Ultimate Rewards, Citi ThankYou, and Capital One.

While points can already be transferred at favorable ratios, sometimes we see bonuses of 20-40% for transferring points during a specific period, which can be a great way to get even more value from your points.

When you combine category bonuses with transfer bonuses, you’re potentially looking at an unbelievable rate of earning points.

There’s a 40% Amex transfer bonus to British Airways through October 1, 2019

Why You Should Have Airline Credit Cards

While I’ve said that it typically doesn’t make sense to spend money on an airline credit card, that’s not true for everyone. Furthermore, there are plenty of other reasons to get an airline credit card aside from the value of everyday spending. So under what circumstances should you get an airline credit card?

Airline Credit Cards Can Offer Great Perks

One reason it could make sense to get an airline credit card is because of the perks the card offers. This is often unrelated to actually spending money on a card, but rather is just a perk for having the card.

For example, potential benefits include a first checked bag fee, priority boarding, a discount on inflight purchases, discounted lounge access, and more.

Perks vary by card, so you’ll want to look at the benefits for the particular card you have. In general there are plenty of circumstances where it could make sense to have airline credit cards even if you don’t spend much on them.

For more details on this, see the following:

Airline credit cards may offer perks like preferred boarding

Airline Credit Cards Can Help You Earn Status

A lot of people try to earn airline elite status, which can offer lots of potentially useful perks, like complimentary upgrades, free checked bags, priority boarding, bonus miles, and more.

In some cases airline credit cards can help you earn elite status in one of two ways:

  • Some airline credit cards offer elite qualifying miles for reaching certain spending thresholds
  • Some airline credit cards offer to waive the elite qualifying dollar requirement for status, or otherwise offer fast tracks to completing the spending requirement

So if you decide that airline status makes sense for you and the only way to earn it is with some credit card spending, then this could make sense.

Elite status can get you perks like complimentary upgrades

Airline Credit Cards Offer Big Welcome Bonuses

Just signing up for an airline credit card can often get you enough miles for an international business class ticket, which can be a great reason to give one of these cards a try.

Redeem American miles for Etihad’s 787 first class

5 Great Alternatives To Airline Credit Cards

Above I’ve talked about why I think most people shouldn’t use an airline credit card for their everyday spending. So, what’s the best alternative? Below I wanted to present a few options, whether you’re looking for a cash back card or a travel rewards card.

All of these travel rewards cards offer a lot more flexibility than any airline credit card will give you, while the cash back cards are great whether you just want to earn cash back that you can put towards your everyday expenses, or if you want to use that cash back towards your next travel adventure.

In no particular order, here are five great cards to consider:

Citi® Double Cash Card — Great No Annual Fee Cash Back Card

The Citi Double Cash Card has no annual fee and offers 1% cash back when you make a purchase and 1% cash back when you pay for that purchase, all without an annual fee. That’s a better return on spending than a vast majority of people are earning.

Learn more about the Citi Double Cash Card.

Cash back will accrue quickly with the Citi Double Cash

Chase Sapphire Preferred® Card — Best Travel Rewards Starter Card

The Chase Sapphire Preferred has a reasonable $95 annual fee and offers a huge welcome bonus of 60,000 points. The card earns 2x points on dining and travel offers great travel protection, and has flexible points that can be transferred to airline or hotel partners, or can be redeemed for 1.25 cents each towards a travel purchase.

Learn more about the Chase Sapphire Preferred Card.

Earn bonus points on travel purchases with the Sapphire Preferred

Capital One® Venture® Rewards Credit Card — Best Straightforward Flexible Card

The Capital One Venture Card has a generous welcome bonus of 50,000 Venture Miles, has a $95 annual fee that’s waived for the first year, and offers 2x Venture miles per dollar spent. Those miles can either be transferred to airlines at a ratio of up to 2:1.5, or can be redeemed towards a travel purchase at the rate of one cent per Venture mile.

Learn more about the Capital One Venture Card.

Transfer points to Emirates Skywards from Capital One

American Express® Gold Card — Best Card For Dining

The Amex Gold Card has a $250 annual fee (Rates & Fees), but offers lots of great perks that help offset that. The card offers 4x points on restaurant globally, 4x points on the first $25,000 spent annually at US supermarkets, and 3x points on airfare purchased directly from airlines.

