Best Credit Card For Earning American Miles

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On Friday I wrote about some minor changes coming to the Citi® / AAdvantage® Platinum Select® World Elite™ Mastercard® as of November 15, 2015. Specifically:

  • Foreign transaction fees will be eliminated on the card
  • The $100 flight discount after spending $30,000 on the card in a membership year will be eliminated

The elimination of foreign transaction fees is obviously a good thing, while the elimination of the $100 flight discount is obviously a bad thing… at least on the surface.

What amazed me were the number of emails I received from savvy readers who spend $30,000+ per year on the card. When I asked them “why?” some responded with “well it’s the best way to earn American miles, isn’t it?”

Not really.

The SPG Amex is the best card for earning American miles

Starpoints are the single most valuable points currency out there, in my opinion, as I value each Starpoint at ~2.2 cents. What makes Starpoints so valuable is that they can be redeemed efficiently for hotel stays, and can also also be converted into miles in over two dozen airline programs. Among those transfer partners is American AAdvantage.

You can convert Starpoints into airline miles at a 1:1 ratio, and for every 20,000 points you transfer you get a 5,000 point bonus. That means when transferring in the right increments, you’re actually earning 1.25 AAdvantage miles per dollar spent on the Starwood Preferred Guest® Credit Card from American Express and Starwood Preferred Guest® Business Credit Card from American Express.

SPG-AAdvantage

Keep in mind that on top of that we see promotions every so often for a bonus when converting Starpoints into American miles. We recently saw a 20% bonus for points conversions, which meant 20,000 Starpoints converted into 30,000 AAdvantage miles. That meant you were earning up to 1.5 AAdvantage miles per dollar spent on the SPG Amex and SPG Business AmEx. If you can make points transfers at the right time, that can greatly increase your earnings potential.

Starpoints-AAdvantage

But the other great thing about earning American miles this way is that you’re hedging against a devaluation. If American devalues their award chart, the value of your miles could decrease significantly. Meanwhile SPG has dozens of airline transfer partners, meaning if American miles go down in value, you can always transfer points elsewhere.

If you want credit towards travel on American

AAdvantage miles are extremely valuable, so wanting to earn them through credit card spend isn’t a half bad idea.

But a lot of people want to earn rewards that help them fly American, and assume earning AAdvantage miles is the best way to do that. And that’s not necessarily true. Two of the hottest cards are the Citi Prestige Card and the Citi ThankYou® Premier Card.

What makes these cars so compelling?

The Citi ThankYou® Premier Card was refreshed back in April, and is now a really rewarding card for everyday spend. It has a $95 annual fee, which is waived the first year. The card also has an extremely lucrative points earning structure, arguably the best of any flexible points currency card. It offers:

  • 3x points on travel
  • 3x points on gas
  • 2x points on dining out and entertainment
  • 1x point on all other purchases

So that’s a fantastic way to maximize your points earning potential on everyday spend.

Meanwhile the Citi Prestige Card has a $450 annual fee, though comes with many benefits which more than justify it, in my opinion.

The card has the following points earning structure:

  • 3x points on air travel and hotels
  • 2x points on dining at restaurants and entertainment
  • 1x point for all other purchases

And on top of that it offers the following perks:

The ThankYou points earned through this card can be redeemed towards the cost of a paid ticket on American. When you factor in that you’re earning 3x points per dollar spent in some categories, that’s a huge return.

Also keep in mind that since these points are redeemed towards the cost of a paid ticket on American, you’ll still earn miles for those flights, and can upgrade, etc.

American-737-Economy-Class

Bottom line

There are lots of ways to get credit card rewards which will be useful for travel on American. However, in general I’d shy away from American’s own co-branded credit card as a way of earning miles towards travel on American.

Instead, the SPG Amex and SPG Business AmEx are probably the best ways to earn AAdvantage miles, given that you’ll do much better than earning one mile per dollar spent. Keep in mind that both of those cards have increased sign-up bonuses through tomorrow only.

But if you’re interested in earning points which can be redeemed towards the cost of paid travel on American, it’s tough to beat the Citi ThankYou® Premier Card and Citi Prestige Card, given the great bonus categories.

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Comments

  1. Yes but the best card for earning AA miles on AA spend is Barclays Silver Aviator as it awards 3 AA miles per dollar.

  2. The world is awash in AA miles. And just like currency, mile values should be calculated based on how many there are out there and how many products can you spend them on. And not based on some redemption chart published by the airline or what rate the airline sells them at (which assumes they know what the miles are worth, fair assumption but that should be the upper bound )

    The miles have already devalued substantially.

  3. The best credit card for earning american miles is clearly the American branded card. For MOSTanyway and here is why.

    10% refund on redeemed miles up to 10,000 back per year. You left out this CRITICAL benefit.

    PLUS 2.0 miles per dollar spent on American purchases. If I spend $8000 per year on air travel thats an extra 8,000 points! or 6,000 more than I would have earned with SPG.

    So if I redeem 100,000 miles plus spend $8,000 per year thats 18,000 miles back! You would have spend around $80,000 per year on your SPG card to get enough of the .25 bonus to make back the 18,000 easy extra miles you get on the American cards.

  4. To get the main benefit of the SPG you have to spend $20k on it. No way Im spending $20k on it, why wouldnt I put that $20k on 3 or 4 sign up bonuses?

  5. I think the best cards are citi aa cards after first year. I’ve been able to get double mile retention bonus (spend $1k on anything and earn 1k bonus on top of regular earnings) on most of the cards. And you get 10k rebate for award. This ends up much better than spg or Barclay silver.

  6. Except that, the only time I ever needed to transfer SPG points to AA miles, they did not arrive in time for my 5-day hold. I had to buy the miles from AA and could not reverse the SPG transfer. YMMV.

  7. @ Stannis — The transfers seem to always leave SPG on Monday and are in the AAdvantage account by Tuesday night/Wednesday morning. We generally place the holds on Saturday to give ourselves enough time, but yeah — if you miss the Sunday night cutoff for transfers it can take a long time.

  8. I use the Silver Aviator Card as I can earn 10k Elite Miles which helps to my status with American. Is this the best card for that reason.

  9. @EricB @Jeff @Ian Well then, I’ll just go straight to the Barclay web site and apply for that silver aviator card right now today! Thanks for the useful advice.

  10. British Airways Visa offers a 50k avios points sign up bonus. Combine that with Amex Everyday Preferred which gives you a 50 percent points bonus every month if you charge 30 transactions. Transfer the amex points to Avios and then book your AA travel through BA as they are in same alliance. Ben, arent you a big fan of Amex Everyday?

  11. @Owen — sadly the Barclay AAdvantage cards are no longer available to new applicants; they stopped applications for those cards a few months back. 🙁 I applied just in time to take advantage of the 50k miles sign up bonus back in March.

  12. Question was not which credit card should I apply to today to earn AA miles. It was which CC is best for earning AA miles. Clearly it is silver aviator for AA spend.

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