As the saying goes, there are two ways to get a donkey to pull a cart, dangle a carrot in front of him, or use a stick. It seems as if airlines have taken that wisdom to heart and have designed their co-branded credit cards with both techniques in mind. Some carriers are dangling valuable benefits and perks in front of their customers, while others compel travelers to get their credit card by taking away perks from those who don't have the "right" card.
Keep Your Eye on the Carrot
When most cardholders think of airline reward credit cards, they think of the frequent flier miles that they can earn. Yet in recent years, it has become harder to redeem those frequent flier miles for award tickets at the lowest mileage levels, while the perks offered by these cards have increased. Here are some airline credit cards that offer the tastiest carrots:
Citi Executive AAdvantage Card From American Airlines
Cardholders receive several valuable benefits such as access to the American Airlines Admirals club lounges as well as priority check-in, security and boarding, and a 25 percent savings on eligible in-flight purchases. This card also features 10,000 elite qualifying miles when cardholders spend 40,000 miles within a calendar year. These special miles are necessary to achieve elite status in their program, which offers even more perks including upgrades to first class. There is a $450 annual fee for this card.
US Airways Premier World MasterCard From Barclaysbank
Even though US Airways is merging with American Airlines, Barclaysbank will continue to offer their own cards affiliated with the new combined carrier. Cardholders can redeem their miles for flights with a discount of 5,000 miles of the standard price. Cardholders also receive an annual companion certificate good for up to two companion tickets at $99 each, plus taxes and fees, as well as priority boarding and first class check-in privileges. There is an $89 annual fee for this card.
Look Out for the Stick
Airlines would love to tout all of the aspects of their credit cards as benefits, but it is easy to see how they use a proverbial stick to motivate their customers to sign up for these products. At the recent Travel Executive Summit, Jeff Robertson, the Vice President for the SkyMiles program at Delta Air Lines spoke about how customers now had to qualify for elite status not just by flying more, but by spending more. However, customers could get a waiver from this spending requirement by signing up for one of Delta's American Express cards and spending $25,000 on it in a calendar year. According to Robertson, this policy has been a major driver of credit card sign-ups. Here are some airlines that allow travelers to keep certain rewards if they get their credit card.
Gold Delta SkyMiles Credit Card from American Express
This card offers a waiver from Delta's new spending requirement to qualifying for elite status this year, but only for cardholders who spend $25,000 on their card each year. Thankfully, cardholders also receive priority boarding, free checked bags and a 20 percent discount on eligible in-flight purchases of food, beverages and entertainment. There is a $95 annual fee for this card that is waived the first year.
United Airlines Club Card
A few years ago, United Airlines imposed a new "close-in booking fee" for award tickets issued within 21 days of travel. At about the same time, it began offering its United Club card from Chase, which offers cardholders a waiver from these fees. Here again, the airline adds fees, but offers a credit card with a waiver. There is a $395 annual fee for this card, but it does include plenty of carrots such as a priority service, a United Club membership, and elite status with Hyatt Hotels and Avis car rentals.
It's important to know what the credit score requirements are for each credit card that you want to apply for, and whether you meet those requirements. By checking your credit scores beforehand (which you can do for free through Credit.com), you can get an idea of whether you're aiming for a card you're more likely to get approved for.
Note: It's important to remember that interest rates, fees and terms for credit cards, loans and other financial products frequently change. As a result, rates, fees and terms for credit cards, loans and other financial products cited in these articles may have changed since the date of publication. Please be sure to verify current rates, fees and terms with credit card issuers, banks or other financial institutions directly.
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