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Which Virgin America Visa Signature Card is Best for You?

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I’m a fan of over-the-top credit card sign-up bonuses that offer a bonanza of miles all at once, but there are plenty of cards with less substantial bonuses that are worth having for their other benefits. Today TPG Contributor Nick Ewen shows us the ins and outs of two such cards from Virgin America, and offers some guidelines for deciding whether these cards are a good fit for you.

In the world of award travel, a lot of coverage is devoted to the legacy airlines like Delta, United, and American. However, one of the best strategies to pursue when accruing points & miles (and one that TPG preaches often) is diversification. Banking currencies in different loyalty programs can be a terrific way to guard against devaluation in a specific program, and this includes revenue-based programs like those offered by JetBlue and Southwest Airlines. In this post I’ll discuss another such program in Virgin America, along with the co-branded credit cards it offers, to see whether you should consider adding one of the two Virgin America Visa Signature cards to your wallet.

Virgin America offers you standard earning rates of 5 points/$ on paid tickets, regardless of the distance flown.
Virgin America offers a standard earning rate of 5 points/$ on paid tickets, regardless of the distance flown.

Let’s begin with a review of the Virgin America Elevate frequent flyer program. The program offers both revenue-based earning and redemptions. You earn 5 miles per dollar spent on base fares on Virgin America, and they have many other partners that offer earning opportunities, including Virgin Atlantic and Virgin Australia, Emirates, Hilton, and Marriott. Virgin America also just announced its Feel the Earn fall promo (their largest ever), offering bonus points for travel through December 19, 2014.

If I wanted to visit my aunt & uncle in San Francisco for Thanksgiving, Virgin America would cost
If I wanted to visit my aunt & uncle in San Francisco for Thanksgiving, a Virgin America flight would cost $219 or 9,489 points, a redemption value of just over 2.3 cents/point.

When it comes to redeeming your Elevate points, the first option is to use them on flights operated by Virgin America. This is the easiest of redemption options, as you can simply search Virgin America’s website for available flights and flip back-and-forth between paid and award tickets with a simple click (though you must have an Elevate account to see point redemption values). There are no blackout dates, and any open seat (in Main Cabin, Main Cabin Select, or First Class) can be booked using Elevate points. However, since the redemptions are based on cost, more expensive seats require more points, even in the same cabin. My searches have generally found redemption values to be around 2.2 cents per point, which is close to the high end of TPG’s most recent valuation of 2.3 cents per point.

Virgin America Elevate also allows you to redeem points on partner airlines, though there isn’t any published award chart for doing so. Instead, their website has a tool you can use to calculate the points required for a round-trip or one-way flight between two cities (scroll about half way down the linked page to find it). For example, here’s what it would cost for a round-trip flight between San Francisco and London-Heathrow on Virgin Atlantic:

Virgin America redemption 1

And here’s the cost for a round-trip flight on Emirates from JFK to Dubai:

Though the site does give the option of one-way flights, they’re generally more than half the cost of a round-trip, and thus offer lower value. In addition, many partner redemptions have high fuel surcharges, but the online calculator will estimate these for you. When you’re ready to book, you need to call customer service (1-877-FLY-VIRGIN) to lock in the flight.

Is one of these cards right for you?
Is one of these cards right for you?

So what about the credit cards? Virgin America currently offers two different cards issued by Comenity Bank: the Virgin America Premium Visa Signature and the regular Virgin America Visa Signature. Before I get into the details, you should know that many readers have reported difficulties with these cards (see the comments here), from having to wait unreasonably long to get their cards, to poor customer service, to misrepresented benefits.  I recommend reading the fine print before you consider applying.

Here’s a quick breakdown of the benefits on each card:

 

Premium Visa Signature

Visa Signature

Sign-up Bonus

15,000 Elevate points after spending $1000 in 90 days

10,000 Elevate points after spending $1000 in 90 days

Earning Rates

3 points/$ with Virgin America; 1 point/$ everywhere else

3 points/$ with Virgin America; 1 point/$ everywhere else

Status

5,000 status points for every $10,000 spent (up to 15,000 points/year); rollover status points

None

Fee Waivers

No change/cancellation fees; first bag free for you and one companion

First bag free for you and one companion

Companion Benefits

$150 off a companion ticket each year

$150 off companion ticket each year

In-Flight Discounts

20%

20%

Annual Fee

$149

$49

Both of these cards offer an intriguing value proposition. Let’s take a closer look at each one:

