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Co-branded Airline Cards vs Travel Cards

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Regular Contributor

Co-branded Airline Cards vs Travel Cards

Good morning everyone,

 

For quite some time now I've used my Citi AAdvantage card as my daily driver and I'm just looking for some advice to maximize my rewards. I don't necessarily have any sort of loyalty to American Airlines other than using the card as my daily driver so that isn't holding me back. My wife and I fly once a year, I fly alone once a year, and we usually fly with our 2 kids once every 2 years. Our spending habits are mostly grocery and dining, and bills so I usually spend $3k-$4k per month on my Citi AAdvantage card. If anyone has any insight on how to maximize rewards with this criteria that would be great! If you need anymore information just let me know. Also, my current cards are in my signature and am open to suggestions. I should also state that I am over Chase's 5/24 rule until mid 2021 so any of those cards would not be an option. Thanks!

MASSIVE OVERHALL (22) MONTHS IN




Message 1 of 22
21 REPLIES 21
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Mega Contributor

Re: Co-branded Airline Cards vs Travel Cards

OT, but are you still paying fees on your credit one cards?  If so, time to close those!

Message 2 of 22
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Established Contributor

Re: Co-branded Airline Cards vs Travel Cards

Generally speaking, co-branded cards are best for people who don't travel often, particularly those who don't have any elite status with any airlines. Besides just miles, they usually offer all cardmembers a free checked bag or two, priority boarding, and other perks that would usually only apply to those with elite airline status. They can also be the best way to earn airline miles, since it's difficult to earn miles organically by only flying a couple times a year.

 

Conversely, travel rewards cards are usually the best choice for people who travel quite a bit, who probably already get free checked bags, priority boarding, etc. by having elite status. These people probably already earn more than enough airline miles just from flying, and want to earn points that are more flexible.

 

A third option, which might be a good fit for you, is to have some combination of both. Have the co-branded card to get airline perks (the free checked bag, alone, is often worth the annual fee), while primarily using a travel rewards card to earn flexible points. Often, those flexible points can even be transferred to your preferred airline.

 

Since Chase is out, it might be worth looking into the Citi lineup (Rewards+, Premier, Prestige) for your rewards card, or you could explore the Amex lineup. Amex Gold is good for groceries (4x) and dining (4x), which you said are your primary spend. I think I prefer the Citi lineup myself, but it's totally subjective. Amex points are worth more, but Citi has transfer partners that work better for some people. You could also decide to wait til next summer and go for Chase, which in my humble opinion, is worth the wait, as they have arguably the best travel rewards program of any card issuer.

    Total Loan Balance: $61k / $104k

    Total SL: $41.2k
Goal cards:



United 1K - 675,000 lifetime flight miles    |    Chase 6/24
Message 3 of 22
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Regular Contributor

Re: Co-branded Airline Cards vs Travel Cards


@longtimelurker wrote:

OT, but are you still paying fees on your credit one cards?  If so, time to close those!


LOL. I am. $13/month total to be exact. Just been kind of lazy not calling in to cancel them.

MASSIVE OVERHALL (22) MONTHS IN




Message 4 of 22
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Regular Contributor

Re: Co-branded Airline Cards vs Travel Cards


@coreysw12 wrote:

Generally speaking, co-branded cards are best for people who don't travel often, particularly those who don't have any elite status with any airlines. Besides just miles, they usually offer all cardmembers a free checked bag or two, priority boarding, and other perks that would usually only apply to those with elite airline status. They can also be the best way to earn airline miles, since it's difficult to earn miles organically by only flying a couple times a year.

 

Conversely, travel rewards cards are usually the best choice for people who travel quite a bit, who probably already get free checked bags, priority boarding, etc. by having elite status. These people probably already earn more than enough airline miles just from flying, and want to earn points that are more flexible.

 

A third option, which might be a good fit for you, is to have some combination of both. Have the co-branded card to get airline perks (the free checked bag, alone, is often worth the annual fee), while primarily using a travel rewards card to earn flexible points. Often, those flexible points can even be transferred to your preferred airline.

 

Since Chase is out, it might be worth looking into the Citi lineup (Rewards+, Premier, Prestige) for your rewards card, or you could explore the Amex lineup. Amex Gold is good for groceries and dining, which you said are your primary spend. I think I prefer the Citi lineup myself, but it's totally subjective. You could also decide to wait til next summer and go for Chase.


Thank you very much for that advice. Pretty much exactly what I was looking for. I looked at the Amex Gold and it looks like it checked every category for me plus it wouldn't be a HP. I don't mind the $250 AF but I wouldn't close my AAdvantage card so now that would be on top of that.

