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I often discuss how helpful credit card sign-up bonuses and spending can be for earning award travel, but some readers are intimidated by the idea of opening new accounts. To help you get started, TPG Senior Points & Miles Correspondent Nick Ewen demonstrates how much a single card can offer you in travel rewards.
Award travel can be a daunting hobby to take up, especially when it comes to credit cards. If you don’t travel regularly for work, your everyday spending habits play a huge role in earning (and then redeeming) points and miles. However, with so many options, you may not know where to start. In this post, I’ll continue my series looking at how easy it is to earn rewards by opening and using a single card for one year.
In previous posts, I’ve looked at the Chase Sapphire Preferred Card, the Citi Hilton HHonors Reserve Card, the Chase Ink Plus Business Card, the Citi ThankYou Premier Card, the Wyndham Rewards Visa Card, the Marriott Rewards Premier Card, the SPG American Express, the Southwest Premier Card, the Amex EveryDay Preferred Card and the Alaska Visa Card. Today, I’ll continue the series with a card that doesn’t land on the radar of many travelers: the TD Aeroplan Visa Card.
Sign-Up Bonus and Benefits
The card is currently offering a sign-up bonus of 25,000 miles when you spend $1,000 on net purchases during the first three billing cycles after account opening. This bonus is worth $400, based on TPG’s latest valuations, but can be even more valuable by taking advantage of the program’s terrific award redemptions like Lufthansa first class. Unfortunately, the Aeroplan program is undergoing a devaluation in December, but there are still several ways to get value out of the program.
The card also includes some other benefits that can be quite valuable:
- 2 miles per dollar spent with Air Canada and 1 mile per dollar spent everywhere else
- Your miles never expire as long as your card is open
- Visa Signature perks like luxury hotel benefits
The card does come with a $95 annual fee, but it’s waived the first year.
So, if you open the Aeroplan Visa, earn the sign-up bonus and use the card exclusively for the first year, where does that leave you? Obviously, the answer depends on your spending patterns, so for this analysis I used consumer-expenditure data from the Bureau of Labor Statistics for 2013 and 2014 to estimate what an “average” household would spend (and thus earn) on the Aeroplan Visa card in one year.
In doing so, I made the following assumptions:
- 60% of “Housing” expenditures cover mortgages or rent, and thus can’t be paid with a credit card (unless you’re willing to pay fees for using a service like Venmo or ChargeSmart).
- “Transportation” expenditures are split evenly between car payments (which typically can’t be paid with a credit card), gasoline and other transportation costs (parking, tolls, train/subway/bus tickets, etc.).
- All “Healthcare” and “Other” expenditures can be paid with a credit card.
- All “Personal insurance and pensions” expenditures can’t be paid with a credit card.
- $500 of the “All other expenditures” category is spent on tickets with Air Canada.
Again, your situation may differ substantially, so feel free to adjust these assumptions in order to calculate your own earning potential.
Here’s a quick table that shows how these spending patterns in the first year of card membership translate to Aeroplan miles:
|Food – At home||$3,977||1 mile/$||3,977|
|Food – Away from home||$2,625||1 mile/$||2,625|
|Apparel and services||$1,604||1 mile/$||1,604|
|Transportation (gasoline)||$3,001||1 mile/$||3,001|
|Transportation (other)||$3,001||1 mile/$||3,001|
|All other expenditures||$2,767||1 mile/$||2,767|
|Air Canada purchases||$500||2 miles/$||1,000|
As you can see, the “average” American consumer would earn 55,947 Aeroplan miles in the first year. Not too shabby!
What Does This Get You?
Of course, earning points is one thing, but knowing how to redeem them for maximum value is a completely different story. Fortunately, the Aeroplan program has a variety of valuable award options, and Air Canada recently opened up premium economy redemptions using Aeroplan miles. Just be sure to factor in fuel surcharges when you’re calculating the costs of your trip, and remember to look at the new award chart for tickets booked on or after December 15, 2015. Aeroplan has actually put together a nice comparison chart of the current and revised mileage requirements; wouldn’t it be nice if all airlines were this transparent?
For complete details, be sure to check out Jason Steele’s post on how to book award flights with Aeroplan, but here’s a sample of what you can get from one year of using the Aeroplan Visa from TD Bank:
1. One-way business-class award ticket from North America to Europe
One of the best uses of Aeroplan miles is currently on award tickets from North America to Europe. The program actually breaks the continent up into two separate regions. Europe 1 encompasses most of Western Europe (including the UK, France, Germany, Italy, and Switzerland), while Europe 2 consists of Eastern Europe (including Croatia, Finland, Poland and Turkey). You can currently book a one-way business-class award to any European destination with your year’s worth of points from the Aeroplan Visa, but come December, only Europe 1 will be within reach, costing just 55,000 miles.
