Starting today, it should in principle be possible to sign up for the Popular Credit Service Avianca LifeMiles credit cards. Signup bonuses are constantly fluctuating up and down, but it's not every day that we get a brand new credit card to evaluate. With that in mind I thought I'd share my simple framework for looking at new offers like this when they come around.
What do I already know, and what do I need to know?
A quick glance at my airline alliances page shows that Avianca is a Star Alliance member. I already know that I hate flying United, so Avianca won't be useful for domestic itineraries, but it might be useful for international itineraries.
On Star Alliance partner airlines, there are no obvious sweet spots. Economy awards to Europe, for example on Lufthansa or Turkish Airways, cost 60,000 LifeMiles roundtrip, the same as United MileagePlus miles. In Business class on a Star Alliance partner you'll pay 126,000 LifeMiles roundtrip, somewhat better than the 140,000 MileagePlus miles United would charge.
To North Asia, LifeMiles will charge the same 70,000 miles roundtrip as United, but 10,000 miles fewer (150,000 LifeMiles versus 160,000 MileagePlus miles) for Business class. So in terms of redemption value, LifeMiles are certainly competitive with MileagePlus miles for travel on Star Alliance partners.
This is the sort of simple calculation you can glance at to anchor the valuation of a new currency compared to ones you're already familiar with. LifeMiles seem to be a pretty good Star Alliance rewards currency, at least competitive with MileagePlus miles.
Do I have a redemption plan?
Some readers seem to think that I'm some kind of maniac who insists there's no point in earning a mile you don't already have budgeted for a specific trip, on a specific flight, on a specific day, with a specific co-pilot leaving from a specific gate.
That's baloney! All I've ever said is that the least valuable point is the one you don't redeem, and that the point of travel hacking is to pay as little as possible for the trips you want to take.
If the trip you want to take is "Lufthansa First class to Europe," then having a slew of reasonably-priced Star Alliance miles lying around is a natural solution — a perfect solution! On the other hand, if the trip you want to take is "summer in Europe" then you may well have been better off waiting for a fare sale like the ones we saw last week where roundtrip economy fares were in the low 3-figures.
Knowing the kinds of trips you're likely to take, whether you're likely to pay for them with cash or with miles and points, and knowing which miles and points are well-suited for the job is a simple way of calibrating whether a brand new deal is spectacular or a dud.
Is it scalable?
There are two kinds of offers: one-of-a-kind opportunities like a 100,000-point signup bonus from a bank with good risk controls, and opportunities with potentially unlimited upside. Into the second category fall things like churnable credit cards, unappreciated reselling opportunities, or gift card liquidation mechanisms no one else has thought of.
A scalable opportunity is worth more than a one-off opportunity because once the background research has been done each iteration produces close to pure profit for as long as the deal lasts.
For example, while the US Bank Club Carlson credit cards offered the last night free on award stays, there was no limit to the number of 2-night stays you could book at half price. Along with a partner you could book any integer multiple of 2 nights at a top-tier 70,000-point property for 35,000 points per night, or $7,000 in otherwise-unbonused credit card spend per night.
In the case of the Avianca Vuela credit card, which is supposed to offer 2 LifeMiles per dollar spent at gas stations and grocery stores, the question is whether you'll be willing to earn 2 LifeMiles per dollar at the expense of other rewards currencies. There's no obvious answer to that question — it'll depend on your own circumstances. At grocery stores, 2 LifeMiles per dollar spent may be worth more than 6 HHonors points, or more than 2 Flexpoints, or more than 2 Membership Rewards points, or it may not.
In short: a lucrative bonus category can turn a so-so credit card, or a decent signup bonus, into a scalable opportunity — but whether it does or not will depend on your own circumstances.
What will I do with the remaining points?
After signing up for a Avianca Vuela card, and meeting the spending requirement, you'll be the proud owner of 60,000 LifeMiles. Say you jump on a 50,000-LifeMile First class award from North America to Hawaii. Now you're the proud owner of 10,000 LifeMiles.
You can either accept that you got a 50,000-mile signup bonus, instead of a 60,000-mile one, or you can start conniving and contriving to redeem your remaining 10,000 LifeMiles, or start doing your utmost to earn more until you get to another redemption threshold.
I don't give advice, and don't care which response you have.
But knowing which response you're likely to have before you get there is a key to long-term mental health and regret-minimization in this game.
Let me stress again that there's no reason that "maximizing" the cash value you get from each travel hacking technique should be the only goal of your practice. But it does provide a general framework that at least lets you calculate, within general parameters, what the tradeoff is between fixed-value and flexible rewards points, between hotel points and airline miles, and between manufactured spend and signup bonuses.