US Airways anniversary miles (and affiliate bloggers acting shamelessly)

I've long said that the only question that mattered - and the one that was being studiously ignored by affiliate bloggers - about the Barclaycard US Airways MasterCard is what will happen to the card's anniversary miles.

Applications for the card before the US Airways-American Airlines merger was completed offered 10,000 Dividend Miles that post on each account anniversary. Affiliate links released since the merger, that is to say, the applications you see on sites like Boarding Area and The Points Guy, have not included those anniversary miles.

Meanwhile, "zombie" applications continued to be available which did offer the 10,000 anniversary miles, and which were studiously ignored by bloggers who were paid for those referrals.

The difference matters because, while the newer applications tend to have higher up-front signup bonuses, those anniversary miles can make the card worth keeping after the first year, especially since Barclaycard is notoriously generous about giving annual fee waivers upon a quick phone call.

It has now been confirmed by Barclaycard that those of us who applied under what I call the "and every anniversary thereafter" version of the offer will continue, for now, to receive our anniversary miles.

Affiliate bloggers have no shame

I get things wrong sometimes. That's not something I relish, but it's something I've come to terms with, and when I do, I admit my mistakes, accept criticism, and try to mend my ways.

When affiliate bloggers get things wrong, they write gleeful posts ignoring their humiliating mistakes, which has never been demonstrated as clearly as their reactions today to the news that they have been screwing their readers for months by linking to inferior, non-anniversary US Airways offers.

Remember I shared a working link to an "and every anniversary thereafter" offer on April 30, 2014.

Here's a Mommy Points post on April 30, 2014 linking only to the non-anniversary version of the offer. And here was her priceless reaction to today's Barclaycard announcement:

Note the word "My" in her tweet: her card will award her 10,000 bonus miles because when it comes to her own cards, she looks out for her best interests. Of course, when it comes to her readers she also looks out for her own best interests.

Likewise on April 30, 2014, The Points Guy wrote up the same offer, again without linking to the "and every anniversary thereafter" offer (an oversight we proceeded to debate on Twitter).

After the announcement today, he wrote blandly that "current cardholders will continue to receive the annual 10,000 Dividend Miles." This is, of course, not strictly true, since anyone who followed his advice and signed up using a non-anniversary application will not receive the anniversary miles.

Finally, again on April 30, 2014, the same day I conveniently provided a link to the "and every anniversary thereafter" offer, Gary Leff wrote up his affiliate link without mentioning the existence of the other application.

And – prepare yourself – his post today celebrates the anniversary miles he'll continue to receive, without acknowledging that he deliberately kept his readers in the dark for months about how to earn them.

Conclusion

I don't think a person who needed a quick influx of US Airways miles would necessarily have been wrong to privilege a 40,000-mile offer that charged the $89 annual fee up front over a 30,000-mile, waived-annual-fee offer that offers anniversary miles.

But the shameless promotion of money-making links, the shameless concealing of other, potentially better offers, and then the inevitable denial that that's exactly what took place, does drive me nuts. It shouldn't, but it does. And today's examples were among the most egregious I've seen in some time.

Post-script

Incidentally, it would be interesting to know whether those who applied under the no-anniversary-miles version of the card application received the same e-mail confirming the continuation of anniversary miles. It doesn't seem likely, since Barclaycard has relatively good IT in my experience, but I think there's a non-zero possibility Barclaycard incorrectly classified at least some of those applications. So if you recently applied for that offer, leave a comment and let me know if you've heard from Barclaycard regarding anniversary miles.

The question that matters about the US Airways credit card

Signup bonuses play a vanishingly small role in my miles and points strategy. They consume, on the other hand, approximately 95% of the the attention of most miles and points bloggers, one reason I scarcely read any other bloggers these days. It's trivially easy to manufacture 100,000 American AAdvantage miles should you foresee a need for them, while most bloggers will tell you only a madman would forego the chance to "opportunistically" acquire them at a cost of just $250. Then, as if to emphasize the absurdity, they spill even more ink over a 5,000 Starpoint increase in the signup bonus for the American Express Starwood Preferred Guest card!

Ongoing benefits (like companion tickets) and lucrative bonus categories are miles ahead of signup bonuses in my decision making.

So in all the supposed "assessments" of changes to the Barclaycard US Airways MasterCard after the merger with American Airlines is completed (for example see here, here, here) I always look for one piece of information that's invariably missing: what's going to happen to the 10,000 miles anniversary bonus offered by the US Airways MasterCard once it becomes an AAdvantage card?

