Maximise your Avios, air miles and hotel points

American Airlines now lets you earn status from credit card spend – but is it a good deal?

Links on Head for Points may pay us an affiliate commission. A list of partners is here.

There is a joke in the US, which contains more than a grain of truth, that the three legacy US airlines are effectively credit card reward programmes with a few cash flights tacked on. There have even been suggestions that one of the big US banks should buy American, Delta or United purely to capture the hugely lucrative credit card contracts and to offer mileage rewards more broadly.

(This wouldn’t exactly be tricky. JP Morgan Chase is valued at 35x more than American Airlines. It would be a rounding error to acquire it.)

One day, of course, the huge fees that US retailers have to pay to accept credit cards will be cut by 80% to the levels seen in Europe and Australia. One day, US residents will also wake up and see that constant devaluations have made mileage credit cards poorer value than the 2% cashback credit cards common in the States.

American Airlines now lets you earn status purely from credit card spend

Until then, the banks will continue to see airlines as no more than a conduit for issuing the frequent flyer miles which are the No 1 carrot required to sell credit cards in the US.

American Airlines is shaking up AAdvantage

American Airlines announced a major shake-up of its frequent flyer programme last month. Nothing changed in terms of redemption costs, but there has been a cultural shift in how you earn status.

This is a radical move by American Airlines, especially as historically their management strategy has been ‘copy whatever Delta is doing but don’t execute it as well’. For once, American is taking a lead.

The reason I am writing about this for a UK audience is that you can be sure that all other major global airlines will be looking at this and wondering if it is somethng to copy.

For the first time, you can earn American Airlines status purely on the back of credit card spending. You don’t need to spend a penny (or a cent) on flights, although of course the status won’t be a lot of use to you otherwise …..

This is how it works. To earn status, you need:

  • Gold (equal to BA Bronze) – 30,000 points
  • Platinum (equal to BA Silver) – 75,000 points
  • Platinum Pro (equal to BA Gold) – 125,000 points
  • Executive Platinum – 200,000 points

You can earn points in two main ways:

  • $1 spent on an American Airlines credit card earns 1 point
  • $1 spent, excluding taxes and charges, on an American Airlines flight earns 5-12 points depending on your AA status

The devil is in the detail

There are a couple of interesting quirks:

  • If you already have status, it is far easier to retain status. If you are Executive Platinum, you’re earning 12 points per $1 spent on AA flights. This makes is FAR easier for you to hit the 200,000 points needed to retain Executive Platinum. Someone just starting out with American Airlines will only be earning 5 points per $1 spent on AA flights. In the long run, this will hurt AA because they won’t see the next generation coming through.
  • Whilst you can earn status purely on credit card spend, there are extra benefits – including, crucially, the lounge passes and the upgrade certificates which are the core of any US frequent flyer scheme – which are only unlocked by flying 30 American Airlines segments per year. We will now see mileage runs replaced by segment runs, as high card spenders look for the cheapest and quickest routings to hit their 30 annual flights.
American Airlines now lets you earn status purely from credit card spend

In truth, American Airlines has stuffed its frequent flyers

In putting together this new structure, American Airlines has sharply increased the amount of travel you need to earn status. Covid be damned.

The headline to this article is “American Airlines now lets you earn status from credit card spend”. In truth, I should have written “American Airlines now forces you to spend on an AA credit card to keep your existing level of status”.

This is bad news if you live in the UK, of course, since we don’t have an American Airlines credit card here.

For example, simplifying it slightly, pre-covid you would earn American Airlines Platinum Pro status by spending $9,000 on AA flights.

Going forward, a Platinum Pro member who spends $9,000 will only earn (9,000 x 9 per $1) 81,000 points. Because requalification now requires 125,000 points, a Platinum Pro member would need $44,000 of credit card spend to earn the additional 44,000 points to hit 125,000.

What you won’t know, reading this in the UK, is that the American Airlines co-brand credit cards in the US are poor. There is a large opportunity cost if you move spend to AA’s cards versus other cards in the market.

With various cards offering 2% cashback in the US, you can even put a firm cash value on the spend you need to divert to AA. In our example above, a Platinum Pro member who moves $44,000 of card spend to AA credit cards in order to retain status would be losing out on $880 of cashback.

Conclusion

I DO believe that status should be offered as a credit card reward.

What I don’t believe is that – as American Airlines as done – the best way to go about it is to increase the qualification levels for status and force flyers to make up the difference with card spend!

If nothing else, giving status as a credit card perk makes sense. With low profit margins on UK credit cards due to cap on interchange fees, giving out Avios or other reward points is expensive.

Offering 1 British Airways tier point for, for example, every £100 spent on the British Airways American Express card would be a game changer.

