Why I won’t be canceling my Chase British Airways Visa card

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If you’ve read my blog the past couple of days, you may have noticed that I’m convinced the sky is falling, at least as far as British Airways Executive Club goes for those of us on this side of the pond. British Airways is “revitalising” their frequent flyer program (a term I’ll be using on this blog from now on in place of “enhancing,” by the way), and by that they mean they’re putting us all on a level playing field. In the past the award chart was incredibly lucrative for those of us in North America, while those in Europe were paying substantially more for similar award tickets.

As I argued, it’s a function of being competitive. In the US, airlines have become nothing more than credit card companies with a fleet of private jet that are just a cost of doing business. In Europe, credit cards are side businesses for airlines.

Just as Delta charges fuel surcharges on award tickets originating outside of the US, British Airways had a much more competitively priced award chart for travel on their partners originating in the US, because their competition suddenly became United, US Airways, etc., and not Lufthansa, Virgin, etc. And when I say that, I’m referring to their co-branded Chase Visa credit card that they launched in the US a couple of years ago, which offered 1.25 miles per dollar. I wouldn’t spend a dime on the card if it would take me 250,000 miles to get a first class “saver” ticket to Asia, while otherwise it was sometimes a good value.

I’ve seen dozens of comments from people saying “that’s it, I’m canceling my British Airways Chase Visa card.” Not so fast. For one, we should wait until they officially announce the new award chart. Speaking of which, it really ticks me off that they announced the changes put say they won’t release the new award chart until it goes into effect.

But beyond that, I suspect that the value of the British Airways Visa card will actually be increasing for me. While they haven’t announced the full new award chart yet, they have provided a few examples of the new pricing, and one of the routes that will go down in price is New York to London, which will now cost 120,000 miles in first class. Many are assuming the new award chart will be distance based, so I wouldn’t expect the price to be the same from the west coast.

But the above pricing means that you can essentially get two first class award seats from New York to London for 120,000 miles, or 60,000 miles per person, plus taxes and fuel surcharges. If you spend $30,000 on the British Airways Visa in a year you get a “companion voucher” good for a second passenger on an award ticket

To add to that, I suspect we’ll see a lot more 50% transfer bonuses from American Express Membership Rewards. They offered a 50% transfer bonus just a couple of months ago, and I’m sure once the new award chart is released they’ll offer several more. So with that in mind, you’re potentially looking at first class for two from New York to London for 80,000 Membership Rewards points, or 40,000 Membership Rewards points per person, plus fuel surcharges.

Yes, fuel surcharges and taxes are substantial, but you’ll typically pay 125,000+ miles per person for first class between the US and Europe, so the taxes and fuel surcharges shouldn’t be more than the value of 85,000 miles.

And yes, New York to London is a short flight. A very short flight, actually. But it’s regularly operated by British Airways’ new first class, and you have access to the Concorde Room in both New York and London.

So my point is simply that the value of the British Airways Visa Signature® Card is increasing with these changes for me, for all the wrong reasons. Previously there was no need to have the card (for me, at least), since my redemptions were on partner airlines and I could rack up those miles at a more favorable ratio through American Express Membership Rewards. Now, the major benefit of the card, which is the companion certificate good for travel on British Airways, suddenly became much more valuable.

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Comments

  1. I like you, I really do. The vast majority of your readers do not charge $30k annually so I hope its ok if they cancel their semi worthless BA Visas without any guilt.
    Spinning bad news isn’t the best way to keep readership.

  2. @ ace — Spinning bad news? Did you read my previous two posts? I’d argue I’ve been the toughest on BA since the very beginning out of just about anyone.

    My point is simple — the value of the companion certificate is going up for those flying from New York to London. That’s all I’m saying. I don’t see any other value in the BA Visa, besides the companion certificate.

    And I actually think a majority (or at least a really, really good number) of my readers charge $30K+ annually on credit cards. At least that’s the feeling I get based on the emails I get. For those that don’t, by all means cancel the card. Other than the sign-up bonus there’s no reason to have it. All I’m saying is that *I* won’t be canceling it for the reasons I outline.

