We take a look at how members can buy their way to elite status through credit card spending and how frequent flyers view frequent buyers.
Back in the day when elite programs were first introduced, the only way to achieve elite status was by flying. When American AAdvantage launched its Gold program, only the top two percent of flyers on American Airlines were invited to participate. United Mileage Plus introduced mileage thresholds as the way to elite qualification when it began its elite program, which has become the standard for elite programs today.
Elite status originally was designed as a way for the airline to recognize and reward its most frequent flyers with extra perks and privileges and remains a way to reward members' loyalty to the airline (or its airline partners). But the entrance of credit card partnerships to loyalty programs has changed the way the elite game is played. Now frequent buyers are also recognized for their commitment to a particular credit card, which causes some resentment from road warriors who spend countless hours up in the air. These frequent flyers are now competing for upgrades with someone who only had to swipe a card instead of a boarding pass for entrance into the ranks of elite.
Loyalty programs hook up
with credit cards
Continental Airlines was the first airline to introduce an affinity credit card when it launched the mileage-earning Gold MasterCard in November 1986. Cardholders could earn 2,500 bonus miles for signing up and another 2,500 bonus miles with first use of the card. And similar to the standard offer of co-branded credit cards today, cardholders earned one mile per dollar spent with the card. Holiday Inn Priority Club became the first hotel guest program to partner with a credit card when it launched its co-branded Visa card in April 1987 and in that same year, American AAdvantage introduced the Citibank AAdvantage card.
The airlines and hotels sell their miles and points to partner companies, and the biggest purchaser of miles is the co-branded credit card. Because of this arrangement, credit cards are the lifeblood of loyalty programs and have become more and more central to the continuation of the programs. As Gary Leff wrote in the December issue of InsideFlyer, "As long as [the airlines] don't mess with the consumer perception of the value in their programs, they're a perpetual money-making machine. And the engine that drives their businesses."
In the 24 years since the first co-branded credit card launched, almost every airline has a relationship with either MasterCard, Visa or American Express. Credit cards are widely viewed as the most important partnership a FFP can establish and it all comes down to cash--the revenue an airline receives from the sale of miles to the credit card company.
Show me the money or the reason
why co-branded credit cards
are so pervasive
According to United's 10-K report filed in March of 2009, Mileage Plus reports that it amended its agreement with its co-branded credit card with Chase, which "resulted in an immediate increase in the Company's cash position by approximately $1.0 billion, which included a total of $600 million for the advanced purchase of miles." In December 2008, American Express extended its contract with Delta and bought $1 billion worth of SkyMiles. In its 10-K, Continental reported a restatement of their agreement with Chase that included a sale of miles, "The Bankcard Agreement provides for a payment to us of $413 million, of which $235 million relates to the advance purchase of frequent flyer mileage credits for the year 2016." And Citigroup purchased $1 billion worth of miles from American Airlines in September of 2008.
While the airlines don't disclose exactly how much they are selling miles for, the price per mile is often based on a number of factors such as whether they are bonus miles used for acquisition purposes by the airlines, promotional miles such as double miles for grocery spending, and of course, the daily transactional miles. Ten years ago airlines were selling miles to major credit card companies for as little as .06 cents per mile. That has ballooned up in the airlines favor and most often that price hovers slightly above or below the one cent per mile range. This statistic has obviously been challenged by the advance purchase of miles by credit card companies since they have negotiated discounts for these advance purchases, allowing airlines to beef up their balance sheets and cash positions with this payment.
But the price per mile isn't the complete story with these extremely complicated partnerships as their agreements may also include allowances (the ability of the credit card companies to use the frequent flyer database for marketing purposes) and positioning on a member's email newsletter and statement. Whatever the cost is, it seems to be well worth it for most because it's rare for any credit card company to leave a direct relationship with an airline unless someone else bids higher on that partnership. Rolfe Shellenberger, who helped develop the first frequent flyer program (American AAdvantage) has said, "Airlines make atrociously scandalous profits from FFPs."
