Frequent Miler on the Air - Taking AAdvantage of AA's New MonogAAmy | Coffee Break Ep36 | 12-10-24

Episode Date: December 10, 2024

Citi recently announced that they will become the exclusive issuer of American Airlines AAdvantage credit cards in the United States, starting in 2026. What does that really mean for points and miles enthusiasts, and how can we take maximum advantage? (Or shall we say "AAdvantage"?)( Read more about the AA / Citi news here. (00:26) - Citi will become the exclusive issuer AAdvantage credit cards in the U.S. starting in 2026. (01:41) - We wonder if maybe AA will become a transfer partner of Citi ThankYou Rewards (02:54) - We wonder if maybe Citi will create Aviator cards that are ONLY available to those who are transitioned over from Barclays (05:07) - Listen to our recent podcast about credit card predictions here. (06:01) - Are AA miles valuable now? (07:27) - Will AA miles be valuable later? (10:56) - Should you get the Aviator Red now? Learn more about the AviatorRed card here. (14:07) - Should you upgrade to the Aviator Silver? (19:11) - Listen to our podcast episode about amassing Citi ThankYou Rewards here. Visit https://frequentmiler.com/subscribe to get updated on in-depth points and miles content like this, and don’t forget to like and follow us on social media. Music Credit – Beach Walk by Unicorn Heads

Here we go. This is not your typical Frequent Miler on the Air episode. This is a standalone segment we're calling Coffee Break. Each Coffee Break segment will cover a single topic related to miles and points. And each Coffee Break is limited to 20 minutes or your money back. Enjoy. Today's coffee break, taking advantage of AA's new monogamy. Citi has announced that they will become the exclusive issuer of American Airlines Advantage credit cards in the U.S. starting in 2026. The press release said that Citi's going to acquire Barclays American Airlines credit card portfolio and will begin transitioning card members to Citi Bank in 2026 as well.

So currently, both Citi and Barclays issue American Airlines credit cards, and that's going to change in a little over a year. So we're going to discuss what that means and how to take maximum advantage of this situation. Yeah, I mean, it's an interesting situation. I don't necessarily want to say exciting, because losing an issuer means fewer opportunities for welcome bonuses. But the good news is that there's still an opportunity now because we've got quite a long heads up on this. Nothing's changing for a while yet, though. Now we have some idea in mind as to when things are going to change. So you got to start making some moves. I think the other other interesting piece of the pie here that came out of the press release is that they hinted that maybe American Airlines is going to become a Citi

thank you transfer partner, right? Yeah, they did. They didn't say it explicitly, but here's a quote from the press release. Working more closely together, Citi and American can create significant value for both Advantage co-branded and Citi branded card members. And that second part is making us think that it's talking about Citi's thank you cards. Yeah. So it sounds to me like they were pretty strongly hinting that American Airlines will finally become a Citi thank you transfer partner. And that will be exciting if it happens. I think people have wanted it for a long time. I didn't really expect it, to be honest with you. I'm not surprised that that was probably part of the negotiation here. But at the same time, American Airlines, I've always been under the impression that they wanted

enough for their miles that city wouldn't want to be ponying up for all of those miles. But apparently I might be wrong. It sounds like there might be the ability to transfer. So that should be exciting. Yeah, yeah. I mean, for those with thank you point balances, it could potentially be very exciting. Another hint of what may happen in the in the announcement is that it sounds like it's possible that Citi is going to create versions of what today are Barclays Aviator cards, but these versions will be only available, most likely, to people who were transitioned over. So basically, they'd be keeping these cards alive in a sort of new Citibank form, but only for those who currently have Barclays cards and get transitioned to the Citi version of them. And the reason we think that is because the quote in the press release said, Barclays card members will continue to experience the same benefits they do today.

Same benefits they do today, same benefits they do today. And so none of American Airlines current, I'm sorry, none of Citi's American Airlines current cards match the exact benefits of Barclays cards. And so unless Citi's going to create new cards that have the current perks of the Barclays cards, it seems to me like the most likely situation is that they're going to create, like currently there's the Aviator Red and Aviator Silver and Aviator Business for those who got that before it's no longer available. I think it's really likely they'll create versions of that in Citi's portfolio that there's no way to get other than by transitioning.

