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TPG reader Daniel sent me a message on Facebook to ask about a credit card bonus offer he received:
“I got an email from Barclays offering a bonus of 30,000 miles for spending $2,500 on my Aviator card each month from December through May. Is it worthwhile?”
While credit card sign-up bonuses get most of the attention, card issuers also routinely offer bonuses to retain cardholders or inspire them to spend more. Last month, Barclaycard sent offers for 30,000 miles to targeted AAdvantage Aviator Red cardholders like Daniel. (It’s actually presented as a 45,000-mile offer, but really 15,000 of that is from earning miles at the standard rate of one mile per dollar spent.)
At face value this is a decent deal. You’d get 45,000 miles for spending $15,000 cumulatively over six months, essentially earning three miles per dollar. I currently value AAdvantage miles at 1.7 cents apiece, though that number is likely to drop soon thanks to the recently announced program changes. Either way, you’d be getting a very respectable return of around five percent.
However, to decide whether it’s worth going after those points, you have to consider the opportunity cost. $15,000 is a fairly high spending requirement, and having to spend $2,500 each month makes meeting it even more difficult (since you can’t cover the total with one large purchase). If you come up short for just one month, you’ll miss the bonus entirely.
Furthermore, other cards offer more rewarding bonuses with lower spending requirements. For example, the Citi AAdvantage Platinum Select World Elite MasterCard comes with a sign-up bonus of 50,000 miles after spending $3,000 in the first three months — a bargain by comparison. Basically, every dollar you put toward the bonus on the AAdvantage Aviator could be better spent on another, more rewarding card.
The one benefit to the Aviator bonus (and other spending or retention bonuses) is that you don’t have to open a new account to get it. If you’re concerned with how card applications will affect your credit score in the short term (for example, if you’re about to buy a house), then you may benefit from keeping your credit report free of new inquiries.
If meeting the spending requirement is easy for you and won’t impact your ability to earn other rewards, then you may as well go for it. Otherwise, there are better bonuses you should target instead.
If you have any other questions, please tweet me @thepointsguy, message me on Facebook or send me an email at email@example.com. 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.