Airline Credit Cards Loyalty Programs (why miles don't matter)

[0TreeLemur]

The Atlantic published an article explaining how co-branded airline loyalty credit cards have turned airlines into something more like financial institutions that happen to fly planes on the side.  According to this article, 1% of US GDP is charged to Delta Sky Miles credit cards alone!  As someone with over 1 million butt-miles sitting on Borg airlines, I have often wondered why that doesn't seem to matter.   Now I know why, and I'm glad I own a Mooney.  Link to article:

https://www.theatlantic.com/ideas/archive/2023/09/airlines-banks-mileage-programs/675374/?utm_source=pocket-newtab-en-us

 

[Mark89114]

I have stopped using the credit card that accumulates miles, I am now on a Capital one card that gives me 2% unlimited back and I buy a LOT on my CC.  I can buy a lot of airline tickets.

The miles required to use them used to be reasonable and reasonably available.  Now they have some dynamic pricing models where you can fly for 20K miles on some days and 80K on other days, same legs.  Plus Delta pulled out of my home base so stuck with AA. 

Need to get my plane fixed......  

[toto]

I always have one or more airline credit cards, but honestly I don’t use them for purchasing. I rotate the cards as sign-up bonuses are available. I have an AA credit card that I used once to meet the minimum spend and got 75k points for it. Annual fee free for the first year. I’ll cancel when the year is up and apply for something else. 

[smwash02]

7 hours ago, Mark89114 said:

I have stopped using the credit card that accumulates miles, I am now on a Capital one card that gives me 2% unlimited back and I buy a LOT on my CC.  I can buy a lot of airline tickets.

This is my primary now as well. The only one that beats it is the BofA that does 2.65% on everything and 3.5% on travel and dining. (details here).

[GeeBee]

The AMEX agreement saved Delta Air Lines. It provided an impetuous  for AMEX to give Delta debtor in possession financing during bankruptcy in 2005 and it adds easily 500 million to the bottom line now. Without these card agreements fares would be much higher. Delta was the first with a loyalty card and it was a brilliant move. If you want to use them or not is up to you.

[Pinecone]

The article mixes up some things.

Points earned from using their card does not count to loyalty status.  They are just points you can "spend."  

Delta has, for a few years, had a loyalty program that combined miles flown AND dollars spend ON TICKETS WITH DELTA.  But, there were milestones of credit card spending where they waived the dollars spend on tickets requirements.   Since they also carried over unused (for loyalty level) miles, there have been some COVID years, where I "earned" a high status due to carry over miles and credit card use without actually flying on their airline.

The requirement for spending came about based on some people finding that they could make a high status for very little cost by doing some strange flight combinations.  That they were doing so was not the problem, but that they started websites on what they were doing and how others could also do so.   So the airlines added the spending requirement.

Delta just recently took that to the next level and just removed the mileage part and says you have to spend XX on TICKETS to get YY status..  But that can acually make it easier to earn high status for business travelers.  IIRC, to make Diamond (Delta's highest status), you have to spend $35,000.  In years past, I have done that on 3 trips (international and business class).  And I would do 10 - 14 trips per year.

Delta has the issue that there are too many high status fliers.  Unless you are Diamond, you can just about forget upgrades to business class.  And even Diamonds are not upgraded a lot of times.  They also just removed the lounge access for international flights for loyalty status.  In the past (and on all US major carriers) if you were second tier (Gold on Delta and United or Platinum on American), if you were on an international flight, you could use the airline lounges.  United is to the point they have separate lounges for those with loyality tier or pay for lounge access and those that are flying Business Class.

While I don't fly as much as I did in the past, I still fly a good bit.  I am Million Miler on United and Delta, and about 50K short of 2 Million on Delta.

[GeeBee]

The CEO of Delta announced yesterday some rollbacks to the new changes. Seems they heard from their loyal customers.

 

[LANCECASPER]

6 hours ago, Pinecone said:

Points earned from using their card does not count to loyalty status.  They are just points you can "spend."  