While the sale of miles are profitable for the airlines, credit card companies clearly benefit from the arrangement as well. They can use the miles to entice new cardholders with lucrative sign-up bonuses and encourage current cardholders to continue spending on their cards. Mileage credit cards tend to have higher than average interest rates, which translates into higher profits from cardholders who don't pay their card in full every month. Even when cardholders don't carry a balance, the credit card companies earn money from merchant fees whenever the cardholder uses the card (from one to four percent of the purchase price--and these fees have been going up) and from the annual fees charged to the cardholder.
Selling elite status
In the beginning, all miles were created equal but then the programs starting seeing miles differently and began to make a distinction between "bonus" miles and "elite-qualifying" or "status" miles. Bonus miles, such as the miles earned from buying a toaster with your co-branded credit card or staying at a partner hotel, do not reflect whether or not a member is loyal to the airline and therefore do not count toward you becoming an elite member. Only miles earned from flying with the airline and a select group of its airline partners count as elite-qualifying and determine whether a member has demonstrated loyalty to the airline and is eligible for elite status and benefits.
In 1999, Delta Air Lines first offered elite-qualifying miles for credit card spending with the launch of the Platinum Delta SkyMiles credit card (customers earned 5,000 Medallion Qualification Miles, or MQMs, after their first purchase). Elite miles with qualified spending was first broadly offered by US Airways beginning in 2003, followed by United Mileage Plus in 2005 with the Mileage Plus Platinum Visa Card and Continental OnePass in 2006. Just as elite flyers have to reach certain thresholds of flight miles or segments to qualify for elite status, it's only the very frequent buyers who can earn significant amounts of elite-qualifying miles. Spending a couple of hundred dollars a month on a co-branded credit card won't get you anywhere. But spend a couple thousand dollars a month and you can get a boost to elite status.
Frequent flyers vs. frequent buyers
Not everyone likes the fact that the airlines allow big spenders to buy their way part or all of the way to elite. There have been many discussions on FlyerTalk around earning elite status through frequent flying versus frequent buying. When asked, "Do you think frequent flyer programs should let members earn elite qualifying miles through credit card spend?", 44 percent of those polled said yes compared to 52 percent who said no. While the majority is opposed to being able to earn elite from plastic, the number of people in favor represents a sizable minority. Only four percent said they didn't care.
On one side of the argument are the road warriors who spend many hours flying and feel they have earned the preferential treatment and advantages of elite status. As one FlyerTalk member, gwilkins, laments, "I find it sad and discomforting that I'm sitting up in first class with someone who got their elite status by paying a few hundred dollars or staying at some hotels without actually EARNING it. I hope the airlines will move away from this practice and leave the first class seats to the folks who deserve first class seats, the ones who actually pay for them or fly the level of miles/segments to accrue elite status." In an interview with Tim Winship published a few years ago in the OAG, independent marketing consultant Stevan Grosvald, Principal of Grosvald & Associates, said, "I do not support the idea of selling elite level as is currently being done by some carriers. It destroys the motivating reason(s) for elite relationships. At best it reduces mileage liability for the carrier but without creating a sense of need or urgency to fly that carrier as much as would otherwise be possible." We interviewed Stevan Grosvald and found that he stills feels this way, although he understands the challenges facing the airlines and why they sell elite status. You can read our entire interview in the sidebar that accompanies this article.
On the other hand are those who see that the airlines are in business to make a profit. While rewarding their most frequent flyers with special treatment and exclusive benefits is one goal, motivating members to spend lots of money with the co-brand card ultimately benefits the airline as well. The more members spend, the more miles the credit card companies will buy from the airlines. As one member, Efrem, succinctly explained, "Airline status is a business proposition ... Airlines give status to encourage desired economic behavior on the part of people they think can be motivated by it."
We got in touch with some of the airlines that offer elite-qualifying miles through credit card spending and asked them a couple of questions to help us see the debate from their point of view.
Why does your program allow members to earn elite-qualifying miles or status through credit card spend?
Continental: "To create additional loyalty."
"We want to provide a variety of earning opportunities for our members, who tell us they appreciate the ability to earn MQMs through our American Express partnership. In addition, we also offer unique program benefits to customers who fly Delta and also hold our premium credit cards. These customers are usually frequent Delta travelers, who especially value MQMs."