  • Sign-up Bonus: Considering a standard rate of 2.3 cents per point, the sign-up bonus on the Premium card offers $345 in value, while the standard card offers $230 in value. Both of those easily cover the annual fee, so if you have an upcoming flight on which you could use Elevate points, this can be an easy way to cover those costs.
  • Earning Rates: These cards are clearly designed to be used on Virgin America flights, though it would be nice to have additional bonus categories (like dining or entertainment). Regardless, 3 points per dollar spent is a pretty good earning rate. If each point is worth 2.3 cents, you’re actually getting a return of 6.9% for every dollar spent on Virgin America purchases. Even using the card on everyday purchases equates to a 2.3% return, though I would recommend using a card like the Barclaycard Arrival or Barclaycard Arrival Plus on those purchases, since the 2.2% return can be applied to any travel expense (and you’ll still earn elite-qualifying miles when you redeem for airfare).
  • Status: The Virgin America Premium Visa Signature offers you 5,000 status points for every $10,000 you spend (up to 15,000 status points every year). If you max out this benefit every year, you’ll be three-quarters of the way to Elevate Silver Status, and only need to spend $1,000 a year on Virgin America flights to earn the remaining 5,000 points. While Silver isn’t the most lucrative elite status level, it does offer you a 25% earning bonus on flights, 2 free passes a year to the Virgin Loft at LAX (an $80 value), free upgrades to Main Cabin Select, and priority check-in/security/boarding. In addition, any status points earned above a qualification threshold will rollover (just like Delta’s rollover MQMs), which gives you a head start on elite status qualification for the next year.
  • Fee Waivers: Both cards waive the fee on the first checked bag for you and a companion; at $25 apiece, that can save you up to $100 for every round-trip flight you take on Virgin America. More importantly, the Premium Visa Signature waives the change/cancellation fees on non-refundable tickets, which can be up to $150 per ticket. However, to take advantage of this fee waiver, you have to purchase the ticket directly with Virgin America using your Premium card (so corporate travelers like me are out of luck), and it does not apply to reward ticket cancellations, which are still subject to the $100 Elevate redeposit fee.
  • Companion Benefit: This one is pretty straight-forward, as you can get $150 off a companion’s ticket every year with either card. This is actually a discount code mailed to you 6-8 weeks after paying the annual fee (or after making the first purchase in year one), and it’s good for a full year from the date of issue.
  • In-flight Discount: This type of benefit is relatively standard across co-branded airline cards, and 20% can save you a decent amount if you travel on Virgin American frequently.
  • Annual Fee: The annual fees ($149 for the premium card, $49 for the standard card) can easily be covered by maximizing one or more of the benefits each year.
If you frequently enjoy the mood lighting onboard Virgin America, one of these cards absolutely should be in your wallet.
If you frequently enjoy the mood lighting on Virgin America, one of these cards should be in your wallet.

So does it make sense to apply for one of these cards? I would say yes, but only if you fit into one of the following categories:

  1. Frequent Virgin America flyer: If you’re based in Los Angeles or San Francisco, or travel on Virgin America at least twice a year, you should consider adding one of these cards to your wallet. I love the change/cancellation fee waiver on the premium card, and would love to see other airlines mimic that benefit on their own top-shelf credit cards. The free checked bags can also be a big money saver, and if you have a trip planned with a companion, saving $150 will cover the annual fee on either card. In addition, earning 3 points per dollar spent on Virgin America purchases is a 6.6% return; that’s pretty hard to beat in today’s loyalty program market.
  2. Upcoming use of Virgin America points: The sign-up bonuses alone on these cards are worth at least $230 toward airfare on Virgin America, so if you open the card and meet the $1,000 spending requirement, you have a good chunk of points that can be redeemed for upcoming award travel. Remember to check for partner flights too. You can redeem points on some relatively obscure routes (like Dubai-Seychelles or Singapore-Maldives). This can be even more lucrative if you have…
  3. Upcoming paid flight on Virgin America: You can make this sign-up bonus even better by booking a paid flight on Virgin America, earning 3 points per dollar spent, and adding a companion (at a $150 discount). The points you earn can be redeemed toward a future flight, and your companion comes along with you at a discounted rate.
  4. Close (but no cigar) Virgin America elite status qualifier: One of the most painful experiences in the world of airline and hotel loyalty programs is just missing out on qualifying (or requalifying) for a particular level of status. If you typically miss out on Silver or Gold status in the Elevate program, the Premium Visa Signature card could be your savior. $10,000 in spending = 5,000 status points, which is 25% of the way toward Silver status.

If you’re considering applying, run some numbers and see how much you’re likely to get out of one of these cards. Being able to pin a dollar value on the benefits will make the decision to apply (or not) much easier.

Do you currently have one of these cards? Please share your thoughts and recommendations with fellow readers in the comments below!
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