Barclaycard hasn't made a decision yet

It's clear that if Barclaycard had made a decision about what's going to happen to the "anniversary mile" version of the card, they would have shared it. In fact, they've already mailed out an update on what changes will be made to the card's ongoing benefits (eliminating the card's companion ticket and 5,000 mile discount on award bookings, most notably).

But they haven't shared what's going to happen to the anniversary miles.

Barclaycard wrote oddly specific terms and conditions

Let me preface this by saying the terms and conditions of the US Airways MasterCard include the same language found on all such documents:

"The APRs, fees, and other account terms, as well as the benefits and features associated with the account are subject to change to the extent permitted by law."

That being said, the language related to the anniversary miles is extremely specific:

"Anniversary Bonus Miles: Beginning with the first anniversary of Account opening and every anniversary thereafter, Cardmembers will be awarded 10,000 Anniversary Miles."

Barclaycard has a very expensive team of lawyers

If Barclaycard believed that they could eliminate the anniversary bonus miles without legal risk, they would do so. The fact that they claim not to have made a decision yet is strongly dispositive to me that they believe they do not have the ability to eliminate the anniversary bonus miles for cardholders who signed up for the card under that offer.

Credit card contracts are different than loyalty program terms and conditions

Loyalty program terms and conditions as written today have a plethora of conditions that protect the provider from any legal liability for future enhancements (devaluations) to the program.

Credit card terms and conditions, on the other hand, are real contracts entered into between customers and banks for mutual benefit, and there are substantially more restrictions on the kinds of changes that can be made to them, with or without notice.

Further, Barclaycard is bound by state consumer protection laws and would be vulnerable to claims in every state they have cardholders if they were to make a change they didn't believe was airtight from their lawyer's point of view.

Conclusion

I don't know anything more than anyone else pontificating about the coming changes to the US Airways credit card. But whenever you see an article purporting to explain those changes, now you know what to look for: does the author have any additional information about the anniversary miles, or are they just reciting their Barclaycard-approved talking points?

[updated] Who decides what the best credit card offer is?

[update 4/30/14 11:21 pm: I see that the 30,000 mile offer with anniversary bonus has been publicly posted on FlyerTalk, so I've included a direct link to it below]

Background

This afternoon I got into what turned into a very interesting discussion on Twitter with The Points Guy over the new BarclayCard US Airways MasterCard link that you may have spotted on all your favorite blogs this morning.

I signed up for the card in January as part of my Blue Cash application cycle and received 35,000 US Airways miles after my first purchase. Historically, there have been a lot of signup offers available for this card, and I felt that was the best one for me, given that I basically never fly US Airways and will never put another dollar in spend on the card.

Who wants an anniversary bonus?

The discussion arose because Barclaycard has issued a new affiliate link for the US Airways MasterCard, offering 40,000 miles after first purchase but with no 10,000 mile anniversary bonus.

Amazingly, Mommy Points was the only one of 4 bloggers I saw writing about this offer today who saw fit to mention that there's no anniversary bonus, which has been a feature of this card for years now.

Which led me to ask the following question on Twitter:

What's the difference?

As The Points Guy points out, both the 40,000 mile and 30,000 mile offer give a companion ticket on the account anniversary, meaning for the first two years of card membership, the only difference is that the 40,000 mile offer gives you 40,000 miles after first purchase, whereas the 30,000 mile offer requires you to wait a year to collect the last 10,000 miles (as reader Paul points out, you can cancel the card and not pay the second year's annual fee, while still collecting your anniversary miles).

The difference comes in the third and subsequent years — and yes, that means after the card has been reissued as an American AAdvantage MasterCard, probably sometime next year and after new applications stop being accepted. Those of us with the "anniversary bonus" version of the card will still be earning 10,000 AAdvantage miles per year, two $118 companion tickets, and be able to earn 10,000 Elite Qualifying Miles by spending $25,000 on the card each calendar year.

While those who sign up with The Points Guy's link will have canceled their card years before.

Who decides what the best offer is?

Lots of people criticize affiliate bloggers for promoting their own links at the expense of better, non-commissioned application offers, but I actually find that to be a vanishingly rare phenomenon (promoting cards that no one should actually carry is a different, and serious, issue).

While they usually won't link to better offers directly, at least the top bloggers understand the reputational consequences of promoting a strictly inferior link, so will send readers off to other blogs or forums where those applications can be found.

