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Air Miles Credit Card Comparison

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Overview

This page offers a comparison of various credit cards that are for the regular consumer.  The listing was obtained from Air Miles website listing of their Air Miles Financial Partners.  We focused on credit cards only.  There were only two types:

  1. Bank of Montreal’s Mastercard
  2. American Express

Considerations

There are a few factors when looking at these cards:

  1. How quickly they earn Air Miles.
  2. The annual fee.
  3. Extra incentives on the cards.
  4. Bonus miles given when signing up.

This article focuses primarily on the first 2 items (the earning rate and the annual fee) and also gives some consideration to #3, the incentives on the card.  In our opinion, #4 (the bonus miles) are interesting, but do not weigh in on the long term since the bonus miles are just in the first few months of signing up.

Comparison of Air Miles Credit Cards

Overview of the Cards

The most relevant information is the below table.  This lists out earning rates, extra features, and the annual fees.

Air Miles Credit Cards - 2016

CardAnnual FeeSupplementary CardsInterest RateRulesExtrasBonus
American Express AIR MILES Reserve Credit Card
$299
$50
19.99%1/$10 at sponsors
1/$10 at grocery/gas/drug
1/$15 elsewhere
FlexFly
Lounge Access
Use miles for taxes/fees
Travel insurance
2,400 miles when spending $3k in first 3 months
American Express AIR MILES Platinum Credit Card
$65
$0
19.99%1/$10 at sponsors
1/$10 at grocery/gas/drug
1/$15 elsewhere
"No fee first year
2,000 miles when spending $500 in first 3 months"
American Express AIR MILES Credit Card
$0
$019.99%1/$15 at sponsors
1/$20 everywhere else
500 miles first time card is used
BMO AIR MILES World Elite Mastercard
$120
19.99%
$0
19.99%1/$10
2x mileage at National/Alamo
25% discount on North American flight miles.
Medical/Travel insurance
Concierge service
Varies
BMO AIR MILES Mastercard
$0
$019.99%1/$20
1.25 at Shell
1.5 at National/Alamo car rentals

Sources:

Assumptions

Some of these cards have varying rates of earning Air Miles.  For example, the American Express AIR Miles Reserve Card earns 1 Air Mile for every $10 spent at Air Miles sponsors and at grocery stores, gas stations, and drug stores.  However, everywhere else is $15 of spend to get 1 Air Mile.

For our purposes, we will assume the worst case earning rate of each card.

We should also place a value on a single Air Mile as well.  The example used recently was a flight from Calgary, AB to Victoria, BC.  It was 975 Air Miles to book the flight with an additional $115 in taxes.  A similar flight on the same airline’s website was $334.  This is a savings of $218.  $218 divided by 957 Air Miles equates to 22 cents/Air Mile.  We will use this for valuation purposes further on.

Please Note: The value of 22 cents is an estimate based on air fare within North America.  Other rewards of vastly different values.  You can read more about that in http://thoughtsfrommylife.com/2007/03/collecting-air-miles-and-their-value/.

Step 1: Air Miles Earned

The table below has a number of annual spending amounts on the credit card ranging from $1,000 through $50,000.  It then shows how many Air Miles would be earned on each card for the worst case scenario.

Air Miles Credit Cards - Points Earned Comparison - 2016

CardWorst Case Earning RatePoints for $1,000Points for $5,000Points for $10,000Points for $20,000Points for $30,000Points for $50,000
American Express AIR MILES Reserve Credit Card
15
673336671,3332,0003,333
American Express AIR MILES Platinum Credit Card
15
67
3336671,3332,0003,333
American Express AIR MILES Credit Card
20
502505001,0001,5002,500
BMO AIR MILES World Elite Mastercard
101005001,0002,0003,0005,000
BMO AIR MILES Mastercard
20502505001,0001,5002,500

Charting this out, we see that the BMO AIR MILES World Elite definitely earns the most Air Miles with the two premium American Express cards coming in 2nd.

Air Miles Points Collected by Spend - 2016

Step 2: Air Miles Value Earned

The value of the Air Miles earned is shown in the table below.  This is using the Air Miles earned and multiplying by the estimated value of 22 cents an Air Mile.

Air Miles Credit Cards - Points Value Comparison - 2016

CardPoints for $1,000Points for $5,000Points for $10,000Points for $20,000Points for $30,000Points for $50,000
American Express AIR MILES Reserve Credit Card
$15$75

$149
$299
$448
$747
American Express AIR MILES Platinum Credit Card
$15$75
$149
$299
$448
$747
American Express AIR MILES Credit Card
$11$56$112
$224
$336
$560
BMO AIR MILES World Elite Mastercard
$22
$112
$224
$448
$672
$1,120
BMO AIR MILES Mastercard
$11$56$112$224
$336
$560

Step 3: Factoring in the Annual Fee

It is very important to consider the annual fee. These can be very steep and when we take that off of the value of the Air Miles earned, it can leave you with considerably less value in your Air Miles.

The table below is the same as the above table, except it subtracted the annual fee.  Please note there are values that are negative now.

Air Miles Credit Cards - Points Value Subtracting Annual Fee Comparison - 2016

CardPoints for $1,000Points for $5,000Points for $10,000Points for $20,000Points for $30,000Points for $50,000
American Express AIR MILES Reserve Credit Card
-$284
-$224


-$150
-$0
$149
$448
American Express AIR MILES Platinum Credit Card
-$50
$10
$84
$234
$383
$682
American Express AIR MILES Credit Card
$11
$56
$112
$224
$336
$560
BMO AIR MILES World Elite Mastercard
-$98
-$8
$104
$328
$552
$1,000
BMO AIR MILES Mastercard
$11
$56
$112
$224
$336
$560

So looking at the above chart, the valuations definitely change based on how much you are spending on the credit card throughout the year.  If you are in the lower amounts, then no fee cards may be more appealing.  There is a break even point for the cards with annual fees that doesn’t happen for a bit.

As soon as you get into the $20,000/year and above on your credit card (just under $1,700/month), the BMO AIR MILES World Elite Mastercard definitely takes over in terms of the quanity of Air Miles being earned.

Step 4: Factoring in the Extras

When we look at cards with annual fees, they always come with various features that may be of interest.  These features can have a value applied to them as well.

For example, the most expensive cards for BMO and American Express come with travel insurance features.  One trip in a year could save you hundreds of dollars and easily cover the cost of the annual fee.   A quick quote from RBC’s travel quote website for a family of 4 on a 2 week trip out of the country had quotes around $500 to get trip cancellation, medical, baggage, and travel accident coverage.

The top American Express card also had lounge access, which is the only one in our list.  This includes food and drinks in various lounges and can be worth a considerable amount depending on your travel frequency through these airports.

 

Conclusion

There are a few factors to consider for each individual, but some recommendations are:

  • If you are frequently use lounges covered by the American Express card and pay for trip insurance: American Express AIR MILES Reserve Credit Card
  • If you frequently travel and need trip insurance: BMO AIR MILES World Elite Mastercard
  • If you do not spend over $20,000/year on your credit card, then stick to the no fee credit cards of American Express and BMO.
  • If you spend over $20,000/year on your credit card and airport lounge access isn’t of value to you, then the BMO AIR MILES World Elite Mastercard.

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