Rising gas prices, rising government surcharges, and skyrocketing airline checked baggage fees are all contributing to the oppressive cost of air travel. Meanwhile, banks have been more upfront about credit card fees since the CARD Act, and they’re striving for more customers in the down economy. As a result, rewards programs are looking better and better. Put the two concepts together, and travel rewards credit cards can be a great tool if you’re a frequent traveler and can use the cards responsibly.
Airline-affiliated cards are useful if you can avoid carrying a balance and have enough regular travel to capitalize on a loyalty program with a particular airline or family of carriers. One catch is that you’re largely restricted to cards co-branded with domestic airlines since only a few foreign carriers offer cards to the U.S. British Airlines is one of the exceptions to this rule, and the British Airways Visa Signature Card through Chase Bank could be the right choice for you. Do your research before you decide, and consider the pros and cons of applying for the card.
In fact, there is a limited time offer for this card that allows customers to earn up to 50,000 bonus Avios points.
Advantages
- Sign-up Bonus. In 2011, Chase offered this card with an amazing bonus of 100,000 points for signing up. An offer like this attracts frequent flyer gurus who want to travel the world for free using miles and customer loyalty programs. The awesome offer was eliminated for a short while but made its return in 2012. Now, new applicants can earn 25,000 points after their first purchase, and another 25,000 after spending $2,500 within the first 90 days.
- Points-to-Dollar Ratio. The British Airways Visa rewards are 1.25 points for every dollar you spend, with 2.5 points being offered for purchases from British Airways. Most airline-affiliated credit cards offer only one point per dollar, with the exception of purchases on that airline itself. British Airways Visa offers 25% more points than other similar cards, putting them on par with the Starwood Preferred Guest American Express Card.
- Companion Awards. If you use the card to spend $30,000 in a calendar year, you’ll receive a companion award certificate. This certificate is good for a second award seat on British Airways at no additional charge. The second passenger must be booked on the same itinerary as the cardholder, and the certificate is only redeemable on flights operated by BA.
- Smart Chip Technology. American travelers to Europe are often frustrated by automated machines that don’t accept U.S. issued cards. Finally, some American banks have started issuing cards to Americans with the required EMV smart chips, and appropriately, the British Airways card has been one of the first.
- Free Foreign Transactions. When Chase started dropping foreign transaction fees on their co-branded cards for international travelers, British Airways Visa cardholders were among the first to benefit. Foreign transaction fees can be as high as 3% on conventional cards, and they’re an unjustified burden on travelers who don’t know about the fee or don’t have an alternative.
- Award Seat Availability. Many airlines have been deservedly criticized for turning their loyalty programs into unregulated lotteries. They love to give out points, but when it comes time to redeem them, you won’t find the seats you want. Others boast of unlimited availability while requiring much more points to redeem rewards during “peak” periods, which seem to cover all twelve months of the year. Thankfully, British Airways has not gone that route. Their award availability remains somewhat reasonable, and they do not ask for double points or more when they release award seats.
- Partner Redemption. As a member of the OneWorld Alliance, you can redeem your British Airways points on partners such as American Airlines, Alaska Airlines, Qantas, Lan, and Cathay Pacific. Awards are now distance based, with only 9,000 points being required for partner awards on America Airlines under 650 miles.
Disadvantages
- Fuel Surcharges. You’re probably used to various taxes and fees on award travel booking, but British Airways is doing something entirely different. All award bookings come with a fuel surcharge, which can be quite substantial. The surcharges are calculated on a per-flight basis, and connecting flights cost even more than those terminating in London. Since fees are also based on the class of the ticket, award seats in business or first class can cost over $1,000. Bizarrely, they will even levy this surcharge on infant passengers who do not even have a seat!
- Multi-Partner Awards. With most frequent flyer programs, you can mix and match flights on any number of airline partners to construct an award itinerary that gets you to your destination. With British Airways, you can only fly with one partner airline. When you try to construct an itinerary with more than one partner, you have to pay according to the amount of miles you fly. The multi-partner chart has much higher redemption rates than single-partner flights do, so the cost escalates quickly. If you’re looking to redeem miles for an award flight on Qantas or Cathay Pacific, for example, you’re probably better off purchasing your own ticket to a North American gateway and then redeeming your rewards for an international flight.
- Annual Fee. The card comes with a $95 annual fee, and there’s no introductory offer to waive it for the first year. You can find plenty of options that don’t have an annual fee, so don’t pursue this card unless you’re sure that your redemption opportunities will far exceed the annual fee.
- Interest Rates. With any rewards card, you can expect a higher interest rate. This card has a 15.24% APR, so it’s only a smart option if you pay your balances in full and on time. If you ever carry a balance, you are much better off with a card with very low interest and fees, such as the PenFed Promise Card.
- Eligibility Requirements. The incredible sign-up bonus is a sign that Chase is only looking to attract people with excellent credit. Even if you have a good credit score, you may be turned down just for receiving another card from Chase within the last six months. Though there doesn’t seem to be an obvious reason for it, Chase has some stringent requirements for approval.
Final Word
I have had this card for nearly a year now. I earned the huge bonus, but I am intimidated by the enormous fuel surcharges British Airways imposes on their awards, nearly $1,000 in some cases. Nevertheless, I have found some interesting opportunities to use the points, without fuel surcharges, on partners such as American and LAN Airlines of South America. I also found the embedded EMV chip to be very useful on my last trip to Europe.
If you have spotless credit, don’t carry a balance, and want to redeem some great rewards quickly, the Chase British Airways Visa Signature could be a great choice for your new rewards credit card.
With the wide range of travel rewards programs out there, how did you decide on your credit card? What benefits have you already reaped, and what hidden catches surprised you? Would you consider the British Airways Visa Signature credit card from Chase?
