Is Earning American AAdvantage Elite Status With Credit Card Spending Worth It?

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The American AAdvantage program has been changed with the introduction of loyalty points. Elite status is no longer based on how many miles you travel but on how many Loyalty Points you accumulate.

Credit card spending is one of the ways to get AAdvantage elite status. I wanted to answer some of the most common questions and do a number crunching on the value proposition of that. Should you use your credit card for purchases?

The new concept of Loyalty Points is the sole metric by which you can get AAdvantage elite status. Specifically, that's right.

• AAdvantage Gold status requires 30,000 Loyalty Points
• AAdvantage Platinum status requires 75,000 Loyalty Points
• AAdvantage Platinum Pro status requires 125,000 Loyalty Points
• AAdvantage Executive Platinum status requires 200,000 Loyalty Points

The Loyalty Points program year will run from the beginning of March until the end of February of the following year instead of following the traditional calendar year. Between January 1, 2022, and February 28, 2023, you will have an extra two months to earn loyalty points.

You can earn one point for every dollar you spend on a co- branded credit card. Welcome bonuses, spending bonuses, and other promotional bonuses do not count as loyalty points. You would only earn one Loyalty Point per dollar spent if the card offered double AAdvantage miles.

You can earn Gold status if you spend $30,000 on a credit card, or Executive Platinum status if you spend $200,000 on a credit card.

There are some opportunities to earn Loyalty Points at an accelerated rate with credit cards in 2022.

• For the Citi® / AAdvantage® Executive World Elite Mastercard®, you can earn 10,000 bonus Loyalty Points when you spend $40,000 in eligible purchases between January 1, 2022, and February 28, 2023
• For the AAdvantage Aviator Silver Mastercard, you can earn up to 15,000 bonus Loyalty Points based on eligible purchases between January 1, 2022, and February 28, 2023 — earn 5,000 Loyalty Points if you spend $20,000, earn an additional 5,000 Loyalty Points if you spend a total of $40,000, earn an additional 5,000 Loyalty Points if you spend a total of $50,000

Which American Airlines credit cards earn Loyalty Points?

One loyalty point is earned for every dollar spent on the co- branded credit cards.

One Loyalty Point is earned for every two dollars spent.

• AAdvantage Aviator Mastercard

If you need a certain number of Loyalty Points before the end of your membership year, it is important to remember that you earn Loyalty Points based on statement close dates.

The opportunity cost of American Airlines credit card spending

A group of people are going to spend $200,000 on their credit card in order to get Executive Platinum status. I think the program is brilliant because people are spending on American Airlines credit cards in record numbers.

I don't think math checks out on an ongoing basis for many travelers. I valued points based on their value.

If you are spending in a non-bonused category, you will usually have the lowest opportunity cost compared to dining, groceries, or gas.

• You could be earning 1x AAdvantage miles per dollar spent, which I value at a 1.5% return
• You could be earning up to 2x transferable points on some other cards, which I value at a 3.4% return

You could get 2x points with the cards.

You can adjust the math to account for different valuations of points currencies. The chance of using a co- branded American Airlines credit card is small. It's in other words.

• Spending $200,000 on an American Airlines credit card would “cost” me $3,800
• Is Executive Platinum status (and 200,000 Loyalty Points) worth $3,800?
• Keep in mind that you only receive Loyalty Choice Rewards (which include bonus redeemable miles, systemwide upgrades, etc.) if you also fly at least 30 qualifying segments on American Airlines or an eligible partner

A hybrid qualification approach could make sense

I wouldn't think of earning Executive Platinum status primarily through credit card spending.

• For the $3,800 opportunity cost, you could just outright pay the fare difference for first class on so many flights, rather than gambling with upgrades (and upgrades for Executive Platinum members are far from a sure bet)
• If you’re earning status entirely through credit card spending, one has to wonder how much value you’d actually get out of the status; it’s not worth inefficiently spending $200,000 on a credit card so that you can get better treatment on a few trips per year

Spending money on an American Airlines credit card could be worth it at the margins. It is worth going out of your way to earn top tier status if you fly 30 segments a year with American Airlines.

