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Update: Some offers mentioned below are no longer available. View the current offers here – Citi® / AAdvantage® Platinum Select® World Elite™ Mastercard®, Hawaiian Airlines World Elite Mastercard
It might seem counterintuitive, but there’s never been a better time to apply for a travel rewards credit card. Many airlines continue to devalue their frequent flyer programs, and the rate of consolidation within the hotel industry also seems to be accelerating. Both developments leave travelers with fewer choices and lower value propositions for their hard-earned points.
However, by carrying a cobranded airline credit card, you can more easily earn the (ever-increasing) number of points or miles necessary for awards, and continue enjoying elite-like benefits that might otherwise be out of reach.
More Choices and More Improvements
The good news is that consumers have more products to choose from than ever, ranging from new premium cards with perks like travel statement credits and lounge access to no-annual-fee cards that provide solid cash-back earning options.
In the past year or so we have seen hotel credit cards in particular dramatically overhaul their benefits, in many ways for the better. The IHG Rewards Club Premier Credit Card, for instance, gets you the fourth night free on award stays, and throws in Global Entry or TSA PreCheck application reimbursement, up to $100 to boot. All for an $89 annual fee. The World of Hyatt Credit Card upped its hotel earning to 4 points per dollar, and introduced new bonus categories like gym memberships and local transit or commuting.
Hilton Honors and Marriott Bonvoy each launched premium rewards cards, including the Marriott Bonvoy Brilliant™ American Express® Card and the Hilton Honors American Express Aspire Card. Both include some incredible benefits like automatic elite status, annual statement credits for hotel purchases worth hundreds of dollars, anniversary award nights, on-property credits and more.
Likewise, the high-fee general travel rewards cards like the Chase Sapphire Reserve, the Platinum Card® from American Express and Citi Prestige all include impressive slates of perks. Despite the fact that many of their benefits, such as Priority Pass lounge access, annual travel statement credits and Global Entry/TSA PreCheck reimbursement are the same (up to $100), they do offer some unique perks. For instance, the Citi Prestige offers a fourth night free on up to two hotel stays per year, and the Amex Platinum gets you access to Centurion Lounges and Delta Sky Clubs when you’re flying Delta.
By contrast, many airline credit cards look increasingly the same. They earn bonus miles on airline purchases, offer inflight food and beverage discounts of around 20-25%, include free checked bags and offer lackluster priority boarding privileges.
Some airline credit cards have tweaked their benefits packages slightly. The United Explorer Card now offers Global Entry or TSA PreCheck application reimbursements (up to $100) and earns 2 miles per dollar, not only on United purchases but also at restaurants and hotels. The Citi AAdvantage Platinum Select World Elite Mastercard offers 2 miles per dollar on American Airlines purchases and at restaurants and gas stations. You can also earn a $125 American Airlines flight discount when you spend $20,000 or more on the card in an account year and renew your card. But even with these additions, the mid-range and high-end airline cards are static.
Considering you can enjoy a free night at a Category 1 – 4 Hyatt (worth up to 15,000 points) or at an IHG hotel worth up to 40,000 points each year you renew your associated credit card for an annual fee of under $100, having to spend $20,000 for a slight flight discount doesn’t seem worth it.
A Wish List of New Airline Credit Card Benefits
Given how many improvements have been made to hotel credit cards in particular lately, here are a few benefits airline credit cards might consider offering in the future.
Passport renewal reimbursement: So many credit cards now offer a four- or five-year reimbursement for Global Entry or TSA PreCheck that this perk alone is not worth applying for or continuing to carry an airline credit card. How much more interesting would it be if an airline credit card offered to cover your passport renewal? It would probably be an even better deal from the issuer’s point of view since you only need to renew your passport once every 10 years and it costs $110 instead of the $100 every four or five years that the Global Entry benefit offers.
CLEAR membership: Instead of offering a TSA PreCheck application fee reimbursement, airline credit cards might consider including a year of CLEAR membership. Currently available in 28 airports and 14 stadiums, CLEAR is an expedited security process that includes biometric identification and allows users to skip to the front of the security line. CLEAR costs $179 per year and you can add up to three family members for $50 each.
