Or I should say that there are two types of credit cards that I find especially lucrative and I find myself drawn to and using. This is a strategy that works for me (as someone who has been doing this for years) and that I think can work for anyone. So if you’re interested in the sport, do likewise.
I’ve said in the past that I know people want to hear more of my opinions on credit cards and while I’ve failed to write at least a little more about them… it’s pretty simple and I hate to be redundant.
Check out my post on how having more credit cards can affect your credit score (positively). And my post “A Data Driven Look At Credit Scores“.
In short, I have no problem trying out new cards and earning miles. But the system I rely on is two fold:
American Airlines miles & Chase Ultimate Rewards points (and then transfer to United)
Why?
1) These are the two main programs that don’t pass on fuel surcharges.
People who start out in this hobby can get burned and discouraged early on when they go to redeem miles for their first family trip to Europe and end up paying $600+ per person. $600 for an award ticket is absurd.
Now think about it. My last roundtrip to Oman (via Europe) was $200 roundtrip without miles! That’s definitely not normal but with the consistent $300 roundtrips to Iceland and London, the $400 pp sale to Milan, $400 tickets to Israel and Moscow, and many more examples of non-mistake fare sales for amazing prices… it’s totally reasonable that someone in this hobby can do better than $600 without miles.
Furthermore, they could have gotten a card like the Barclay World Arrival which gives $400 towards travel and could have gotten one of those $400 tickets for free. If you’re getting a card anyways, using a bonus for a $600 flight is a complete waste of opportunity.
But the main point is that you could have gotten miles that don’t pass on fuel surcharges. Full disclosure, Europe does have high airport taxes and you still have to pay taxes. But for example, our roundtrip to Europe using AA miles was $130 per person. Not the best but way better than $600!
The deal with fuel surcharges.
With United:
- When using United miles you never pay fuel surcharges.
and with AA:
- When using AA miles you don’t pay fuel surcharges on over 20 airline partners (including AA and US Air flights).
- The only airline you would pay fuel surcharges on is British Airways. Which isn’t a big deal as I’ve flown to Europe multiple times using AA miles and never flown BA or paid fuel surcharges. I’ve mostly flown on AA, US Air, and Air Berlin, all using AA miles.
2) Many different earning options
One thing I like about both AA and United is the fact that I can rack up points in multiple ways. For example…
Earning AA Miles with credit cards:
- American Airlines personal card
- American Airlines business card
- American Airlines Executive card
- SPG card (transfer to AA 20,000:25,000)
And earning United miles with credit cards:
- United personal card
- United business card
- Chase Sapphire Preferred (transfer to United 1:1)
- Ink Bold (transfer to United 1:1)
With just these 8 cards I could earn 180,000 AA miles and 200,000 United miles!
For me this is a bigger deal than spreading out my miles by transferring to a ton of different programs. After all, there are a ton more possibilities that open up by having more than one credit card bonus worth of miles. For example, there are crazy routes using United miles like having a stopover in Africa on the way to Tokyo for 70,000 United miles, which is too much for one card.
So I don’t like to spread myself thin. Earning a lot in one program is a big deal for many big/creative awards.
3) The best redemption (but in different ways)
I’m not saying that United has a good elite status program, but in terms of having miles; AA and UA have the best redemptions over all. Of course, not having fuel surcharges makes things a lot easier. And of course there are many other amazing redemptions within other programs. Some of my favorite redemptions come from the best Flying Blue redemptions, and best ANA miles redemptions.
But the strengths of AA and United are overwhelming.
Strengths of United miles:
United allows stopovers and open-jaws.
A stopover means that you can stop in a second location for as long as you want. You could turn a ticket to Rome (which would be 60,000 miles roundtrip), into a ticket at least to Rome and Istanbul and it would still be 60,000 miles.
On the basic level, it’s great to have two destinations. At the pro-level, it’s amazing as you can hack the price and see more than two places. It’s incredible. See United Stopover Secrets. And the other thing is that it’s consistent.
Strengths of AA miles:
The strength of AA is simple- its great prices. Off-peak to Europe is 20,000 miles and is 6 months of the year! Despite not allowing stopovers, some of the prices are so good that I’ve come up with a ton of routes that would save miles by booking multiple hot spot tickets.
Read The New Best Use of AA Miles.
AA’s prices are simply the best in many situations, but especially so in Business class and First class. Now I almost always fly economy, but recently I gave 6 examples of routes even I’d fly business class on, and in one case Business class was only 7,500 AA miles more! And that was for 13 hours of flying.
Even if you only fly economy, this is mainly to emphasize how consistently cheap their prices are.
100,000 miles is not the same on every airline. Right now a flight to Istanbul would be 40,000 miles with AA miles and 75,000 with Air Canada miles. Whose miles would you rather have 100,000 of? So even if bonuses weren’t equal I would still favor AA in many situations.