It wouldn’t even represent a huge cost to BA. By definition, anyone without a Silver card isn’t flying a huge amount so the cost of lounge access etc is minimal. At 1 tier point per £100 most people would need a mix of card spend and flying to reach Silver or Gold which may also drive additional flight bookings.

For the hotel companies, giving away status as a card perk is even more of a no-brainer. The cost of your free breakfast, upgrade, bonus points etc is paid by the franchise owner who runs the hotel you are staying at, not the brand owner.

If you really don’t believe that we will see ‘status for card spend’ in the UK, remember that BA’s sister company, Iberia, already gives away Silver status (equivalent to BA Bronze) if you spend €9,000 per year on its Icon credit card. Over in Spain, the future is already here.

If you want to learn more about the new American Airlines programme, there is a special website here.


Want to earn more points from credit cards? – January 2022 update

If you are looking to apply for a new credit or charge card, here are our January 2022 recommendations based on the current sign-up bonus

You can see our full directory of all UK cards which earn airline or hotel points here. Here are the top current deals.

There are special sign-up bonuses on both of the BA American Express cards until 28th February 2022. The bonus on the free card is doubled to 10,000 Avios and the bonus on the Premium Plus card is increased from 25,000 Avios to a huge 40,000 Avios.

British Airways BA Amex American Express card

British Airways American Express

10,000 Avios for signing up (SPECIAL OFFER) and an Economy 2-4-1 voucher for spending ….. Read our full review

British Airways BA Premium Plus American Express Amex credit card

British Airways American Express Premium Plus

40,000 Avios (SPECIAL OFFER) and the UK’s most valuable card perk – the 2-4-1 voucher Read our full review

Nectar American Express

American Express Preferred Rewards Gold

Your best beginner’s card – 20,000 points, FREE for a year & two airport lounge passes Read our full review

American Express Platinum card Amex

The Platinum Card from American Express

30,000 points and an unbeatable set of travel benefits – for a fee Read our full review

Earning miles and points from small business cards

If you are a sole trader or run a small company, you may also want to check out these offers.

The bonus on the Capital On Tap card is increased from points worth 10,000 Avios to 30,000 Avios until 4th February 2022.

The bonus on the British Airways Accelerating Business card is increased from 30,000 Avios to 45,000 Avios until 28th February 2022.

American Express Business Gold

20,000 points sign-up bonus and free for a year Read our full review

Amex Platinum Business American Express

American Express Business Platinum

40,000 points sign-up bonus and a long list of travel benefits Read our full review

British Airways Accelerating Business American Express card

British Airways Accelerating Business American Express

45,000 Avios sign-up bonus – plus annual bonuses of up to 30,000 Avios Read our full review

Capital on Tap Visa card

Capital On Tap Business Rewards Visa

30,000 points bonus – the most generous Avios Visa for a limited company Read our full review

For a non-American Express option, we also recommend the Barclaycard Select Cashback card for sole traders and small businesses. It is FREE and you receive 1% cashback on your spending.

Apply 31st March 2022 and your cashback will be increased to 2% for the first three months.

Barclaycard Select Cashback credit card

1% cashback (2% for your first 3 months) and no annual fee Read our full review

Comments (39)

  • Jonathan says:

    VS has been giving away tier points on its US credit card spend for many years.

    • Rui N. says:

      Delta as well I believe. The United card also offers a sort of “Silver-light” benefits.

    • ChrisC says:

      Yes they did but there was both a monthly and annual limit which meant you still had to do some actual flying to earn status. You couldn’t get status just via card spend.

    • ECR says:

      Earning Qantas status credits on BP was a limited offer, although they have run a promotion a couple of times. They do have occasional limited time offers to earn status credits ‘on the ground’ e.g. through supermarket spend, wine purchases using Qantas points, transferring credit card points (e.g. Amex MR), luxury hotel stays, spending Qantas points in the Qantas store etc. A lot of these have happened since Covid, although I think some of this may have been planned beforehand.

  • ChrisBCN says:

    There’s another new psuedo-status card in Spain. The Vueling Up credit card gives premium check in desks, fasttrack security, priority boarding, free same day changes. No lounge access though!

    Although you can buy these things individually, having this psuedo-status card brings a lot of value if you travel enough.

  • John says:

    I think the big thing is that AA realizes that there must be other ways to earn status besides flying.

    Many people are getting more serious about reducing their carbon footprint. I’d expect there will be more opposition to mileage running–taking unnecessary flights just for the miles–in the years to come.

    Lastly, I am not 100% convinced AA raised the status requirement. They are gonna know the extent to which their membership base engages with co-brands. While the co-branded credit cards are the biggie in the US, it is my understanding you get loyalty points for spend on other partners as well.

