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Today TPG Contributor Nick Ewen looks at a co-branded American Airlines business card with a solid sign-up bonus offer.
Citi announced a new offer for the Citi / AAdvantage Platinum Select World Elite MasterCard with a sign-up bonus of 50,000 miles
and 2 Admirals Club one-day passes. The same bonus is currently being offered for the CitiBusiness / AAdvantage Platinum Select World MasterCard, TPG wrote a quick review of the personal version, but today I want to take a closer look at the business version to see if it should have a place in your travel rewards card portfolio.
- Designed for businesses
- For a limited time, earn 50,000 American Airlines AAdvantage® bonus miles after making $3,000 in purchases within the first 3 months of account opening*
- First checked bag is free on domestic American Airlines itineraries for you and up to four companions traveling with you on the same reservation*
- Enjoy Group 1 Boarding on American Airlines domestic flights*
- Earn 2 AAdvantage® miles per $1 spent on eligible American Airlines® purchases*
- Earn 2 AAdvantage® miles for every $1 spent on purchases at telecommunications, car rental merchants and at gas stations*
- Earn 1 AAdvantage® mile per $1 spent on other purchases.*
For starters, the sign-up bonus alone makes this card a great value. 50,000 AAdvantage miles are worth $850 according to TPG’s December valuations, but you could get even more value out of them if used strategically. 50,000 miles are enough for a one-way business class ticket from North America to Europe, and if you avoid British Airways, taxes and fees are quite low.
Update: The Citi AAdvantage Platinum cards no longer come with two Admirals Club passes.
The Admirals Club day passes are a nice added perk; they’re technically worth $50 apiece (the regular price for a one-day pass), although you can buy passes on eBay for about half that. Unfortunately, you’re not allowed to bring guests, although up to 3 children under the age of 18 can accompany the passholder, and you can use it multiple times during your day of travel.
That yields a total sign-up bonus value of $900-950 depending on how much you think the passes are worth. Of course, this sign-up bonus is identical to the one offered by the personal version of the card, and requires the same amount of initial spending. The similarities between the two cards don’t stop there:
- They have the same baggage and boarding benefits when traveling on American (saving up to $250 per round-trip flight).
- They have the same bonus earning category for purchases on American and US Airways (2 miles/$).
- They have the same in-flight discount (25%).
- They have the same annual fee ($95), and both cards waive it for the first year.
However, there are some notable differences between the cards, so for the remainder of the post, I will analyze these benefits to shed some light on which one might be best for your particular spending and travel patterns.
Additional category bonus
One of the nice things about this business card is that in addition to earning double miles on American Airlines/US Airways purchases, you can also earn double miles at select merchants that typically appeal to small businesses: office supply stores, telecommunications, and car rental agencies. Based on TPG’s valuations, this is an additional return of 1.7% (for 3.4% total) on these purchases compared to the personal version of the card, which can bump up your mileage earnings significantly.
For example, suppose you typically spend $100 a month on office supplies, $250 a month on cell phone/landline/internet purchases, and $100 a month on car rentals. That totals $5,400 of annual spending, which earns you 5,400 extra miles every year. Since TPG pegs AAdvantage miles at 1.7 cents apiece, that’s an additional $91.80 of value in every year of cardmembership, which almost covers the annual fee.
Remember too that office supply stores sell gift cards to a variety of retailers, so you can increase your earnings on everyday purchases as well. I love going through an online shopping portal (like Ebates) and purchasing electronic gift cards from Staples for merchants that would normally just count as a “standard” purchase (e.g., Home Depot, Target, and Petco). Again, each of these purchases would earn you an extra AAdvantage mile on this card compared to the personal version.
That being said, the CitiBusiness AAdvantage card isn’t the best option for earning bonus miles in these categories:
- For office supplies and telecommunications, the Chase Ink Plus gives you 5 Ultimate Rewards points per dollar spent—a return of 10.5% (compared with 3.4%). While these bonus categories only apply on up to $50,000 in spending per year, you’d need to spend over $320,000 in these categories on the CitiBusiness card to earn the same return.
- Several other cards out there earn bonus points on car rentals (or travel purchases in general). The best—again based on TPG’s December valuations—is the Citi Prestige, which offers 3 points per dollar spent (4.8% return). The Hyatt Visa (2 points per dollar, or 3.6%) also edges out the CitiBusiness MasterCard.