Delta SkyMiles members get discounts on membership. Diamond Medallions receive it for free. Platinum, Gold and Silver members only pay $109, and general members only pay $119. We have yet to see a credit card offer CLEAR membership for free though. Since it costs nearly $200 a year for most folks, it would likely have to be one of the premium airline cards like the Delta Reserve® Credit Card from American Express, the United MileagePlus Club Card or the Citi / AAdvantage Executive World Elite Mastercard, which all have $450 annual fees (see rates & fees for Delta Reserve).
Free or discounted inflight Wi-Fi: The only US airline that offers free inflight Wi-Fi is JetBlue (and possibly Delta in the future). If you fly other carriers, you’re usually stuck paying anywhere from $7 per hour to $19 per day, $49.95 per month or $599 per year (on a single airline). Some credit cards do come with Gogo inflight passes, including the Business Platinum® Card from American Express and the US Bank Altitude Reserve Visa Infinite Card, but you only get a handful of passes each year.
Barclaycard just changed the benefits of the AAdvantage Aviator Red Card so that it offers $25 in Wi-Fi credits aboard American Airlines flights each year. The AAdvantage Aviator Silver offers $50 in such credits. However, this is unique among the airline credit cards. Given how connected many consumers feel they need to be, even up in the air, an airline credit card offering free or discounted onboard Wi-Fi or even just a handful of flight passes per year would be a really compelling product for a lot of business and leisure travelers.
Non-airline bonus categories: While many airline credit cards offer bonus miles per dollar spent only on airfare, some have started to diversify their bonus categories. The JetBlue Plus Card and JetBlue Card both offer 2 points per dollar at restaurants and grocery stores. The Hawaiian Airlines World Elite Mastercard not only earns 3 miles per dollar on Hawaiian Airlines purchases, but also 2 miles per dollar on gas, dining and grocery store purchases, making it one of the top possible earners among airline cards. The Southwest credit cards offer two Rapid Rewards points per dollar on Southwest purchases as well as at hotel and car rental partners.
But none of the Delta American Express cards offers a non-airline bonus category. Nor does the British Airways Visa Signature Card. And while the Alaska Airlines Visa Signature credit card earns 3 miles per dollar on Alaska purchases, it earns a flat 1 mile per dollar on everything else. Imagine how much more consumers would use their airline credit cards if they could earn bonus miles on everyday purchases even for limited periods of time like the Chase Freedom’s quarterly rotating merchant categories that earn 5% back on the first $1,500 spent each quarter you activate. Even better, what if card holders could choose a specific category in which to earn bonus miles?
Automatic basic elite status: Many hotel credit cards, like the Marriott Bonvoy Boundless Credit Card and the World of Hyatt Credit Card, offer at least the lowest tier of elite status automatically. The IHG Rewards Club Premier Credit Card even provides mid-level Platinum status. But no airline credit cards offer outright elite status.
Some do allow card holders to earn elite-qualifying miles by meeting spending thresholds. For example, with the Platinum Delta SkyMiles® Credit Card from American Express cardmembers can earn 10,000 SkyMiles and 10,000 Medallion-Qualification Miles (MQMs) for spending $25,000 in a calendar year, and an additional 10,000 miles and MQMs for spending $50,000 in a calendar year. The Citi / AAdvantage Executive World Elite Mastercard earns you 10,000 EQMs after $40,000 in purchases per calendar year.
But what if an airline credit card offered outright elite status for hitting a spending threshold? Even if it were higher than the already considerable spending levels for earning elite-qualifying miles through a card, some flyers would likely consider achieving status this way. Especially since the elite-qualifying dollar waivers for most levels of elite status that involve credit card spending waivers are $25,000. Even better, what if you could just guarantee basic elite status by paying your annual fee? Chances are a lot of flyers would value that over club access, and would pay the same or even higher annual fees to enjoy it.
Premium economy or extra legroom upgrades: As premium economy proliferates on American, Delta and United flights, and we even see airlines like Alaska and JetBlue carve out evermore distinct premier sections in their otherwise egalitarian economy cabins, being able to upgrade to a seat with more legroom and nicer amenities is looking more and more alluring. And more possible thanks to increased capacity.
