Calculating the Value of Airline Credit Card Bonuses

airline credit card


(The following is post is by guest blogger Michael, founder of Credit Card Forum)

During the recession, those uber-generous bonus offers for airline cards basically disappeared. However over the past year or so, they have come back in full swing. But determining their value isn’t as easy as it used to be, because many airlines have re-worked their reward programs over the past 2 or 3 years to accommodate higher fuel prices. Here’s a look at three of the most popular offers from 2011 and what they’re really worthâ¦

Capital One Venture Card â“ Match My Miles Challenge
You probably saw the commercials a few weeks ago with Alec Baldwin peddling this. In a nutshell, Capital One was offering to match your current mileage account balance â“ up to 100,000 miles â“ if you submitted proof and then spent $1,000 during your first 3 months with a new Venture card.

But how much is this bonus worth? Well the Venture miles❠are not like regular frequent flyer miles. Rather, they can basically be thought of as cash; each mile is worth exactly $0.01 towards a travel purchase. So assuming you actually had 100,000 miles on your current mileage account (whomever that may be with) then the value of this Venture card offer is $1,000⦠which is truly mind blowing!

The bad news is that they ended this promotion earlier this month. But if it comes back and you have a frequent flyer account with a boatload of miles, then you will probably want to take advantage of it (even if you signup and cancel afterward, like Jon advocated with the Citi ThankYou credit cards, ha!)

British Airways Credit Card â“ 100,000 Bonus BA Miles
This offer was just launched a couple weeks ago and like the Venture card, it has generated quite a bit of buzz. What they are offering is 50,000 bonus miles after the first purchase and another 50,000 for spending $2,500+ during the first 90 days. This offer was supposed to be ending but just today, Chase announced that they would extend it until May 6th.

So what will these 100,000 miles buy you? Well it ends up being enough for two round-trip transatlantic flights. The fine print goes into further details; from USA to Europe Zone 1❠which includes the UK, Germany, France, Belgium, Ireland, Switzerland, and Luxembourg. However keep in mind the cardholder is still responsible for paying fees, taxes, and airline surcharges out-of-pocket, which can really add up on international flights!

In terms of the cash value of this promotion, I suppose it would vary based on your destinations and flight dates (which would affect the cash price you would normally pay for the same tickets). Regardless, I think it’s safe to say this appears to be at least a $1,000 value. I actually have never been to Europe myself, but am strongly considering this offer to change that! Plus, since I advertise the card on my site, I would get a few extra bucks for signing up anyway. Here’s is my full review of the British Airways credit card promotion.

Southwest Airlines Credit Card â“ 20,000
If you’re a member of the Southwest Airlines Rapid Rewards❠frequent flyer program, than you are well aware that for 2011 they totally changed the way you earn free flights. Here’s a comparison of the new and old Southwest programs. There are pros and cons for both versions but to sum it up, the old program was better in the sense that you got more value per point. However I personally like the new program better, because it does away with blackout dates, rewards expiration (before they expired after 24 months), and you can use points for any seat (you don’t have to worry about award seats❠being available).

The promotion that Chase and Southwest are currently running is 20,000 bonus points. But what’s the value of that in the new program? Well if you are redeeming your points for Wanna Get Away❠fares, then you get $100 airfare credit per 6,000 points. That means your bonus is worth $333.33. That being said, point conversion isn’t the same for their other airfare tiers. I recently wrote a review of the Southwest Airlines credit card which goes over the current program.

Although $333.33 is a nice bonus, the value is comparable to what the Gold Delta SkyMiles, Continental Airlines OnePass Plus, and a couple other airline cards are currently offering. That means unless you regularly fly Southwest, there is no reason to jump at this specific offer.

For 2011, by far the biggest standouts for bonuses in the airline credit card category are the Capital One Venture and Chase British Airways. It will be interesting to see what the offers will look like throughout the rest of the year. Unfortunately with oil hovering around $105 to $110 per barrel and possibly heading higher, I wonder if they will be forced to scale back the promotions?