But what about situations where the offers are so different that a strict comparison is impossible? In those situations, my gut would tell me to give my readers the options together with my analysis, and let them decide for themselves.

Conclusion

Since this is my blog, I'll do the gentlemanly thing and give The Points Guy the last word:


American and US Airways award discounts

As I've mentioned, in January I was approved for both the Citi Platinum Select / AAdvantage World MasterCard and Barclaycard US Airways MasterCard. Having met the minimum spending requirements for both cards, I paid them off and stuck them in a drawer.

Of course, now I've got all those miles on my hands! Since I have an expensive domestic roundtrip coming up in March, I thought I'd check out what kind of award availability the airlines had on the dates I needed (hint: not much!).

That got me to wondering about the award discounts offered by the two airlines to their co-branded credit card holders. I found it intensely confusing, so I thought I'd throw up a quick summary in case any of my readers recently signed up for the same cards.

American Airlines: 10% mileage rebate & reduced mileage awards

There are two kinds of discounts you get as a Citi / AAdvantage cardholder. First, there's a 10% mileage rebate on all the miles you redeem out of your account each calendar month, up to 10,000 total miles (on 100,000 in mileage redemptions). Second, there are "reduced mileage awards" which are offered to a changing list of (domestic) destinations throughout the year. That program is clearly decided to be as difficult to take advantage of as possible: you need to look up the eligible cities for each month, copy down the code, and input it when making your award reservation.

Oddly, the terms and conditions of the 10% rebate program don't even require these redemptions to be for flights, so if you find a good redemption for hotels or car rentals, or if you redeem your miles for an Admiral Club membership, you should receive the rebate on those redemptions as well (I don't know how this works in practice).

Finally, for bookings made through February 27 for flights through April 4, there's another active promotion whereby non-stop MileSAAver economy award flights between Los Angeles and cities in the continental United States, and all MileSAAver economy award trips between Las Vegas and cities in the continental United States cost 10,000 AAdvantage miles each way, instead of 12,500. The 10% mileage rebate should apply to the final (post-discount) cost of each flight.

US Airways: 5,000 mile award discount

When you're a Barclaycard US Airways cardholder in good standing, you are designated "Dividend Miles Select." As far as I can tell the only benefit of that "status" is that you receive a flat, 5,000 Dividend Mile discount on all US Airways-operated flights.

I'm not going to lie, I've been messing around on US Airways' website for the last hour and I cannot for the life of me get the 5,000 mile discount to apply to any award tickets. Presumably if I actually wanted to book an award I could call in and have a phone agent apply the discount.

Analysis

The added wrinkle in all this is that starting a few weeks ago, you've been able to use American miles to make award reservations on US Airways, and vice versa. That means that it's possible to receive a 10% discount on US Airways award reservations by making the reservation through your American AAdvantage account. So when deciding which account to make a reservation through, you need to ask yourself the following questions:

  • Have I already received 10,000 miles through the AAdvantage rebate program this calendar year? If so, you won't receive any additional discount this calendar year.
  • Is this award ticket operated entirely on US Airways aircraft? If not, it's not eligible for the 5,000 mile discount.
  • If it is operated entirely by US Airways, is it more or fewer than 50,000 Dividend Miles? If it's more, you'll be better off using AAdvantage miles. If it's fewer, use your 5,000 Dividend Mile discount and save your rebate headroom for a more expensive redemption.

Finally, consider checked bag fees. The US Airways MasterCard famously does not include free checked bags, while the AAdvantage card does. American's website currently has the following helpful information:

"Q: Do the First Bag Checked Free Waiver and Group 1 Boarding (or Priority Boarding) benefits on select Citi®/AAdvantage® cards apply to US Airways flights?

"A: Not at this time. These benefits will not be available for travel on any US Airways flights, including any codeshare flights."

That means that if you're deciding specifically between American-operated and US-operated flights, booking the American flight with a 10% discount may be more economical than booking the US Airways flight with a 5,000 mile discount; it depends on whether the difference in miles is worth more or less than the $50 you'll pay roundtrip per first checked bag and $70 per second checked bag on US Airways.

Confused yet? Me too. Let me know in the comments if I'm missing anything obvious.

Comparing co-branded airline credit cards

Hard at work on the second edition of The Free-quent Flyer's Manifesto and re-reading Chapter 4, it occurred to me that it might be useful to give a side-by-side breakdown of the similarities and differences between the co-branded credit cards of the principal US airlines.

