Competition Heats Up Between Card Issuers for American Airlines Cardmembers: More Benefits for Us

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Competition for attention and new cardmembers is heating up between Citi and Barclaycard, with the Barclays folks upping the ante on their signup bonus and with benefits and Citi making a matching signup bonus publicly available.

  • US Airways and American are merging frequent flyer programs.
  • The Barclays-issued US Airways card is becoming an American card.
  • You won’t be able to apply for it anymore once the programs merge.
  • This will happen during the second quarter of the year.

Barclays is losing the ability to issue new US Airways/American credit cards with the merger, and Citi will get that right exclusively in the U.S.

So Barclays is quite anxious to sign up as many cardmembers as they can before the clock strikes midnight on the US Airways Dividend Miles program, and new card applications turn into a pumpkin.

There’s little reason not to get a US Airways card, and certainly little reason to wait. Once the programs combine during the second quarter the window shuts. I’m guessing it’s earlier in the second quarter rather than later for reasons I’ve explained in a variety of other posts.

With the US Airways card you get 50,000 miles after first purchase and there’s an $89 fee. That’s really cheap miles, and it gives you the option to have the card once the window for new applications closes.

Miles from US Airways will get combined into American AAdvantage accounts, and you can always get a Citibank American AAdvantage card later — or at the same time. (If you’re interested in both the personal and the small business AAdvantage cards, be sure to wait 8 days after applying for one before you apply for the other.)

Competition is Good: Matching Higher Bonuses

The US Airways card had a hidden link for years, targeted at top tier elites, offering 40,000 miles. But most bonuses were 30,000 or 35,000 miles for the card. With limited time remaining to sign up new cardmembers, they’re offering 50,000 miles with first purchase ($89 annual fee applies).

Citibank has long had links of one sort or another offering 50,000 miles as a signup bonus after meeting minimum spend (and with a $0 fee the first year). But their ‘public’ offers have varied from 30,000 to 40,000 miles much of the time. It’s currently 50,000 miles publicly, and described as ‘limited-time’. My hypothesis is that they’re publicly more aggressive with the cardmember acquisition offer because they see Barclays getting more aggressive on the US Airways side and they don’t want customers to choose the US Airways card that will become an American card over theirs.

Competition Over Benefits

The US Airways card has stopped adding foreign conversion fees when you use it for non-U.S. purchases.

What’s neat here is that Citibank charges these fees for their standard AAdvantage co-brand cards, it’s only the $450 annual fee ‘Executive’ card that comes with lounge access which waives these fees.

So that’s Barclaycard one-upping their Citi rivals.

Once the programs combine the US Airways card will become the AAdvantage Aviator Red MasterCard. It has an $89 fee versus the $95 fee with Citibank, and offers similar benefits:

  • Double miles on US Airways and American purchases
  • A 10% rebate on redeemed miles annually, up to 10k miles
  • First checked bag free (up to 4 traveling companions)

I’m keeping my US Airways card, hoping I can upgrade to the currently invitation-only AAdvantage Aviator Silver World Elite MasterCard with a $195 fee.

The key for me is that the Aviator Silver card will offer elite qualifying mileage earning at a lower price point than the Citi Executive card and it will also continue to offer a companion ticket benefit. That requires spend, which I’d meet anyway in order to earn elite qualifying miles.

  • Triple miles on US Airways and American purchases plus double miles on hotels and car rentals
  • A 10% rebate on redeemed miles annually, up to 10k miles .. this is just like the Citibank American Airlines offering.
  • First checked bag free (up to 8 traveling companions)
  • Companion certificate each year for two guests at $99+tax each with $30,000 in purchases by each anniversary date. The annual companion certificate was a fantastic benefit of the US Airways card, so I’m glad to see it continuing in some form.
  • 5,000 elite qualifying miles for each $20,000 in annual purchases (up to 10,000 per year). This is better than the Citi Executive card’s 10,000 after $40,000 spend at a higher annual fee price point.

Editorial note: 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 any card issuer. Comments made in response to this post are not provided or commissioned nor have they been reviewed, approved, or otherwise endorsed by any bank. It is not the responsibility of any advertiser to ensure that questions are answered, either.


About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. This sounds to me like a net reduction in benefits for US Airways card holders:

    – Elimination of 5,000 mile discount for award tickets on US flights
    – Elimination of $99 companion fare
    – Elimination of annual lounge pass
    – Elimination of 10,000 EQM for $25,000 in spend

    If you want the EQM or companion fare, cardholders have or might have the opportunity to upgrade to the Silver for a higher fee and more spend. I don’t see how this is “heating up the competition” when it will cost more to get less… But hey, no foreign currency conversion fee and a 10% redemption bonus (capped at 10,000 miles)!

  2. @Hua there are things American was never going to offer that US Airways did. Given those constraints the two companies are competing for signups these next few months.

  3. Hi Gary,

    I already have US Airways card which got approved last April. What would be the best way to get a 2nd card if at all possible?

    Bill

  4. If we have both the Aviator Red AND a Citi AA card, will we get 20% off of award redemptions?

    Does the Aviator Red ALSO keep the 10k/year annual bonus?

  5. If you have both the Citi Executive and the Aviator Silver, you can get the 10K EQMs on each and put yourself within 5K EQMs of Gold every year? If so, both cards and a cheap transcon mileage run each year would get you Gold.

  6. I am also wondering about this: “If we have both the Aviator Red AND a Citi AA card, will we get 20% off of award redemptions?”

    Should be possible given it is two completely different banks/credit cards as oppose to holding both Citi AA Visa/MC.

  7. I have the current US Airways card with the 10k annual bonus. When it becomes the Aviator Red will I get both the 10k annual bonus and 10% rebate on redeemed miles?

  8. Garry,
    If you have both citibank and U.S. Barclay current Card, can you get the 10 k eqm for each so thait counts towards 20k for 2016 status on aa ?Does it matter when you have to spend the 40k on each given aa is merging accounts in q2?

  9. @David – as mentioned above, you can get 10k eqms for the citi executive card after $40k spend. And then if you get upgraded to the aviator silver card from barclays you can earn up to 10k eqms for 40k spend on that card.

  10. Gary, thanks
    Will it work with existing us card or only new aviator? Will Barclays count spend on both cards towards 10k or only aviator? Appreciate the clarification

  11. @David only the new Aviator SIlver will have the EQM component, and it’s spend on each bank’s card separately that is totaled to see if you earn EQMs

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