Instead of offering an annual companion ticket, airlines could offer an annual premium economy upgrade. This would not only be easier for many travelers to use considering you just need the space for one traveler versus two, but could also be based on upgrade availability. Airlines might not feel too much of a financial squeeze since they could restrict the routes on which this would be available, and a passenger would have to purchase an economy ticket anyway and would be subject to the same availability as other customers redeeming miles for a premium economy award. Extra legroom seats are often only a modest premium over regular economy seats, which could end up being cheaper for the airline than offering a free companion ticket.
Upgraded boarding: While many airlines offer priority boarding as a benefit, the best you can hope for is to hop on the plane somewhere in the middle of the process toward the beginning of the coach cabin boarding. What if an airline credit card offered you the option to upgrade your boarding to Group 1 or even pre-boarding a handful of times per year? The Southwest Rapid Rewards Priority Credit Card does just that, with up to four upgraded boardings per year. However, these are based on availability due to the airline’s unique boarding procedures. Offering a shot at boarding among the first passengers, even just once or twice per year would be an appealing option for many travelers.
Free seat selection: As airlines increasingly monetize various aspects of the flight experience, the fees to reserve specific seats on the plane have been going up. One way airline credit cards could set themselves apart would be to offer card holders the chance to select seats fee-free once or twice a year. We’re not talking exit row or extra legroom seats, which can sell for hundreds of extra dollars depending on the route. Though perhaps this would be a great option for the premium credit cards.
Rather, just give card holders a crack at an aisle or window seat somewhere in the middle of the economy cabin. Family travelers, especially, would appreciate the opportunity to select seats together without having to pay extra or hoping for friendly fellow passengers willing to swap seats.
Inflight credits: Most airline credit cards offer discounts for inflight purchases such as meals, beverages, Wi-Fi and entertainment. Delta’s credit cards offer a 20% discount, the Citi / AAdvantage Platinum Select World Elite Mastercard and United Explorer Card offer 25%, and the JetBlue Plus Card offers a whopping 50%. This still assumes customers will want to spend money during their flight though. What if more airlines followed the lead of Barclaycard’s AAdvantage Aviator Silver card and instead offered inflight food and beverage credits? While the Aviator Silver’s benefit is perhaps excessive at a $25 daily statement credit toward inflight food and beverages, even offering $25 once or twice a year would be worth it for some customers.
Mileage minimums: Airline elites regularly earn 500 elite-qualifying miles (EQMs) minimum per flight, so why not extend a similar benefit to co-branded card holders but for award miles instead? For the average American AAdvantage, Delta SkyMiles or United MileagePlus member, you would need to spend $100 to end up with 500 award miles after a flight. If you’re a low-level elite, that fare number drops to $71.43. Why not offer a minimum mileage-earning guarantee of 500 miles or so to card holders who use their cobranded credit card for a ticket purchase? Chances are airlines would only be giving up a few hundred miles per cardholder every year given current airfares and earning rates.
Waived change fees: Airline change and cancellation fees can add up to hundreds or even thousands of dollars depending on your flight plans and elite status. Even changing to another flight on the same day of travel can be pricey. But how enticing would a credit card that offers to waive such fees even once a year be for many flyers? Just giving flyers a little flexibility in a pinch would go a long way toward generating goodwill, providing value, and guaranteeing that a cardholder would likely hold onto their card for another year and pay the annual fee again.
Waived close-in award and redeposit fees: Two of the main stumbling blocks for folks hoping to redeem their hard-earned award miles are the hidden fees on award tickets. If you don’t have elite status, you’ll usually be liable for a $75 fee for booking an award ticket within 21 days of departure. If your plans change and you want to cancel your award ticket and redeposit your miles, you could end up paying $150 per ticket. Airlines should consider adding a one-time or once-annual award fee waiver to their premium cards that could save cardmembers the hassle and expense of hesitating to use their miles for a trip or changing their plans if unforeseen circumstances arise.
Could any one credit card offer all these benefits? Certainly not. It would be far too expensive to do so. However, it’s time for airlines and their credit card issuers to start getting creative and offering more value-added benefits to their cards. Simply earning 2 miles per dollar on airfare, getting a free checked bag or two and boarding ahead of only half the other flyers is not enough anymore. Given the exciting new benefits being offered by many hotel credit cards and the increasing competition in the airline card marketplace, now is the time for airlines and issuers to start considering unique benefits that will set their products apart and win new customers.
For rates and fees of the Delta Reserve Card, please click here.
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