Video SRQ: Should I Cancel The British Airways Visa Before the Annual Fee is Due or Keep It?
Update: Some offers mentioned below are no longer available. View the current offers here – British Airways Visa Signature Card
TPG follower Jake tweeted me this week worried that he may lose his Avios after canceling a card:
"@thepointsguy time to keep or cancel my British Airways Visa Signature Card. I still have 91K Avios sitting around. Chase said I would forfeit if I cancel...is that true?"
First off don’t worry - you are not going to lose your Avios. With airline co-branded credit cards, every month when your statement closes those Avios go directly into your frequent flyer account. This is true regardless of whether it’s a British Airways card, a Gold Delta SkyMiles Credit Card from American Express or a Citi Platinum Select American AAdvantage Visa, and your miles will be safe once deposited into your account. I think credit card representatives often say what they think is right, even if it's not the right answer. The reps don’t want you to cancel the card and want to keep your business with the company so sometimes they’ll tell you something in hopes that it will keep you around, even if it may be wrong. I don't think it's intentional, I just think they are not completely educated on the specifics of each and every credit card they offer.
However, one thing to keep in mind is that the credit company can pull back your miles if you engage in fraudulent activity, but for the most part that is not going to happen. As a rule of thumb, I would recommend keeping a credit card open for at least 6 months after you apply. If you get a sign-up bonus and then cancel the card the next day after having it for two weeks the credit card company can say, "You had no intention of keeping this card and we are taking the bonus back." Always try to keep a good relationship with the credit card company since it will affect your likeliness to get approved for cards with them in the future.
That being said let's get into the details of the card and why you might want to cancel it or keep it open. The British Airways Visa Signature Card currently has an offer for 50,000 Avios after $3,000 in purchases after the first 3 months and a $95 annual fee. However the perks that come with the card can far outweigh that amount.
I keep the card open because I spend $30,000 on it annually to get the Travel Together ticket, which allows me to redeem an award on a British Airways-operated flight and get a second award ticket for zero additional Avios. Granted British Airways does charge heavy fees (about $800 for a transatlantic business class flight), but for example if you flew New York to London round trip it would cost 80,000 Avios for one ticket in business class. With the Travel Together ticket you would get two tickets for 80,000 Avios and about $1600 in fees. So for a flight that would normally cost you $3,500 a ticket ($7,000 total), you would be getting two tickets for about $1,600 and 80,000 Avios. In my mind, that is a pretty good deal.
The card also offers some other great benefits, like 10% off all British Airways flights, no foreign transaction fees and they do run some promos from time to time like the Michelin dining promotion that they had last year. The base earning is 1 Avios for every dollar spent and 3 Avios for every dollar spent on British Airways purchases. Most airline cards only earn one mile per dollar on purchases so with this card your getting a good 25% increase.
The bottom line is, this is a great card to have in your wallet if you know how to maximize its benefits, but if you’re not using it enough and you’re earning more points in other programs then you should cancel it. Do an inventory and see what benefits make the most sense for you and make your decision from there.