"Members tell us that elite status is important and the inclusion of that benefit allows us to recognize a member who becomes further vested in Priority Club Rewards by acquiring the card. This engagement means most cardholders increase their stays with our hotels and remain active so as to achieve Elite status in subsequent years.
"This allows members who are close to reaching a particular elite status to get the extra lift needed to reach their elite goal. All cardmembers receive enough elite night credit to reach Silver Status."
"The Starwood Preferred Guest credit card by American Express strengthens the relationship that we have with our members. Our credit card members are some of our most loyal and we use our first tier of elite status as a way to recognize those cardmembers who reach $30K of spend on their Starwood Preferred Guest credit card by American Express."
"We began offering this benefit to our Mileage Plus credit cardholders because it was something they asked for ... just like they have also asked for Red Carpet Club access and other travel rewards. Our cardholders are among Mileage Plus' most loyal members and a good portion of our elites also hold one of the Mileage Plus Visa cards."
"The biggest beneficiaries of credit card elite qualifying miles are actually members who already have Preferred status. Our Preferred members find this feature invaluable when it comes to keeping their Preferred status or striving for the next level. In any given year a frequent flyer may find that their travel patterns change and they may be flying less than in previous years. The ability to earn Preferred-qualifying miles with a co-branded credit card is always a welcome option when a frequent flyer fears they won't fly enough to maintain their current status. It's a good boost when travel budgets have been cut and flying is down--especially in today's economy."
How do you ensure that offering elite-qualifying miles through credit card spend doesn't dilute the overall value of the elite status?
Continental: "EQMs are offered to a very small, targeted group of elite members."
"We carefully monitor our Medallion membership levels and offer MQMs to customers who provide significant overall value to Delta. We also adjust the program as necessary to ensure Medallion benefits are valuable and readily available to members."
"The credit card value proposition increases the depth of engagement for those members who, upon making this commitment to the program, would very quickly reach elite status. It's our way of helping our valued members achieve rewards faster by maximizing participation in the program, through stays and with our partners."
"The vast majority of our members reach elite status on their own. This provides them with an incentive to keep staying at Marriott Rewards hotels."
"SPG allows members to earn Gold status through the credit card, but keeps our top tier, Platinum, reserved only for members who earn the status through their stays. This allows us to have the richest Platinum upgrade policy in the industry; upgrades for Platinum members to our best available room, including standard suites."
"First and foremost, EQM credit card benefits make Mileage Plus a better program for our members overall. Separately, and important to know, elite status cannot be achieved through credit card purchases alone."
"To help ensure that features like this don't dilute the value of our Preferred program, the most important benefit to our Preferred members, access to first class upgrades, is determined based on the last 12 months worth of actual miles flown on US Airways. (For example, a customer who has 25,000 PQM (EQM) earned just by flying will always be upgraded before a customer who has earned 25,000 PQM through a combination of flying and credit card spending.) Because it takes 25,000 PQM to move between Preferred tiers, the number of customers who can advance a level just with credit card spending is very, very limited--just a handful of customers who carry multiple cards in their wallet and pay the corresponding annual fees can do this. Our analysis shows that while a lot of non-Preferred members earn the credit card boost just by using their cards all the time, most of these members fly infrequently and aren't 'competing' with members who are flying all the time."
Credit cards offering elite status
While credit card companies and airline and hotels profit, how can you as a frequent flyer benefit? Here are the cards that offer elite status or elite qualifying miles as a co-branded credit card perk. More information about the cards' annual fees and other details can be found in a chart online in an expanded version of this article at insideflyer.com.
American Airlines Citi AAdvantage credit cards will not help you qualify for elite status every year as they do not have any permanent promotion allowing for purchase power to earn EQMs. However, they have been known to offer a promotional sign-up bonus in which new cardholders were offered 5,000 EQMs. This was only a one-time bonus for acquiring the card, not an ongoing offer that will earn you EQMs for regular spending.