The card also offers a $100 annual airline fee credit and $120 annual dining credit.

Amex Membership Rewards points also give you lots of flexibility.

Learn more about the Amex Gold Card.

Earn 4x points on dining with the Amex Gold

Chase Sapphire Reserve® Card — The Ultimate Travel Rewards Credit Card

The Chase Sapphire Reserve is arguably the ultimate travel rewards card. The card has a $450 annual fee but offers 3x points on dining and travel, a $300 annual travel credit, a Priority Pass membership, the ability to redeem points for 1.5 cents each towards a travel purchase, and much more.

Learn more about the Chase Sapphire Reserve Card.

Get a Priority Pass membership with the Sapphire Reserve

Airline Credit Card Summary

There’s potentially value in having an airline credit card, for the great welcome bonuses, generous benefits when flying that airline, and possibly even for spending if you’re going for elite status. However, for the average person, you shouldn’t be using an airline credit card for your everyday spend.

Very few people will get over 2% back with an airline credit card, in which case a cash back card could make a lot more sense. If you do want to earn miles, use a transferable points card that will earn you points that are more flexible and more valuable, and will typically even earn you points at a faster rate.

Does anyone have a different take, and think an airline credit card is actually best for everyday spending if you aren’t going for status?

The following links will direct you to the rates and fees for mentioned American Express Cards. These include: American Express® Gold Card (Rates & Fees).

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Comments
  1. You’re blinded by your need to push credit cards to earn money for yourself, so you’re missing an important truth: for most people, no matter how they direct their everyday spending, that’s not going to make much difference in their miles/points accumulation.

    Redeeming points now requires pretty large buckets of points. The only practical way to get that many points is via sign-up bonuses. After you’ve met the required minimum spend for the sign-up, it really doesn’t matter much what card you put your spending on, because for the average person (MSers excluded) you’re never going to generate the tens (or hundreds) of thousands of points you need. Most people are not spending hundreds of thousands of dollars routinely (and if you are, you can afford to pay for your tickets).

    Maybe all those people you see that make you want to “intervene” are just hitting the minimum spend on those cards.

    Save your “interventions” for people using debit cards, which get you nothing.

  2. I love using my JetBlue card. I live in a JB hub, so they’re my preferred airline and I am always redeeming points (not hoarding, so I don’t expect devaluation to impact me too much.) I get 10% of miles back once I fly on an award ticket, 5000 point aniv bonus, 2x points on restaurants and grocery, 6x points for JB spending. I typically don’t use the card for spending that nets me 1x points. I wonder if you agree with this use or still think I’m not optimized.

  3. @ Gerry — I disagree. “Most people” aren’t comfortable signing up for multiple credit cards to maximize sign-up bonuses. They’re comfortable getting maybe one or two cards that they want to keep long term. Sure, the average family isn’t spending hundreds of thousands of dollars on credit cards per year, but the difference between earning 1x points and earning up to 4.5x points plus being able to transfer points with a 40% bonus is huge, and can make a difference for the average household.

    For those who are comfortable with signing up for multiple credit cards, there’s nothing wrong with approaching this from both ends and getting cards that have the best bonus categories AND cards that offer a generous return on spend.

  4. I am putting spending on four cards now to hit the minimum spend. Some of that spend will be restaurants which I know is suboptimal but it’s spend that getting 15-20x. Once I am done with minimum spend, I go back to optimizing, but lately there have been so many offers I am almost always putting towards spend, so a good problem to have. I never put any money past the minimum on an airline card in general but there may be some exceptions for small amounts.

  5. funny you whine about airline cards not returning 2%, but conveniently omit the Chase UA Club card that is 1.5 miles for all un-bonused spend. Even if you assign a poor 1.5 cents per mile valuation for UA miles, that’s 2.25%.

    lemme guess … the current referral bonus Chase quotes you is too poor to promote it ?