  3. @ ace — And I stated that clearly, didn’t I?

    What would you rather pay: 125,000 Membership Rewards points plus $300 in taxes (including the London luxury taxes), or 40,000 Membership Rewards points plus $800 in taxes/fees? I’ll gladly shell out $500 for a savings of 85,000 points.

  4. Ace – this isn’t spinning bad news. If you want to use the BA program to get inexpensive partner redemptions to Asia, the changes are probably bad. If you want to fly to London from the east coast, this is a 20% reduction in points – in all four classes.

    Imagine a carrier announced they were reducing the points required for TATL premium cabin award tickets? That would prompt celebration.

    Some changes will be positive, others negative. Good for some, bad for others.

    I’ve felt this blog has been too negative on the changes – and hadn’t, until this post, focused on the positives.

    Finally, to your assumption about the “vast majority” of this blog’s readers not spending $30k annually on their card – what data do you have to reach that conclusion?

  5. I charge $30k, but not on the BA Visa. I get value elsewhere. Especially since I have no plans to actually go to London any time soon (and if I did, it would be from SFO).

    Chase will get two cancellations from me when the renewal of our cards comes up. I’ll find some other card with sign-bonus to fill the gap.

    So yes, it might still work for you, but not for me.

  6. “Spinning bad news isn’t the best way to keep readership.”

    “I’ve felt this blog has been too negative on the changes”

    Why I love being a blogger… 😀

  7. @ Oliver — I totally agree with you. Works for some, doesn’t work for others. In your shoes I would wait till the new chart is released, though if an annual fee is coming up I can certainly see why you’d cancel now.

  8. “Works for some, doesn’t work for others.”

    Indeed there was a big fat “I” in the subject line of this post. I certainly don’t perceive it as spin.

  9. @ace – Yea I don’t see lucky trying to spin anything. Several times, he reiterates the point that HE won’t be cancelling the card for HIS reasons.

    And I would bet on the OVER if you were talking about travel hackers (both rookie & experienced) who have $30k+ credit card spend annually.

  10. @ Stvr — I realize the average person doesn’t put $30K per year on a credit card, though I do believe that a majority of people that read this blog put $30K a year on a credit card. I believe it’s a combination of people interested in this hobby generally having higher than average income, plus many people reading this blog traveling a lot for work and having expense accounts, plus people reading this blog being smart and knowing how to generate spend without really spending money.

    I’ll do a survey later, because I could very well be off base. I’m curious…

  11. You stole my thunder Lucky. The companion cert on BA metal is exactly why I am keeping the card.

    Now $30k is a stretch for most people, but if one travels a lot for business or in my case, is able to charge their rent and some family member travel, it is quite doable.

  12. Coins, I know that you don’t drink, but what are you smoking?

    If you wrote an article about flying a R/T BA flight out of London, and flying in on a positioning flight, then I’d value that option. But to say that Americans should be ok with the upcoming changes just because of the 2 4 1 deal is something I’m uncomfortable with.

    For whatever reason, BA is spinning this their way. As for me, I’m a non-trusting New Yorker. I don’t trust BA as far as I can throw them. They’re up to something (no good) IMHO.

    Regarding the 30,000 spend 2 4 1 first class trip… the CHASE BA card is the last place I’d spend my $30,000. Even if I’d get the 2 4 1 deal, the taxes are a dealbreaker for me.

    I’ll continue to spend the bulk of my $$ on my Starwood Amex card.

  13. @ Dan — C’mon, you’re completely misinterpreting what I’m saying. Did you read my last two posts? I am NOT okay with these changes. Not in the slightest. I’m more against them than just about anyone.

    My only point is that the companion certificate that comes with the British Airways Visa increases in value for those on the east coast for two reasons:
    a) the cost of shorter distance awards on British Airways metal is going down
    b) Redeeming miles on partner airlines will no longer be a smashingly good deal, so by comparison redeeming with the companion certificate will be a better deal.

