American Airlines has two banks that issue their credit cards in the U.S. Barclays markets cards inflight and in the airport (but not within 100 feet of an Admirals Club) while Citibank markets their cards through the rest of the channels.
That’s great for customers because it’s created competition, I even used to hear flight attendants pointing out that if you had a Citibank card you could still get a Barclays card through them.
Last summer Citi adjusted the benefit of their primary AAdvantage consumer card, adding two new bonus categories for spending and introducing the ability to earn a discount on American Airlines travel through card spend. So I’ve been waiting to see what sort of updates would be coming to the Barclays AAdvantage cards. There are several changes that go into effect May 1.
Overall I think these are much more interesting than what Citi announced last summer. Not everyone is going to like them (though I think I come out way ahead with my Aviator Silver card), but they make logical sense from the perspective of wanting customers to use the cards for ongoing spending rather than just signing up for the cards and getting benefits like free checked bags and earlier boarding.
Instead they’ve got some clever ways to get customers to use their cards for everyday transactions, and also to encourage them to take the card out to improve the flight experience.
Barclays Introduces Flight Cents
Customers can choose to ’round up’ purchases to the next dollar and use the extra spend to buy American AAdvantage miles at 2 cents each. They set a dollar limit per billing cycle, up to $500, where they want to do this. For those who don’t want to participate they just won’t set a monthly limit for the benefit.
A year and a half ago I was targeted as part of a test of Flight Cents and was able to buy miles at just one cent apiece through the program. That was huge.
I value American miles at 1.4 cents apiece so don’t recommend buying for two cents.
However dealing with readers and award booking clients I know that many people do this all the time. Indeed they even buy extra miles in conjunction with purchased tickets for more money than that. You’d think elite customers and credit card customers are the savvy ones who would pass on the offers, but the reverse is true. These are the people who like American AAdvantage miles and will pay more than the average frequent flyer collector to accumulate them.
Indeed the fact that this went from a beta test to a regular feature of the card tells me that the numbers were good in testing.
Dan Dougherty, Barclays’ Managing Director of Airline Partnerships, tells me that during testing cardmembers were highly engaged with Flight Cents, and they saw a lot of tipping to get round up one cent over a dollar to maximize the benefit, and a lot of gas pump activity doing the same thing. Cardmembers seem to keep the product top of wallet and use it daily to take advantage of the benefit.
This benefit lets people buy more miles at a discount compared to American’s regular price. Now perhaps 8 months of the year they’ll sell miles for around 1.8 cents apiece, though getting that price usually requires a large purchase of miles. This lets customers get somewhat similar pricing in smaller increments.
Companion Ticket Being Re-introduced
One hallmark of the US Airways Dividend Miles Mastercard that Barclays issued was that the card came with an annual companion certificate where you’d buy one qualifying ticket and you could bring up to two companions on the same itinerary for $99 plus tax each.
That benefit went away with the changeover from Dividend Miles to the Aviator Red card. However a companion certificate, which allows you to bring a single companion at $99 plus tax, will be earned starting May 1 with $20,000 in spend each year.
The premium Aviator Silver card already offers a companion certificate. It required $30,000 in annual spend. Since the Aviator Red card is going to get it with $20,000 spend, the spend threshold for the Silver card’s benefit is being reduced to $20,000 spend as well. The Silver’s companion certificate remains valid for up to 2 companions at $99 plus tax each.
Additional Changes to the Aviator Red Card
The card’s annual fee is going up from $95 to $99. The card gets a new $25 statement credit each anniversary year for inflight wifi purchases on American Airlines flights. And they’re eliminating:
- The 10% rebate on redeemed miles, worth up to 10,000 miles per year
- The $100 American Airlines Flight Discount after $30,000 in purchases in a cardmember year
In addition, legacy cardholders from an old US Airways offer who receive 10,000 bonus miles each year at card renewal will be losing this benefit. Barclays tells me they will “deliver the last 10,000 mile anniversary bonus” coinciding with when each eligible cardmember pays their new $99 annual fee for the first time.
Roughly speaking the card loses 10,000 miles each year you redeem 100,000 miles from your account, picks up a companion ticket at $20,000 spend (which is better in my view than a $100 discount after $30,000 spend), and picks up the Flight Cents benefit. By the way I’m hearing Citi is losing the 10% rebate also the question then is do we get value added in exchange?
Whether you see these changes as positive or negative depend on whether you’ll spend to obtain the companion certificate and whether you value buying American miles at 2 cents apiece. I suspect there will be more people disappointed to be losing the 10% rebate on redemptions but if Citi is losing it too then that part may have been inevitable.