4) Diversifies across the two best alliances (IMO)
Well, one of them is objectively the best in terms of being the largest. Star Alliance has 28 full airline members (and 39 smaller affiliate), and the other two alliances have 15 and 20 airlines. Simply put, Star Alliance reaches more destinations, has more flights, and has more award options.
But the main point is that having miles in two different alliances is a good thing. When you can’t find awards for the flight you need, check the other alliance.
United miles can book flights on all Star Alliance airlines, and AA can book on OneWorld airlines. See Master Chart Of Sites To Search For Award Availability.
Conclusion
I don’t only use AA and United miles, but it seems like it makes up 90% of my redemptions, and 90% of what I recommend to others. I’ll take all low hanging fruit, but all things being equal, this is my strategy.
Drew, when I search for availability to Europe on AA.com…British Airways almost always comes up. What cities can I fly from LAX to Europe, Middle East, Africa, etc. without using BA (or stopping in LHR)? The taxes are way too high. Thanks
DUS (on airberlin) and MAD (on Iberia). Iberia award availability won’t show on aa.com – need to call AA or search on iberia.com, qantas.com, or ba.com to see it.
If you’re willing to do a domestic layover in DFW, ORD, MIA, NYC, CLT, or PHL, you’ll open up more options.
Thanks Robert, I’ll check that out!
Very true for me as well. I have close to 0 miles/interest in Delta currency, although it did seem to improve a bit this year. Many of my redemptions take me to Japan, and JAL/ANA is exactly what you said, *A and OW. Can’t have enough of em. Thinking about going on a spree of those citi/barclay cards for the AA miles…
Nice post. For travel within the Americas (no fuel surcharges) funded with transferable points, I’d also look at using Singapore miles (more flexibility in terms of low change fees than United and some cheaper redemptions such as Hawaii) and BA Avios (which you wrote the “book” on). For travel outside the Americas, one could certainly do far worse than a stash of AA and United miles!
So will you be publishing a Complete Guide to American Airlines miles? It is so great to have all your advice in one place!
Thanks for creating a travel hack blog for the rest of us who value getting somewhere cool more than status. I’m so appreciative!
How soon after getting the bonuses do you cancel the cards? Do you cancel all your cards after getting the bonus? Are there any cards you keep “forever”? Do you have a post explaining the process of getting/canceling cards?
Why are you in a hurry to close a credit card you get got? One rule is you do not ever close a credit card as soon you get the bonus. You will look bad with the credit card company. You need to approach this logically. Most credit card offers have the 1st year annual fee waived. So why not keep it for 11 months and rack up as many points as you can before closing the credit card. When you hit 11 months, ask yourself the question. Do I really want to keep this card and pay the annual fee? If it’s no, pick the phone, call the 800# in the back of the card and tell the customer rep, I want to close the credit card. He/she will ask you why. You say because I don’t want to pay the annual fee. Simple like that. They could make you an offer to keep the card (waive the annual fee again, etc…). Again ask yourself, Do I really want to keep this card?
Are there any cards you keep forever? Yes, the ones you don’t pay an annual fee that earn you points or cash back.
Thank you Alex. I am in no hurry to close the card. I was just wondering if you guys have a system since it appears that you get a lot of cards, which also looks bad in your credit report.
can you Chime in on the current situation with Flying Blue blatent closing of peoples accounts for transferring and redemption of Citi and MR points
Drew,
With the AA and UA cards do you use them for everyday spend or only use cards with bonus categories? Also, do you MS with the AA and UA cards to “buy” miles at a lower cost?
I would like to second the request for a complete guide to American airlines miles. I have learned a lot from your posts about united and Avios for example, but I’m quite fuzzy on how AA miles work— I’m not even clear on whether it’s a distance-based or region-based program.
It would be helpful if you could give some advice on how to use AA miles if you don’t live near a OneWorld hub. For example, we live halfway between DEN and ABQ. Can we take advantage of the 20,000 mile off-peak trip to Europe, or do we have to do “positioning flights”?
I love your blog, and I’m really impressed with the ingenuity of your “hopper” and “round the world on three credit cards” routes, but we are older and don’t have the stamina for this kind of travel. Our ideal is to go somewhere, spend a couple of weeks, and return home. And it will probably be off of the beaten path. I don’t think you’ll find us trundling along with the mobs at famous sites in big cities. Thanks.
Love the website, analysis spot on (amazing how brilliant people are when your positions agree with them!). I am getting back in this game after being an early adapter to the FF world when they first started in the ’80s. Doing many of the CC things you talk about now. Here is my question: I have 930,000+ lifetime AA miles. I would like to get 1M. I am even in the position of (Gasp!) spending some money to do it.
Do you have a recommendation of how to get there other than the obvious brute force way? Like to do it in 1-2 years. Europe best, will likely be scheduling at least some of the travel for a family of 5 good road warriors. Thanks if you have some thoughts!
I am leaning towards the Citi AAdvantage card for their 50,000 bonus miles on $3,000 spent in the first 3 months. Is it possible to have my wife open up the same card as well to earn twice the bonus miles? I’m very new to this. All I’ve ever had is an REI card before.