For more than two decades, airline credit cards offered consumers a simple formula: Spend a dollar, earn a mile, pay an annual fee, repeat. If you played the game correctly, you’d score at least a free ticket each year—just by making everyday purchases.
The only issue? As powerful rewards cards such as the Platinum Card from American Express and Chase Sapphire Reserve began offering bigger perks and faster redemptions, airlines and their credit-card issuers got left in the dust. Add devalued frequent-flier programs—which began prioritizing dollars spent, rather than miles flown—and it’s easy to see why airline-sponsored plastic lost its luster.
Enter the new generation of airline credit cards. They’re not for everyone—but this time, that’s the point. With new earning opportunities and perks valuable to both very frequent and very casual travelers, they’re an aggressive bid to attract new cardholders, retain existing ones, and cement loyalty among their fans.
Benefits boosts
The first step in overhauling airline cards was to stop thinking about them as just airline cards and view them more broadly as travel cards.
“When deciding what benefits to add, we have to look across the industry,” says Luc Bondar, United’s president of MileagePlus. That means adding earning bonuses for purchases beyond flights and catering more holistically to the frequent traveler.
With the United Explorer card from Chase, specifically, that translates to card holders earning two miles per dollar spent at hotels and restaurants—a category that Points Guy founder Brian Kelly (for whom this writer has previously worked) says has become especially important for airline cards. But just as crucial, according to Kelly, is “improving airline-specific perks like free checked bags, priority boarding, and the ability to earn elite-qualifying miles.”
To that end, United Explorer now offers a 25% discount on all in-flight purchases and credits for Global Entry and TSA PreCheck applications.
Dan Dougherty, Barclaycard’s managing director of airline partnerships, agrees that upgrading day-of-travel experiences is the prime competitive advantage for airline cards. As a result, the bank’s products, issued in partnership with American Airlines, Frontier Airlines, Hawaiian Airlines, JetBlue, and Lufthansa, now include perks such as on-board Wi-Fi credits, in-flight purchase discounts, and Global Entry or TSA PreCheck application fee refunds.
For one example, Barclaycard's American AAdvantage Aviator Red card now includes $25 back each year in statement credits toward in-flight Wi-Fi purchases and the ability to earn a $99 companion travel certificate by spending $20,000 on the card in a year. It also features a program called Flight Cents, which rounds up purchases to the nearest dollar and converts the overage into American miles at a discount. (Think of it as the airline equivalent of Bank of America’s popular “Keep the Change” savings program.)