Oh, I also forgot to mention, there's an Aviator colorless one that has no fee. Aviator white, I guess. It kind of looks silver, but it's, yeah, I don't know. I'm not sure. Yes, the colorless Aviator card. So, and I think that the key wording to me there was that it said Barclays card members will continue to experience that, not that City card members are going to gain access to, you know, new cards and new benefits

necessarily. So I agree. I think that might be that it's highly possible the only way to end up with those City versions of these Barclays cards will be to get the Barclays cards now, which is something we talked about recently on our recent Coffee Break episode number 35. We were predicting the next credit card collectibles. And, Greg, you did pretty well with this one, huh? I mean, the timing was ridiculous. We recorded it, and then a day or two later, this announcement came out. And, like, wow. Yeah, in that show, I talked about particularly the aviator

silver it has some unique perks and talked about the possibility that it would become a collectible card where what that means is a card that if you don't get it when it's possible to get it you'll you'll never be able to get it again, yet the credit card company will still support it. That's what I consider a collectible. And this appears to be headed in that direction. Yeah. So, all right. So then to figure out whether or not it's worth going for that in order to have that collectible, I guess we first have to discuss, well, are American Airlines miles valuable or what do you think? I mean, are they still really valuable currency? I know you've been pretty bullish on them in the

past. Yeah. I mean, obviously, well, obviously, obviously to us, American Airlines miles are crazy valuable right now. All three of us who participated in the million mile madness challenge our team did used American Airlines miles during that challenge to great effect. I think Stephen's only one of us that used them for American Airlines-owned flights. And with American Airlines-owned flights, they're randomly valuable, as we've talked about before, that you sort of pull the lever on that slot machine and see what you get. And sometimes you get good pricing.

Sometimes you get terrible pricing. Where they're consistently very valuable is with partner awards, especially business and first class partner awards. Nick and I both flew. Eddie had first class with AAMiles recently. We both flew Qatar business class for only 40,000 AAMiles going all the way from the Middle East to Asia. And I also flew Japan Airlines first class for 80,000 miles from Japan to Chicago. And all of those are incredibly valuable uses of American Airlines miles. And there's some others as well. So absolutely super valuable today. Real question

is, will they be valuable later? What do you think? You know, I think it's an interesting question. So I think everybody kind of has expected that they would be the next, you know, everybody's waiting for the next shoot, the other shoot to drop, so to speak, that next big devaluation at some point, you know, it's got to happen because it's been years and years that the partner award chart has been the same. Now, American Airlines own flights is highly variable, like Greg said, but their partner award chart is so consistently valuable and better than most other competitors in at least many situations that I think we've kind of expected that at some point it would devalue. And so is that coming now if all of a sudden there's a whole bunch of new people with city thank you points that perhaps are going to

transfer to American Airlines, which let's be clear, we don't even know that they're going to. And if they do, we don't know for sure that they're going to transfer one to one. So there's a lot of questions still and not a lot of answers there. But, you know, I think that it's unlikely that we'll see a devaluation quickly. And the reason why is because of all of the increased attention on frequent flyer programs as of late with the Department of Transportation. Now, maybe that'll change with a new administration coming in. But at the moment, anyway, I think probably the airline might be hesitant to make a major

devaluation that, you know, creates a lot of waves and headlines. So I actually think that they will probably continue to be valuable for at least the first year of this exclusive arrangement. So I'm going to go ahead and predict, and maybe I'll be very wrong with this, but I'm going to predict that we're not going to see a big devaluation to the American Airlines Partner Award chart until 2027. But I bet we probably will by 2027. Like they're certainly in early 2027, I think it's likely. Yeah, it does seem ripe for devaluation.

