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What is the Best Credit Card for Air Miles Collectors?

A little while ago, I wrote an article about the best credit card for Aeroplan collectors (TD Visa won the battle).  The thing about Aeroplan credit cards is that they all “premium” cards which means they require an annual fee (As a limited time bonus, TD will waive the fee for the first year).  While Aeroplan is a decent rewards program for travelling on longer flights within North America, there aren’t a lot of opportunities to accumulate serious points outside of using a credit card.

Air Miles, on the other hand, has a number of sponsors outside credit cards which allows collectors to freely strategize their shopping and accumulate points, all without requiring a premium credit card.  In fact, as outlined in an earlier post on how to maximize your air mile points, a friend of mine collected over 12,000 miles with the bulk of the points collected without the need for a premium credit card.

However, signing up for an Air Miles credit card with a large sign-up bonus is almost a prerequisite to becoming hardcore and focused Air Miles collector.  With the number of Air Miles credit cards out there, some free and some with an annual fee, which ones gives you the best bang for you buck?  Note that I calculate an Air Mile to be worth around $0.15.

The Top Air Miles Credit Cards with annual fee:

1. BMO AIR MILES World Elite MasterCard (link) (Editors Choice)

If I were to join Air Mile hackers out there, I would likely sign up for this card.  Your probably thinking “Wait now… this card has an annual fee, isn’t MDJ against annual fees?”.  While I do not advocate annual fees on credit cards, I am willing to consider them providing that the value is there.  In my opinion, this card is packed with value for the Air Miles collector.

Here’s a key feature that is not widely known, the annual fee is waived for BMO Premium Account holders.  While the Premium Account has a $30/month fee (ridiculous), this fee is waived if you maintain $5k in the account.

  • The Rewards
    • 1 Air Mile for every $10 spent (~1.5% return); and,
    • 25% Flight Discount -> 25% fewer miles required on North American flights (if including this discount, card works out to have a 1.88% return).
  • Bonuses
    • 1,000 Air Miles welcome bonus ($150 value);
  • Insurance
    • Travel Medical;
    • Trip Cancellation;
    • Trip Interruption;
    • Delayed and Lost Baggage Insurance;
    • Flight/Trip Delay Insurance;
    • Common Carrier Travel Accident Insurance;
    • Car Rental collision damage waiver; and,
    • Purchase Security and Extended Warranty.
  • Other Perks
    • VIP Airport Lounge Access (2 passes per year).
  • Requirements: $70k personal income or $120k household income.
  • Annual Fee: $120, free for secondary users (annual fee waived if you hold a BMO premium account – avoid the $30/month account fees if you hold $5k balance).

2. BMO Air Miles World MasterCard (link)

This is a decent Air Miles credit card for someone who doesn’t qualify for the Elite card above.  However, I do not believe that this card would qualify for the Premium Account annual fee discount.  In my opinion, I would sooner hold a free cash back credit card that has similar returns, and continue to collect Air Miles through other means.

  • The Rewards
    • 1 Air Mile for every $15 spent for a maximum of $7k/month spending (~1.0% return); and,
    • 25% Flight Discount -> 25% fewer miles required on North American flights (if including this discount, card works out to have a 1.25% return).
  • Bonuses
    • No bonus.
  • Insurance
    • Trip Interruption;
    • Delayed and Lost Baggage Insurance;
    • Flight/Trip Delay Insurance;
    • Common Carrier Travel Accident Insurance;
    • Car Rental Insurance; and,
    • Purchase Security and Extended Warranty.
  • Other Perks
    • None.
  • Requirements: $60k personal income, $100k household income.
  • Annual Fee: $99, $0 for secondary users.

3. American Express AIR MILES Platinum Credit Card (link)

I find that American Express always offers a lot of value in their credit cards.  The only problem I have with them is their acceptance.  We aim to funnel our spending through one credit card to maximize the points/cash back, and when we have tried using an AMEX to do that, it simply did not work.  This card offers the lowest annual fee of the bunch, but also the smallest insurance package.  Now mind you, if you find that you can funnel most of your spending through an AMEX, then this card would rank higher in this list.

  • The Rewards
    • 1 Air Mile for every $10 spent at Air Miles sponsors, and other grocery stores, gas stations and drug stores (~1.5% return); and,
    • 1 Air Mile for every $15 spent everywhere else (~1% return).
  • Bonuses
    • 2,000 Air Miles welcome bonus when you spend $500 in first three months ($300 value); and,
    • First year annual fee waived.
  • Insurance
    • Common Carrier Travel Accident Insurance;
    • Car Rental Insurance; and,
    • Purchase Security and Extended Warranty.
  • Other Perks
    • None identified on website.
  • Requirements: $15k personal income.
  • Annual Fee: $65, $0 for secondary users.

The Top Air Miles Credit Cards with NO annual fee:

While these cards are ok for those who want to focus on Air Miles, I would prefer a free cash back card that offers an extra return on gas/groceries would provide a higher return.  The BMO Sobeys card below is my top pick for a free Air Miles card (of course, for those who do their grocery shopping at Sobeys).

1. BMO Sobeys AIR MILES MasterCard (link)

  • The Rewards
    • 2 Air Miles for every $20 spent at Sobeys (~1.5% return); and,
    • 1 Air Mile for every $20 spent everywhere else (~0.75% return).
  • Bonuses
    • 400 Air Miles welcome bonus ($60 value).
  • Insurance
    • Pay-as-you-go roadside assistance;
    • Purchase Security and Extended Warranty.

2. BMO AIR MILES MasterCard (link)

  • The Rewards
    • 1 Air Mile for every $20 spent (~0.75% return).
  • Bonuses
    • 500 Air Miles welcome bonus ($75 value).
  • Insurance
    • Purchase Security and Extended Warranty.

3. American Express AIR MILES Credit Card (link)

  • The Rewards
    • 1 Air Mile for every $15 spent at AIR MILES sponsors (~1% return); and,
    • 1 Air Mile for every $20 spent everywhere else (~0.75% return).
  • Bonuses
    • 500 Air Miles welcome bonus ($75 value).
  • Insurance
    • Travel Accident Insurance.

Conclusion

There are a few options for serious AIR MILE collectors and all of the good cards have one thing in common, they are pricey!  To sum it up though,  I think the best offerings are with BMO – specifically the AIR MILES World Elite MasterCard.  This card will give you a decent return on all spending (1.5% return) in addition to giving you a 25% discount on miles required for flights within North America.  Combined with a very comprehensive insurance package (as good as it gets) and airport lounge passes, this card leads the pack.  One more thing, the annual fee is waived if you have a BMO Premium Account (with monthly fees that can be avoided if you keep $5,000 in the account).

The contenders for the no annual fee AIR MILE credit cards are weak.  With low return on spending combined with poor insurance packages, I would think twice before signing up for one.  As mentioned above, there are free cash back credit cards with better returns that include better insurance coverage.

Are you a serious AIR MILE collector?  If so, which credit card do you use?

 

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FT About the author: FT is the founder and editor of Million Dollar Journey (est. 2006). Through various financial strategies outlined on this site, he grew his net worth from $200,000 in 2006 to $1,000,000 by 2014. You can read more about him here.

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