MASSIVE OVERHALL (22) MONTHS IN




Message 5 of 22
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Established Contributor

Re: Co-branded Airline Cards vs Travel Cards

Ultimately your goals are going to drive what the best card is and what you care about.  @coreysw12 made several excellent points already and it will depend largely on what you care about in terms of perks and where you are going to spend your money.  Based on your your spend and the fact that you like putting most spend on a single card, what I would probably do if I were you is look into the AMEX Gold  With 4X on Dining and Grocery that covers a big part of your spend.  Pair that with a card that earns at 2% cashback on bills and then decide if you are want to keep paying the AF on your AAdvantage for priority boarding and some checked bag fees.  AMEX gold will give you $100 statement credit on those airline checked baggage fees.   





Message 6 of 22
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Established Contributor

Re: Co-branded Airline Cards vs Travel Cards


@mmajer4211 wrote:

I don't mind the $250 AF but I wouldn't close my AAdvantage card so now that would be on top of that.

The Gold also does give you $120/year ($10/mo) in dining credits, so it works out to just $130 effective AF.

    Total Loan Balance: $61k / $104k

    Total SL: $41.2k
Goal cards:



United 1K - 675,000 lifetime flight miles    |    Chase 6/24
Message 7 of 22
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Valued Contributor

Re: Co-branded Airline Cards vs Travel Cards

@mmajer4211  You're at high 7 scores now and you still got your Credit 1s open?!!

Tell you what? Close those cards first and I'll tell you your best option! Look at my siggy, with my suggestion, you'll be way better in  rewards with your AA card right now!

I guarantee it! 

BK7 dc in 01/2011 with FICO8 in the 500s

New cc TLs : 1/6 ; 1/12 ; 2/24
HPs EX 2 EQ 2 TU 1
AAoA 5y4m
UTIL 1% - 3%

$220K+ Total Limits










Message 8 of 22
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Valued Contributor

Re: Co-branded Airline Cards vs Travel Cards


@sxa001 wrote:

AMEX gold will give you $100 statement credit on those airline checked baggage fees.   

 

@coreysw12 wrote:


@mmajer4211 wrote:

I don't mind the $250 AF but I wouldn't close my AAdvantage card so now that would be on top of that.

The Gold also does give you $120/year ($10/mo) in dining credits, so it works out to just $130 effective AF.


Depending on how you can use the credits, the Gold card is much cheaper than $250. 

  • $250 annual fee
  • Less up to $120 in dining credits at $10/month. 
  • Less up to $100 in airline fees
  • Equals effective $30 AF if you use all those credits

 

  • Less up to $100 annual credit at The Hotel Collection.

         ... Equals effective + $70 back in your pocket.

 

Factor in the higher returns you get at your valuation of 4x MR points on groceries and dining, which can be effectively up to 8% compared to whatever other options you may have at 2%, 3%, or 6% for example.  Most people with moderate to heavy spend on groceries (up to $25K) or dining out (unlimited 4x MR) will get some additional incremental value from the high payout on these categories.  If these are not high-spend areas, the Gold card may not be a good value.

 

Factor in no additional fees for authorized users (like the $75 on CSR) for up to 5 AUs.

 

Factor in additonal value from AMEX Offers.  For example, I have added and used some recent dining out offers that were for 5 additional MR points per dollar spend (for a total of 9 MR points per dollar.) 

 

These are just the direct potential monetary value of the card, not to even include what you'd value other services or perks. 

 

*While the $120 dining credit has to be taken once a month at $10 increments, it's not only available in selected restaurants but also for Grubhub or Seamless food delivery and for "Boxed" delivery of grocery items to your home. 



Updated 10/08/2020
Total Length of Credit = 35+ years; AoOA (Currently open accounts) = 27+ years;
AAoA = 8+ years; AoYA = less than 1 year (Aug 2020)
Total Open Credit Lines Over $538K. Utilization Less Than 1%.
Inquiries until Nov 2020 (TU:3 -- EQ:4 -- EX:9)
New Accounts: 3/6 months; 8/12 months; 12/24 months (as of 10/15/20)
*Hover cursor over each card to see name & CL, or press & hold on mobile app.
Message 9 of 22
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Valued Contributor

Re: Co-branded Airline Cards vs Travel Cards


@coreysw12 wrote:

Generally speaking, co-branded cards are best for people who don't travel often, particularly those who don't have any elite status with any airlines. Besides just miles, they usually offer all cardmembers a free checked bag or two, priority boarding, and other perks that would usually only apply to those with elite airline status. They can also be the best way to earn airline miles, since it's difficult to earn miles organically by only flying a couple times a year.

 

Conversely, travel rewards cards are usually the best choice for people who travel quite a bit, who probably already get free checked bags, priority boarding, etc. by having elite status. These people probably already earn more than enough airline miles just from flying, and want to earn points that are more flexible.

 

Interesting... I always saw it as the other way around.

 

I see airline cobranded cards as targeted to people who already have loyalty to a particular airline and want to enhance their loyalty benefits with things like lounge access and additional qualification points to maintain status.  Loyalty program status is something that typically only frequent travelers really care about.

 

Conversely, general travel rewards cards have points that are more flexible, which is an advantage if you're not a frequent traveler and don't have allegiance to a particular airline.

Message 10 of 22
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