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

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Update: I have added more information to this post. I now know which credit cards can accrue Loyalty Points and whether the new Loyalty Points system for credit cards is fair. I also answered some frequently asked questions.

We've been learning about American's radical transformation of AAdvantage, including the introduction Loyalty points. You can now earn elite status in AAdvantage by only spending on credit cards. This post will focus on the value proposition and how it works.

Spending on credit cards counts towards AAdvantage elite status

American AAdvantage is introducing Loyalty Points in 2022. This will be the only metric that will allow you to earn elite status at AAdvantage. Particularly:

To attain AAdvantage Gold status, you will need to earn 30,000 loyalty points

To attain AAdvantage Platinum status, you will need 75,000 loyalty points

To be eligible for AAdvantage Platinum Pro status, you will need 125,000 loyalty points

To attain AAdvantage Executive Platinum status, you will need to earn 200,000 loyalty points

You will earn one Loyalty Point for every dollar you spend on a eligible co-branded Citi American Airlines or Barclays credit card. For these purposes, Loyalty points do not include welcome bonuses, spending bonuses and other promotional offers.

You could earn Gold status by spending $30,000 with a creditcard, or Executive Platinum status by spending $200,000 with a creditcard.

Notable is also the fact that Loyalty points can be earned at a faster rate with credit cards in 2022 (we don't know if they will continue beyond that).

Citi AAdvantage Executive Mastercard: Earn 10,000 Bonus Loyalty points when you spend $40,000 on eligible purchases between January 1, 2022 and February 28, 2023

Earn up to 15,000 bonus loyalty points with the AAdvantage Aviator Silver Mastercard. You can earn 5,000 LoyaltyPoints if your purchase total is $20,000 and 5,000 LoyaltyPoints if it totals $40,000; earn an additional 5,000 LoyaltyPoints if your total spend is $40,000; earn an additional 5,000 LoyaltyPoints if it totals $50,000.

Spending on credit cards will count towards AAdvantage elite status

What American Airlines credit cards earn loyalty points?

These credit cards, which are co-branded by Barclays and Citi American Airlines, earn 1 Loyalty Point for every dollar spent.

Citi AAdvantage Executive card

Citi AAdvantage Platinum Select card

Citi AAdvantage Card Gold

Citi AAdvantage MileUp card

CitiBusiness AAdvantage Platinum Select card

CitiBusiness AAdvantage Select card

AAdvantage Aviator Gold Mastercard

AAdvantage Aviator Mastercard Red

AAdvantage Aviator Blue Mastercard

AAdvantage Aviator Mastercard

The following card earns 1 Loyalty Point per two dollars spent.

AAdvantage Aviator Mastercard

You can earn status with many AAdvantage credit card

American Airlines credit card spending: The opportunity cost

Some people believe that a lot of people will spend $200,000 on their credit cards to achieve Executive Platinum status. Based on my point valuation:

American AAdvantage miles have a value of 1.5 cents per each

Points with major currencies can be exchanged for 1.7 cents each

Assuming you are spending in a non-bonused group (which would typically have the lowest opportunity costs):

Earn 1x AAdvantage points per dollar you spend, which I value at 1.5% return

Earn up to 2x points transferable on other cards. I value this at 3.4% return

You could get 2x transferable points by using the following cards:

People may have different points currencies valuations, which is fine. You can adjust the math accordingly. My math shows that the opportunity cost for using an American Airlines credit card with a co-branded American Airlines logo is 1.9%.

And this is how it works:

I would spend $3,800 on an American Airlines creditcard if I spent $200,000

Are Executive Platinum and 200,000 Loyalty points worth $3,800 each?

You will only be eligible for Loyalty Choice Reward (which include bonus redeemable mileage, systemwide upgrades, and so on) If you fly at least 30 segments with American Airlines, you will also receive Loyalty Choice Rewards

Spending on AAdvantage credit cards can have a cost.

It could be a good idea to use a hybrid approach to qualification

As I mentioned, I can't see myself achieving Executive Platinum status on an ongoing basis purely through credit card spending.

You could pay the $3,800 difference to fly first class on many flights rather than gamble with upgrades. Upgrades for Executive Platinum members are not a sure thing.

It is not worth spending $200,000 to get better treatment for a few trips each year if you are earning your status solely through credit card spending.

Despite this, I believe there is value in spending money with an American Airlines credit card at the margins. If you are flying 30 segments per year, American Airlines would be able to offer top-tier status.