I think what we can, I think our best hope is if and when that happens that it's more of a sort of percentage-wise devaluation, you know, prices go up by 20% or somewhere in that range. If they go to something, if they go to all new partner pricing, it could be very ugly, but we just don't know. And the good news is I don't think,

for booking American Airlines' own flights, I don't think that it'll go away that it'll be randomly very valuable you know what i mean right right right it'll just continue that there will be many situations where it's terrible value but many where uh or at least some where it's really good value so so i i'm still um i wouldn't say bullish on getting American Airlines miles, but very happy to get them even for the future. Here's the one thing I think maybe is a concern is that if they do become transferable from City Thank You Points, if you can transfer and they become transferable one-to-one from City Thank You Points, the competition for the Best American Airlines Partner Awards is going to be fierce. There's going to be so many more people that will have access to a lot of American Airlines miles that it might make it a lot harder to book those Etihad First Class and Japan Airlines First Class type redemptions, which are already not necessarily easy. So that might be the tough. Yeah, no, really good point. And but, you you know maybe that'll save us if if if if it's too hard to

you know since it's already is really hard to get some of those best value redemptions maybe it doesn't cost american airlines that much to support the current award chart i don't know all right let's talk about some opportunities or or uh yeah that that we should consider right now. So first of all, the Aviator Red card is the only Barclays card right now, I think, that's available new. And as we're recording this, it has a really good offer. 70,000 points after first purchase within 90 days. Should we jump on this? Let's talk a little bit about the cost and perks. Yeah, so it has a $99 annual fee. And you do have to pay the annual fee in order to earn the bonus.

So it's first purchase and payment of the $99 annual fee to earn the 70k points. But, you know, for 99 bucks, it's not really a terrible card. You get your first check bag free. And I think that's true for you and up to eight companions on your reservation or something along those lines. So if you're traveling with a family, it can come in handy there. You can also earn a companion certificate, a $99 plus tax domestic companion certificate with $20,000 spend in a card membership here. So maybe that again might be okay. Now in terms of earn on spend, this is not a great earner, but keep in mind that you do earn one loyalty point, not only one redeemable mile, but one loyalty point per dollar spent

too. So if you're spending your way towards elite status or might be able to bridge a gap to reach elite status, it could be useful for that. Eligibility, you may not be eligible for this offer. If you currently have or previously had an account with us in this program is the terms, that's what it says on the website. So it's very unclear. It's saying if you've had it before, you may not be eligible to get it again. But that, of course, means that you may be eligible to get it again. And we've had some

readers who have been able to get the card again. It's not clear how long you have to wait. It's variable, it seems, from person to person in terms of how long you have to wait after previously earning the bonus or closing the card in order to get the welcome bonus again. But there's a chance anyway. So is that worth it? I mean, is it worth a 524 slot? I guess let's start there. So if you're looking to get under 524 to be eligible for more chase cards, is it worth burning one of those slots for 70,000 American Airlines miles? So I think so. I think this is an opportunity to get a bunch of American Airlines miles with almost no spend requirement. I mean, this is after first purchase. So you just have that $99 annual fee to pay. So very low cost, very low effort if you get approved to get

70,000 American Airlines miles. That's a great deal. And it's not something that's likely to last long. We don't know when Barclays is going to be forced to stop issuing new cards. But it could happen anytime. And so I'd say the sooner you jump on it, the better. I'm personally looking at throwing an application with everyone in my immediate family, because why not? Yeah. I mean, my wife and I just got these cards last year. So and then upgraded to the Aviator Silver. So we don't have any more capacity for it. But yeah, I totally agree. 70,000 miles after first purchase, very little opportunity cost. Sure. Yeah, it's a 524 slot, but it's 70,000 miles with one purchase.