However what I can appreciate is that the changes are clearly geared towards getting people to use the card every day (Flight Cents) and for a significant spend over the course of the year (companion ticket). This shifts the product from one that gets you checked bags and early boarding, but you can stick in a drawer, to one that many cardmembers will use. (No doubt some will decide that without the 10,000 annual mileage rebate it’s no longer worth keeping, but most are likely customers not spending much on the card to begin with so I imagine that’s folded into the calculation.)
Additional Changes to the Aviator Silver Card
You can’t apply for an Aviator Silver card directly, this is the Barclays premium card that’s offered as an upgrade to Aviator Red customers.
I’m an Aviator Silver cardmember and I spent $50,000 on the card last year. I was disappointed when it was announced the card would no longer earn 6000 elite qualifying dollars for $50,000 spend, and instead just 3000.
American Airlines benefits are richer with Silver than Red, for instance priority boarding and checked bag benefits apply to up to 8 passengers on the same itinerary.
The card already offers incremental benefits for spending:
- 5000 elite qualifying miles after $20,000 spend in a year
- $99 companion ticket (valid for up to 2 companions at $99+tax each) after $20,000 spend in a year (effective May 1, being reduced from $30,000 spend)
- 5000 more elite qualifying miles after $40,000 spend in a year
- 3000 elite qualifying dollars after $50,000 spend in a year
The card’s annual fee is going up from $195 to $199, a $4 increase. And it too loses the 10% rebate on miles redeemed (up to 10,000 miles annually).
However it’s getting new benefits in addition to Flight Cents:
- $50 in statement credits each cardmember year for inflight Wi-Fi purchases on American Airlines operated flights.
- $25 in statement credits for inflight food and beverage purchases each day that you fly American Airlines operated flights
This last benefit is huge for regular American Airlines customers, at least those who find themselves in economy. To be sure, sandwiches are only available as buy on board on flights 3 hours or longer. And Executive Platinum and ConciergeKey members already get a free snack and drink when seated in economy.
However Barclays is buying the snacks and the drinks for Aviator Silver cardmembers. And those who are not traveling with family I suspect will be picking up drinks for their row quite often.
Here’s what’s brilliant about that: Aviator Silver cardmember picks up the tab for drinks. Seatmates naturally ask how they’re able to get free drinks on American, and that very naturally leads to a conversation about the credit card — just as a flight attendant is about to make a pitch for an American Airlines card (albeit for the Red rather than the Silver card). It’s great peer endorsement, and it’s demonstrating the benefits of the card in action. I would love to see the data on how use of the Silver food and beverage statement credit correlates with inflight applications.
As for me, if I fly American 50 days a year that’s potentially $1250 in food and beverage I can consume — even mini bottles to take with me for later, I suppose. And the statement credit doesn’t know whether you’re in first or business, I’m going to have to sort through how to use the card for buy on board even when I’m up front!
Changes, Good or Bad?
The loss of the 10% rebate on redemptions, up to 10,000 miles each year, is disappointing. Citibank should be losing this benefit as well. Annual fees go up $4 a year.
The cards become a bit less valuable just to have and never use, although they still make sense even that way for a regular American Airlines flyer who doesn’t travel enough to earn elite status.
But you’re going to start pulling the cards out for inflight internet, thanks to the statement credit, and pulling out the silver card inflight to cover buy on board food and drinks. This last is a big plus for someone like me that flies American all the time.
There’ll be more companion tickets out there, which is great. As for Flight Cents I’m not going to use it myself though I know some people will.
Ultimately how you see these changes depends on how often you fly American, I think, and how much you want American AAdvantage miles. And from the bank’s perspective that’s the right tradeoff since they want the customers who will use the card on American and to earn American miles and not just sticking it in a drawer.
Would you give an example of how Flight Cents works
Flight Cents made a little sense when I was doing the promo at 1 cpp. Doesn’t anymore.
I’ll collect my last 10K from the US Air card and drop it.
Gary, as a PHL hub captive I fly American all the time as well. Every frequent flier I know has the Silver Aviator card. You hit the nail on the head about buying drinks during the flight with the Silver card. It is a brilliant move by Barclays, they will have to stock a lot more applications on each flight (and probably more alcohol as well). I am surprised they went as high as $25 a day, but if you want the Silvers to buy for their 2 seatmates, I guess that number makes sense. I am curious to see how it works out, but this is definitely a unique marketing strategy.
what are the companion ticket restrictions (lower 48, economy only etc. )
@Daniel – spend $1.50 somewhere and they round the charge up to $2, with the other 50 cents going to buy 25 miles for your AAdvantage account
Losing the 10% rebate and the 10,000 mile anniversary bonus makes this card one that I will retire. Need to sort through when that is so I retire it at the right moment. This was a good run. I was getting 20,000 miles a year for $95… that’s 0.475 cpm
@ Gary — Fortunately, I closed my garbage Silver card.