100,000 loyalty points can be earned if you book cheap fares. I think it's a good idea to use credit cards for Executive Platinum status at that time. If you choose to fly 30 segments, you should consider the value of Loyalty Choice rewards, such as getting up to five systemwide upgrades or up to 85,000 AAdvantage miles, which could have a significant value.

My plan with the Loyalty Points system

The Loyalty Points system is genius, but I am struggling with it. I have been an Executive Platinum member for many years, and I will probably keep my status, but I am trying to reduce my spending on American Airlines credit cards.

My general strategy is listed here.

• Up until now I haven’t been putting any effort into requalifying for status, but rather have just been flying as usual; I’m “only” at 70,000 Loyalty Points the for the year
• I’m going to start focusing more on earning Loyalty Points with low opportunity cost ways other than credit card spending, like using AAdvantage Dining, AAdvantage SimplyMiles, AAdvantage eShopping, earning miles through the AAdvantage & World of Hyatt partnership, etc.
• As we near the end of the program year, I’ll probably put some spending on an American Airlines credit card, though I’m not sure yet if I plan to go for Platinum Pro or Executive Platinum
• I’m also considering eventually just going for status with another oneworld program, since that comes with some advantages as well

Is earning elite status with credit card spending unfair?

Some people have said that I am going to be competing for upgrades with people who never fly American Airlines. I disagree with this logic and say that I will use my American Airlines credit card less.

• If someone doesn’t actually fly American Airlines often but earns the same elite tier as you, they won’t pose much competition for upgrades
• For example, say someone earns Executive Platinum status with credit card spending, and flies just 20,000 miles per year on the airline; it would take 10 of these kinds of travelers to pose the same level of competition for upgrades as a single Executive Platinum member who earns the status by flying 200,000 miles per year
• So even if elite ranks are swelled significantly, the risk to upgrades clearing should be minimal if people aren’t traveling that much

Credit card agreements are where major US airlines make most of their profits. In the third quarter of 2022, the cost per air seat mile was higher than the revenue per air seat mile. The airline makes a lot of money from its frequent flyer program and credit card agreements

It is reasonable for American to want to further incentivize the behavior that is most profitable. I have not spent a dime on my American Airlines card this year.

American Airlines credit card spending FAQs

I thought I would address some of the most common questions about the Loyalty Points program. No specific order...

Does American Airlines credit card spending count toward million miler lifetime status?

Nope, that's right. Base miles earned for travel on eligible partner flights are used to calculate lifetime status. Spending with a credit card is not counted toward that.

Don’t you also need 30 flight segments to earn elite status with American?

Not quite, isn't it? You can get American Airlines elite tier only if you use your credit card for purchases. If you want to qualify for Loyalty Choice rewards, you have to complete 30 segments.

Does American Airlines credit card spending help upgrade odds?

It does, yes. You earn AAdvantage elite status with credit card spending, but within each elite tier, upgrades are prioritized based on your loyalty points. If you spend more on your co- branded card, the higher your upgrade priority will be.

Do you need to use an American Airlines credit card to earn Loyalty Points for a flight?

This appears to cause some confusion. Five Loyalty Points can be earned for every dollar spent on American Airlines flights. Up to 11 Loyalty Points per dollar spent on American Airlines flights can be earned if you have elite status. One Loyalty Point is earned for every dollar spent on American Airlines flights.

Bottom line

Credit card spending is the only way you can earn all the published AAdvantage tiers. There is a significant opportunity cost to spend money on American Airlines' co- branded credit cards if you are a savvy credit card user.

The opportunity cost of American Airlines credit card spending is estimated by me at 1.9%. If I spent $200,000 on an American credit card, it would cost me $3,800.

I just can't make sense of the math when it comes to the idea of earning AAdvantage status solely through credit card spending. If you don't fly a lot, status isn't that important.

The new Loyalty Points system is brilliant. Consumers have increased spending on American Airlines credit cards in order to earn elite status and that is very profitable for the airline.

Are you going to use your credit card to earn American AAdvantage loyalty points? What's your logic if that's true?