It's not going to divert your ability to earn a welcome bonus on a different card. So yeah, I would I would say it's worth it, worth getting now. But if you have the Aviator Red already, or if after you have the Aviator Red for a while, you get an opportunity to upgrade to the Aviator Silver, should you get the collectible? Yeah, so the Silver card has some interesting perks, but it costs $195 a year. So you have to be really interested in these perks to want to do it because it's about $100 more than the base level aviator cards or American Airlines cards. And so the perks that it has that are unique, you get $25 per day in-flight food and beverage credit. So you use your card while you're flying to pay for food or drinks. You get that back up to $25 a day. You get $50 per year Wi-Fi credit versus the red has $25 per year Wi-Fi credit. And then you can get a companion ticket with $20,000 of membership year spend. But this one, it's good for up to two

companions who each have to pay $99 plus tax for their flight. So, you know, if you've traveled a lot with three people, you know, yourself and two others, that could be very valuable. It really just depends on are you going to use it to good effect each year. Now, for those seeking elite status, it has some interesting perks. This is the one American Airlines card that will give you bonus loyalty points for your spend above just the one per dollar. And so at $20,000 spend, again at $40,000 spend, and again at $50,000 spend, you get 5K bonus loyalty points, 5,000 loyalty points. So a total of 15,000 loyalty points with $50,000 spend. For those seeking status, it's a really good companion, ironically, to the American Airlines executive card. The one that, that one gives you 10,000 bonus miles

when you earn 50,000 and again at 90,000 loyalty points. Like it has nothing to do with spend on the executive card. So you could earn your loyalty points with spend on the aviator card and then get those extra bonus loyalty points just by having the AA executive card. So that's an interesting combination. And that combination, once you can't get the silver card anymore, I think that opportunity is gone.

So if that interests you, if you're interested in spending your way to AA status, I think this is a particularly interesting card. Yeah, agreed. And so actually, we have the Aviator Silver now. And I'm thinking that in January, I may try to do my 20k spend with a tax payment. Because if I do that 20k, I'll earn the next companion certificate upon next renewal, and I'll get the 5000 bonus loyalty points. So the 25 K that'll help me towards status in the current membership year. Cause remember American airlines, you have until the end of February to earn loyalty points for the, you know,

the current year to, to real fresh status for the next year. So, so I'm, I'm probably going to try to do that in January, but anyway, is it worth getting it now? I mean,

again, only if you value the perks and, and if you are one of those people who's like, oh, but I might never be able to get it again, which is kind of us, right? That we're like, oh, I might never be able to get it again. So, you know, now's the time, I guess, on that. All right. So are you going to keep yours?

Are you going to keep yours to see what happens? Yeah, I think I kind of have to, to see what happens. Yeah. And I say I kind of have to, and I'm hesitant on that because I'm still waiting for my companion certificate. I did the 20K spend this last year, and my anniversary passed. It's been more than two months at this point. I got an email saying, yes, you qualified for the companion certificate.

You'll get it in eight to 10 weeks, and we're pushing up. I mean, it's been nine weeks already now, and so I'm waiting for this companion certificate. I want to see how easy it is to use it. But I'll probably renew it at next renewal anyway, even if I don't love the companion certificate, just to see what happens when it converts over to Citibank in 2026. Yeah, yeah. Same with me. I'm definitely going to keep it and see what happens.

As you said, this could be a really good collectible or at least a cool one for a collection if you're a credit card collector like me. Okay, so some other stuff to consider. Citi Thank You Rewards cards might become more valuable than ever. So there are cards that earn anywhere from 2x everywhere to 3x in many categories to 5x in certain categories. Now, that'll be awesome assuming a one-to-one transfer actually happens from Citi to AA and it assumes that AA miles

don't devalue too much. But I think, you know, if you've been on the fence of whether to jump in the Citi ecosystem, this might be enough to push you over. We have a podcast that dives deep into how to earn lots of city points. So listen to How to Amass City Thank You Rewards, podcast episode 274. There you go.

Yeah. So that may end up being really interesting. I think certainly for people who have a lot of city points, it'll be exciting. And this might be interesting. The Barclays cards might be interesting for those who've been shut down by city in the past, because maybe this is going to provide a path to get back in since your Barclays card will presumably become a city card. Now, we don't know for sure.

Maybe if you've been shut down by city in the past, they'll just shut you down again after they move it over. We don't really know. But maybe it'll give you a chance to get back in their good graces. Yeah, it could be. We'll see. All right. All right.

Get it now while the getting's good. Exactly.