Yeah I’ve been wondering when the 10,000 anniversary bonus was going away, and now finally have my answer. I will do the same as the above previous poster, and collect one mile bonus before canceling the card.
I”ll be dropping the card but then it wasn’t worth putting spend on so I am sure Barclays won’t care. I am mildly annoyed since i just paid my AF but I think I can cancel now and get a refund. I am hand baggage only so the only reason I kept the card was the 10% refund and the very slight priority boarding the latter of which is not enough for me to keep the card. I never check luggage so no benefit to me there. Given the state of AA’s award availability and rumored possible loss of Etihad relationship there is no way in heck I”d pay 2 cent per AA mile. That said props to Barclays for trying something different. Of course that is what some said about the Arrival Primer card….
Barclay card was good for the initial bonus, and that is it. Cancelled mine last week and will not look back.
Loss of 10% back sucks, especially if Citi is dropping it too.
As always, changes are bad news (takeaways) especially the 10k rebate though I rarely redeem on AA. However the WiFi credit will be handy for the next family trip. Not worth upgrading from Red to Silver though…
Interesting how BofA can offer the $99 companion ticket on AS with $0 spend requirement but Barclays expects 20k spend. Not gonna happen and thus not driving business to AA.
What’s behind the $4 increase in the annual fee. It’s such an odd jump.
Losing the 10% rebate on used miles is huge.
Gary are you sure Citi cards are also losing the same benefit?
When will the cut happen for Citi cards?
I don’t see the value in the silver anymore. EQMs aren’t the problem for me, it’s EQDs. So this year I’ll spend to get platinum pro but I’m only getting miles/copay upgrades on my routes, and those that clear in advance don’t require status. Spend $200 just to get inflight food? Most of the time the airport food is better.
They must think everyone in love with AA miles. But if you already have a million, why hassle for more.
I was only keeping card for 10% rebate because I am always redeeming >100K annually. Will drop the card now after booking another trip on Fri.
How AA will making money from CC business after all these changes?
$20k for a companion certif, AS and DL give you one for $0 spend.
This was my old US Airways card that I kept because of the 10k yearly bonus. Will ditch it after I get my last bonus next year. I fly Delta now and just got their card. It was good while it lasted.
I’m in the same boat as Kodoma. Only reason I kept the aviator card was for the 10k anniversary bonus grandfathered from US Airways days. Will ditch it unless they give a convincing retention offer.
AA is only profitable because they can sell miles.
But makes it so very difficult to redeem those miles for decent value.
Almost impossible to find saver fare any where…
It doesn’t matter how easy it is to earn AA miles if you cannot find decent use for it.
Something has to give… I stopped looking for AA saver fare now…
Come on, you can’t be serious – what kind of a moron buys AA miles at all, never mind at 2 cents per mile? Jeezus.
I’ve kept the Red for years because of two reasons:
– the annual 10K bonus at renewal (grandfathered from the old USAir card)
– the 10% rebate (up to 10K/year) on redeemed miles
The things being “added” are a joke. By killing those two valuable benefits, it’s a very easy decision to kill this card.
I just sent secure message to cancel card and get back recently paid annual fee.
On a B737 there will be no drinks and snacks left after row 9. Sucks for me as I prefer the exit row.
If the 10% miles rebate is going away, I wonder if that means the reduced cost award tickets for certain cities each quarter are going away as well. I’ve actually used that twice to good effect. This has been a sock drawer card for me, where I kept it for the benefits rather than to spend on, so I doubt Barclays will weep when I (likely) cancel.
I didn’t use your favorite benefits mentioned, but did go to quite a bit of effort to meet the 50K spend to reduce the minimum cost of EXP to 6000 EQD. I ended up spending more than I would have had to, but still it was a significant benefit for me. Now the card is no longer as valuable (cost of EXP went up $3000, and offset went down $3000), I’m “grandfathered” in for a $6000 offset this year. Anyway, if they were wanting people to put spend on the card, they gutted the one thing that was likely to insure that happened.
No annual 10K bonus at renewal is a deal killer on this card.
I received my 10K miles on my Red card with the statement ending in May. Does it mean I can also get 10K in May 2019, and then proceed to cancel the card?
I’ll drop/downgrade my red aviator card as well after I get my last $100 voucher. First the loss of earning EQDs, now the loss of the 10% mile redemption feature. No more reason to use it. Used to have the old dividend miles card but these changes made me move all my transactions over to Chase.
to get the food & beverage credit for silver card when flying AA would you have to purchase the ticket with the barclay silver card or does it apply regardless the card you used to buy the aa ticket?