You might earn 100,000 loyalty points if you book relatively cheap fares. It might be worth spending some credit card money to maintain Executive Platinum status. You might consider Loyalty Choice Rewards if you fly more than 30 segments. These rewards can include up to five systemwide upgrades.

Loyalty Choice Rewards can make your status more valuable

My plan for the new Loyalty points system

American has been my Executive Platinum member for many years. I plan to continue to be an Executive Platinum member in some capacity with American, as I view the new program's concept of change as positive.

As of right now, I am still trying to decide on my strategy.

As this is still being determined, we don't know if AAdvantage points earned with Hyatt, Bask Bank, or Rocketmiles will be counted towards LoyaltyPoints.

If they do count, that could make it awesome. If you have a lot of cash, you could put $200K at Bask Bank and earn 200,000 AAdvantage points plus 200,000 loyalty points annually. (I don't consider that there is an opportunity cost for people with cash, as you won't find a higher return on flexible savings accounts.

If Bask Bank or any other partners don't count, I may have to resort to credit cards to increase my Loyalty points balance each year

I am currently waiting and watching, because the announcement of the new program is a little premature. Details haven't been fully figured out yet.

We don't know all of the Loyalty points-earning partners.

Is it unfair to achieve elite status through credit card spending?

Some people have commented that it was unfair for me to compete with others for upgrades.

You won't be able to upgrade someone who doesn't fly American Airlines as often, but is in the same elite tier.

If someone is awarded Executive Platinum status through credit card spending and flew 20,000 miles annually on an airline, it would take 10 such travelers to be as competitive for upgrades. A single Executive Platinum member flying 200,000 miles per calendar year earns the status.

Even if the elite ranks were to be enlarged significantly, which I don't believe will happen, especially for higher tiers), there should be very little risk of upgrades clearing if people aren't traveling as much.

Bigger picture. While I understand there is some disagreement between those who earn status by flying and those who spend on credit cards, it is important to recognize that major US airlines are able to make a large portion of their profits through credit card agreements. Pre-coronavirus, Americans lost a lot of money flying planes and made billions from credit card agreements.

It is therefore reasonable that American would seek to incentivize such profitable behavior. Again, this is my opinion as someone who does not plan to earn airline status by credit card spending.

Credit card users shouldn't have to compete for upgrades.

American Airlines Credit Card Spending FAQs

There have been many questions about the details of the new credit card system. I thought I would answer some of them below. In no particular order

American Airlines' credit card purchases will count towards a million-miler lifetime status. No. Nope. Lifetime status is still calculated based upon the distance travelled for American marketed flight, or base miles earned to travel on eligible partner marketed flight. This does not include credit card spending.

To earn American elite status, you will need to fly 30 segments. Not quite. Credit card spending is the only way to qualify for any American Airlines elite tier. You must also complete 30 qualifying segments if you wish to be eligible for Loyalty Choice Rewards, which are available to Platinum Pro or Executive Platinum members.

Can American Airlines credit card spending increase odds of getting a better job? Yes. You will not only earn elite status with your credit card spending but upgrades within each elite tier will be prioritized based upon your rolling 12-month total of Loyalty points. One Loyalty Point will be earned for every dollar spent on eligible co-brand cards. The higher your priority, the higher your upgrade priority within your elite Tier.

To earn loyalty points for flights, do you have to use an American Airlines creditcard? This is confusing because you don't need to use an American Airlines credit card in order to earn Loyalty Points for a flight. No matter which credit card you have, you can earn five loyalty points for every dollar spent on American Airlines flights. You can earn up to 11 Loyalty points per dollar if you are an elite member. You can earn an additional Loyalty Point for every dollar you spend on American Airlines flights if you use an eligible American Airlines creditcard.

It can be difficult to understand loyalty points

Bottom line

You will be able earn all AAdvantage elite tiers through credit card spending starting in 2022. There is a catch: savvy credit card users can save a lot of money by spending on American Airlines credit cards.

The opportunity cost of American Airlines credit card spending is approximately 1.9%. Other valuations may differ. This means that spending $200,000 on an American creditcard would cost me $3800, which is a lot less than the best options.

Personallly, I can't see myself earning AAdvantage status primarily or entirely through credit card spending. It is just too complicated math. If you don't fly a lot, status isn't very valuable. This would be true if you earn status through spending.

I'm sure my thoughts on this will change as we find out more about the Loyalty Points earning partners (in particular Bask Bank). That's where I am at the moment.

Are you planning to earn American AAdvantage Loyalty Points by using your credit card purchases? What logic would you use to earn American AAdvantage Loyalty Points through credit card spending?