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Update: Some offers mentioned below are no longer available. View the current offers here – Chase Sapphire Reserve
Until recently, Allegiant was the largest airline in the US that didn’t have a loyalty program. This changed when it introduced the Allegiant World MasterCard from Bank of America, which offers points toward airfare purchases. In today’s post, I want to take closer look at this card and its program, and compare it to the value offered by other credit cards.
ALLEGIANT WORLD MASTERCARD BASICS
Allegiant’s new rewards program isn’t anything like any other carrier’s frequent flyer program. In fact, Allegiant realizes that its typical customers only fly the airline once or twice a year, so it doesn’t even use the term “frequent flyer.” Instead, the Allegiant World MasterCard offers points which are worth 1 cent each toward the cost of an Allegiant trip, and because this is a credit card-based loyalty program you won’t earn any additional rewards for flying. When redeeming rewards, each point is worth 1 cent as a statement credit toward Allegiant purchases, with no blackout dates, capacity controls or minimum points needed for a redemption.
New applicants earn 15,000 bonus points — worth $150 toward airfare — after making at least $1,000 in purchases on their card within the first 90 days of account opening. Cardholders earn 3x points on all Allegiant purchases including airfare, hotel reservations, car rentals and attraction purchases; 2x points on qualifying dining purchases; and 1x points on everything else.
Other cardholder benefits include a buy one, get one free offer for companion airfare when you book a package from Allegiant that includes either four (or more) hotel nights or seven (or more) rental car days on the same itinerary. Allegiant cardholders also receive complimentary priority boarding and one free beverage every time they fly Allegiant and show their credit card.
This card offers new customers 12 months of 0% APR introductory financing on balance transfers, then 13.49% – 23.49% variable with a 3% balance transfer fee. There’s a $59 annual fee for this card, and a 3% foreign transaction fee imposed on all charges processed outside of the United States.
HOW DOES THE ALLEGIANT CARD COMPARE?
This card has preciously little going for it, especially when you compare it to other travel rewards cards. First, it offers a substandard sign-up bonus that’s only worth $150 — not impressive when there are plenty of cards that get you at least $500 in value. Earning rewards worth 1 cent per dollar on most purchases is terrible, and the 2x points you’ll earn on dining would be acceptable — if it wasn’t merely credit toward Allegiant purchases.
If you think that the 3x points offered for Allegiant purchases is an advantage, think again. When you use any credit card to make a purchase from Allegiant, including the Allegiant World MasterCard, you’ll get socked with a surcharge of 3.2%, not to exceed $8 each way, per passenger, per transaction. This wipes out much, if not all, of the value of the reward points offered by this card! Note that you can use a debit card to make purchases from Allegiant to avoid this fee.
MAKING THE CASE FOR THIS CARD
Despite these severe drawbacks and limitation, this card might still appeal to a very narrow group of Allegiant customers. First, cardholders would have to live in a city that offers airline service that’s unique to Allegiant. But since Allegiant specializes in taking people to vacation destinations from small cities with little or no other competing service such as Appleton, Wisconsin; Casper, Wyoming; and Minot, North Dakota, this market is part of its customer base.
Next, these customers would have to travel as a couple or a family, book hotel or car rental reservations through Allegiant and use this card’s two-for-one offer on airfare. This benefit may only be worth about $200 to $300, as Allegiant has very low base fares and makes much of its money from add-on fees and sales of vacation packages. And as anyone who has tried to price out a ticket on Allegiant’s website knows, you can’t purchase airfare without selecting or declining a hotel and car rental purchase.
Finally, you could figure in the value of the priority boarding benefit, which Allegiant sells for $4 to $12, and the free beverage, which it sells for $2 to $7. And thankfully, you don’t actually have to use the Allegiant credit card to book your ticket in order to receive these benefits; you merely have to show the card to Allegiant staff. As a World MasterCard, it can also offer some valuable cardholder benefits, such as concierge services, enhanced price protection and more.
