Should you spend toward status with airline premium cards?
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The spread of the novel coronavirus has upended nearly every corner of the travel industry, but one surprising impact has been the way that the outbreak has completely upended the value of premium credit cards.
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Over the years customers have gotten more and more comfortable with the idea of paying hefty annual fees up front (often $500 or more), knowing that they'll recoup that value over time through statement credits, elite status, and other travel and lifestyle perks. Much of that payback is on hold now, leaving many customers unsure what to do with the premium cards they have.
Related reading: Battle of the premium travel rewards cards: Which is the best?
All three of the top legacy U.S. airlines offer at least one premium credit card that can help you qualify for elite status faster, if you hit certain targeted spending thresholds. With non-essential travel cancelled for the foreseeable future, two of the three top legacy carriers — Delta and United — have extended elite status. So is now the right time to take advantage of their elite status perks? Let's take a look.
Elite status extensions
At the time of writing, three major U.S. airlines have announced status extensions: Delta, United and Alaska (we won't focus on Alaska in this post because the carrier doesn't offer any shortcuts to elite status with its cobranded credit cards).
Both Delta and United are extending all elite members' status levels through the 2021 qualification year, which means whatever elite status you currently hold in those programs will be valid through Jan. 31, 2022. Each airline is also making it easier to qualify for status in the months to come. Delta is rolling over all Medallion Qualification Miles (MQMs) earned in 2020 to 2021, including MQMs earned from flying and from credit card spending. United, which just switched to a new system for elite status qualification this year, is cutting the number of Premier Qualifying Points (PQPs) needed to qualify in half, as follows:
|Status level||PQF||PQP||PQP only|
Airline cards that let you spend your way to status
Now that we've caught up on recent events, let's review the different airline credit cards that can help you qualify for elite status:
- United Club℠ Infinite Card: Earn 500 Premier Qualifying Points (PQPs) after spending $12,000 on the card in a calendar year, up to 1,000 PQPs per year.
- Delta SkyMiles® Reserve American Express Card: Earn 15,000 bonus Medallion® Qualification Miles (MQMs) after spending $30,000, $60,000, $90,000 and $120,000 on your card in a calendar year.
- Delta SkyMiles® Platinum American Express Card: Earn 10,000 bonus MQMs after spending $25,000 and $50,000 in a calendar year.
Should you use credit card spending to qualify for status?
The coronavirus has changed the way we travel and the way we think about our travel, but the hefty amount of spending necessary to earn airline elite status from credit cards has always been a questionable value proposition. My rule of thumb is that it's only worth considering if it would level you up from a mid-tier to a top tier (like from AAdvantage Platinum Pro to Executive Platinum, not from being a general member to AAdvantage Gold). Let's take a look at a few pros and cons.
Many people are now starting to come to terms with the fact that the demand for air travel isn't going to return all at once. Rather it's going to be a gradual process that may take several years. If much of your travel was for business, you may find your company switching from in-person to online meetings and your travel (and elite status) might never return to what it once was. In that case, it might be worth taking advantage of the opportunity to lock in your current tier or even level up for one last hurrah, so you can keep enjoying the perks you're used to. This is especially true for loyal United fliers, who can earn status this year with half the normal PQP requirements.
One of the biggest cons of spending your way toward status is that all of the credit cards on this list have pretty poor earning rates. You might see some bonus multipliers when booking airfare or spending in a limited number of other categories, but you'll be earning 1x mile per dollar on most purchases. There are plenty of cards out there that are better for everyday spending and for all kinds of purchase categories (such as groceries or dining). If you're spending tens of thousands of dollars on an airline card just to earn status, you'll be leaving a lot of valuable points on the table.
It's also important not to underestimate the uncertainty of our current situation. While we all hope that life returns to normal as quickly as possible, this situation could drag on for several months, and potentially well into next year. Going out of your way to secure status when you have no idea when you'll be able to start enjoying the perks again may not be the smartest choice. If you aren't traveling as much next year as you did last year, you won't have as many opportunities to enjoy the status you worked so hard to earn.
Spending your way toward status with an airline credit card has always been a questionable decision, primarily because of the high cost. The coronavirus and airline status extensions have delayed the payoff, but they don't really change the underlying math. More often than not, if you don't fly enough to earn status organically, then you don't fly enough to fully maximize the benefits. Couple that with the low earning rates on most airline credit cards, and applying for a credit card to help achieve status will not be right for most people.