This review was updated in September 2016 and all the information is correct as of that date
This is my review of the American Airlines AAdvantage credit card issued in the UK by MBNA.
It is part of my series of articles looking at the major UK loyalty credit cards and discussing whether or not they are worth applying for. These articles will be linked to the relevant sections of the ‘Credit Cards Update‘ page. My other UK airline and hotel credit card reviews can be found here.
If you want to check your credit record before applying for a new card, click here for a free 30-day trial of Equifax’s online credit report service. Note that a monthly fee of £14.95 will apply following the 30 day free trial of this product if you do not cancel within the trial period. You can cancel your subscription at any time.
As with all rewards cards, this is not a suitable product for you if you do not clear your balance in full every month. You should focus on a credit card with a low interest rate such as the AA Low Rate Card. This has a very attractive representative APR of 6.4% variable on purchases and balance transfers.
Key facts: No annual fee
The representative APR is 22.9% variable.
About the card
The American Airlines AAdvantage cards are issued by MBNA as a double-pack, with recipients receiving an American Express card and a Visa card. This has become a common trend in recent years, with card issuers wanting to benefit from Amex’s higher merchant fees whilst at the same time not wanting to put off anyone who is concerned about limited Amex acceptance.
MBNA also issues the United, Etihad, Emirates, Miles & More and Virgin credit cards, amongst others. If you already hold one of these cards and are refused for the AA card, they will usually change their mind if you ring up and offer to reduce the credit limit on your existing card or cancel it entirely.
What is the sign-up bonus?
The sign-up bonus is 5,000 miles, triggered with your first purchase.
During special promotions, this can increase to 15,000 miles. The last offer ended in early January 2016.
On its own, 5,000 American Airlines miles are not going to get you very far if you live in the UK. I discuss some possible redemption ideas below – 30,000 miles is probably the most interesting ‘cheap’ redemption, which would get you a one-way in Business Class on AA’s partner Etihad to the Middle East.
Note that American Airlines devalued its reward chart in February 2016 and most redemptions increased in price after that date.
Any other benefits?
12 months interest-free credit on all American Airlines purchases charged to the card. You will pay 0% interest for six months on any balance transfers you arrange within the first 90 days. These are subject to a 2% fee.
What is the annual fee?
There is no annual fee.
What do I earn per £1 spent on the card?
Cardholders earn 1.5 AA miles per £1 spent on the Amex and 0.75 miles per £1 on the Visa. MBNA has a good reputation in my experience for posting points punctually.
This is a very impressive earnings rate for a free card.
What is an AAdvantage mile worth?
This is a tricky one, especialy from the perspective of someone living in the UK. Let’s consider a few variables.
Firstly, AA is a member of oneworld, as is BA. This means that AA miles can be redeemed for British Airways flights, although you will be using AA’s partner award chart which is here. You can quickly see that using them for BA European flights is poor value – 12,500 AA miles is enough an Economy one-way inside Europe in Economy, for eg, but you will still pay BA’s taxes and fuel surcharges.
Redeeming with Avios instead would let you do a Reward Saver redemption which caps the taxes on a one-way in Europe at £17.50, possibly £100 cheaper. It only becomes interesting if you go to the far reaches of Europe, since AA charges the same for London to Paris as it does for London to Moscow.
Long-haul from London, using BA planes, AA is a relative bargain on India and the Middle East since Business is 85,000 vs 120,000 (Middle East) or 150,000 (India) for BA, and First is 125,000 vs 180,000 (Middle East) or 200,000 (India) with Avios points (all return prices, BA prices are based on peak dates). AA is also a partner with Etihad which lets you fly to Abu Dhabi in their impressive J and F cabins.
Asia routes are equal, with Japan and Hong Kong costing 150,000 miles return in business class compared with 150,000 Avios. Cape Town is a decent deal – BA charges additional Avios miles if you change planes in Johannesburg, which is necessary in most cases given poor availability on the direct flights, whilst AA does not.
Australia is also an exceptional deal using American Airlines miles. A First Class ticket costs just 230,000 miles return from London, compared with 400,000 miles using British Airways.
AA miles come into their own when redeeming on AA planes, especially across the Atlantic, where you will NOT pay a fuel surcharge. When using Avios, BA charges a fuel surcharge whether you use AA or BA planes, even when AA does not charge a fuel surcharge itself. The new AA business class seat is also seen as superior to the British Airways Club World seat.
Since a UK-based AA collector is likely to redeem on BA flights, I use the same valuation as I do for Avios – 0.75p per mile. On this basis, the 1.5 miles per £1 on the Amex is equivalent to a 1.1% rebate on your spend. The Visa returns just 0.55%.
How does this compare to a cashback credit card?
The best cashback card on the market which offers a) a MasterCard or Visa, b) no annual fee and c) unlimited cashback is the ASDA credit card, which pays 0.5% back in ASDA vouchers.
Both the American Express and Visa cards compare OK with this, even at my (very conservative) 0.75p per mile valuation.
Other points to note
American Airlines is not an Amex Membership Rewards partner, so you cannot collect AA miles via that route as an alternative to this card. (One option is to transfer to Starwood Preferred Guest and then to American, but the rate is only 1 : 0.625, even assuming you transfer in chunks of 20,000 SPG points.)
The only alternative credit card sign-up for collecting American Airlines miles is the Starwood Preferred Guest American Express card. This has a sign-up bonus of 10,000 SPG points (converts to 10,000 AA miles). My review of the Starwood Amex is here.
If you did need to top-off an AA account to reach a specific target, you could also transfer miles from a hotel programme or do a miles purchase – AA runs regular promotions where it sells miles at a discount to the regular rate.
Remember that the American Airlines cards have an FX fee of almost 3% for foreign currency transactions. You may want to consider getting a separate card to use abroad which charges no foreign exchange fees. I recommend the Lloyds Avios Rewards card which also earns Avios points – even on your 0% FX transactions! It comes with a 4,500 Avios sign-up bonus if I refer you. My review of the Lloyds Avios Rewards card is here.
The current sign-up bonus of 5,000 miles is OK for a free airline card. That said, 5,000 AA miles have little value on their own and the card is best suited to someone with existing AA miles or heavy card spending.
The earning rates are impressive. 1.5 miles per £1 on the Amex is as good as it gets at the moment on a free mileage card. The same goes for the Visa at 0.75 miles per £1.
The application form can be found here.
Disclaimer: Head for Points is a journalistic website. Nothing here should be construed as financial advice, and it is your own responsibility to ensure that any product is right for your circumstances. Recommendations are based primarily on the ability to earn miles and points and do not consider interest rates, service levels or any impact on your credit history. By recommending credit cards on this site, I am – technically – acting as a credit broker. Robert Burgess, trading as Head for Points, is regulated and authorised by the Financial Conduct Authority to act as a credit broker.