The Delta Reserve AMEX gives you the ability to get MQMs just from spending (miles toward Silver, Gold, Platinum, Diamond status)
I haven't looked over the recent changes, but most recently for every $30,000 annual spend on the AMEX you got 15,000 MQM (For 2023 it takes  25,000 MQM to reach Silver; 50,000 for Gold and 75,000 for Platinum)

[Mark89114]

13 hours ago, smwash02 said:

This is my primary now as well. The only one that beats it is the BofA that does 2.65% on everything and 3.5% on travel and dining. (details here).

I wonder if this is going to become a taxable benefit if you are using this card for business reasons?  Capital One required me to fill out some type of form.  I guess the IRS is busy looking for those $600 venmo transactions rather than the billions/trillions wasted elsewhere.  

[Pinecone]

5 hours ago, LANCECASPER said:

The Delta Reserve AMEX gives you the ability to get MQMs just from spending (miles toward Silver, Gold, Platinum, Diamond status)
I haven't looked over the recent changes, but most recently for very $60,000 annual spend on the AMEX you got 15,000 MQM (For 2023 it takes  25,000 MQM to reach Silver; 50,000 for Gold and 75,000 for Platinum)
 

OK, good to know. 

Hmm, spend $120K to make Silver. Cheaper to just buy some tickets.   Unless you spend that much.  Even with my airplane I don't spend that much on credit cards.

I have a Delta AMEX Platinum.

[smwash02]

41 minutes ago, Mark89114 said:

I wonder if this is going to become a taxable benefit if you are using this card for business reasons?  Capital One required me to fill out some type of form.  I guess the IRS is busy looking for those $600 venmo transactions rather than the billions/trillions wasted elsewhere.  

I'm not a tax person, but because you had to spend money to get it, it's considered a 'non-taxable rebate'.

Since most of my spending is business-related, I stick with the Cap1 2%. There's a new chase one that came out last year, Chase Ink Business Premiere, that's 2% and transactions over 5k are 2.5% I've been debating switching to, but the Cap1 waives the annual fee with a certain level of purchases and most of mine aren't over 5k so it works better for me.

[flyboy0681]

Read it and weep. Tucked away in a drawer are statements from 1987, one from the "original" AAdvantage program, the other from Marriott. The award levels will absolutely make you cry. I still have 3 millions miles/points between the two, but they go less than quarter as far as they used to. I'm lifetime gold  with American (which doesn't get me squat, but it used to) and lifetime Titanium with Marriott.

AAdvantage.pdf

Marriott.pdf

[LANCECASPER]

43 minutes ago, Pinecone said:

OK, good to know. 

Hmm, spend $120K to make Silver. Cheaper to just buy some tickets.   Unless you spend that much.  Even with my airplane I don't spend that much on credit cards.

I have a Delta AMEX Platinum.

Mistake on my part, 15,000 MQM for every $30,000 spend  ( I corrected my post.). Thankfully with your Million Miler status with Delta you have lifetime Silver.

[Fly Boomer]

1 hour ago, flyboy0681 said:

Read it and weep. Tucked away in a drawer are statements from 1987, one from the "original" AAdvantage program, the other from Marriott. The award levels will absolutely make you cry. I still have 3 millions miles/points between the two, but they go less than quarter as far as they used to. I'm lifetime gold  with American (which doesn't get me squat, but it used to) and lifetime Titanium with Marriott.

AAdvantage.pdf 758.7 kB · 4 downloads

Marriott.pdf 733.92 kB · 5 downloads

I had the highest level with TWA (if you have to ask, look it up) and, when AA took over, they were kind enough to provide me with lifetime Platinum.  It too is worth squat.

[Echo]

I have a wife that has parlayed cc points into business class airfare and countless nights at great destinations. It goes beyond hobby on this for her. There is a portfolio full of points/cards. It’s a beautiful thing. There are blogs on this stuff. I could care less, but love free travel. 