Both the personal and business versions of the card offer some type of a mileage bonus. The personal card gives you 10% of your redeemed AAdvantage miles back, up to 10,000 miles per year. The business version instead gives you a 5% mileage bonus on all purchases made in the previous year when you renew the card. Unfortunately, the terms indicate that the bonus is only earned on “eligible purchases”, so it doesn’t include miles from the sign-up bonus.
However, the 5% mileage bonus does have some appeal over the 10% redemption discount:
- It’s always in place and doesn’t depend on your redemptions in a year. If you have a year where you only redeem 25,000 miles, you’d only get 2,500 of them back (leaving 7,500 on the table). The 5% is constant.
- There’s no cap. With high levels of spending, you can surpass the 10,000 limit imposed on the mileage bonus for the personal card.
Let’s assume that you always redeem at least 100,000 AAdvantage miles in a year and thus max out the 10% back from the personal version. In order to break even and get those same 10,000 miles back with the business card, you would need to spend the following:
- $100,000 on American, US Airways, office supply, and telecommunications purchases
- $200,000 on everyday (non-bonus) purchases
- A combination of the two
This is definitely a high level of spending on a card, but remember that the amount decreases if you typically redeem fewer than 100,000 AAdvantage miles in a year.
Finally, this benefit actually makes the category bonuses above even more lucrative. With the 5% bonus, every $1 spent on American Airlines, US Airways, office supplies, and telecommunications will technically earn you 2.1 AAdvantage miles. As a result, if you plan on keeping this card long-term, it’s better than the personal version when purchasing tickets or other items directly with American and US Airways (though not quite as good as the 3x points per $1 on airfare that you would earn with the Premier Rewards Gold from American Express).
Companion pass vs. $100 flight discount
If you plan to spend at least $30,000 on one (or both) of these cards in a cardmembership (not calendar) year, you’ll earn an added bonus. The personal version gives you a $100 American Airlines flight discount, valid for one year and usable on AA.com. You can also apply it toward tickets on Oneworld carriers and other American codeshare flights.
The business version instead offers a $99 companion certificate for round-trip economy class travel within the continental U.S. It’s also valid for one year, but unfortunately, the certificate is only valid for travel on American-operated flights, and both the initial flight and companion fare must be booked through American Airlines Meeting Services.
These two benefits are, in my mind, essentially equal. The $100 flight discount is very user-friendly and flexible, given that it applies to any type of electronic ticket on American and Oneworld partners. However, it’s capped at $100. The companion certificate can offset a greater amount of the initial fare, but it’s restricted to American-operated flights and must be redeemed for round-trip travel, and of course isn’t much use if you travel solo.
The break-even point here is when the base fare of an economy class round-trip ticket is $199 (we’ll ignore taxes & fees, since they would apply to either ticket):
- Personal card: $199 – $100 = $99 out of pocket
- Business card: $99 out of pocket
As soon as the base fare of the round-trip ticket rises above $199, the companion certificate has more potential value.
There are other cards out there with bonuses for reaching the $30,000 threshold, like the Travel Together ticket earned on the British Airways Visa Signature Card, so be sure to evaluate whether this is truly the best card to use for high spending.
With so many similarities to the personal version of the card, the CitiBusiness / AAdvantage Platinum Select World MasterCard may be easy to overlook. However, I think this card provides a nice alternative to the personal version. For starters, it’s a great option if you’ve never had a CitiBusiness card before (but have had an AAdvantage personal card from Citi), as you shouldn’t have any problems earning the full sign-up bonus.
In addition, you can earn category bonuses on a wider variety of spending, and can take advantage of the 5% mileage bonus on these purchases. Finally, this 5% mileage bonus each year makes this the better option for purchases with American and US Airways, as you’ll effectively earn 2.1 AAdvantage miles per dollar spent.
Though there are better cards out there for certain purchases, the CitiBusiness MasterCard is definitely one to consider, and with the slightly different benefits, can actually be a nice complement to the personal version. If you’ve never had either card, earning 100,000 AAdvantage miles and four Admirals Club day passes is a pretty decent haul!
What are your thoughts on the business version of the AAdvantage World MasterCard? While Citi announced some negative changes to this card back in July — including a lower sign-up bonus, the elimination of Admirals Club access and the end of the free rounds of golf benefit — one of its most valuable perks still remains, which is the 4th Night Free perk. This benefit alone can save you thousands of dollars a year if you use it to its full advantage.
While Citi announced some negative changes to this card back in July — including a lower sign-up bonus, the elimination of Admirals Club access and the end of the free rounds of golf benefit — one of its most valuable perks still remains, which is the 4th Night Free perk. This benefit alone can save you thousands of dollars a year if you use it to its full advantage.