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Choosing the Right Travel Rewards Credit Card

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I frequently get asked if it’s better to go with a general travel rewards credit card or with one that’s branded by an airline. Well, the answer to that depends on how you answer this question: Do you fly on one airline the vast majority of the time?

If the answer is no, then stick with a general travel rewards card, such as the Chase Sapphire Preferred Credit Card. The general cards offer flexibility and you can choose the airline that meets your needs at the time.

But if you do favor a particular airline, and your airline of choice happens to be American Airlines, then the new Citi Platinum Select / AAdvantage MasterCard is worth a look. The sign-up bonus is pretty good. After you spend $1,000 in purchases within the first three months, you get 30,000 American Airlines AAdvantage bonus miles, which is more than enough for a round trip domestic ticket.

Rewards and Benefits

This card has a really nice rewards program and some excellent perks, such as a free ride for your first checked bag. Up to four of your traveling companions also get a free bag. These days, I think that free bag plus a few more for companions is a really great deal.

Here are a few more highlights:

  • You earn two AAdvantage miles for every $1 you spend on eligible American Airlines purchases.
  • You earn one AAdvantage mile for every $1 spent on other purchases.
  • Use AAdvantage miles and earn 10 percent of your miles back ($10,000 limit per year).
  • Save 25 percent on eligible in-flight purchases.
  • Earn a $100 American Airlines Flight Discount every card membership year that you spend at least $30,000 (you have to renew your card membership to qualify).
  • You get to enjoy priority boarding.

There’s no limit to the amount of miles you can earn. You can redeem miles for flights on American (or on an airline partner, such as British Airways) or for gift cards, vacation packages, Admiral’s Club membership, and more. There’s also a Reduced Mileage Award program that offers mileage discounts to destinations that change quarterly.

Another thing I like about this card is that there are three levels of elite membership that you can attain: Gold, Platinum, and Executive Platinum. So if you fly a lot, you can climb the status ladder and get even more perks and miles.

Rates and Fees

The current national variable APR for an airline credit card is around 14.63 percent. So this card is a little on the high side. Don’t carry a balance or it will negate your rewards.

Here are a few of the basics:

Purchase APR: You get a variable 15.24 percent. There’s a 23-day grace period so pay your bill on time to avoid interest. As I just mentioned, if you carry a balance, it will effectively wipe out your rewards.

Balance Transfers: There’s a 3 percent transfer fee. There isn’t a current offer for balance transfers, but you might receive one after you’re a cardholder.

APR for cash advances: There’s a variable 25.24 percent APR. There’s also a 5 percent fee. Keep this in mind if you suddenly get the urge for quick cash. That “quick cash” will be very expensive.

Foreign transaction fee: 3 percent

Annual fee: Waived for the first year; after that, it’s $95 a year.

[Credit Cards: Research and compare rewards credit cards at Credit.com.]

Bottom Line

Overall, it’s a good choice for American Airlines loyalists. The rewards program is solid and you get a lot of the “enhanced travel experience” perks that are so popular right now.

I have to say, though, that if you travel overseas a lot, you might think twice about this card because you do have to pay foreign transaction fees. You might consider a card that doesn’t charge these fees, such as the Chase Sapphire Preferred Credit Card I mentioned earlier. Capital One doesn’t charge foreign transaction fees on any of their credit cards. And the miles you earn on many of the general travel rewards cards can be used to fly on American Airlines.

Image: Marcin Wichary, via Flickr

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