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Update: Some offers mentioned below are no longer available. View the current offers here – British Airways Visa Signature Card
In the travel rewards game, earning points and miles is only one half of the equation. How you spend them is what really determines what they’re worth, and how far they’ll take you. Today TPG Contributor Nick Ewen offers suggestions for using British Airways Avios earned from the co-branded Chase credit card.
In this month’s ranking of TPG’s top credit card offers, the British Airways Visa card from Chase came out on top. TPG has written extensively about this card (and Avios) in the past, but it currently sits at #1 due to the fact that the $95 annual fee is waived for the first year (for applications through December 31, 2014). In this post I’ll highlight the key benefits on the card that allow you to make the most out of your hard-earned Avios.
The Sign-Up Bonus
The first (and most obvious) benefit of the card is the sign-up bonus, and that’s where you’ll find the first of several ways to get great value. The British Airways Visa offers you 50,000 Avios after spending $2,000 in the first three months of cardmembership. Based on TPG’s November valuations, this bonus alone is worth $850. However, there are many ways to make those Avios go even further:
1. Distance-Based Awards:
British Airways offers distance-based awards, so the farther you fly, the more mileage you need. On the flip side, short-haul flights are a sweet spot, as you can redeem just 4,500 Avios for flights that are 650 miles or less, and these shorter flights (especially last-minute ones) can be very expensive. Since British Airways is a part of Oneworld, your redemption options include American Airlines and US Airways, among others.
As an example, suppose you needed to book a flight from Charlotte to Orlando this Saturday. One-way flights on US Airways are $470, while at the time of writing, the 7:50 am, 4:35 pm, and 8:10 pm flights are available for just 4,500 Avios + $5. The sign-up bonus from the BA Visa would allow you to book 11 of those flights for a whopping total value of $5,170! That comes out to 10.4 cents apiece.
The value also extends to longer flights that are still “cheaper” in Avios than other mileage currencies. I personally took advantage of this back in January, when my wife and I wanted to fly to Curacao for a friend’s wedding, and coach tickets on American from Miami were over $800 per person. Fortunately, the round-trip flight only took 20,000 Avios plus $62 per person, getting me almost $1,500 in total value (3.75 cents apiece).
2. Aer Lingus Flights:
Aer Lingus offers a strong option to avoid paying huge fuel surcharges on transatlantic flights, and since British Airways uses distance-based awards, you can get some great deals from East Coast gateways. Boston to Dublin is just 25,000 Avios round-trip in economy and 50,000 Avios round-trip in business class. Most fall dates have 9 economy award seats available (business class is much more scarce), and with base fares that are typically $419.50 one-way, your sign-up bonus can be worth $1,678, almost double TPG’s valuation.
3. Upgrading Paid Tickets: Another option for redeeming Avios is to upgrade a paid ticket. British Airways allows you to book a paid ticket and then use Avios to upgrade to the next highest class of service. To do so, log in here and click on the Book and Upgrade With Avios tab at the top. Then search for the class below the one in which you would like to travel (e.g., if you want to book a business class ticket and use Avios to upgrade to first class, search for business class).
I’ve generally found that this really only makes sense in two cases:
- Going from World Traveler Plus (premium economy) to Club World (business class)
- Going from Club World to First class
For example, let’s say you wanted to fly from Miami to London and back next fall. At the time of writing, there is upgrade space for flights leaving October 28, 2015 and returning to the US on November 4. 2015. Here’s what it would cost to book the cheapest premium economy ticket:
If you searched for upgradeable flights, you would find that it costs less than $400 more (plus 25,000 Avios) to fly both legs of the trip in Club World instead of World Traveler Plus:
If you want to book the flights directly in Club World, the price jumps to $7,524.46 per person. Thus, those 25,000 Avios would save you $5,454. In this case, the sign-up bonus alone could get you almost $11,000 worth of value! Unfortunately, availability isn’t great to go from World Traveler Plus to Club World, but if your dates are flexible, British Airways does let you look at a calendar of dates.
Another option would be to upgrade paid business class tickets to first class. This could be great for someone taking a work trip in paid business class. Booking a paid trip in first class from the US to London will generally set you back at least $10,000, but for 40,000 Avios you can upgrade both legs of a JFK-London round-trip flight. Again, the sign-up bonus could wind up saving you over $5,000. TPG has flown British Airways’ first class several times, so see his past reviews from 2010, 2011, and 2012.
4. Transatlantic Flights on airberlin
Another way to avoid British Airways’ notorious fuel surcharges is to use Avios for transatlantic flights on Oneworld partner airberlin. Airberlin flies to New York, Chicago, Miami, Fort Myers, and Los Angeles. Economy tickets from Miami to Dusseldorf are just 25,000 miles one-way, and availability is decent. A paid round-trip ticket can run you over $1,100, so the sign-up bonus on the British Airways Visa can get you to Germany for Oktoberfest. TPG flew airberlin in business class last year, and while he wasn’t overwhelmingly impressed, it’s another great option for crossing the pond without huge taxes and fees.
