How Will American Airlines' Changes to the AAdvantage Program Affect Credit Card Users

Updated on May 11, 2017

*Editorial Note: This content is not provided or commissioned by the credit card issuer. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by the credit card issuer. This site may be compensated through a credit card issuer partnership.

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As the first frequent flyer program offered by a major airline, American Airline's AAdvantage program was a pioneer in the field offering customers one frequent flier mile for each actual mile flown. In recent years, the AAdavntage program has maintained its good reputation by continuing to reward customers this way, even though its primary competitors were changing their programs to make the frequent flyer mile earnings based upon the amount of money spent on a ticket. Another reason that consumers remained loyal to American is that while Delta and United were raising the mileage requirements for free flights, American held off on devaluing its AAdvantage Miles by refusing to increase the number of Miles required for an award flight.

But on November 17th, American Airlines made major changes to its AAdvantage program, to the dismay of many of their customers. These changes not only included increased mileage requirements for award flights, but also the abandonment of the popular distance-based mileage earning for the new spending-based structure already adopted by Delta and United.

What these changes mean for travelers

First, American will start awarding miles based on the price of the ticket and the status of the traveler. Passengers with no status will earn five miles per dollar spent, while those with elite status will earn 7, 8 or 11 miles per dollar, depending on whether they hold Gold, Platinum, or Executive Platinum status.

Finally, American has increased the number of miles needed for most awards, with the steepest increases for awards in business and first class on international flights. Thankfully, there are a handful of award flights that will go down in price, including domestic flights under 500 miles, and award tickets to Mexico, the Caribbean, and Central America.

What this means for credit card users

I have a saying that goes like this, "What's the hardest way to earn frequent flier miles?"  The answer is "Step on an airplane," because for some time, airlines have awarded more miles from their credit cards and other sources than they do to those who are actually buying tickets on an airplane. In a few seconds, you could apply for the Citi® / AAdvantage® Platinum Select® World Elite™ Mastercard® and score a big sign up bonus: For a limited time, earn 60,000 bonus miles after making $3,000 in purchases within the first 3 months, more than enough for a round-trip, domestic flights in economy class. Citi offers a total of four different credit cards that earn American Airlines miles.

Under the new system of revenue based miles, it will take most travelers even longer to earn the amount of miles that they would have last year. For example, it would take a general (non-elite) member another $10,000 in spending on airline tickets to earn 50,000 miles, which is a lot of airline purchases even for a frequent business traveler. So in the end, these changes mean that miles earned from credit cards are becoming even more important, while miles earned from traveling are becoming less important.

Ways to counter devaluation

Sadly, the increase in miles required for most award flights will make the miles earned by credit card users less valuable. Although American's changes are not as damaging as the changes made by some other airlines, they still hurt. But since we've seen this happen so many times already, award travel enthusiasts have already learned some ways to mitigate the damages. The key is to earn reward points in programs that allow transfers to multiple different airline partners. Here are a few credit cards that allow you to earn points that can be transferred to numerous airlines and hotels:

Premier Rewards Gold Card from American Express: This card offers 25,000 Membership Rewards® Points after new cardholders spend $2,000 on purchases in the first 3 months of Card Membership. For ongoing rewards, you’ll earn 3x points for flights, 2x points at US restaurants, gas stations and supermarkets, and 1x points on all other purchases. American Express Membership Rewards Points can currently be transferred to the loyalty programs with 16 different airlines and 4 hotels. A few of the most popular Membership Rewards transfer partners include Delta Airlines, British Airways, and Starwood Preferred Guest.

Chase Sapphire Preferred® Card: New cardholders can receive 50,000 Ultimate Rewards points after they sign up for this card and spend $4,000 in the first 3 months from account opening. Those 50,000 points can easily equate to more than $750 in travel if you transfer them to one of the 6 airline or 4 hotel loyalty programs. Among those are Hyatt Gold Passport, United MileagePlus, and Southwest Rapid Rewards. Cardholders will earn 2x points on all travel and dining purchases and 1x points per dollar on every other purchase.

Citi ThankYou® Premier Card: With this card, you can earn 40,000 points after spending $3,000 in the first 3 months. You’ll also earn 3x ThankYou Points per dollar spend on all travel purchases, including gas, 2x Points on Dining and Entertainment, and 1x Points on other purchases. If you choose to transfer your points to one of their travel partners, you will have 12 airlines and 1 hotel to choose from. Many experts consider the transfer partners less valuable that those of the two previously mentioned cards, but you can still get a good value from programs like Singapore KrisFlyer, Hilton HHonors, or Air France Flying Blue.

*This offer and/or promotion may have since changed, expired, or is no longer available.

*Editorial Note:This content is not provided or commissioned by the credit card issuer. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by the credit card issuer. This site may be compensated through the credit card issuer Affiliate Program.

*The content in this article is accurate at the publishing date, and may be subject to changes per the card issuer.

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