OTHER CARDS TO CONSIDER
If you were going to purchase one or two flights and vacation packages from Allegiant each year, and you could take advantage of this’s two-for-one offer, then it might be possible to use the Allegiant World MasterCard to save $200 or so on each vacation, making up for this card’s $59 annual fee while enjoying the perks of priority boarding and a free beverage. But even in this case, I would never consider using this card for making any purchases at restaurants or even for making purchases from Allegiant, due to its outrageous credit card surcharges.
Instead, consider these other travel reward cards that offer far better sign-up bonuses, dining bonuses and rewards for spending on other purchases:
This card offers a sign-up bonus of 50,000 miles when you spend $3,000 in the first 90 days from account opening, worth $500 in statement credits toward any travel reservation. The Arrival Plus also offers double miles on all purchases, while the Allegiant card only offers double points for dining. You also get 5% of your redeemed miles back. There’s an $89 annual fee for this card that’s waived the first year.
This card also offers a sign-up bonus of 40,000 miles — worth $400 in statement credits toward any travel reservation — after new customers use their card to spend $3,000 within three months of account opening. It too offers double miles on all purchases, and miles are worth 1 cent each as statement credits toward travel purchased anywhere. There’s an $59 annual fee for this card, which is the same as the Allegiant card, but Capital One’s is waived the first year.
If you’re looking to maximize rewards on dining, I would consider the Chase Sapphire Preferred Card, which offers double points on all travel and dining expenses. These points are worth 1.25 cents apiece toward travel booked through the Chase Ultimate Rewards travel center (which doesn’t list Allegiant flights). And of course, Ultimate Rewards points can be converted to points and miles with 11 different airline and hotel partners. The Sapphire Preferred also comes out way ahead of the Allegiant card by offering new applicants 50,000 bonus points when they spend $4,000 within three months of account opening. According to TPG’s latest valuations, these points are worth 2.1 cents each. There is a $95 annual fee for this card that’s waived the first year.
Chase Sapphire Reserve
This new card offers triple points on all travel and dining purchases, which is far superior to the rewards offered by the Allegiant card. It also offers a 100,000-point sign-up bonus after you spend $4,000 within three months of account opening, and it allows you to redeem points for 1.5 cents each toward travel reservations through the Ultimate Rewards travel portal. Among its many benefits are a Priority Pass airport lounge membership and a $300 annual statement credit toward travel reservations. There’s a $450 annual fee for this card.
While Allegiant’s new loyalty program is better than nothing, unfortunately the Allegiant World MasterCard isn’t a very compelling choice. Not only is the sign-up bonus on the low side, but the earning rates are unimpressive, especially compared to the return you can get — both on travel and dining purchases and non-bonus spending — with other travel rewards cards. Plus, the 3.2% surcharge you’ll have to pay when you use this credit card (or any others) to book an Allegiant flight wipes out the value you’ll get from the 3x points.
If you fly Allegiant frequently and can maximize this card’s benefits like the two-for-one airfare and priority boarding, this card could make some sense, but even then it’s almost certainly not your best option. Luckily there are plenty of other cards that offer better sign-up bonuses, perks and returns on spending.
Featured image courtesy of Shutterstock.
What are your thoughts on this new credit card?
Even after the introduction of the Chase Sapphire Reserve, the Chase Sapphire Preferred is still a fantastic choice if you want to avoid the Reserve’s $450 annual fee, earn 2x on all travel & dining and earn a 50,000 point sign up bonus.
- Earn 50,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $625 toward travel when you redeem through Chase Ultimate Rewards®
- Named Best Credit Card for Flexible Travel Redemption - Kiplinger's Personal Finance, July 2016
- 2X points on travel and dining at restaurants worldwide & 1 point per dollar spent on all other purchases.
- Earn 5,000 bonus points after you add the first authorized user and make a purchase in the first 3 months from account opening
- No foreign transaction fees
- 1:1 point transfer to leading airline and hotel loyalty programs
- Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards. For example, 50,000 points are worth $625 toward travel
- No blackout dates or travel restrictions - as long as there's a seat on the flight, you can book it through Chase Ultimate Rewards