Editorial Policy

Airline Credit Cards Can Rev Up Rewards

Eva Norlyk Smith Ph.D.

July 11, 2012

QHi Eva,

I’m looking around for airline rewards cards, and there are so many. Some are only for certain airlines, while others can be used on any airline. I usually fly American (probably more than half the time I fly), and I already have a frequent flier mile account set up with them. So should I get an American Airlines rewards card? Or am I better off getting a card that lets me use my points on any airline? Or should I get both? I just want to be as strategic about this as possible. — Cassie

ADear Cassie,

Yes, indeed, with all the options out there, it’s easy to get confused trying to find the best airline rewards card. And, not surprisingly, the task is made even more difficult because there isn’t one best card; it all depends on your situation. However, here are a few tips to help you on your way.Ask Eva

First of all, generic travel rewards cards that let you use your points on any airline may seem to offer greater flexibility. However, you’d be earning free travel only through your purchases, not through your trips, and that is a serious drawback. With airline cards, however, you can rack up rewards points both by shopping at certain retailers and by flying with the carrier. So generally speaking, if you travel enough, an airline card linked to a frequent flier program is the better way to go.

In your situation, the choice is made easier, because the main criteria for selecting an airline rewards card is to stick with the carrier you use the most. Not everyone has a preferred carrier, but in your case, it makes the most sense to get the rewards card associated with American — the Citi AAdvantage card. That way, you’ll earn miles toward free travel faster, both through travel and credit card miles, instead of diluting your earnings power by spreading yourself thin between several frequent flier accounts.

You may have heard that American Airlines entered into bankruptcy proceedings at the end of last year. Should you be concerned? If the bankruptcy were to end up in a liquidation of AA’s assets, yes, you could say there should be reason for caution, because holders of AAdvantage frequent flier miles would stand last in line of the list of creditors to pay back.

However, industry experts are saying that a liquidation of American Airline assets is not in the cards, and that the bankruptcy might actually be good news for AAdvantage frequent fliers. American Airlines is not the only major carrier to file for bankruptcy in recent years. In fact, the airline follows in the footsteps of major carriers Delta, United and US Airways, which all filed for bankruptcy within the past decade in an effort to get costs under control. Those carriers came out stronger after they restructured their costs and, most likely, so will American Airlines.

In fact, according to blogger Gary Neff of the highly respected frequent flier websites Milepoint and BoardingArea, AAdvantage members might come out ahead because of the bankruptcy. Why? According to Neff, American hasn’t restructured the award redemption requirements for their frequent flier accounts for quite a while, and they are less likely to do so now out of fear of scaring away already worried customers. Also, the airline may well offer more bonus offers and promotions in an effort to keep loyal customers.

Indeed, if you look at the current redemption requirements at AAdvantage.com, you will find that American currently offers some of the best frequent flier redemption deals around. It’s fairly easy to find round-trip tickets for 25,000 rewards miles in the AAdvantage program, compared with the 37,500 to 45,000 miles you easily end up paying for a domestic round-trip ticket with other carriers. On overseas flights, the redemption value of AAdvantage miles is typically even more favorable, with savings of as much as half the miles required as for other frequent flier programs.

Eventually, the AAdvantage program will likely get restructured and level off to match the awards requirements of other frequent flier programs. So now’s the time to start racking up those miles.

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