Also, uniquely, miles earned from credit card spend will count toward lifetime elite status. AAdvantage members who earn one million miles through all avenues--flying, credit card spend, hotel stays, dining out, etc.--will earn lifetime Gold status. Earn two million miles and receive lifetime Platinum status. The lifetime elite status benefit is undocumented and can change at any time, but for now, you can spend your way to lifetime elite with American AAdvantage and it is currently the only FFP in which you can do this. If you don't have elite status in AAdvantage, however, the number of miles you can earn with the credit card is capped at 100,000 to 150,000 miles so it can take up to 10 years to earn lifetime elite status through credit card spend. These limits are waived for elite members. If you aren't a big spender and put only $20,000 on a credit card per year, it would take 50 years to reach lifetime AAdvantage elite status.
Because of this, the fastest way to American AAdvantage lifetime elite status is through flying, although the credit card helps. And some members have obtained hundreds of thousands of miles through churning the Citi AAdvantage credit card (opening a new credit card to earn the sign-up bonus, cancelling the card and signing up again) although this method can wreak havoc with your credit score and according to blogger Rick Ingersoll of Frugal Travel Guy, AAdvantage no longer allows members to churn the credit card.
FlyerTalk member Eujeanie was pleasantly surprised with lifetime elite status, unknowingly inching closer to the milestone with credit card spending. "My husband was Gold for several years when he traveled a lot on business ... but it wasn't until last year, at the ripe old age of 61 (retired for several years), that we got the totally unexpected, out of the blue, didn't even know it existed letter that he had made lifetime gold, mostly because of credit card charges." Free checked baggage, occasional upgrades and priority status for life are a welcome surprise to have in retirement.
When we asked whether American Airlines has plans to offer EQMs for credit card spending, Lauren Burns of the airline's PR agency told us, "American continually evaluates the AAdvantage product offering and monitors the competitive landscape. However, we cannot speculate on future changes to the program. The AAdvantage program is quite generous with elite status and the qualification requirements versus other airlines. While credit card miles do not count toward annual qualification of elite status, all miles-- including credit card miles--count toward million mile status."
bmi diamond club
The bmi plus American Express card comes with 3,000 status miles that will be added to your account annually. There is no spending threshold and the status miles will be applied to your account after the annual fee has been paid.
The Continental Airlines Presidential Plus World MasterCard offers 2,000 Flex Elite Qualification Miles (Flex EQMs) for every $15,000 in purchases, up to 28,000 per year. You'd have to spend $210,000 on the card to earn the maximum 28,000 Flex EQMs per year. These Flex EQMs do not expire, so you can redeem them toward elite status at any time in future years.
Delta SkyMiles members can earn 10,000 Medallion Qualification Miles (MQMs) after first purchase and up to 30,000 MQMs per year--15,000 MQMS for each $30,000 spent on the Delta Reserve American Express card in a calendar year. Platinum American Express SkyMiles cardholders can earn up to 20,000 MQMs per year. With the Platinum Delta SkyMiles card from AMEX, you can earn 20,000 miles with your first purchase, 5,000 of which count as MQMs. Each year you spend $25,000 in eligible spending, you will earn 10,000 MQMs. When you reach $50,000 in the same calendar year you'll receive another 10,000 MQMs.
Members can gift earned MQMs to friends and family helping them reach elite status and SkyMiles has a "rollover" program for elites and any MQMs you've earned above your Medallion qualification level at the end of the year will rollover to your MQM balance for the following year--even MQMs earned from spending via the credit card.
Frontier Airlines EarlyReturns
Frontier Airlines used to offer members the opportunity to achieve elite status with credit card spending. In 2007, members who made more than $60,000 in purchases to the Frontier Airlines MasterCard within 12 credit card statement cycles (January to December statements) were automatically upgraded to Ascent status, normally reserved for members who fly 15,000 miles or 20 segments in a calendar year. But alas, this is no longer an option. According to Krista McClure, Frontier EarlyReturns Program Coordinator, Frontier has "decided to discontinue that benefit this year. We plan to explore alternative incentives in the future for our Frontier MasterCard holders."