  6. Agreed 100% on the general point about the value of transferable currencies.

    Want to push back on one point just a bit- while paying with a debit card almost never makes sense, I like to pay with cash for small purchases (less than say $15) at small businesses. If they take credit cards they can’t enforce minimums, but it’s clear from talking with owners that the base fees are killer on small charges. So if I go to a local shop for lunch or a cup of coffee, I pay cash if I can. I doubt it affects things much at all, but makes me feel like I am being a bit sensitive to the difficulties of making a small business work.

  7. I have a Chase MileagePlus Explorer (United Airlines) Visa. It had a sign up bonus. I don’t use it very much but would use it more if they let you temporarily switch to another bonus, like cash back.

    I do not want my frequent flyer account to have too many miles. Too risky for hacking or airline “enhancements”. I wish airlines stop enhancements and start being crappy, which means they would get better. Ha ha..ok, don’t get crappy because they would comply and not do the oppose.

  8. @ henry LAX — I don’t value United miles at 1.5 cents. I’d much rather put that spend on the Freedom Unlimited and have more flexibility.

  9. @Gerry, I also disagree, and I’ll add that your cynicism is a bit misplaced and off-putting. You may be assuming that your particular financial situation is representative of everyone’s, which is a common mistake.

    For a family of four living on America’s coasts and paying typical rates for child care, gas, professional licensing, food, incidentals, airfare, utilities, etc, they can easily spend $100,000 a year on credit cards. Sometimes double that if extraordinary expenses are being generated (e.g. moving expenses). Translated to any sort of rewards or airline travel, that’s a bucketload of points, good for multiple international trips. You say that if people are spending tens or hundreds of thousands of dollars, they should be able to afford their tickets. Well, that may not necessarily be true: there are many people in high-wage, high expense cities that don’t have a lot left over after all the bills are paid. But even if people can afford it, smart people don’t leave hundreds of thousands of rewards points/airline miles on the table.

    Lucky’s article simply points out that spend should be directed toward cards that offer maximum flexibility and minimum devaluation, versus having the default solution to thoughtlessly go to airline miles. I don’t see anything to disagree with there.

  10. I love my Delta Amex. I know it doesn’t have the best return on everyday spend (obviously), but the perks are more than worth the $95 fee: free checked bags have saved me hundreds of dollars, the priority boarding lets me get on the plane first ad nab overhead bin space instead of dealing with the huge crowds, being able to “pay with miles” and still earn MQMs has been really amazing, and of course I get Amex offers that have saved me hundreds of dollars. I’ve never really needed perks like Priority Pass membership or airline incidentals credits, so my Delta card really does the job in terms of perks.

  11. “The good news is that I think for now airline award chart devaluations have slowed down”

    Hope you’re right. We have some AA miles I want to redeem on Etihad when we go to Sydney, but our time off for next year is already planned, and we won’t be able to use them until next year (for a 2020 trip)

  12. I am also a bit confused why there’s no mention of UA Club Card. Pretty good return on international business awards considering the 1.5 miles/$ on all spending. While partner metal first is a bit steep, it has quite a few advantages with lounge access, premier access, etc.

    I consider UA Club to be the best of all exclusive airline credit cards. It’s still probably not as good as AMEX Plat or Chase reserve, but in the above discussion it should be added for completeness.

  13. @ Gerry, Yeah bro, I don’t think you realize how many people are way richer than you and spend more money on their cards in a month than you would spend in a year.

  14. @Kendor – While I also take issue with aspects of Gerry’s post, I found much more amusing the way you chide him for “assuming that your particular financial situation is representative of everyone’s,” and then proceeding to relate to us a hypothetical world from a bubble of privilege.

    Even in the wealthiest counties in the country, you won’t find a “typical” household with $100k+ in annual expenses. While I certainly get why you might think that (after all, your statement actually would apply to me, my coworkers, my neighbors, and most of my friends from law school), your suggestion that a typical family—even in an expensive coastal city—would spend $100k+ annually on credit cards is just objectively false.

  15. I use my Barclays AA Sliver card for everyday spend. Between AA flights (3X points on AA metal) and bonus categories I’m earning about 100K in points a year. I use the CSR for work spend. Between those cards, my vacations are dope. Just did CX F to BKK and then spent a week at the Reverie in SGN. So I think you can use an airline card for everyday spend, you have to have a focused redemption in mind. Next I plan to take the Fiancee to Zanzibar on Qatar metal.

