Somewhere right now, a flight attendant is walking the aisle with credit-card applications. A gate agent is promising you will never pay $45 for a checked bag again. An influencer is breathlessly promising a sign-up bonus will make you a jet-setter. The Journal audited the pitch. We took notes.
What you are actually buying
Travel cards are great for banks and airlines. Delta expects to take in $9 billion from American Express this year. Southwest wants in too, and is planning a premium card and lounges of its own. The question is whether cards charging hundreds of dollars a year are right for you. The columnist’s honest answer: often, none of them.
Travel frequency is the first test. The perks are travel-centric — lounge access, annual credits, free checked bags, Global Entry and TSA PreCheck, travel insurance, upgraded status and points multipliers. Tantalizing, but not automatically yours to use.
One reader asked about upgrading to the $895-a-year American Express Platinum. She and her husband own a second home in England and fly there a few times a year. They care about British Airways points, not lounges. The advice: keep her $95-a-year British Airways card. The boring card won the audit.
And the lounge — the emotional core of the pitch — is shrinking. Lines and wait lists are common. Guest privileges are being cut. Delta caps annual visits to its Sky Clubs, and starting next year it will bar its top Delta One lounge to buyers of its new stripped-down business tickets. If the lounge is your reason, check the restrictions first — quality varies enormously by airport.
The famous bonus, audited
The Chase Sapphire Preferred — the $95 card influencers cannot stop touting — is offering 100,000 points if you sign up by July 30. It is genuinely a good starter card. The columnist even mentioned it to her own 26-year-old son.
Then she read the fine print: you must spend $5,000 on the card in three months to collect. Every card has a version of that hurdle. Citi’s American Airlines cards require $3,500 to $7,000 in the first three or four months. One Amex Platinum bonus requires $12,000 in six months. Piles of points are a no-brainer if you have big expenses coming and can pay in full. Not everyone new to the game has that lying around.
Even spending the points is work. The 100,000-point offer has appeared only three times since the card launched. One of the best redemptions — transferring points to an airline partner — sounds glamorous until you search. The only business-class option one search turned up for two people was New York to Porto, Portugal, via Madrid, in October. There is a reason every card has its own Reddit forum.
The only rule that matters
Do not touch a pricey card unless you pay the balance in full every month. High interest charges will wipe out any value from points and perks. Pay it off monthly, or the mimosa costs $400.
Annual-fee arithmetic is a miniature of all financial planning. What does it cost? What does it return? And what does it return to me — at my travel frequency, from my home airport? The influencer touting the card is not paying your interest rate.