    C’mon, please don’t read into things I’m not saying…

  14. Lucky,
    I love reading your blog and perspective….looking/knowing others point of view helps me determine my POV.

  15. Love how Lucky is trying to put his personal point of view of how one positive aspect of the change will benefit he and others in a similar position yet other take liberty on attacking his moral and logic. If it doesn’t apply to you, then consider your own situation and decide for yourself.

    Lucky isn’t telling you what to do and in pretty sure he doesn’t care what you do with the chase card. Take a chill pill and relax….

  16. Lucky, your point is well taken regarding cheaper redemption on BA F JFK-LHR (though I would wonder exactly how much availability they’re going to release in premium cabins going forward, and whether there will be a tiered system of redemption levels…)

    However, as my life is right now between SFO, JFK, LHR, and PEK, I really wonder what the utility is of a 6 hour flight in F. Of course, I’d rather be in F than C or Y, but I mean…do you *really* need it for LHR-JFK? I find that flight relatively stressless in C or even WT+. It’s rather the truly long-haul flights (8 hours or more) that I absolutely have to travel in a premium cabin, not for a relatively short hop like London-New York. In that sense, I find that this is such a terrible devaluation that a few cheaper routes cannot fix. I’m burning what’s left of my stash of BA miles on CX F and getting over with it.

    I also sincerely hope they don’t do away with their very generous stopover rules.

  17. @ Alex — Thank you, thank you, thank you.

    @ deux — Does what I point out make up for the other changes? Absolutely, positively not. These changes royally suck. Just trying to point out the one positive coming out of this.

    Yes, no one needs first class on a six hour flight, though at the same time I’d argue no one needs first class on a 15 hour flight — it’s possible to fly business class and arrived incredibly rested. That being said, for many of us it’s not just about arriving well rested (because no matter what cabin I’m in, I won’t be well rested after flying New York to London given how short it is), but enjoying the experience. So thanks to the Concorde Room on both ends and new first class, I’d probably have a fairly nice experience that’s worth the premium, IMO.

  18. @Lucky – any idea if the first class redemption cost will increase from LAX/SFO-LHR? While JFK is dropping to 120k, will those west coast routes remain at 150k?

    While I do not expect them to drop due to the distance, am worried they might actually increase.

  19. @ Carl — Ultimately there’s no way to know until they release the chart. That being said, they have said that London to Tokyo and Hong Kong will cost 180,000 miles in first class, and Los Angeles and San Francisco are only slightly shorter distance wise. So I wouldn’t be surprised to see the cost go to 180,000 miles in first class, unfortunately.

  20. Another plus to this card is the lack of a foreign currency conversion fee, making it attractive for foreign transactions. When traveling in Europe recently, this was my go to card. (Once I hit 30k in spend, I’ll go back to SPG Amex for most purchases)

  21. @Joe yes, but there is now a whole bunch of forex-free cards. I have been using the BA card for it, but will likely switch to the PC VISA or get the Hyatt VISA.

  22. I’m west coast based and don’t spend $30K on my CCs. I plan to cancel the BA visa as well as the AMEX PRG if the changes are as predicted. With Amex MR losing CO/UA, devaluing BA and Aeroplan, there’s not much value left there for me. If only they transferred to AA…

  23. I was considering cancellation anyway when I received a bill of $1700 for my “free” business/first trip from SFO-LHR-FCO using the 2for1 cert. If I wanted to make a co-pay when I cash in my miles I would simply buy a cheap ticket on a competitor and use MFU, which would require fewer miles and possibly less cash (not to mention earning always useful EQMs). As noted above, the bogus fuel surcharges are a dealkiller.

    Those of us on the West Coast are getting screwed twice – we won’t get cheaper BA mileage tix to LHR and it will likely cost far more miles to fly BA partners.