In the second edition I'm adding Alaska Airlines to the list of traditional airlines given detailed treatment, along with Delta, US Airways, American Airlines, and United. Why? Alaska's route map makes them far from a regional carrier; their partnerships with American and Delta make their Mileage Plan program more flexible than miles with either AAdvantage or Skymiles alone; and their co-branded Bank of America credit card has a number of lucrative features.

What kinds of co-branded credit cards exist?

For all the traditional carriers except US Airways and Alaska Airlines, there are two kinds of co-branded credit cards: an "entry-level" card that offers some combination of a free checked bag, priority boarding, annual companion tickets, and sometimes a bonus for meeting a high annual spend target; and a "club-level" card that gives lounge access, plus some combination of the above. This basic picture is made a little more complicated by the fact that Delta also splits its "entry-level" cards into a Gold and Platinum American Express: the Gold has a lower annual fee, but substantially fewer benefits. Note: do not confuse the American Express Platinum cards with American Express Delta Platinum cards. The names are similar; the products are completely different.

US Airways and Alaska Airlines both have entry-level cards, but no club cards. Here's a side-by-side comparison of the entry-level cards available from each airline:

Take note of the following differences between these cards:

  • The annual fee on all these cards is waived the first year of card membership, except for the $150 annual fee for the American Express Delta Platinum card (although signup bonuses sometimes include statement credits of up to $100).
  • All the cards offer 1 mile per dollar spent on purchases, and 2 miles per dollar spent on purchases with the airline, except the Alaska Airlines Visa Signature, which offers 3 miles per dollar spent on Alaska.
  • The US Airways and Alaska Airlines companion tickets are available during your first, fee-free year, and every subsequent year. The Delta Platinum companion ticket is only earned the second year of card membership, after paying the $150 annual fee a second time.
  • The MileagePlus Explorer card offers 10,000 redeemable United miles after spending $25,000 on the card; the Delta Platinum card awards both redeemable and Medallion Qualifying Miles for high spend on the card.

Here is a comparison of the Club-level cards from United, American Airlines, and Delta:

Note that unlike the AAdvantage and United cards, the American Express Delta Reserve card does not technically give you a Sky Club membership; rather, it gives you Sky Club access, but only while you're flying on a Delta-issued or Delta-operated ticket.

Who should sign up for a co-branded credit card?

n my view, there are four reasons to sign up for a co-branded airline credit card, rather than a card that offers double or triple flexible points on airline purchases, like the Chase Sapphire Preferred or American Express Premier Rewards Gold cards:

    1. High signup bonuses. These cards periodically feature very high signup bonuses, high enough to justify applying for a card even if you have never set foot on the airline before. For example, the Citi AAdvantage ard offers up to 50,000 AAdvantage miles (my lifetime American Airlines miles flown are about 11,000), American Express Delta Gold occasionally offers 70,000 Skymiles, and I signed up for the United MileagePlus Explorer card when it was offering 65,000 miles. Since the annual fees on these cards are waived the first year, these are incredible offers of $1,000 or more in value for the cost of a hard inquiry on your credit report.
    2. You're a Delta frequent flyer. The American Express Delta Platinum and Reserve cards give you the opportunity to "mileage run from home" and earn 20,000 or 30,000 Medallion Qualification Miles per year through high spend bonuses. This is a no-brainer, especially if this is the difference between Silver Medallion and Gold Medallion status, since that's when the Medallion mileage bonus rises from 25% to 100%.
    3. You only fly occasionally, or fly a secondary airline, and check bags. If you have a preferred airline, where you receive free checked bags because of your elite status, but occasionally have to fly another airline because the fares are substantially cheaper, then you may save money on checked bag fees by carrying a Delta, United, or American co-branded credit card. Here in New England, I fly Delta whenever possible (because I receive unlimited complimentary Medallion upgrades to First Class, and I prefer Delta's in-flight product, even in Economy), but sometimes United flights are so much cheaper that I can't justify paying the premium to fly Delta. In these cases, it's helpful to carry the MileagePlus Explorer card in order to check bags for free.
    4. You pay for a lounge membership. In almost all cases, you're better off receiving your lounge access by paying the annual fee for a Club-level card, and also receiving the benefits of the co-branded card, like the United Club card's high earning rate and the elite-qualifying miles generated by high spend on the AAdvantage Executive and Delta Reserve cards.