  16. @Kendor you are completely out of touch.

    The US median household income is $59,039. That’s before taxes. And thats household, ie, dual income.

    The number 1 expense is housing, which is around 30%.

    That leaves around $35k for everything else.

    The next biggest payments, things like car payments and school/college tuition can’t be paid on card (or shouldnt be anyway).

    So no, “easily spend $100,000 a year on credit cards” is absolutely wrong for the vast majority of Americans.

    @Gerry is absolutely right. Most people are charging dinners and groceries on their cards.

    $1,000 x2 or $1,000×3 isnt going to make a difference, when you need like 20k points for a one way domestic off-peak flight.

  17. I think an article like this is long overdue. Particularly with point devaluation, the more cards you have the more challenging it gets to decide where to put things. I can imagine, as you say, most folks having one or two cards. There are probably a few regular travelers who have three – one general spend, one airline, and one hotel type of thing. I suspect only the brave and the diehard chase sign up bonuses and status. Transferable currencies, while flexible, are only really of use if they can transfer to someplace you want to spend at. Left out of the discussion so far are shopping portals – another way to help maximize points.

  18. For airlines without transferable currency (AA, JetBlue, Southwest) it can make a lot of sense to put a lot of “everyday” spend on the cards if you are topping off mileage accounts you generally earn miles in anyway. A lot of the commenters seem to do this. I agree that with Delta, it doesn’t seem to make sense to spend much money on the card as opposed to an AMEX Charge Card.

  19. @tda and @JJJ: Did I say anywhere in my post that $100,000 a year in credit card charges was “typical” spend? Did I try to characterize the spending habits of median income holders in any way whatsoever? No? Then while I’ll notate your general SJW awesomeness for reflexively trotting out terms like “privilege”, I’ll suggest that you’re not being responsive to what my post actually said. I specifically described the scenario of a professional couple living on the coasts, which should have instantly cued you that I was not describing average or median income. (Don’t confuse my wording describing the “typical rates” of goods and services on the coasts (e.g. the price of gas, the cost of child care) with notions of “typical wealth” or “typical experiences.” )

    Beyond that, I disagree with the idea that this article can’t make a difference for some “average” families, whatever that is. @JJJ notes that 30% of spend is housing. Maybe they are able to put that expense on a credit card. Maybe they figure out a mechanism for manufacturing spend. Depending on their situation, that could translate to a few tickets a year, or some nights in a hotel. Even as a student earning about $10,000 a year, I was able to periodically earn tickets and other rewards that were valuable to me as a result of my credit card activity.

    But yeah, we can probably agree someone earning $5,000/yr is probably going to benefit less from this article than someone in the top 1% of earners. I’m just not clear on what purpose is served by commenting on that fact. That’s not the target audience for the article, or these credit cards.

  20. The AA cards from Citi and Aviator do offer bonus points in some categories – this month I think Aviator is offering for gas and restaurants. It comes in handy when I need to reach a certain limit but I usually stop spending after that. However, I find the cards helpful for priority boarding as well as free checked bag if needed – so I always use the airline credit card or choice when booking. In the end, I use my Reserve credit card for every day spend but use airline and hotel cards when I need to.

  21. @tda and @JJJ: more succinctly, crowded child care in my area runs about $18,000 year per child, and that’s at a not particularly fancy school. (Folks richer than us pay $25,000, $30,000, and more at various private daycares.) These child care places do take credit cards for payment, and without a surcharge. Someone paying that amount of money would generate enough spend for this article to be worth a look, I think.

    Of course there are going to be people who cannot afford that and care for their children themselves. But many people want to have the freedom to pursue work and careers in an effort to better themselves and their financial strength. They will pay for daycare, and they will pay rates that are typical for the coasts.

