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Airline Merger Mayhem: How to Score With Credit Card Rewards

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Not a single airline industry observer was surprised last week when American Airlines and US Airways announced their intention to merge into the largest carrier in the world. At the same time, savvy credit card users were salivating over the new opportunities that are always created when two airlines join forces.

What to Expect During the Merger

After the mergers of Delta and Northwest, United and Continental, and Airtran and Southwest, there are clear expectations about how this latest merger will affect holders of these airlines’ reward credit cards.

At this moment, American Airlines offers several different credit cards through their banking partner Citi, while US Airways offers its own mileage earning cards through Barclays Bank. Over the course of the next year, the merger will have to gain approval from regulators, and only then will the deal close and the airline will begin integrating the two organizations.

At that time, the new American Airlines will announce how it will merge the two frequent flier programs while likely selecting a single banking partner that it will continue to work with. The customers of one bank will continue to earn miles as usual, while the holders of the other bank’s mileage earning reward cards will be notified that their accounts will close, but will likely be offered a competing reward card. In addition, members of US Airway’s Dividend Miles frequent flier program will become members of the American AAdvantage program, and will have their mileage added to any existing AAdvantage account.

How Cardholders Can Take Advantage

The fact that there are now two competing banks offering airline credit cards for carriers that will soon merge presents a unique opportunity for cardholders. Customers can now receive cards affiliated with both carriers knowing that all of their miles will be combined. In the case of American, Citi offers both business and personal cards that can award up to 50,000 bonus miles each. Likewise, Barclays Bank offers a US Airways Dividend Miles card with a 40,000 mile bonus offer.

Therefore, holders of one of these bank’s cards can apply for the other bank’s cards and expect to earn a second sign-up bonus. In fact, it is entirely possible to earn four separate sign-up bonuses from both the personal and business versions of each bank’s cards.

The same strategy is also possible with credit cards from merger partners Airtran and Southwest. But in this case, both carriers’ credit cards are issued by Chase. Nevertheless, this merger has already taken place on paper, and the merger of Airtran’s A+ program with Southwest’s Rapid Rewards is inevitable.

What Are the Risks?

First, it is possible that the merger of American and US Airways will not be approved by regulators, although most analysts feel that this result is unlikely. Also, cardholders should not apply for too many new credit cards within a short period of time, as this will have a small, temporary, but negative effect on their credit score. And as always, those who carry a balance should avoid reward cards and look for cards with the lowest interest rates.

By understanding how airline mergers affect credit card users, you can leverage these deals to pad your frequent flier accounts and save up for that dream vacation.

Image: Ron Chapple Studios

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  • Arne arendts

    Hi, anybody impacted by the card merger from usairways/bank of america to aa advantage/barclay?.
    I was issued two cards and in the process of just wanting one card, my credit history was shorted from 10 years to one year and as the credit line went from 20k to 10k on the later card, my credit score went from 810 to 644…. Barclay card apparently can only help me by increasing the card limit to 20k and lower my score even more, as they have to pull my credit
    I was a loyal us airways card member since 2006 did most of my charges though this card, did not apply for the new card, and as an innocent consumer was not informed of posssible impacts. Ready to start a lawsuit!!!

    • http://www.Credit.com/ Gerri Detweiler

      Can you clarify the situation? I am not sure I follow. Were you issued a replacement card for your existing one or they accidentally issued two?..?

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