These Credit Card Devaluations Affect My American Airlines Loyalty

by Chris Dong

As a New Yorker, I’m not hub captive to a particular airline. However, I often choose to fly American Airlines and Oneworld. For all the negative publicity that the airline gets, I still value two things: frequent flyer upgrades and American’s Oneworld partners. And since American isn’t the popular choice in the New York City metro, I probably get upgrades that the equivalent Delta flyer wouldn’t get.

However, there were two recent unrelated credit card devaluations that negatively impact my loyalty with American Airlines. These are cards that I carry in my wallet and actively use, some to a lesser degree than others. Those cards are the American Express Gold, The Platinum Card from American Express, and the Citi / AAdvantage Platinum Select World Elite Mastercard.

First, let’s go over what these card benefit devaluations were.

American Airlines Co-Branded Cards Lose 10% Rebate On Mileage Redemptions

Here’s how the card benefit worked. Cardmembers would get 10% back on redeemed AAdvantage miles each year, with a cap at 10,000 miles returned to your account. You could max out on this benefit by redeeming 100,000 AAdvantage miles in a calendar year.

Cathay Pacific Business Class onboard the A350. Source: Cathay Pacific

You can redeem AAdvantage miles on Cathay Pacific’s A350 business class product.

This was my favorite perk of the Citi / AAdvantage Platinum Select Mastercard. In fact, it was the primary reason why I kept the card. Well, it was announced that this 10% mileage rebate is being eliminated on May 1st, 2019. Both Citi’s cards and Barclays’ Aviator cards, the two issuers for American, are losing the benefit.

Credit Card Devaluation #1.

Purchasing American Airlines Gift Cards No Longer Triggers AMEX’s “Airline Fee Credit”

Among the many great benefits of the The Platinum Card from American ExpressThe Business Platinum Card, American Express Gold Card was an annual “airline fee credit.” Each year, you selected an airline to receive credit back from incidental airline fees (like checked bags, airline lounge memberships, etc.)

While it was excluded from AMEX’s terms, buying airline gift cards used to be an active loophole to trigger the benefit. (The fact that you had to use this loophole is an annoyance in and of itself, but that’s a separate issue.)  However, recent data points show that as of early February, this loophole no longer exists for American Airlines gift cards. 

American Airlines Virtual Gift Card Photo

AA gift cards no longer trigger a credit from AMEX.

The reason is that gift cards used to trigger as “Airline Miscellaneous Taxes & Fees” on your AMEX statement and therefore AMEX would have no idea you were purchasing a gift card. Now, American gift cards are clearly coded as what they are, gift cards.  No word yet if other airlines will follow suit.

Credit Card Devaluation #2.

What’s The Impact Of These Credit Card Devaluations?

For many of you, maybe not much. However, I personally put significant value in the benefits above and it disincentives me to use the AAdvantage program and will have me fly American’s competitors more. Here’s why.

Cancelling The Citi Card

With the Citi / AAdvantage Platinum Select World Elite Mastercard, I don’t value any of the other perks that come with the card, except for perhaps trip delay and cancellation coverage. Priority boarding and free checked bags already come with my American elite status.

With the card’s devaluation come May, I am incentivized to burn more of my AAdvantage miles now to receive my rebate. Then, I’m cancelling the card.

Shifting My AMEX Airline Fee Credit Away From American

With the American Express cards, I have a total of $300 in airline fee credits for 2019 ($200 with the Platinum Card and $100 with the Gold card). Instead of cancelling these cards since I value its other many benefits, I will simply shift over these airline fee credits to another airline.

The American Express Centurion Lounge - Las Vegas

I still value Centurion lounges, a benefit of the AMEX Platinum.

Normally, AMEX requires you to stick with the airline you select at the beginning of the year to receive the credit. I selected American back in January. However, I was able to change my airline by simply calling card member services. The new airline I selected to receive the airline fee credit? Delta. And I’ve purchased those Delta gift cards already.