  22. I totally agree with Kendor. Living in a state like NJ, spending $100K on credit cards every year is very easy. We put our life insurance, car insurance, travel, vacations, all household expenses, day care, groceries or any expenses on the credit cards. And these are the so called “free expenses” i.e there is no additional charge to put these on the credit cards. If you want to maximize you can even charge mortgage (via Plastiq), pay IRS taxes, pay college tuition etc on the credits which if appropriately timed gives you 2 month float in addition to using a card which has a higher return than the fee to pay those expenses.

    Also this notion of throwing out the median income has limited value. Median just means that 50% of folks make less than ~58000 but then there are 50% who make more than 58000 where the sky could be the limit. Don’t fall for these statistical central tendencies like means and medians because they skew the data. Coastal America is a really a well off country and it is for these folks Lucky is providing advice. Obviously if your expenses are low then more power to you and I would argue that you don’t have to play the points game since your expenses and vacations don’t cost much so just pay cash for those trips….

    As for us after paying all those expenses a free vacation really comes in handy by maximizing points accrued on credit cards.

  23. @Kender, stop tripping over yourself to get a comment in and read what Gerry wrote.

    ” for most people, no matter how they direct their everyday spending, that’s not going to make much difference in their miles/points accumulation.”

    Again, read it slowly.

    “for most people”

    He is correct. Period.

    That should have instantly cued you that he was describing average or median income.

    So your comment where you say “you may be assuming that your particular financial situation is representative of everyone’s” is incredibly ironic when you follow up with a ridiculous example of someone charging $100k to a card every year.

    Do those people exist?

    Absolutely.

    Are they “most people.”

    Absolutely not.

  24. @Kendor – Gerry’s argument was premised on the idea that most people do not (and cannot) spend $100k+ on credit cards annually. You chided him for “assuming that your particular financial situation is representative of everyone’s.” This despite the fact he made no reference to his particular situation and the fact that the premise of his argument is objectively correct. (As an aside, agree with you that the conclusion he draws from this premise is incorrect.)

    Immediately after rejecting the Gerry’s premise as “not representative,” you present the claim that a family of four paying “typical rates” for a variety of common goods and services ”can easily spend $100,000 a year on credit cards.”

    The conclusion JJ and I drew from your post was thus well-founded. If you wanted to avoid the implication that it was somehow typical or representative to spend $100k+ annually on credit cards, you could have just said “there are many people who are only relatively affluent that put $100k+ on their credit cards,” and then proceeded with your example.

  25. The avg person doesn’t fly that much one card with sign up points (60K) and 2 years spending later is a lot of points (30K each year )==== 120K . Which will get them TWO RT to EU ..I know one lady who has SIX SS numbers that her family never uses so THEY pool the sign up points then Dump the cards.
    Most Avg people do NUTTING so they get nothing as in trips.
    CHEERs

  26. @MrChu – “I totally agree with Kendor. Living in a state like NJ, spending $100K on credit cards every year is very easy.”

    I suspect the 75% or so of NJ households that don’t even earn that much in a year would disagree with you on that…

    “Don’t fall for these statistical central tendencies like means and medians because they skew the data.”

    While means can skew data, the median is certain the best number to use to evaluate a claim regarding what “most people” in a large population can afford.

  27. Just adding to Anastasia about the Delta Amex, which I also use for everyday spend in larger part to make the $25k or $50k miles for MQM. The biggest additional perk with the Platinum version of the card is the free US round trip companion certificate every year. This is especially valuable to me. While certificate does not allow travel to Hawaii, since my billing address is in Hawaii, I can originate my trip here. I generally use it for a trip to the east coast to visit family, and those fares can easily rise above $1000.

    I should also say that the companion certificates used to be cumbersome to use, requiring phone calls and a trip to a “ticket office.” Now however, it is added to your on-line “wallet” and are pretty simple to redeem.

  28. “While means can skew data, the median is certain the best number to use to evaluate a claim regarding what “most people” in a large population can afford”

    Totally disagree here. What you are referring to is when the parameter is normally distributed. Income is NOT normally distributed so applying these central tendencies gives you a skewed response. Most folks don’t understand the normal distribution and just take the mean and median and hope to get the glimpse of the societal income. There is possibility that a power function describes income and in such a case using the median values only leads to erroneous beliefs. This applies to both on the upper and lower income.