    • John says:

      Addendum:

      Oh, and I also agree with Gary from VFTW on one thing. With this change, AA shows it knows what drives its profitability. Much of the profit comes from selling AAdvantage miles to financial partners at a mark-up. Incentivizing consumers to use partner credit cards more heavily is smart. It should drive incremental profits which is the raison d’etre of the loyalty programme.

    • Rob says:

      Only a couple of very small partners are confirmed as offering ‘qualifying’ points. It seems AA wants to charge partners more to have their points count as qualifying and most are saying No – hotel and car hire points won’t count for example.

      • Rob says:

        It WOULD make sense if they had kept the total qualification thresholds the same, instead of increasing them and making you make up the difference in card spend. For a start, AA has disenfranchised a) all members who don’t live in a market with AA credit cards and b) those who currently have no status, since starting from scratch is hugely difficult. b) also impacts a), since those early in their careers who AA wants to attract won’t have high card spend either.

        Totally agree that scrapping all the EQD nonsense was the right way to go but the implementation is wrong.

    • Paul Pogba says:

      I’m not sure, an Ipsos MORI poll found support for net zero drops off when it will cost them personally. The public support frequent flyer levies 35:26 (% support:oppose) until they’re told it will cost them when the balance shifts 32:33.

      https://www.ipsos.com/ipsos-mori/en-uk/public-support-majority-net-zero-policies-unless-there-is-a-personal-cost

      As with many things, taxes and government interference are great until they impact you personally.

  • AJA says:

    I like the idea of tier points from BA Amex spending.

    For an added incentive, an extra 50 TP every year you keep the card. Increasing by 50TP each year eg after 5 years you automatically get 250TP on renewal. 10 years of holding the card would give you 500TP. That would stop the churning and and help towards status. One can dream….

    • Peter K says:

      BA don’t really gain from you holding the card, they gain from you spending on the card. Giving away TP for just holding it does not incentive spend.

  • flyforfun says:

    I just wish AA still had a card in the UK, to keep my AA miles ticking over until I can use them. With only an 18 month time frame before expiry, its a challenge to find a qualifying hotel chain or car hire within my travel plans that work within the AA programme. Thankfully during the darkest hours of the pandemic they had that game/promo where everyone got 100 miles as minimum.

    But going forward it sometimes is a choice of sacrificing some benefits of the BA programme to renew. There is some survey thing I believe, but I feel my life gets sucked out of me every time I go through those types of enrolment processes only to find out you don’t qualify. The only sure thing (apart from flying of course!) is to buy AA miles which is my back up plan in a few months unless they make it easier to earn miles in the UK.

    • chabuddy geezy says:

      If you post on the award wallet blog you earn 5 points, this will continually reset the 18 month expiry.

      • flyforfun says:

        Thanks! That may be one worth investigating. Is it safe though? I’ve also been burnt getting hooked on these consolidator apps and then they withdraw from the market. I’ve been using Yolt for banking and credit cards, but then they stopped working with Amex and now they are withdrawing from the UK completely. (Thanks Brexit!).

    • Paul Pogba says:

      You could book a stay through Rocketmiles for a Aadvantage credit.

    • John says:

      I’m in a similar boat. I have AA miles as a legacy of membership of the US Airways programme, but I don’t see the point of now having two One World based schemes. I earn enough to keep the miles active but need a useful way to empty out the miles (only around 40,000 odd), any ideas?

      • Colin MacKinnon says:

        40,000 is one way in business class Tokyo to Tahiti.

        Or 70k from Europe to Tahiti!

        I’m looking at cashing out IHG points for AA miles, since IHG is moving to fixed rewards and I have no IHG earning card anymore 😉

        • Rob says:

          What is Etihad one-way in Business from London to Abu Dhabi? This is one AA redemption perk that Avios can’t get you.

          • mart says:

            i recently booked dublin-abu dhabi 42.5k aa miles plus £9.80 in tax
            i wish there was more ways to earn aa miles best program bar none

  • Concerto says:

    We had this with Lufthansa this year. I requalified for my status mostly on Miles & More credit card spend this year, which is new. And the status miles were doubled (capped at 30,000) which made it quite easy. Hope it continues next year. (I have the German M&M card)

  • Will says:

    One request Rob, as AA are very hard to earn in the U.K., it would be useful if you could highlight when Marriott to AA conversions are offering a bonus.

    If you do already then apologies 🙂

  • Alex W says:

    I think Amex MRs is a different prospect. Rob is talking about the airline branded card.

The UK's biggest frequent flyer website uses cookies, which you can block via your browser settings. Continuing implies your consent to this policy. Our privacy policy is here.