5. Intra-European Flights
Another great redemption option for the sign-up bonus involves flights within Europe. Since British Airways is a part of Oneworld, you have access to numerous airlines and their award inventories for short flights within the continent. Some of these flights can be quite expensive when you pay cash, but again the distance-based award chart is a lifesaver. In addition to booking flights on British Airways metal, European airline partners include:
- airberlin: hubs in Berlin, Dusseldorf, Palma de Mallorca, and Vienna
- Finnair: hub in Helsinki
- Iberia: hubs in Madrid and Barcelona
Many flights between European cities cover less than 650 miles and thus cost only 4,500 Avios each way. The map below (courtesy of Great Circle Mapper) shows which parts of Europe are within 650 miles of London-Heathrow:
The 650-mile radius includes basically all of the UK, France, Belgium, the Netherlands, Germany, Denmark, and Switzerland.
Remember that intra-Europe business class is nothing to write home about, so it definitely isn’t worth paying double the number of Avios (compared to economy). In addition, elite members with a tier equivalent to Oneworld Emerald or Oneworld Sapphire can access lounges when traveling in any class of service.
The sign-up bonus (especially with the current offer that waives the annual fee) is clearly one of the top reasons why you should considering applying for this card. However, there are other intriguing benefits that depend on your ongoing spending patterns.
6. Everyday Spending
This card doesn’t get a lot of hype for everyday spending. However, it’s one of the few airline co-branded cards that offers more than the standard rate of 1 point or mile per dollar spent. Instead, you earn 1.25 Avios per dollar on everyday purchases and 2.5 Avios per dollar spent on British Airways purchases. Since TPG values Avios at 1.7 cents each, you’re actually getting a return of 2.125%, which is very close to the return on a card like the Barclaycard Arrival Plus, and surpasses that of other fixed-value cards like the Citi Double Cash. Remember that this rate of return is the absolute minimum you would get; if you make any British Airways purchases, the return increases.
Suppose (for example) that 10% of your yearly purchases on this card are with British Airways, and the other 90% are in non-bonus categories. Your average earning rate is thus 1.375 Avios per dollar spent ([2.5 x 10%] + [1.25 x 90%]). This ups your overall rate of return on the card to 2.34%, again based on TPG’s Avios valuation of 1.7 cents apiece.
7. Travel Together Ticket
One of the unique benefits of the British Airways Visa is the Travel Together Ticket, which is awarded to cardholders who spend more than $30,000 in a calendar year. This allows you to bring a companion along on an award ticket, and it’s valid for two years from the issue date. $30,000 is a significant amount of spending, but having just replaced an air conditioner in my house (with a company who takes credit cards with no fees), it may be an easier mark to reach than you think.
Unfortunately, there are a few restrictions to this benefit:
- You must still pay taxes & fees for the companion, which generally run at least $1,000 on a round-trip transatlantic business class award
- It’s only valid on round-trip British Airways flights
- You must depart from and return to the US
- The cardholder and companion must fly the exact same itinerary
Full T&C are available here.
Since you still need to pay the taxes & fees for your companion, the Travel Together ticket generally isn’t worth much on economy awards. Howver, business and first class award tickets can offer some tremendous value in spite of the out-of-pocket costs.
For example, suppose you open the card, earn the sign-up bonus, and spend exactly $30,000 in 2015. You’ll earn a total of 87,500 Avios (50,000 from the sign-up bonus plus 1.25 Avios/$ x $30,000 = 37,500 Avios). British Airways charges 40,000 Avios for a one-way business class flight of 3,000 – 4,000 miles, which puts London in reach of many North American gateways such as Boston, New York-JFK, Philadelphia, Baltimore, Washington-Dulles, and Chicago. Here’s an option for mid-January flights from Chicago to London-Heathrow:
As you can see, this would normally set you back 160,000 Avios and $2,344.42 in taxes & fees (note that the $2,360 in the image is an estimate). With the Travel Together ticket, you would only need half the Avios. Since these flights would set you back $11,862.42 if you paid for them, your 80,000 Avios (combined with the Travel Together ticket) are saving you $9,518, which comes out to a value of 11.9 cents apiece!
There are other credit cards out there with sign-up bonuses similar to the British Airways Visa and points/miles that could be used for British Airways flights, including the Citi AAdvantage Platinum Select World Elite MasterCard and the US Airways Premier World MasterCard. However, I agree with TPG that the British Airways Visa is the better option for several reasons:
- The 50,000-mile sign-up bonus for the Citi AAdvantage card is the same as the BA Visa (and is also valued at $850 according to TPG’s November valuations), but the real benefit of American miles are the long-haul partner redemptions, and 50,000 miles won’t get you enough for those premium cabins. The card also comes with lower earning rates for everyday (and bonus) spending. Finally, you only get a $100 flight discount after spending $30,000 in a calendar year. You’d have to work pretty hard to only get $100 of value out of the Travel Together ticket on British Airways.
- While TPG values US Airways miles slightly higher than Avios and AAdvantage miles (1.9 cents vs. 1.7 cents apiece), the sign-up bonus on this card is just 40,000 miles, so you only get $760 in value. In addition, the $89 annual fee isn’t waived for the first year, which drops the net value of the card even lower.
I would only recommend either of these options over the British Airways Visa if you regularly fly either American or US Airways (soon to be one and the same), as these cards can offer some valuable perks like free checked bags, award redemption rebates, and in-flight discounts. If you have no specific loyalty to any of these airlines, the British Airways card is the way to go.
What are your experiences with the British Airways Visa? Please share your thoughts in the comments below.
Citi® / AAdvantage® Platinum Select® World Elite™ MasterCard®
|Intro APR||Regular APR||Annual Fee||Foreign Transaction Fee||Credit Rating|
|N/A||14.24% - 22.24%* (Variable)||$95, waived for first 12 months*||0%||Excellent/Good|