  29. I am a happy Cathay Pacific Elite Amex card user which gets me 1.5miles (asiamiles) for every usd 0.76 in overseas spent. It’s not great but good enough.
    Only use this card for company expenses and do accumulated a large number of miles which I need to start using.
    Thanks for this insight esp concerning devaluation etc…

  30. People have gotten into the weeds.

    Forget the coastal elite spending $100k on their credit cards for a moment.

    What about someone spending $1000/month…
    Many people can and do spend that

    If they can average 2 points per dollar, that’s 24k points per year. Enough for a round trip domestic economy ticket. They can get to Europe I’m 1.5 to 2 years.

    But on an airline card? They’d only get a little more than 12k points per year (I’m assuming a person who only spends $1000 per month isn’t flying a ton!)

    Thus, putting their spend on a Chase gets them a free flight far faster than if they used their airline card

    (Obviously this neglects sign up bonus)

    Thus, the average Joe would also do well to spend on a transferable card or cash back card too, validating Luckys point

  31. Wow. Who would have predicted all the debate? I almost didn’t even click on the link because it it seemed like basic advice. Don’t put spend on airline cards…unless you have a good reason to do so.

  32. I use Citi AAdvantage card on everyday purchases because that is all I have at the moment I don’t have the funds or credit score for anything else currently. I spend $100 per week on fuel so the 2X Miles starting July will help. I just purchased a bed and bicycle and earned about 3,500 Miles using the eshopping portal and Citi AAdvantage card. I probably shouldn’t be using a credit card to begin with given my situation but I make the most of it for now. Once my financial situation improves I will switch over to Citi thank you points and Chase rewards it seems much better. Great article.

  33. @MrChu “Totally disagree here. What you are referring to is when the parameter is normally distributed. Income is NOT normally distributed so applying these central tendencies gives you a skewed response.”

    Except my claim in no way requires a normal distribution. “Most people” would by definition be 50% + 1. In a large population such as contemplated here, there would have to be a seriously anomalous distribution for person 50% + 1 would significantly differ from the median.

  34. There’s another big benefit to the UA Chase MileagePlus cards — it opens up more award space when booking on United. I have the CSR but I keep around my MP Explorer card for that reason.

  35. We need a financial Endre:

    I’m a member of the coastal elite and I spend $100k per month (90% on my united explorer card)…

  36. @everyone – just use percentiles. 90 percentile for income in the USA is $143,000 per household. So, definitely, 90% of the households make less than $143,000 a year. Yes, we ARE the privileged ones – even though we always complain we want more… #getreal

  37. People who know I do the credit card thing typically ask me for advice, and I almost always point them to Citi Double Cash and/or Cap One Quicksilver (if they go on int’l trips). Maybe the Uber card is good for most people now too. But I don’t sell them on the Ultimate Rewards trio or Amex Membership Rewards unless I KNOW they are as anal retentive as me and they are willing to learn the system. Usually a quick look at my tracking spreadsheets is enough to weed out the able.

  38. Thanks Ben, this is incredibly helpful, and in fact I was just asking about this very topic on a different thread here.

    However, for someone like me who flies AA via PHL the majority of the time, I don’t see Chase as a good option for me being you can’t transfer points from Chase to AA. What’s your take there, is there a transfer option I’m not aware of, where dropping an AA card for Chase make sense ? I’m looking for a good reason to jump.

  39. @RJW: I would still charge my daily expenses on other cards — even a flat 2% cash back card is better than 1 AA mile given that AA is constantly selling miles for under 2c/mi.

  40. I have the Delta Reserve which provides access to the Delta Club, but it also shows up as a priority for upgrades. I think the Reserve has real value for me. And while the companion ticket is annoying because it excludes Hawaii and Alaska, I can make it count by taking a companion to SEA from ATL. I buy first class and the companion gets first class for the taxes and fees.

  41. @Gerry

    While the pimping on this site hasn’t gotten quite as bad as it has on TPG, it shouldn’t be something new to you if you’ve been visiting this site for the last few years.

  42. I used my AA credit card yesterday to protect my miles from expiring. Hope this qualifies as a good reason to use it.

