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The United States is home to four of the world’s five largest airlines, and most domestic carriers offer credit cards. So why would you want to consider a card from a foreign airline? In today’s post, I’ll explain the advantages of using a credit card to earn frequent flyer miles with a foreign carrier, and show you five of the top cards offered to US citizens and residents.
Why use a foreign airline’s credit card?
As you’ve probably noticed, the US airline industry is still undergoing serious consolidation. We’re down to three major legacy carriers; Airtran is no more; and an impending merger could threaten the existence of Virgin America as a separate brand (though hopefully not). Not coincidentally, these mergers and acquisitions tend to be followed by substantial devaluations of the remaining airline’s frequent flyer program.
As many travelers and rewards credit card users become dissatisfied with the directions these frequent flyer programs are taking, the programs offered by foreign carriers start to look more attractive. Foreign programs often feature superior award charts, and, in some cases, credit cards from foreign airlines can offer more miles per dollar spent and better bonuses than their domestic competitors. Americans can also earn miles in foreign frequent flyer programs program by flying on the US-based partners of foreign airlines, while receiving reciprocal benefits of elite status.
Furthermore, foreign carriers may offer award travel enthusiasts a chance to earn sign-up bonuses from banks that they might not currently have a relationship with. And as more of the major credit card issuers restrict applications and bonuses to existing customers, it becomes necessary to look at other card issuers.
What to Look for in a Foreign Airline’s Credit Card
Plenty of foreign airlines offer credit cards in partnership with an American bank, but some of these are token products with substandard rewards and benefits. When looking for the best credit cards offered by foreign airline, seek out four things:
1. A solid rewards program — First, look at the strength of the frequent flyer program itself, as the miles you earn are only worth as much as the awards you can redeem them for. A good frequent flyer program will have a competitively priced award chart, reasonable routing rules and at least some way to avoid crippling fuel surcharges. It will also have partnerships with other carriers, especially here in the US. And if you can combine the rewards you earn from this card with points that you can transfer from one of the major credit card rewards programs, all the better.
2. A favorable earning structure — Second, see how easy it is to earn miles with the card, including both with its sign-up bonus and its rewards for spending. Since every domestic airline credit card offers at least 1 mile per dollar spent and double miles for ticket purchases with the carrier, the best airline cards from foreign airlines will have to offer more than that.
3. Additional perks — Third, I like to see some unique benefits such as discounts, lounge passes or companion tickets. Credit cards offered by domestic airlines may offer some of these benefits, but the ones from some foreign airlines can be even more generous.
4. Minimal (or reasonable) fees — Finally, look at the fees, including the card’s annual fee and foreign transaction fees, which are especially unwelcome on a foreign carrier’s card.
The Top Five Foreign Airline Cards
The program: The British Airways Executive Club calls its miles Avios, and while it’s not as strong of a program as it once was, it still offers value. Short-haul awards in North America that are less than 1,151 miles cost 7,500 Avios one-way, and you can still get a flight under 650 miles for just 4,500 Avios in other parts of the world. For more information, read TPG Senior Points & Miles Contributor Nick Ewen’s post on Maximizing Distance-Based British Airways Awards in 2016. British Airways is a Oneworld alliance member and partners with American and Alaska Airlines. The airline is also a transfer partner of American Express Membership Rewards, Chase Ultimate Rewards and Starwood Preferred Guest.
Earning miles: This card currently offers new applicants 50,000 bonus Avios after spending $3,000 on purchases within the first three months of account opening. You earn 3 Avios per dollar on British Airways purchases and 1 Avios per dollar on all purchases.
Card benefits: The major benefit of this card is the Travel Together ticket, which you earn each time you spend $30,000 on your card in a calendar year. This ticket allows you to redeem Avios for one ticket on a British Airways-operated flight and receive two award seats for the price of one. However, you’ll have to pay taxes, fees and British Airways’ very high fuel surcharges on both tickets. However, this can still be an outstanding value when you’re able to fly in first class for about the price of a coach ticket.
Costs: There’s a $95 annual fee for this card, and no foreign transaction fees.
The program: Virgin Atlantic’s Flying Club is a mixed bag, but it can offer some outstanding value. On the plus side, it has several strong partners including Delta, Hawaiian and Virgin America. It can also offer some good values on its award chart, especially when it has award sales like this recent one that featured lower prices on economy and premium economy awards. In addition, you can top off your account by moving over points from all four major transferable points programs.
Unfortunately, the Virgin Atlantic Flying Club program is often crippled by ultra-high fuel surcharges, even now when fuel prices are extremely low. Nevertheless, there are still some ways to use Virgin Atlantic miles while avoiding these fees. According to TPG’s latest monthly valuations, Virgin Atlantic Flying Club miles are worth 1.5 cents each.
Earning miles: The Virgin Atlantic Black Credit Card offers 20,000 bonus miles after your first purchase, which isn’t that great, but you can also earn 7,500 miles if you spend $15,000 in your first year as a cardholder, and an additional 7,500 miles after spending a total of $25,000 each cardmember year for a total of 15,000 miles. Thankfully, you receive 1.5 miles per dollar spent on all purchases, and 3x miles on all Virgin Atlantic purchases, which is 50% better than the typical airline credit card.