Spirit Airlines FREE SPIRIT
FREE SPIRIT MasterCard members receive Elite status each month they make a purchase with the card, as well as priority boarding and domestic priority check-in. All mileage earned by FREE SPIRIT members, including those earned from partner activity and credit card spend, is counted toward the status qualification requirements of Elite and VIP tiers. Elite status with FREE SPIRIT is set up differently from most programs and members must qualify every month, so the credit card is a useful way to ensure your status. Cardholders will stay at Elite status as long as they use the card once every month. Spend $4,000 a month and you'll receive VIP status, which is given to members who earn 24,000 miles over the preceding six months.
US Airways Dividend Miles
US Airways Dividend Miles members can earn 10,000 miles annually towards Preferred status when spending $25,000 per year on the Premier World MasterCard. After you spend $25,000 in new purchases in a calendar year, 10,000 of the miles earned will be converted from base miles to Preferred miles. Preferred miles are only valid for one elite year.
United Mileage Plus
United Airlines offers EQMs on three of its co-branded cards. Mileage Plus Select Visa cardholders can earn one EQM per $1 spent at United.com, up to 5,000 EQMs per year. Mileage Plus Access Visa and Mileage Plus Club Visa cardholders earn 5,000 EQMs per year when spending over $35,000 in net purchases to the card. After reaching the $35,000 spending threshold, cardholders will earn one EQM for each $10 spent, up to an additional 5,000 EQMs (the maximum 5,000 EQMs is earned after spending an additional $50,000). United Mileage Plus EQMs are only valid for one elite year.
Virgin Atlantic Flying Club
Virgin Atlantic offers a co-branded card that allows members to earn elite status through spending, but this card is only available to residents of the U.S. The version of this card available to U.K. residents does not come with tier points. The Virgin Atlantic Flying Club Black Card offers one tier point per $2,500 in purchases, up to two tier points per month. To receive the maximum benefit of 24 tier points per year, cardholders would need to spend $60,000 per year. Virgin Atlantic's Silver elite level can be reached after earning 15 tier points in a rolling 12-13 months.
The programs clearly differ in how many EQMs they allow members to earn through spending and the thresholds required to earn EQMs. With the Continental OnePass Presidential Plus MasterCard, members can buy their way to Silver elite, but they will have to spend $195,000 to earn the 25,000 MQMs required for the lowest level status. With the Delta SkyMiles Reserve card, you only need to spend $60,000 a year to earn Silver status. Spend $50,000 on the Platinum card and you'll be almost to Silver status with 20,000 MQMs. US Airways Dividend Miles and United Mileage Plus only allow cardholders to earn up to 10,000 EQMs so the majority of elite-qualifying miles need to be earned through flying. Spirit Airlines gives members Elite status just for making a purchase with the credit card every month. But as a low-cost carrier, the FREE SPIRIT elite program isn't in the same league as the elite programs of the legacy carriers.
