American launched the first modern airline loyalty program, in 1981. And its Citi AAdvantage card, introduced in 1987, was among the first credit cards to award miles in a frequent flyer program. The fact that today all airline programs feature one or more co-branded credit cards is certainly due at least in part to the success of the Citi AAdvantage card.
American won't disclose the number of Citi AAdvantage cardholders, saying only that it's in the millions. But several years ago, the prevailing assumption was that it was the most popular affinity card, and might even be the most popular credit card of any kind.
In any case, it was an important product for American and for Citibank, which issues the card. And it remains so today.
But travel rewards credit cards have been evolving and improving, with Chase and American Express in particular working with their airline and hotel partners to design cards with a variety of benefit bundles at multiple price points. The activity has been especially intense in the realm of what we might call the premium airline-affiliated cards -- the high-priced cards that offer not just miles but airport lounge access, baggage fee waivers, priority airport services, and elite-qualifying miles (EQMs).
Premium cards already in the marketplace include the American Express Platinum card ($450 per year), the Continental Airlines Presidential Plus card ($395), the Delta Reserve card ($450), and the United Mileage Plus Club Visa ($375). US Airways' Premier World Mastercard ($89) features a slimmed-down benefits package -- priority airport services and EQMs -- at a significantly lower price.
Yesterday, American had no premium card of its own Today it does: the Citi Executive/AAdvantage World Elite MasterCard.
Offer Details
With an annual fee of $450, the Executive AAdvantage card is not for the faint-of-wallet. It's at the high end of the price spectrum, together with the Reserve card linked to Delta's SkyMiles program and the American Express Platinum card.
But as with the other premium cards, the annual fee is handily offset by the airport lounge membership. Normally, an annual Admirals Club membership costs $500. So you could think of this as a $50 discount on lounge access, plus a raft of additional benefits, including:
- 10,000 EQMs after charging $40,000
- No foreign transaction fees
- Priority check-in, airport screening, and boarding privileges
- Waived baggage fees for first domestic checked bag
- Concierge service from Citi
- No cap on earned miles
The annual percentage rate on outstanding balances is variable, currently at 15.24 percent.
New cardholders earn 25,000 bonus miles after charging $1,000 to the card within the first four months.
Deal or No Deal
The new card is not a game-changer. It's an overdue addition to a product line that was lagging the market.
The benefits are solid, but very much in line with those offered by the other premium cards. Comparing the premium cards head-to-head and factoring in annual fees, there's no clear winner.
Assessing any credit card -- and especially one that is clearly geared more toward frequent flyers than frequent buyers -- always brings us back full circle to the program the card is linked to. In this case, AAdvantage.
For AAdvantage loyalists who travel often enough to benefit from the lounge access and priority airport services the card's high price is easily justified.
On the other hand, for infrequent travelers with no particular loyalty to American or AAdvantage, a $450 credit card is an unjustifiable extravagance.
Most travelers fall somewhere between those extremes. For them, the list of available options just got a bit longer.
Reader Reality Check
Is the new AAdvantage card on your shopping list?
Given a blank slate, what benefits would you like to see included with a travel rewards credit card?
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