Reader jlocke asked the following in the “Ask Lucky” forum:
I recently took advantage of the Citi Premier℠ Card sign up bonus and will consider another credit card in the future. However their airline partners are limited from my hometown airport of Pittsburgh. I fly AA the majority of the time and have 250K + miles. I assume that I should get the Chase Sapphire Preferred® Card credit card since BA is one of its airline partners. This will allow me to utilize the AVIOS short segment sweet spot on the American Airline routes that service my hometown airport. Are my general thoughts/assumptions correct?
It’s a great question, so let’s unbundle it a bit…
The Citi Premier℠ Card isn’t great for American flyers (as such)
I have (and love) the Citi Premier℠ Card:
- The annual fee is waived the first year, and $95 per year thereafter
- The card offers fantastic bonus categories, including 3x points on travel and gas, 2x points on dining out and entertainment
- The card has no foreign transaction fees
That being said, in and of itself it’s not especially useful for an American flyer. That’s because:
- Citi ThankYou isn’t transfer partners with American AAdvantage or any other program which is especially “efficient” for travel on American
- You can, however, redeem each point for 1.25 cents each towards the cost of a ticket on American, or any other airline, for that matter; when you factor in the bonus categories that could be a good deal, though I think you can still do better than that
The Citi Prestige® Card improves the value proposition
The Citi Prestige® Card is the “premium” card which accrues ThankYou points, though it can increase the value proposition of all your ThankYou points in an important way. Specifically, if you have the Prestige Card then
each point can be redeemed for 1.6 cents towards the cost of a ticket on American. Update: The new redemption rate is 1.25¢ towards any airline.
You could transfer your points from the Premier Card to the Prestige Card as well, so all the points could be redeemed at that price. Given the bonus categories, that’s potentially an incredible value. After all, you’d be getting a return of ~4.8% on travel and gas purchases on the Premier Card, for example.
So while they’re not miles you can use towards travel on American, they can help you book paid travel on American, which can earn you elite qualifying and redeemable miles, status, etc.
The Citi Prestige® Card does have a $450 annual fee, though has so many perks which help offset that fee, including a huge sign-up bonus, a $250 annual airline credit (with your first year’s annual fee you actually get two of those — that’s $500 of airline credits with your first year’s $450 annual fee), access to American Admirals Clubs, a fourth night free hotel benefit, the most comprehensive Priority Pass membership offered by any card, and a $100 Global Entry fee credit
Is the Chase Sapphire Preferred® Card a good alternative?
The Chase Sapphire Preferred Card is one of the all around best travel credit cards out there. It offers 2x points on dining and travel. On the surface those bonus categories aren’t quite as good as on the Citi Premier, given that it offers 3x points on travel and on gas as well.
That being said, the points can be transferred to British Airways Executive Club, which is one of the most useful programs for short-haul award travel on American. Furthermore, the points transfer ratio is 1:1, and I suspect it will stay that way, given that the relationship between British Airways and Chase is strong, since Chase issues the British Airways Visa Signature® Card.
If the goal is to earn British Airways Avios…
If the goal as an American flyer is to earn more British Airways Avios, is there a better alternative?
Specifically the Amex EveryDay® Preferred Credit Card accrues Membership Rewards points which can also be converted into British Airways Avios. Furthermore, for some kinds of spending profiles, the card offers an incredible return on spend:
- Earn 3x points at U.S. supermarkets on up to $6,000 per year in purchases (then 1x)
- Earn 2x points at U.S. gas stations
- Earn 1x points on other purchases
- Use your card 30 or more times on purchases in a billing period and get 50% more points on those purchases less returns and credits
So with 30 transactions per billing cycle, you’re earning a minimum of 1.5 Membership Rewards points per dollar spent, which is a pretty awesome rate of return.
There are two important things to note when it comes to converting Membership Rewards points into British Airways Avios:
- Historically, Membership Rewards sometimes has transfer ratios when converting points into Avios, though they’ve become rarer in the past (for what it’s worth, I don’t recall ever seeing such a transfer bonus from Chase Ultimate Rewards)
- As of October 1, 2015, the transfer ratio from Membership Rewards to British Airways will be devalued from the current 1,000:1,000 to 1,000:800; it remains to be seen what the overall impact is when you weigh that with the transfer bonuses
I think jlocke has the right general approach towards credit cards when it comes to being an American flyer living in Pittsburgh. To sum up my advice:
- If you get a ton of value out of short-haul Avios awards on American (which is perfectly reasonable, given how expensive many short-haul tickets are), either the Chase Sapphire Preferred® Card or the Amex EveryDay® Preferred Credit Card makes sense, depending on your spend profile
- Even if you are an American flyer, keep in mind there are plenty of other ways to redeem miles for travel that doesn’t include American — there are plenty of great non-US carriers out there that you can redeem miles on at an efficient rate, and that’s something which isn’t to be overlooked
Which card would you be using if you were in jlocke‘s shoes?