AAdvantage MileUp Card: New No Annual Fee American Airlines Credit Card

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American Airlines has co-brand credit card agreements with both Barclays and Citi, which is good for consumers, since it means we have access to all kinds of different products.

Today American Airlines and Citi have revealed a new no annual fee credit card, which will be open to new applicants starting July 22, 2018. The new AAdvantage MileUp Card will offer the following:

  • Welcome bonus: 10,000 AAdvantage miles and a $50 statement credit after spending $500 in purchases within the first three months of account opening (limited time)
  • Return on spend: 2 miles per dollar spent on American Airlines and grocery store purchases, one mile per dollar spent on everything else

Previously American’s no annual fee credit card was the AAdvantage Bronze Card, which offered one mile for every two dollars spent. Bronze cardmembers will automatically be upgraded to the new card, which is great news because they’ll be earning double as many miles on everyday purchases, and four times as many miles on American Airlines and grocery store purchases.

Those with the AAdvantage MileUp Card will receive 25% off inflight purchases of food and beverages, as is the case with all co-branded American Airlines cards.

Does it ever make sense to get a no annual fee airline credit card?

It depends on how you look at it. Sure, I suppose there’s limited downside to having a no annual fee card for the modest welcome bonus, the 25% savings on inflight purchases, etc.

However, in general it just doesn’t make sense to use an airline credit card that awards only a mile per dollar spent on a bulk of purchases. I value American miles at 1.3 cents each, so you’re much better off using something like the no annual fee Citi® Double Cash Card, which offers 1% cash back on every purchase, and then an additional 1% cash back when you pay for those purchases. Or the Capital One® Savor® Cash Rewards Credit Card, also offers 2% cash back on groceries, along with 3% on dining and 1% on everything else. I think most (reasonable) people value American miles at less than two cents each, in which case the math just doesn’t add up.

If you’re someone who spends a lot at grocery stores I guess this isn’t a bad no annual fee option. I’d still much rather get the no annual fee Amex EveryDay® Credit Card from American Express, which offers 2x Membership Rewards points on the first $6,000 spent per year at US supermarkets, plus a 20% points bonus when you make at least 20 transactions per billing cycle.

Earn bonus points at supermarkets

American’s premium credit cards are also worth considering

While it will be nice to have a no annual fee option, I do think American’s premium credit cards are potentially worth paying annual fees on. Both the personal and business Citi AAdvantage Platinum cards are offering increased welcome bonuses of 60,000-70,000 miles each, with the first year annual fee waived. The details are as follows:

Since I value American miles at almost 1.3 cents each, I value those bonuses at $780-910, so that will cover a lot of annual fees.

These cards also offer perks that make them worth holding onto long term, including:

  • Preferred boarding on domestic American flights
  • First checked bag free on domestic itineraries for you and up to four companions on the same reservation
  • The Personal Platinum Citi AAdvantage Card offers a 10% refund on miles redeemed, for a total of up to 10,000 miles per year (assuming you redeem at least 100,000 miles per year, this means you’re getting 10,000 American miles with the card annually, which makes the card a keeper, in my opinion)

Bottom line

We’ve seen both Delta and United recently introduce no annual fee cards, so it’s only reasonable that American would introduce an updated one as well. On the plus side, the new card is a huge improvement over the old card, which only offered one mile for every two dollars spent.

However, I generally don’t recommend using a card that offers only one mile per dollar spent, given all the other great cards out there. However, I get why they offer a card like this. There are lots of brand loyal people out there who like using a credit card from a certain company, even if the value isn’t amazing.

The value from an airline credit card comes mostly from the perks the card offers, and that’s why I think a card like the Platinum Citi AAdvantage Card could make more sense, since the free checked bags and preferred boarding benefits add up quickly.

What do you make of the new AAdvantage MileUp Card?

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Comments

  1. I think no annual fee cards such as these great to have around in order to keep FF accounts active with no pain. For instance, I still have lots of miles in my AA FF account, but fly Delta exclusively now. I can literally buy a 25-cent candy at the grocery store and have my expiration date reset another year.

  2. Seeing how you can only get one Citi AA sign up bonus every 24 months, I’d rather just get the Platinum version….even if it comes with an annual fee.

  3. I am definitely getting this new card, probably downgrading or canceling my AAdvantage Citi Platinum Select Card. I currently hold the AAdvantage Silver Aviator card (under the old US Airways generous offer). I spend around $10,000 on groceries per year (which is triple my restaurant spend) and this is definitely worth it for me. I am one of the (unreasonable) people who values AA miles at 2.2 cents each. I also have the Citi Double Cash Card that I love. Thanks for the heads up!

  4. Not another AA card.
    Jeesh, the FA minutes long announcements for the cards get to me after awhile.

  5. 30 YEARS AGO I DOWNGRADED A FEE-BASED A.A. CARD TO THE BRONZE NO FEE CARD – NEVER USE EXCEPT WHEN THEY OFFER A SPECIAL SPENDING BONUS -LIKE SPEND $500 GET 3K-5K MILES
    AFTER IT SITS IN A DRAWER

    WILL GIVE THE CARD TO MY WIFE TO USE IN GROCERY STORES -NICE AND EASY

    WHY NOT AFTER PEOPLE GET THE BONUS ON THE AA SELECT ETC AND FEE SHOWS UP -YOUNG PEOPLE SHOULD DOWNGRADE AS I DID AND LET IT AGE — IT IS MY OLDEST CARD

  6. I spend a LOT at grocery stores (read: 7 figures) so yeah, this will be quite a good source of AA miles. Or I should say, the best source of AA miles.

  7. To keep branding consistent across the portfolio, they should have kept this one called bronze and just changed the features and perks. Or if they really wanted it to have a greenish color, call it jade.

    They could have made it blue and called it cobalt, though I guess that did not happen because the CitiBusiness Select (No AF Business Mastercard) is also blue.

    However, I guess the Executive card is not named after a metal, but it could easily be called Onyx.

    I just hate the name of this. MileUp gives nobody any indication of its tier level. Platinum is a more precious metal than gold, which is more precious than bronze, so common sense dictated this hierarchy easily. Executive will always mean the highest, so no logic is needed there.

    They really need a better branding expert at their co branded cards division…

    Rant over

  8. @Kalboz

    No you will not, as they are the same product, just with a branding change. You also cannot earn sign up bonuses on product changes generally, only new applications at least 24 months apart.

  9. I got my current Citi AA Bronze card when I didn’t want to pay the whopping fee on the Citi AA executive card more than 24 months ago! So, I guess I am applying for new LOC comes 7/22.

    Thank you @Tav!

  10. Seems like the obvious use for this card is as a downgrade path for AA card with better signup bonuses, with the great virtue of a useful bonus category.

  11. Interested to read this article. I live in the Uk where AA is stopping its Amex/Visa card on 28th july. Will AA be introducing a new card in Uk anytime soon as I am holding off booking an AA ticket

  12. Lucky–you mentioned Bronze cardholders will get upgraded automatically. How about Citi AA Gold credit card holders? Right now I don’t put any spend on this card unless I get one of Citi’s periodic bonus e-mails (or it’s been a year and I just want to keep the card alive). Double AA miles on supermarkets could be interesting.

  13. Lucky, Citi used to be pretty flexible with PC’ing – couldn’t any of their cards be changed to this (not just an AA card)? Thank you

  14. @ Pam — We’ll have to wait to find out for sure, but yes, in general you can product change pretty easily across Citi cards.

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