[PMcClure]

I fly a lot and am top tier on two airlines and have 2 cards that give points. I use the points for tickets for family. Based on actual use, I value the points at about $.015 per mile. They sure have made it more difficult to get perks but I still think the miles are worth it and better than cash back. The main reason is you can stack miles buy using bonus miles. I probably earn 2-3x the miles I spend or fly each year. So that makes the points worth $.03-$.045/mile.

[dzeleski]

I’ve started moving to hotel cards now that I travel with my J more than flying Delta. The last handful of years airline perks and miles have really been watered down a ton. I’ve had a Delta Reserve card for 10 years and mostly Platinum for that whole time. We will see what that back pedaling for the SkyMiles ends up being but I might end up canceling the card and focus on Marriot status/points.

[JayMatt]

fidelity is unlimited 2% cash back and can go higher depending on how much you have in a fidelity account. Their money market / savings account if you will, earns 5. something% apy. Toss that 2% in there and earn on it, adds up over time and makes a nice little vacation or plane upgrade.  

If you look at rewards points over cash back none of them are worth it. The prices on hotels are higher than you would pay if you just called them and they also don't offer the better rooms. Been there done that math, cashback is really the best way. 

Edited September 29, 2023 by JayMatt

[Echo]

2 hours ago, JayMatt said:

fidelity is unlimited 2% cash back and can go higher depending on how much you have in a fidelity account. Their money market / savings account if you will, earns 5. something% apy. Toss that 2% in there and earn on it, adds up over time and makes a nice little vacation or plane upgrade.  

If you look at rewards points over cash back none of them are worth it. The prices on hotels are higher than you would pay if you just called them and they also don't offer the better rooms. Been there done that math, cashback is really the best way. 

I believe it is about the initial bonus points you get when you sign up for a card (with a minimum spent in a time period)  THAT is how rewards points add up and trump a simple cash back deal (according to my wife...the expert  )

[Echo]

You have to book airfare about a year in advance as that is when the reduced fares become available and of course are very limited in availability.  Not "worth it" (to me) to be checking all the time, but ultimately a HUGE savings on air travel and motel rooms.

[Pinecone]

19 hours ago, flyboy0681 said:

Read it and weep. Tucked away in a drawer are statements from 1987, one from the "original" AAdvantage program, the other from Marriott. The award levels will absolutely make you cry. I still have 3 millions miles/points between the two, but they go less than quarter as far as they used to. I'm lifetime gold  with American (which doesn't get me squat, but it used to) and lifetime Titanium with Marriott.

 

The one night stay award is not that much different for many properties.  Mny are 25,000 now. But the multinight is much better, as now there is only one night.  Stay two nights, it is 2x the points needed.

One really big change that is annoying was, in the past the points requirements did not change for special events.  In 2015, wife and did the F1 race in Montreal.  The rooms were $450 for Friday and Saturday night, but still only 25,000 points per night.

I am lifeime Titanium with Marriott.  I have heard that there will be no more people getting lifetime Titanium.  Not the highest lifetime will be Platinum (the old Gold level)  When I made lifetime, back before Titanium, the program was not known.  Unless you knew someone who was lifetime Platinum, you would not find any info.  There was no publish criteria for it, and no one you could reach in Marriott knew.  When I made it, I got a new card in the mail.  No comment in the letter, just the here is your card letter.  So I got out my old card and compared it.  Same design.  Same name.  Same number.  Expiration, OMG, there is none.  And then noticed under the logo, in small letters, it said Lifetime.

I am lifetime Gold with United (Million Miler), so get lounge and free bookable ungrade to premium economy.  I got MM due to the merger.  United only counts base miles and miles on United aircraft.  No class of service, no code share, no partner.  When they merged with Continental, their program was based on Delta, which counted everything.  So United did a one time adjustment to match what you would have earned with Continental. So I jumped for 480K to 920K and make it pretty easy.