  43. The nitpickers picking on this article because it does not help the bottom 80% of the population : Would you rather this article address the needs of the bottom 20%, which is likely 1. without a computer 2. illiterate ?

    There are blogs that pimp ideas/services for the bottom 20 percenters. They are usually found under other headings, not under ‘travel’
    So please limit your nitpicking to your spouse.

  44. Faye,

    That’s not really comparable as buying miles directly requires incremental out of pocket costs while simply using a credit card for what you already buy requires no incremental cost.

  45. @Anthony: Yes, but that incremental cost could be taken out of the 2% cash back you would have earned.

    For example: Instead of charging $100K to get 100K AA miles, I would charge the $100K on a 2% cash back card netting me $2,000. With AA mile sales at 1.7-1.8c/mi, buying 100K miles would cost $1,800; hence, I’m still $200 better off using a cash back card. As overtime miles tend to devalue, most likely miles could even cost less than that in the future. Moreover, cash back gives me the option to buy or not buy miles.

  46. @texanflyer – you’re a complete douche. Just people are lazy, dumb and illiterate just because they don’t earn what we do. Maybe be appreciative and either 1. Remember where we came from or 2. Be appreciative you were born with a golden spoon.

    I grew up poor. I can assure not all of the working poor are dumb and illiterate.

  47. If you do your banking with Bank of America, don’t forget the BOA Premier Rewards card. While you can’t transfer miles to your frequent flier accounts, you get 2 points for travel & dining and 1.5 points for everything else. Each point is worth a penny. If you are a Rewards bank customer, you get a bonus of between .25 to .75 per dollar spent. I am a Platinum Rewards customer, so I get a 50% bonus on every dollar spent. So for travel (including Uber, hotels, airport parking, etc.) I get 3 points, and for everything else I get 2.25 points. The card has a $95 annual fee, but there is an annual $100 travel incidentals credit that more than offsets the fee. The 50,000 sign-up bonus isn’t bad either, and BOA is one of the easier banks to get cards from.

  48. Every situation is different of course, but this seems like decent advice if you’re US-based. However, things are different in Europe and I have yet to find a non-airline credit card that would give me better value overall. Yes, Amex Rewards Points are an option but please note also that Amex is not widely accepted in many European countries. Any out of the box advice?

  49. Couldn’t disagree more. I can’t be bothered to go into detail as I know few would read my comments and even fewer take any notice of them but I still feel impelled to say how much I disagree with this article. I have a British Airways American Express card, it’s used for my regular domestic expenditure and business expenditure and I enjoy low cost flying and free car hire frequently as a result.

  50. Count me among those surprised to see the Chase United Club card dismissed so quickly. It earns 1.5x miles on everything regardless of category, which is why I use it for all my non-travel and dining expenses. I’m shifting my domestic flying away from United, but UA miles are useful in picking up international Star Alliance awards, which are plentiful from my home base in Boston.

  51. The two reasons I use my Delta card is MQM waiver after $25K and (primarily) Delta allows you to use points as dollars. 10,000 miles = $100 discount. This is by far the best way to use points as you can book any normal flight, seat, class, etc. and pay by points. No need to look for award travel which many times gets you less bang for your miles!

  52. As an accountant, I am fed up with the archaic AmEx payments online. They don’t allow you to enter payments from separate bank sources simultaneously, so you constantly have to monitor payments. NO other card does this. I advised my clients to drop AnEx until they hire a teenager to update their system. It’s a nuisance, others do better.

  53. I look at a stash of AA miles as another good diversification tactic. I only earn them thru 2x AA flt spend, gas, or phone charges via both Citi AA cards (never 1x other).

    They are so much easier to redeem thru AA rather than having to go thru Avios & other p&m contortions. People who live in one of their hubs always find a need, sometimes exclusively, for them.

  54. I know this is an American blog, and you have all this options concerning different credit cards, etc…
    But if you live in europe, the only way you can go about this is having the airline credit card.
    I mean, American Express Switzerland gives you 1 point for 2 swiss francs!!! No bonus on airfare, restaurants, NOTHING… people living in US must account for 80% of all award tickets in the planet. You get miles way more easily than anybody, including the UK.