|Card name||Annual fee||Max. number of EQMs per year||Money needed to spend to reach max.||Other card features||Link to sign up|
|American Airlines AAdvantage Citi Platinum Select World MasterCard||$85||n/a||n/a||All miles count towards lifetime elite status, reduced mileage awards.||http://www.insideflyer.com/link/?2205|
|American Airlines AAdvantage Citi Select American Express||$85||n/a||n/a||All miles count towards lifetime elite status, reduced mileage awards.||http://www.insideflyer.com/link/?2206|
|bmi plus American Express||60 pounds||3,000 status miles||none||Offer available to UK applicants only, earn two miles per one pound spent.||http://www.insideflyer.com/link/?2207|
|Continental Airlines Presidential Plus World MasterCard||$375||28,000 Flex EQMs||$210,000||Two free checked bags, President’s Club membership, Hyatt Gold Passport Platinum, 25 percent mileage bonus.||http://www.insideflyer.com/link/?2208|
|Delta Air Lines Reserve American Express||$450||30,000 MQMs||$60,000||Gift earned MQMs to friends and family, complimentary Delta Sky Club access, Pay with Miles benefit, domestic first class companion certificate.||http://www.insideflyer.com/link/?2212|
|Delta Air Lines Platinum American Express||$150||20,000 MQMs||$50,000||Pay with Miles feature, annual companion ticket, fewer award ticket fees.||http://www.insideflyer.com/link/?2209|
|Spirit Airlines FREE SPIRIT MasterCard||$69||Elite status per month||One purchase per month||Complimentary $9 Fare Club, triple miles for Spirit Airlines purchases, priority boarding and check-in.||http://www.insideflyer.com/link/?2213|
|United Mileage Plus Select Visa||$130||5,000 EQMs||$5,000 spent at United.com||Triple miles on United purchases; double miles for gas, groceries, dining, etc.; 5,000 bonus miles per year.||http://www.insideflyer.com/link/?2214|
|United Mileage Plus Access Visa||$275||10,000 EQMs||$85,000||Economy Plus seating, two one-time lounge passes per year.||http://www.insideflyer.com/link/?2214|
|United Mileage Plus Club Visa||$375||10,000 EQMs||$85,000||Red Carpet Club membership, earn two miles per $1 spent on United purchases.||http://www.insideflyer.com/link/?2214|
|US Airways Premier World MasterCard||$89||10,000 EQMs||$25,000||Domestic award discount, first class check-in and zone 2 boarding, one lounge day pass annually, up to two $99 companion tickets.||http://www.insideflyer.com/link/?2215|
|Virgin Atlantic Flying Club Black Card||$90||24 tier points||$60,000||Three miles per $1 spent on Virgin, up to 15,000 bonus miles per year, half price companion ticket when spending $25,000 per year or more.||http://www.insideflyer.com/link/?2216|
Hotel programs have taken a different approach with the elite benefits they offer with their co-branded credit cards and are more willing to give members elite status with credit card spend at lower spending thresholds than the airlines. This is likely because the hotel programs have far fewer partners and most of their members already have frequent flyer related credit cards, which means hotels have to be more aggressive with their offers since their card is often number two or even non-existent in the wallets of their members. And, they can qualify members at lower spending thresholds since the hotel program elite-level benefits are much weaker than the airlines. For instance, the mid-tier member in the Hilton HHonors program earns an elite bonus of 25 percent. The mid-tier of elite with United Mileage Plus, Premier Executive, earns an elite bonus of 100 percent. Quite a difference, wouldn't you say? With this in mind, hotel programs can "afford" more elite members without much more exposed liability for more points.
Hilton HHonors American Express cardmembers automatically receive Silver VIP status and will be upgraded to Gold VIP status each year they spend $20,000 or more on the card. Hilton HHonors Surpass AMEX cardmembers receive complimentary Gold VIP status for their first year of cardmembership and Gold status each subsequent year in which they spend $20,000 on the card annually. Spend $40,000 in a calendar year and receive Diamond VIP status, Hilton HHonors' highest elite status. Hilton HHonors Visa Signature cardmembers automatically receive Silver VIP status.
InterContinental Hotels Group Priority Club Rewards
IHG Priority Club Rewards offers Gold elite status for one year to members who use either their Rewards Business Visa or Rewards Visa Signature Card. After the first year, the Priority Club Rewards credit cards can still help members reach elite status since the program counts all points as elite-qualifying, including those earned from credit card spend. Members who earn 20,000 points will be upgraded to Gold and Platinum membership requires 60,000 points.
Marriott Rewards offers a 15-night credit toward elite status to cardholders of the Premier Visa and a 10-night credit to Visa Business Card and Visa Signature Card cardholders. Plus, for every $3,000 spent on the card, credit cardholders will receive one extra elite night credit and there is no limit to the number of additional elite night credits members can earn. Marriott's Silver status requires 10 nights to qualify so all cardmembers automatically receive Silver status with the option to buy their way to Gold status (50 nights) or Platinum (75 nights).