Lifetime Silver with Delta, which like AA Gold, gets you nothing.  But I am less than 50K from 2 million miles, that gets me lifetime Gold.  Which now, gets me virtually nothing.

 

[dzeleski]

4 hours ago, JayMatt said:

If you look at rewards points over cash back none of them are worth it. The prices on hotels are higher than you would pay if you just called them and they also don't offer the better rooms. Been there done that math, cashback is really the best way. 

Thats just not true and there are plenty of websites that already prove this out. The big caveat is generally you need to pick a brand and stick with them. The more you stay with them the more points multipliers you get. The higher status you get means more upgrades for standard rates. I regularly get suites with Marriot for standard rates. I accumulate enough points every year to get ~1 week of hotel stays every year. I usually get 2 free nights on top of that a year. All rewards models have moved to dynamic pricing models, doesnt matter if you are paying on the phone, or online, etc. I specifically take vacations during off peak times because its generally less busy and I can get more for my money. This all takes effort to do correctly, if thats not for you then there is probably a card that works better for your use case.

If you want cash and that works for you thats totally fine. But the points on a vendor card are only one tiny piece of the actual value of the card (assuming you actually use the card correctly).

The Fidelity card is restrictive: "2 points for every eligible dollar spent, which equals 2% cash back when deposited into an eligible Fidelity account to which your card is linked." All of the 2% cards generally have hoops to jump through to get it.
 

edit: https://www.forbes.com/advisor/credit-cards/cash-back-vs-flexible-rewards-points-how-to-decide-whats-right-for-you/
The chart at the bottom explains things well

[Schllc]

1 hour ago, dzeleski said:

Thats just not true and there are plenty of websites that already prove this out

I cant speak to hotels because I don't use them enough to worry about points, but i have been a delta SkyMiles member for over 20 years and the majority of my miles are from purchases that I make with my business card.  I have almost 2 million miles and have been platinum for several years.  I used to take a combination of actual miles flown as well as purchases but that seems to have changed.

The miles are nearly worthless now, 8 years ago when my wife and I took a trip to Europe, first class tickets were 150,000 miles and nearly all flights were open to the redemption.  Today they are 600,000 and severely limited options for when they can be used.  

I will be switching to a cashback card as well.  Even with all of that loyalty and spending between 250-500k a year for over 20 years i still cant go to the SkyMiles lounge, never get upgrades and now there are harsh limits for redemptions.  basically it now sucks.

[dzeleski]

5 hours ago, Schllc said:

I cant speak to hotels because I don't use them enough to worry about points, but i have been a delta SkyMiles member for over 20 years and the majority of my miles are from purchases that I make with my business card.  I have almost 2 million miles and have been platinum for several years.  I used to take a combination of actual miles flown as well as purchases but that seems to have changed.

The miles are nearly worthless now, 8 years ago when my wife and I took a trip to Europe, first class tickets were 150,000 miles and nearly all flights were open to the redemption.  Today they are 600,000 and severely limited options for when they can be used.  

I will be switching to a cashback card as well.  Even with all of that loyalty and spending between 250-500k a year for over 20 years i still cant go to the SkyMiles lounge, never get upgrades and now there are harsh limits for redemptions.  basically it now sucks.

You aren’t wrong about deltas points getting devalued but if you use them correctly you can get a ton of value. That being said they don’t tell you how to do it, and in fact they straight up hide it.

https://thriftytraveler.com/guides/points/tips-to-use-delta-skymiles/

I don’t use points for international travel, I find that it’s far better for domestic flights.

https://thepointsguy.com/guide/sweet-spots-delta-skymiles/

If you can be flexible with your dates you can get some pretty great deals but if you can’t they do tend to be difficult to use. I’ve gotten some insane deals out of their flash sales and have gone places I never would have. 

[Pinecone]

I don't use my points for free tickets, I use them for upgrading.  Many times I will call and the agent will look into alternate times/dates and find a fare with upgrade (booked) that works for me.