If you’ve got good credit, and travel enough to justify an annual fee, check out today’s competitive rewards card market.
When Congress passed credit card reform legislation in 2009, banks predicted the end of rewards cards that offer points and miles. In fact, the opposite has occurred – there are more cards offering more miles than ever before. With bonus mile offers flooding the market, the latest airline rewards credit cards are competing with non-mileage perks such as lounge access and fee waivers.
“The current airline rewards are the hottest thing we have seen in the credit card industry in a long time,” says Bill Hardekopf, CEO of LowCards.com. “Two new offers came out this week that will increase competition to an already heavily contested category.”
If you’re considering one of these cards, you could spend hours studying the fine print, which is often written with the clarity of mortgages and patent lawsuits. Or you could let us break ’em down for you…
1. American Airlines Citi Executive AAdvantage World Elite MasterCard
Citi and American Airlines just introduced the Executive AAdvantage World Elite MasterCard – and it provides more benefits than their existing cards. New cardmembers will receive 25,000 American Airlines AAdvantage miles after $1,000 in purchases within the first four months of card membership. As for non-mileage benefits, American will waive its checked baggage charge for up to nine passengers, and your party will also receive priority check-in and boarding privileges. Those seeking higher status in their program will earn 10,000 elite qualifying miles each calendar year by charging at least $40,000 to this card. International travelers will be thrilled to learn that this card has no foreign transaction fees and features “chip and pin” technology that’s compatible with train stations and automated kiosks throughout Europe.
Analysis: This card has nearly identical terms to the Delta Reserve Card and the Continental Presidential Plus Card, which also offer lounge access and miles towards status. There’s a steep $450 annual fee, but that’s roughly the cost of a lounge pass by itself – and it falls in line with competing cards. It’s easy to recommend this card to international travelers and frequent customers of American Airlines, but occasional customers will find the annual fee much harder to justify.
2. United MileagePlus Explorer Card from Chase and United Airlines
Chase and United Airlines have just introduced a new version of the United Mileage Plus credit card that they’re calling the Explorer Card – it replaces their Mileage Plus Visa Signature card that made my list of the 7 Worst Reward Credit Cards. New card members receive 25,000 MileagePlus bonus miles after the first purchase, and at last, cardholders will earn double miles for purchases with both United and their merger partner Continental. As for non-mileage perks, tickets purchased with this card will entitle you and only one traveling companion to check a single bag for free – potentially worth $100 per round-trip for travelers without elite status. Cardmembers also receive priority boarding and two United airport club passes on their membership anniversary date. There is a $95 annual fee that is waived the first year.
Analysis: Chase and United have merely improved this card to match their existing Continental OnePass Plus Card. Other cards from Delta and American offer the same checked-bag fee waiver for up to nine passengers traveling on the same itinerary, while carriers like Southwest and JetBlue already offer a free checked bag to everyone.
3. Southwest Airline’s Rapid Rewards Premier card From Chase
Earlier this month, Southwest Airlines introduced the Rapid Rewards Premier card from Chase. It offers 50,000 points after your first purchase, enough for $830 worth of tickets in their widely available “Wanna Get Away” fare class. It’s $99 annual fee is not waived the first year, but you will receive a 6,000 point bonus each year that’s conveniently worth $99.
Analysis: Since Southwest’s points work like a gift card, this large sign-up bonus is especially useful for travelers who wish to redeem awards for several shorter, less expensive flights.
4. Chase Sapphire Preferred
Rather than airline miles, the Chase Sapphire Preferred card offers a sign up bonus of 53,500 points in Chase’s Ultimate Rewards program – 50,000 points for spending $3,000 in the first three months of opening an account, and another 7 percent back as an annual bonus. A single point is earned for each dollar charged, with double points granted to hotel and airfare purchases through Chase’s website. Points can be redeemed for 1 cent each as cash back, or for 1.25 cents when booking travel through Chase’s online travel agent. Finally, points can be transferred to airline miles with Continental or British Airways, or to Marriott’s and Intercontinental’s hotel programs. There is a $95 annual fee that is waived the first year, and no foreign transaction fees.
Analysis: By offering a sign up bonus of 50,000 points, Chase wants everyone to know that this versatile cash back rewards card is not tied to any specific airline program. The most rewards are realized by booking and redeeming travel with Chase’s website. Although this may or may not be more convenient than how you normally purchase travel, with no annual fee for the first year, you have nothing to lose by trying this card out.
If you’ve got good credit, and travel enough to justify an annual fee, check out today’s competitive rewards card market. By choosing the right offer, you can receive valuable points, miles, and other perks. To find the best card for your particular circumstances, check out the Money Talks News Credit Card Search Tool. It’s free and objective.