The Upshot

Two recent credit card devaluations, one with American Airlines’ co-brand card issuers and one with American Express are dissuading me from flying American or its partners. The latter situation isn’t necessarily American’s fault, and I recognize that.

Is it a complete dealbreaker? Will I no longer fly American because of this? No, of course not. As mentioned, I still personally value some of American’s frequent flier benefits. But it’s small shifts that can influence consumer behavior over time. And I’ll be flying Delta more in the near future.

Heck, with Delta’s best ever bonus offers for its lineup of co-branded cards, I’m even considering signing up for one. Beyond the bonus SkyMiles, I don’t have status with Delta so the checked bag and priority boarding could actually come in handy. Since you know, I’ll be flying Delta soon.

Will any of these credit card devaluations impact your flying or mileage redemption behavior?

 

The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

9 comments
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9 comments

Byron March 5, 2019 - 2:12 pm

I look at what I am getting on the front end when I get a card, and something as measly 10% rebate is pittance. Give me those 60K miles and if the benefits outweigh the annual cost, the card will stay or go. It is that simple. Getting 6K miles back when I use those miles is not enough to keep me or lose me. Really, the value of those 6K miles returned to me is nothing.

Reply
Chris Dong March 5, 2019 - 2:17 pm

Sure, but I’m speaking about after having had the card for a couple of years. Love sign up bonuses like everyone else, but there comes a point when the card no longer provides value to you. And then the scissors come out. I’ll likely downgrade to the no-fee AA Citi card.

Reply
RJB March 5, 2019 - 2:28 pm

Took the 60 k miles sign p bonus last year. Losing the points rebate (10,000 miles a year) is a deal breaker because that covered the annual fee. no way I’m paying an annual fee for card that offers zero benefits to an AA platinum.

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Marriott Loyalist March 5, 2019 - 2:29 pm

These devaluations, coupled with the new requirement for $50,000 spend to receive AA credits going forward are really the most recent of a series of “death by 1,000 cuts” instigated by American’s totally out of touch management.

At a time when other large carriers seem to be recognizing that customer patronage and loyalty must be earned, not taken for granted, American is spiraling down the drain. I am considering cancelling my AA Silver card — $199 seems more than the thing is now worth — and transferring my new business and travel to Delta.

Enough of this nickel and dime nonsense! It’s high time consumers voted with their wallets and demanded more appropriate consideration from those with whom we spend our hard-earned dollars. American, you can take a hike — your planes will not be flying much longer.

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100K March 5, 2019 - 6:12 pm

Thanks Chris. I would not have thought about calling to change the Amex airline (since it closed Jan 31) but I just called and changed it away from American. They were very nice and didn’t hesitate to change it for me. I plan on cancelling my AA Plat Select Citi card as well. My brother is Ex Pl with AA and is fed up with all of the mechanical issues, delays, cancelled flights but says he gets upgraded more easily than on Delta so he’s sticking with it, as bad as AA is.

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100K March 5, 2019 - 6:16 pm

Question: if I downgrade to the no-fee MileUp would it likely trigger a credit check? I’m close to ending the Chase 5/24 rule so I don’t want to affect that.

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Chris Dong March 6, 2019 - 3:02 am

Nope! Downgrading should not affect your credit history or credit report. You will probably even keep the same credit card number.

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Boraxo March 6, 2019 - 1:26 am

For a pretty savvy blogger this seems like an overreaction. If you are getting upgraded all the time on AA you will be sorely disappointed on DL or UA. From any Ua hub it is rare even for 1Ks to get upgrades on popular business routes. So you will give up one of your best perks because you are upset about a card deval? Just cancel the card like everyone else.

Reply
Chris Dong March 6, 2019 - 3:06 am

If you read the post above, I mention that I’m still going to be loyal to AA — just not AS loyal if these card benefits remained. And I’m cancelling the card.

Reply

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