Why I signed up for the card

I signed up for the AAdvantage Aviator Red World Elite Mastercard in August 2018 enticed by the 60,000 point sign-up bonus and 10% rebate on all redeemed AAdvantage miles, up to 10,000 miles per year. The card has a $95 annual fee and you receive the sign-up bonus after paying the annual fee. There aren’t any minimum spending requirements to get the sign-up bonus, which made the card particularly attractive given the points earning schedule for the card is awful.

Points earning

The AAdvantage Aviator Red World Elite Mastercard earns 2 AAdvantage miles per dollar spent on American Airlines purchases and 1 AAdvantage mile per dollar spent on everything else. This card shouldn’t be your first choice for buying tickets on American let alone for everyday spend. There are cards that offer a much better return including the Citi Prestige, which earns 5 ThankYou points per dollar spent on airline tickets including those issued by American Airlines.

Value received from the card

Using The Points Guy’s latest valuation of AAdvantage miles (1.4 cents per mile) the sign-up bonus alone was worth $840. Furthermore, I was able to get back the maximum 10,000 points on redeemed AAdvantage miles – 7,000 on my Qatar Qsuite business class flight to the Maldives and 3,000 on my JAL first class flight to New York. Using the same 1.4 cents per mile valuation, the rebate of 10,000 AAdvantage miles was worth $140. After the $95 annual fee I realized an $885 benefit during my first year holding the card.

Benefits I didn’t use

This card offers benefits that may appeal to those who don’t have elite status with American Airlines. Cardholders receive their first checked bag free and “preferred boarding” for themselves and up to 4 companions on the same reservation. Preferred boarding means boarding with Group 5, which is behind ConciergeKey, first class, business class, Executive Platinum, Platinum Pro, Platinum, Gold, AirPass
Premium Economy, Citi AAdvantage Executive cardmembers and travelers who bought Priority boarding. I’d say this is hardly preferred, but the card does provide a higher chance of getting overhead bin space for non-elites especially if your purchase basic economy tickets.

I currently have Platinum Pro status with American Airlines, which entitles me to 2 free checked bags and boarding in group 3. Given my status I didn’t benefit from the checked bag or priority boarding features.

Devaluation of benefits

Barclays announced in February that as of May 1, 2019 the AAdvantage Aviator Red World Elite Mastercard cardmembers would no longer get the 10% redeemed miles rebate. From my perspective this was the only benefit that would get me to renew the card given the $95 annual fee.

They added some additional “benefits” along with this negative change. I’ll break each one down:

• $25 rebate on in-air WiFi fees – I’ll assign this the full value so I’ll conservatively bring the net effective annual card cost down to $70
• a companion certificate, which entitles you to purchase a $99 ticket for your companion on an economy domestic flight after putting $20,000 of spend on the card – If you put $20,000 of spend on your Chase Freedom Unlimited Card you get 30,000 Ultimate Rewards Points, which at TPG’s 2.1 cents per mile valuation is worth $630. Few people are going to find a companion fare to be worth the $729 opportunity cost to take advantage of this
• Flight Cents program, which essentially allows you to purchase AA miles at 2 cents per mile – this doesn’t make sense if AAdvantage miles are worth 1.4 cents

Call to Barclays

When I evaluate the benefits of a credit card and find that the forward looking annual benefit is less than the annual fee I call the card issuer to let them know and ask for a retention offer. The conversation can go a few ways:

• Best case scenario they waive the annual fee. If this happens I’ll keep the account open.
• If not, a lot of card issuers will offer you a challenge promotion (e.g. 10,000 miles after spending $3,000 a month for 3-months) that offsets the annual fee.
• When that doesn’t happen some card issuers will let you downgrade to a no-fee credit card product. The advantage of this is that you wont take a hit to your credit score by reducing the amount of your available credit.
• When they don’t offer anything I’ll close the card.

Final Decision

Barclays refused to waive the annual fee, offer a challenge promotion or agree to let me downgrade to a no-fee product. Part of the reason may be that I only purchased a pack of gum on the card. Oh well. I made the right decision given that the forward looking benefits don’t cover the annual fee.