Benefits: Earn 1 tier point toward elite status for each $2,500 in purchases made with the card (maximum of 2 per month). Also, when you spend $25,000 in purchases each year, you can receive a second award ticket for half the miles when you redeem Flying Club miles for a Virgin Atlantic economy award ticket.
Costs: There’s a $90 annual fee for this card, and no foreign transaction fees.
The program: The South American carriers LAN and TAM have merged to become LATAM, and the airline now uses the LANPASS frequent flyer program. LANPASS uses kilometers instead of points or miles, and it has a distance-based chart that can offer real value, especially for very short-haul flights on Oneworld carriers. LATAM partners with American and Alaska Airlines, among other carriers, and you can transfer points from Starwood Preferred Guest to LANPASS at a 1:1.5 ratio.
Here are some examples of short-haul flight awards:
- 1 to 500 km (up to 311 miles) = 6,000 km in coach
- 501 to 750 km (311-466 miles) = 6,001 – 8,000 km in coach
- 751 to 1,000 km (466 – 621 miles) = 8,001 – 9,000 km in coach
- 1,001 to 1,300 km (621 – 808 miles) = 10,000 km in coach
This can offer some great value for short hops to and from American Airlines hubs and those of other Oneworld carriers.
Earning miles: Even though the LANPASS program uses kilometers, this card offers rewards as miles and then converts it to kilometers — using the actual conversion rate for distance (1 mile = ~1.61 kilometers). You earn 20,000 miles after your first purchase on the card, which works out to 32,187 kms. You’ll also get 4,000 miles (6,437 kms) when you renew your card. And since you earn 1 mile per dollar spent and just 2 miles per dollar on LATAM purchases, that works out to 1.6x and 3.2x kilometers, respectively.
Benefits: Cardholders receive a 20% discount on a LATAM purchase (up to $1,000) that they can use once per year, as well as a 25% bonus on rewards earned from flying LATAM. You also receive three one-way upgrade coupons each year, although multiple coupons are required for upgrading some flights, and the lowest fare class isn’t eligible.
Costs: There’s a $75 annual fee for this card that’s waived the first year. It does have a 3% foreign transaction fee (2% for foreign transactions in US dollars).
The program: The Miles & More program is used by several European carriers including Adria, Austrian, Brussels, Condor, Croatia, LOT, Lufthansa, Luxair and Swiss. Miles & More is also a transfer partner of the Starwood Preferred Guest program. The award chart offers some sweet spots, and the program also features a changing list of discounted routes. Unfortunately, Miles & More does impose fuel surcharges on its flights and those of many of its partners, but there are some exceptions. One of the major advantages of this program is that you receive additional access to Lufthansa’s first-class awards, which are only offered to partner programs 14 days in advance.
Earning miles: This card is offering new applicants 35,000 miles after spending $1,000 within 90 days of account opening. However, you only earn a weak 1 mile per dollar spent, and 2x miles for purchases from participating carriers in the Miles & More program.
Benefits: Cardholders receive an annual companion ticket, but it’s only valid on some of the more expensive fare classes. In addition, once each year you can convert up to 25,000 miles earned on purchases into status miles at a 5:1 ratio. For example, 5,000 award miles converts to 1,000 status miles. You also receive two complimentary Lufthansa Business Lounge vouchers annually (there are several lounges in the US), and 15% off hotel and car rental redemptions.
Costs: There’s an $89 annual fee for this card, and no foreign transaction fees.
The program: The Asiana Club program has a very good award chart that includes bargains such as round-trip business-class to awards Europe for 80,000 miles, northern South America for 55,000 miles and southern South America for just 70,000 miles (all from the US). As a member of the Star Alliance, the carrier’s also partnered with United and Air Canada. It’s a transfer partner of the Starwood Preferred Guest program, and it has no change fees and low cancellation fees of just $30 or 3,000 miles. And while it does impose fuel surcharges, there are some exceptions, such as awards for flights operated by LOT and Turkish Airlines.
Earning miles: The current sign-up bonus is 30,000 miles after spending $3,000 in purchases within 90 days of account opening. You earn 3x miles on Asiana Airlines purchases, 2x on gas and at grocery stores and 1x elsewhere.
Benefits: Each year, you get two Asiana lounge passes, 10,000 bonus miles and an automatic $100 annual rebate on Asiana ticket purchases.
Costs: There’s a $99 annual fee for this card, and no foreign transaction fees.
Featured image is of Asiana A380 first class.
What’s your favorite credit card from a foreign airline?
- 50,000 bonus Avios after you spend $3,000 on purchases within the first 3 months of account opening.
- Every calendar year you make $30,000 in purchases on your British Airways Visa card, you'll earn a Travel Together Ticket good for two years.
- In addition to the bonus Avios, you will also get 3 Avios for every $1 spent on British Airways purchases and 1 Avios for every $1 spent on all other purchases.
- Pay no foreign transaction fees when you travel abroad.
- Chip Technology allows you to use your card for chip based purchases in Europe & beyond, while still giving you the ability to use your card as you do today at home.