The only worthwhile thing under discussion in this post is the 10,000 mile rebate. This card is now useless to me.
Has anyone done the math on how absolutely stupid and worthless the “Flight Cents” gimmick is? So I pay $14.25 for something and I get the privilege of buying 75 cents worth of AA miles for 2 cents per mile?
Wow! If I do this 5,000 times (spending $71,250) I wind up with the opportunity to pay $37.50 for 1,875 miles. Is there anything, anywhere in the world of points and miles marketing hype so idiotically pointless?
That doesn’t even consider the point that AA miles are not worth 2 cents in the first place, so the whole thing runs at a net loss.
Ba bye barclays. Only reason we had card was the 10k bonus and 10k rebate on two cards. Why would I keep this card when I avoid aa like the plague.
This decimates the Red card for me. I was getting the 10K anniversary points plus the 10% rebate, so 20K miles for my annual fee. Both of those are gone.
I won’t put anywhere near $20K on the card, since AA miles aren’t worth enough to put that much spend there, so no companion cert for me. As dicsussed, the flight cents are overpriced.
I’m lifetime Gold, so I already get the early boarding and free checked bag benefit anyway.
So about all that leaves is the wifi credit, and even that is capped at $25.
There’s literally no reason for me to keep this card.
On a practical note, Gary, do you know how the 10% rebate will be phased out? Do I have only until May 1 to earn that? Or December 31? Or card anniversary?
The only benefits this card had was that it was Chip & PIN and useful for EU travel when buying things like train tickets or gas (along with PenFed Visa card) – but the loss of the 10k point rebate kills it for me. Not worth the $99 annual fee anymore, unfortunately.
I hate to sound like a broken record; but like many others, the Red Aviator card will crash and burn due to the loss of the 10k yearly bonus and rebate on points used.
$25 in statement credits for inflight food and beverage purchases each day that you fly American Airlines operated flight
Can you comment if you must buy your ticket with the Barclays Silver card to get this benefit or if it applies if you own the card regardless of which card you used to buy your aa ticket?
I agree. The rebate and 10k bonus will sink the card. I’m done.
@swag – I agree completely with you, the Red card held limited value for me before, now it will hold zero value for me. Strange that they’ll lose a customer over a handful of points.
@kevin p – does not appear to require buying the ticket with the cards
The 10% miles back was the only reason I kept this card. I have the Citi with Admirals club so this allowed me the best of both worlds. Guess I’m glad I booked my big trip with AA miles already. Just one more reason to use before you lose them.
The 10% miles back and the PIN were the only reasons I kept this card. I have the Citi with Admirals club so this allowed me the best of both worlds. Guess I’m glad I booked my big trip with AA miles already. Just one more reason to use before you lose them.
“Citibank should be losing this benefit as well. Citibank should be losing this benefit as well.“
Why did you choose the word, should? Does that mean you’re only predicting this because you think Citi won’t see a reason to keep it after the aviator changes?
You could have written, will, instead.
To me it’s the only reason to keep the card.
Gary,
Thanks for the news. Just wondering if you are aware when Barclays is going to send out notification of these changes to their customers as not one person of my small sample size of 10 has received notification of these changes and if they are happening effective May 01, 2019 that is only approximately 60 days from now which is very short notice for the removal of benefits. In addition, I can’t seem to find a press release from Barclays or American Airlines detailing these changes either. Would you be able to point me to this by chance?
Thanks
Ugh! What a shame…10% rebate gone and no more 10K annual bonus. Forget it! We don’t travel but a couple of times a year and use our miles for business or First so we don’t really find value in boarding priority and checked bag fees. We’ve have two of these cards between us and two more recent Citi AA Biz cards. Nothing enticing at all for us to spend or keep either at this point. We’ll keep one out of four. Would love suggestions for downgrading these to avoid loss of significant credit lines. We’ve already downgraded a couple of cards to Arrival and Citi Bronze. Are there any fresh choices to consider? Thanks, Gary and readers!
Losing the 10K annual benefit upon renewal? I’ll be dumping this in a red hot second. I struggle to use AA miles out of Houston for the destinations/cabin that I’m interested in—actually it was a question value already with the 10K given the difficulty I have using the miles.
“Daniel says:
February 27, 2019 at 7:01 pm
What’s behind the $4 increase in the annual fee. It’s such an odd jump.”
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$4.00 increase for thousands of card holders equals thousands of extra dollars for the bank – aka – greed!
The annual fee for Aviator Red was $89 for my last renewal in Sept. So they’re jAAcking it $10.