By Adam Jusko, ProudMoney.com, adam@proudmoney.com

Citi and American Airlines are launching a new, no annual fee credit card called the AAdvantage MileUp Card. Is it right for you?

Rewards Formula

As mentioned, the AAdvantage MileUp credit card has no annual fee. It offers the following rewards:

  • 2 AAdvantage miles per dollar on American Airlines purchases
  • 2 AAdvantage miles per dollar on grocery store purchases (but not grocery purchases at warehouse club stores)
  • 1 AAdvantage mile per dollar on all other purchases

Bonus Opportunity

You can earn 10,000 AAdvantage miles plus a $50 statement credit if you spend at least $500 with the card in the first three months, a threshold that most new cardholders can probably meet without too much difficulty.

Other Notes:

  • Like other AAdvantage cards, the MileUp card also gives you a 25% discount on in-flight purchases of food and beverages on American Airlines.
  • If you are a current AAdvantage Bronze Card holder, the benefits on your card are automatically changing to the same benefits as this card as of July 22, 2018. Once your Bronze card expires, it will be replaced with the MileUp Card.

The Verdict

While the AAdvantage MileUp Card offers decent rewards for a no annual fee card, it’s difficult to get excited about it.

It does make sense from the perspective of Citi and American Airlines. After all, certain other airlines offer no annual fee cards (Delta in particular) and this card allows American to hit every market segment — some people won’t pay an annual fee under any circumstances, so this gives American an option to offer those customers.

However, from your perspective, this card makes less sense. Here’s why:

  • If you don’t regularly travel on American Airlines, you’re getting a card that will require significant spending to get you to enough miles to earn a reward. Further, you could actually earn more in terms of actual value by getting a top-of-the-line cash back card instead, such as the Citi Double Cash which offers 2% cash back on every purchase.
  • If you do travel often on American Airlines, or if you spend a lot with your credit cards, you’d be better off with the AAdvantage Platinum Card, which has a $99 annual fee (but $0 for the first year) and significantly increased benefits.

Citi and American Airlines will no doubt find takers for this card, especially when it is marketed next to their other cards that have annual fees. However, for the wise card customer surveying the full landscape of opportunities on the market, it’s difficult to make a case for the MileUp Card as a card to pursue.