Still, with luxurious Star Alliance partners like Lufthansa and SWISS (and given United’s massive devaluation of partner awards last year), this can still be a nice option.
2. One-way economy-class award ticket to South Africa (including Hawaii!)
Another option available to you with just one year of miles from the Aeroplan Visa is a one-way award ticket from North America to South Africa, which will set you back just 50,000 miles. Incredibly, this is also available from Hawaii as well! This was actually one of the redemptions that will be dropping with December’s program changes. A round-trip coach award ticket from Hawaii to South Africa currently costs 140,000 miles, but it’s falling to 100,000 miles.
Flights to South Africa are also dropping from other regions (prices are for round-trip award tickets):
- Asia 1: 140,000 miles to 100,000 miles
- Asia 2: 140,000 miles to 90,000 miles
- Caribbean & Central America: 140,000 miles to 100,000 miles
- Indian Subcontinent: 140,000 miles to 80,000 miles
- Middle East & North Africa: 120,000 miles to 65,000 miles
- Northern and Southern South America: 140,000 miles to 90,000 miles
3. Three round-trip short-haul flights from Canada on Air Canada
Short-haul flights can often be outrageously expensive, so I love when a program provides an inexpensive way to redeem miles for these itineraries. Aeroplan allows you to redeem miles for short-haul flights on Air Canada, Air Canada Express and other Canadian domestic partners within Canada and to select destinations in the US. Complete details are available at the short-haul ClassicFlight Rewards page, but these actually include a variety of US cities from several Canadian gateways, including:
- New York
- Washington, DC
Unfortunately, these flights do incur some significant taxes & fees (~$150) and are capacity-controlled, but if you can find availability and the cash price of the ticket is high, you can get some solid value.
For example, here’s a round-trip award flight from Washington-Reagan to Montreal in mid-January:
The same itinerary would set you back almost $600 if you paid in cash:
Even when you take out the $148.60 in taxes and fees, you’re still getting almost 3 cents per mile on this redemption, close to double TPG’s valuation of Aeroplan miles (1.6 cents apiece)
4. Round-trip long-haul flight within North America
If you prefer redeeming your miles for premium-class travel, you’d have enough Aeroplan miles after the first year for a round-trip long-haul flight within North America in business class (50,000 miles). This may not sound that enticing, but Air Canada actually uses some internationally configured aircraft on certain routes. For example, here’s a round-trip flight from Toronto to Los Angeles, with the outbound on a 787-900 and the return on a 777-300 (both of which offer lie-flat seats):
Paying for those flights would set you back a cool $2,841.64, giving you a great value of 5.4 cents per mile.
5. Up to 11 lap infant award tickets
A final (more off-the-beaten-path) redemption is for infants traveling in your lap. This past spring, I discovered just how expensive it is to carry a baby in your arms on an international flight, as I had to pay 10% of the full-fare business class ticket for my daughter to accompany me and my wife to Europe. However, Aeroplan makes it exceedingly easy (and cheap) to accomplish this, as the program only requires a flat number of miles for these awards:
- Economy: 5,000 miles (or $50)
- Premium Economy: 7,500 miles (or $75)
- Business: 10,000 miles (or $100)
- First: 12,500 miles (or $125)
Unfortunately these tickets must be booked by calling the Aeroplan Contact Centre (1-800-361-5373), but given the right situation, this could bring you some tremendous value, especially compared to how other programs charge you when you bring an infant-in-arms on an international flight.
For more information, check out Jason Steele’s post on award travel with an infant.
The TD Aeroplan Visa Card offers a decent sign-up bonus, and by opening the card and using it for a year, you can earn a solid number of Aeroplan points and unlock some terrific redemptions around the world.
In addition, keep in mind that the above calculations may be too conservative:
- The calculation assumes that you’re the average consumer. If you typically spend more in a year, your earnings will be even higher.
- The calculation assumes that you don’t make any purchases through an online shopping portal. The Aeroplan eStore site allows you to earn additional miles at more than 100 retailers when you shop online.
- The calculation assumes you don’t take advantage of Aeroplan’s regular transfer bonuses from other programs (the most recent one ended August 24th).
- The calculation assumes that you only open one card. Other travel rewards credit cards with terrific sign-up bonuses (like the Citi ThankYou Premier Card or the Chase Sapphire Preferred Card) can be opened and used alongside the Aeroplan Visa card for even more earning potential.
These items notwithstanding, I hope I’ve illustrated how one card (especially in the first year) can open up a wealth of redemption possibilities.
How would you redeem one year of points from the Aeroplan Visa card?
Chase Sapphire Preferred® Card
|Intro APR||Regular APR||Annual Fee||Foreign Transaction Fee||Credit Rating|
|N/A||16.24%-23.24% Variable||Introductory Annual Fee of $0 the first year, then $95||0%||Excellent Credit|