Credit Cards

Do You Need to Re-Evaluate Your Airline Miles Credit Cards?

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The past few months have brought some disappointing news to award travel enthusiasts.

In August, Delta airlines announced that business class awards to many international destinations will increase 20-25%, for travel beginning after May 31, 2014. In September, Southwest lopped about 17% off the value of its points, for all travel booked after March 31, 2014. Finally, United waited until the morning after Halloween to announce the scariest program change of the year: Miles required for international award tickets in business and first class just went up by as much as 87%. And for the first time, travelers will have to pay more miles for award tickets on United partners’ flights than they would on flights operated by United. These changes apply for award flights booked after Jan. 31, 2014.

How These Changes Affect Credit Card Users

When credit card users receive frequent flier points and miles for spending, the value of these awards points and miles depend on how many are needed for an award flight. So when an airline increases the number of miles needed for an award ticket, it decreases the rewards returned from its award cards.

Here is how the outlook appears for some of the major airline miles credit cards.

United Explorer and Club Cards From Chase

Although these cards are an excellent way to earn rewards in the form of United MileagePlus miles, you’ll soon need more miles to get where you want to go. For example, a business class award flight to Europe on a partner airline like Lufthansa that requires 100,000 miles will soon require 140,000. A first-class award on a partner carrier to the Middle East that costs 150,000 miles will soon require 280,000 miles at the lowest mileage redemption rates.

Even though the changes are largely confined to international awards in business and first class, these awards are the most valuable way to redeem miles. Cardholders who are planning award trips to these destinations might want to consider booking whatever they can before the price increase takes effect on Jan. 31, 2014.

Chase Ultimate Rewards Program

Many of the credit cards that are part of Chase’s Ultimate Rewards program have the ability to transfer points to airline partners such as United and Southwest. These cards include the Sapphire Preferred, Ink Bold, Ink Plus and Palladium cards. This program is affected by both Southwest’s and United’s frequent flier award devaluation. However, Ultimate Rewards points can still be very valuable when transferred to other travel partners such as Virgin America, Hyatt, Amtrak — and British Airways, which is an American Airlines partner.

Southwest Rapid Rewards Cards From Chase

Chase offers four different credit cards in partnership with Southwest airlines. Southwest used to offer a dollar’s worth of airfare for 60 points, but will be asking 70 points starting for travel booked after March 31. This equates to a value of about 1.4 cents per point. On the other hand, those who hold Southwest’s Companion pass receive double the value from their points and can still earn competitive rewards.

Delta SkyMiles Cards From American Express

Delta increased the number of miles required for business class awards to destinations in Europe, Africa, the Middle East and southern South America, for travel on or after June 1, 2014.

Other Programs to Consider

Whether or not you’ll be affected by these changes, there are many airline miles programs also worth checking out, including these:

  • Capital One Venture Rewards or the Barclaycard Arrival both offer double miles that are worth one cent each toward travel rewards on any airline.
  • Cardholders of American Express Membership Rewards or the Starwood Preferred Guest program can earn miles in a flexible point system that can then be transferred to Delta SkyMiles, or one of several other different frequent flier programs.

As the airline industry consolidates and becomes more profitable, carriers are increasingly raising the price of award tickets. However, the credit card industry remains extremely competitive, and cardholders can look for the cards that earn the most valuable miles. By taking the time to re-evaluate which airline miles you earn with your credit cards, you can continue to earn the most award travel from your spending.

Compare airline miles credit cards on Credit.com.

At publishing time, the Capital One® Venture® Rewards Credit Card, Gold Delta SkyMiles® Credit Card, Starwood Preferred Guest® Credit Card from American Express, and Southwest Airlines® Rapid Rewards® Premier Credit Card are offered through Credit.com product pages, and Credit.com may be compensated if our users apply for and ultimately sign up for any of these cards. However, this relationship does not result in any preferential editorial treatment.

Image: iStock

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