Over the last year, I’ve done a lot of free credit card consultations. I’ve noticed a pattern with the credit cards that people have on hand. The pattern would appear to be logical, but it actually isn’t.
The assumption is that I should have and use the credit card that is sponsored by my favorite airline.
- Someone who loves Southwest will have a Chase Southwest account.
- The United fan carries a Chase United card.
- The American Airlines frequent flyer has a Citi AAdvantage piece of plastic.
- The Delta flyer carries a Delta American Express.
And it seems like that makes sense.
But, it might not.
In each of those cases mentioned above, there is another card that potentially offers a better rate of return than the credit card that bears the name of the airline.
With the Southwest card, you’ll earn 1 point per dollar you spend and 2 points per dollar spent on Southwest flights. However, with the Chase Sapphire Preferred, you’ll earn 1 point per dollar spent and 2 points per dollar spent on travel and dining out.
Since Ultimate Rewards (earned with the Chase Sapphire Preferred) transfer 1:1 to Southwest, you’d actually earn more Southwest points using the Sapphire Preferred instead of the Southwest card.
The Sapphire Preferred also has a 7% annual bonus and a 0% foreign currency exchange fee.
The only two reasons that I can think of for having this card is to get the sign up bonus, and if you are going for a Companion Pass. Your spending on the card counts towards the Companion Pass, but not points transferred in from the Ultimate Rewards program.
Much of the information regarding the United card is similar to that of the Southwest card. You’ll be able to earn more United miles by spending on a Sapphire Preferred than you can by spending on a United card.
The advantages of the United card include a free checked bag (could really add up if you fly United a lot and don’t have status), the primary car rental insurance offered for United card holders, and some cards offer a complementary lounge access or two.
The American Airlines Citi card offers 1 mile per dollar spent and 2 points per dollar spent on American airlines. However, if you had the Starwood American Express, then you can get 25,000 American Airlines miles out of every 20,000 points transferred. This means you’ll essentially earn 1.25% across the board on your spending. That sure beats the 1 point per dollar spent.
Reasons to have this card (other than the bonus): If you spend a lot on American Airlines, that 2 miles per dollar might add up to be worth more than the other benefit of the Starwood card (but you could have both and use the Starwood for everyday purchases).
All American Express credit cards that earn Membership Rewards points (like the Premier Gold card or the Platinum card) transfer to Delta. While on the surface it would look like all cards earn a 1:1 spending ratio (with 2:1 for Delta spending on the Delta AMEX), Membership Rewards frequently offers 30 – 50% transfer bonuses to Delta.
It would be a horrible feeling to spend 50,000 on your Delta card and end up with 50,000 Delta miles only to find out that if you had spent that on a Membership Rewards card, you could have 75,000 Delta miles.
Again, the Delta card is one that offers a free checked bag, so there are advantages to this card.
The Shopping Portals Factor
One final factor to consider is that it seems like you can earn more bonus points through the Ultimate Rewards or Membership Rewards booking portals than you can with many of the airlines directly. I haven’t done a thorough analysis, but this does generally seem to be true.
As you can see, there are circumstances for having an airline branded credit card. But you’ll need to look closely at your spending patterns because it’s quite possible another card will have better earning rates for that program and offers you a lot more flexibility.
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