Starwood Preferred Guest
The Starwood Preferred Guest American Express card offers Gold elite status to members who spend $30,000 annually. Gold normally requires 10 stays or 25 nights.
|Card name||Annual fee||Elite Benefits||Money needed to spend to receive benefits||Other card features||Link to sign up|
|Hilton HHonors American Express||$0||Silver status with option to earn Gold||$20,000 to maintain Gold||Earn six points per $1 spent at Hilton and other everyday categories and three points per $1 everywhere else, 500-point online booking bonus.||http://www.insideflyer.com/link/?2217|
|Hilton HHonors Surpass American Express||$75||Silver status, Gold status for first year with option to earn Diamond||$20,000 to maintain Gold status; $40,000 for Diamond||Earn nine points per $1 spent at Hilton, six points per $1 spent on groceries and other categories and three points per $1 spent everywhere else, Priority Pass memebrship.||http://www.insideflyer.com/link/?2218|
|Hilton HHonors Visa Signature||$0||Silver status||$0||Earn six points per $1 spent at Hilton, three points per $1 spent on groceries and other everyday categories and two points per $1 everywhere else.||http://www.insideflyer.com/link/?2219|
|IHG Priority Club Rewards Visa Signature||$29||Gold status||$0||Earn 10,000 bonus points each year you spend $15,000, $20 credit on your first statement.||http://www.insideflyer.com/link/?2220|
|Marriott Rewards Premier Visa Signature Card||$65||15-night credit toward elite status||$0||Annual free night stay certificate, five points per $1 spent at Marriott and two points on airline, dining and rental cars.||http://www.insideflyer.com/link/?2221|
|Marrioot Rewards Visa Business Card||$30||10-night credit toward elite status||$0||Annual free night stay certificate, three points per $1 spent at Marriott.||http://www.insideflyer.com/link/?2222|
|Marriott Rewards Visa Signature Card||$30||10-night credit toward elite status||$0||Annual free night stay certificate, three points per $1 spent at Marriott .||http://www.insideflyer.com/link/?2224|
|Starwood Preferred Guest American Express||$45||Gold status||$30,000||Transfer 20,000 points into 25,000 airline miles with many airlines.||http://www.insideflyer.com/link/?2225|
Most credit cards have a disclaimer that says something along the lines of: if you do not meet the criteria to qualify for the card you want, you will automatically be considered for another card that does not offer the same benefits.
It doesn't seem like there is any way around this. We talked to one credit card representative who said that you can't request to opt out of being considered for an alternate card with different benefits from the one you applied for. If you don't like the card, we were told, you can cancel it. But there may be something else you can do. One FlyerTalk member said, "I applied for the Alaska Airlines Signature Visa from Bank of America a couple of years ago for the 25,000 miles but they sent me the Platinum Plus because I had another Bank of America card with about a 17,000 credit limit. I called and they were able to reduce that one to 10,000 and approve me for a Signature Visa. I canceled the Platinum Plus but they still charged me the annual fee, which was okay because I got another 10K miles or so out of it." We've also heard reports from others who were initially denied because they had another credit card issued by the same bank. After they requested that some of their available credit from the existing card be reallocated to the new card, they were approved.
Is earning elite status through credit card spending good or bad? Our observation is that it is both. It's bad in the sense that these programs create more elite members. The air warrior has enough competition from the growth of elite level members caused by airline alliances, which typically have increased base membership of elite-level programs over the years by 30 percent.
However, the positives are plenty. Earning elite status just by credit card spending likely means that the traveler is not that much of a "frequent" flyer--meaning that while they may have a magic card in their wallet, the odds are that they are not displacing too many other elites on the planes. Also, credit card elites are often spread out equally so there is not a high concentration of plastic elites in a single market. And one benefit for the member is that credit card EQMs have started to replace the year-end dash for mileage runs. With almost minimal use of a credit card, a member should have no need for a mileage run to re-qualify for elite, unless of course the credit card elite miles have bumped them up to almost the next elite level. Furthermore, for the mid-tier frequent flyer, these EQMs can take a pedestrian frequent flyer and put him into a higher class where he has a chance of actually making the upgrade list in the near future. There is a huge difference between the actual ability to land upgrades as a Silver member vs. a Gold.
Stevan Grosvald, Principal, Grosvald & Associates
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