  55. I’m currently an AA Executive Platinum and a majority of my flying just moved to being between Orlando and Atlanta. As a result, I’m trying to go for Delta status but the flight only gives me about 500 miles per leg. I fly round trip every week and I was just approved for a status challenge. My current flying would only get me to the second tier or maybe a bit below that. Is there any credit card that can help me get a higher status with Delta.

    Otherwise I’m 20,000 miles from requalifying for AA Exec. Platinum again and I may just do a trip for that.

  56. @Pedro Costa

    I know it’s a bummer that you don’t have better credit card bonuses over in Europe but at least you get universal healthcare and your streets aren’t flooded with handguns and assault weapons so all in all I think you have the better of it.

  57. Hello guys, I know it was already mentioned by @Pedro Costa, but still:

    I wish I could have lived in US. You get up to 100k sign-up Bonus per Credit Card (CC) every two years easily and there are maybe 100s of them available on the market. With three CCs and three bank accounts opened, I have reached in total not more than 60k miles. And those are once in the lifetime.
    PS: You won’t find many guns and assualt rifles in the Airport Lounges either.

  58. @DCJoe, if it’s a place you frequent, consider getting a $50 or $100 gift card that you can spend down over time. That way the transaction charges aren’t too high as a percentage of the purchase price and you can earn points.

  59. Just used my Alaska card last week for an Alaska Airlines companion ticket. 3x points. Then, back to the sock drawer!

  60. Looks like this is a post from last year that just been re-posted? Nothing wrong with that, but I think it’s worth mentioning at the top.

    Anyway, I keep a $450 DL Reserve Amex with very little spend on it precisely because of the perks. For me the SkyClub access plus companion certificate makes it a no brainer. Plus, it’s a tiebreaker for medallion upgrades. I’ve collected a small chunk of Membership Rewards points and it looks like I’m going to transfer to SkyMiles anyway for two D1 round trip tickets for a redemption that should work out to be around $.03/mile

  61. I have the UA club card. Got it a few years back when they sent me a 60k sign up in the mail. I think the perks are great for Star Alliance flyers as the card gets you into pretty much ALL Star Alliance members business class lounges. Forget the UA lounges – think bigger and better. Flew IAD to DEN recently and I spoke with another club card member who planned on spending their time at the UA lounge but when I told him they can get into the Turkish business lounge, have a hot meal, free drinks, and take a shower, he couldn’t believe it. This is something UA doesn’t advertise well enough when pushing their club card. I suppose this access costs them more money? Only reason I can think of.

  62. @ Ben L.
    You forgot about the “benefits” of not having health insurance: a visit to the ER can easily cost you tens of thousands of dollars, which if you put it on a credit card helps you earn tons of points. Most europeans don’t earn that many points in a year. LOL

  63. There aren’t really good transferrable options for AA or Alaska miles any more, so you have to spend on their cards to build mileage (apart from signup bonuses, of course).

    There is Marriott, but Marriott now offers only 2/3rd of a mile for general spend.

  64. @JB- the AmEx Delta Reserve gives 15K bonus MQMs when you spend $30K in a year on the card and another 15K MQMs when you hit $60K in a calendar year. The AmEx Platinum Delta SkyMiles gives 10K bonus MQMs at $25K in spend and another 10K bonus MQMs at $50K of spend in a year.

    With the AmEx Skymiles Gold/Platinum/Reserve cards, USA-based customers get a waiver for the MQD requirements for Silver, Gold and Platinum status once you put $25K on that card in the year.

    So if it makes sense to lock into the Delta ecosystem for your flight needs, (ex-I live in the small market Southeast. I have been assimilated) AmEx actually gives what can be decent reasons for some to use their Delta co-branded cards rather than sock drawer-ing them

  65. @Gerry – the less a household spends the more important each category is maximized, not less! Each $ really counts, & the points really do add up over time.

  66. @Ed. I have 8 cards and keeping it all straight in my head is a challenge. Any way you could share a tracking sheet template for us? I asked Lucky a while back who said he doesn’t use anything. Thanks.

  67. Number 1 reason not to use a mileage credit card or convertible point card…is if you carry a balance on those credit cards.

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