Should I Get a Virgin America Credit Card Before the Merger?

Dec 18, 2016

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TPG reader Thomas sent me a message on Facebook to ask about getting an airline credit card:

“Since Alaska Airlines and Virgin America are set to merge soon, should I get a Virgin America credit card now to earn Alaska miles? Will Virgin America continue to offer cards even after the deal closes?”

After the US Department of Justice recently gave its approval, Alaska Airlines’ acquisition of Virgin America finally closed last week. Alaska has indicated that the two loyalty programs could merge, which would likely spell the end of any co-branded Virgin America credit cards. However, if Elevate points are eventually going to be converted into Mileage Plan miles, then for now those cards could be used to pad your Alaska Airlines account.

We’ve seen similar opportunities during past mergers: Many readers applied for the old US Airways Mastercard in its last days, along with the Continental OnePass Plus card before it disappeared in 2012. Those were both lucrative offers worth jumping on right away, but I’m not convinced the Virgin America cards warrant similar enthusiasm just because they might not be around for long.

The Virgin America Premium Visa Signature Card offers a sign-up bonus of 15,000 points after you spend $1,000 in the first 90 days. The card comes with some useful benefits — such as waived change/cancellation fees and a discounted companion ticket — but if you’re not actually interested in flying Virgin America, I don’t think it justifies paying the $149 annual fee. The regular Virgin America Visa Signature Card has a lower $49 annual fee, but also comes with a lower sign-up bonus.

If you want Alaska miles, you’d be better off just getting the Alaska Airlines Visa Signature credit card, which currently comes with 30,000 bonus miles after you spend $1,000 in the first 90 days.

Ala
Alaska Airlines has its own co-branded cards with more rewarding sign-up bonuses.

Another issue is that we don’t know for sure whether the two loyalty programs will merge. Alaska Airlines CEO Brad Tilden has discussed the possibility of leaving both brands intact, which adds an extra layer of uncertainty for award travelers. Members might still be able to transfer points between Mileage Plan and Elevate in that scenario, but there’s no guarantee.

We should know more about the future of these two carriers soon, and you’ll likely have time to weigh your options before the Elevate program winds down (along with its co-branded cards). Unless Alaska decides to offer a favorable conversion rate, I think this is an opportunity you can comfortably pass up.

If you have any other questions, please tweet me @thepointsguy, message me on Facebook or send me an email at info@thepointsguy.com.

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