    Had I known BA and LHR were going to ream me with “fuel surcharges” and “luxury taxes” (this was never disclosed in the credit card app) I doubt very much I would have charged more than $1 on the card and simply used the miles to fly F to South America. But what’s done is done, Mrs. B and I will enjoy our trip to Rome in C and back from London in F and then say “arrivaderchi” to BA. I have 3 other Chase cards…

  24. Great coverage of this, Lucky. I don’t see how anyone who “has let loose the dogs of war” on the issue (per Leff on View from the Wing) can be accused of being soft on an issue!!!!

    And I think your analysis may be right IF you are restricting it to East Coast – LHR redeomptions (maybe to Zone 1).

    However, if you are using it for things that go maximium YQ (like LAX-CPT), then you are talking $2280 for two in pure YQ, not including LHR APD if you stop over, other taxes, etc. LAX-CPT on a 241 cost $3200 with a stopover in LHR.

    There is also award loading issues that discriminate against US west coast folks (maybe US east coast too, I haven’t been looking at that)

    The tipping point is the opportunity cost of those $30k. How many new credit card bonuses would I be shut out of if I had to give all my charges to Chase BA?

  25. Lucky, it’s possible some partner redemptions could end up a better value, if as some have suggested, the BA+1 partner under the new zone system ends up lower than it is now for some routes. There are some possible routes I’ve considered that would be nicer or more convenient to fly on BA + a partner, but it’s just too expensive right now.

    But the thing is, just not knowing! Which is very poor on BA’s part (BA apologists’ arguments to the contrary on FT notwithstanding).

    I’m going to hold off charging anything to BA Visa for now, until I know if the new scheme will be useful for us or not. It’s certainly too soon to cancel and I may end up keeping it.

    And no, I don’t charge 30K to a single card (too many other good offers – and I have to charge work airfare & hotel to the official travel card). But with a family of 3 to take places, we’re looking at Y awards, so things like US-LHR on BA were never an option for us. But it’s still possible I may keep my card – I’d just rather have more advance notice to think about it!

  26. Just wanted to correct a mis-statement (and common misconception) Lucky makes in his post. DL does not collect YQ on all award redemptions originating outside the US. They collect YQ on all award redemptions originating in *Europe*. (See their award charts for the definition, as some countries included might surprise some people.) The only other time I’ve heard of YQ being collected on AF/KL metal is on ex-TLV redemptions. (It’s not collected on ex-TLV redemptions on DL metal.) DL collects YQ for some partners (MH, CZ, and VA for sure) regardless of where the trip originates, but fly DL or KE from Asia to the US (and back) and you won’t pay YQ (or maybe only the < $2 in KE YQ DL sometimes collects).

  27. I’m in the same position as you, Lucky – the BA Visa will continue to work very nicely for me.
    I’m a Scot living on the West Coast, a civilian you might say, as I don’t travel for work.
    So the 2-4-1 gives me very efficient access to J and F travel that I could never otherwise afford.

    I can usually hit the 30k in August, which leaves me the rest of the year to hammer another card. This year it’ll be the Sapphire Preferred.

    Yes the taxes etc are high, but it comes out to about the same as two coach tickets which is what I’d be buying ordinarily.

    I understand it’s not for everyone, but it works very nicely for me as an upgrade caper, getting me and Himself into J or F and with the leftover miles the companion ticket saves me, I can upgrade a parent to J which scores me major daughter points!

  28. I’m always late to the bash-Ben threads!

    Anyway, I understand that this thread is about one case that works for you. And that’s fine. But I’m confused about just how many times you really want to fly JFK-LHR? Does one good route a program make?

  29. So I am just about to hit 30k, is there anything I need to know regarding the upcoming changes and my 2-4-1?

    I live in Vancouver, but can make the trip to SFO/LAX to take advantage of the flights. As the 2-4-1 doesn’t work outside of USA if I recollect.

  30. @ Andrew — In your situation nothing will likely change. I suspect the redemption level for LA/SF to London will remain roughly the same, or possibly go up or down a bit depending on which connection you want to make. But you don’t need to be rushing to redeem since I doubt we’ll see much of a change for BA metal redemptions in this case.

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