Don't apply for a credit card from US Airways without seeing my review. Is it just a big ripoff for 2013? Some people have asked that, but it's not a ripoff (it actually has some very nice benefits). That being said, there are real drawbacks to be aware of too.
So is the US Airways MasterCard any better in 2013?
For starters, you should know that a different bank (Barclays) acquired a majority ownership stake in the U.S. Airways Dividend Miles card program from Bank of America a couple years back.
When Credit Card Forum reported this news on the blog, a record number of complaints from existing cardmembers were posted about high fees, unfair terms, difficult mileage redemption, and difficulty dealing with their customer service.
However in defense of Barclays (and in critique of BofA) despite the rocky transition of ownership, it sounds as if things are now back to normal. That flood of complaints has stopped.
Are the rewards really premier?
The official name of it is the US Airways Premier World MasterCard, but some people feel that the rewards don't quite live up to that label.
It gives 1 Dividend mile per dollar, with the exception purchases on the airline which earn double. Now this in and of itself is pretty typical of an airline credit card. But what isn’t typical is how the reward seat availability reportedly stacks up against the competition…
A graph using that same data was published in the Wall Street Journal about a year and a half ago. The data came from the consulting firm IdeaWorks, who made 6,720 booking inquiries to check the reward seat availability on 24 frequent flyer programs. They checked travel dates spanning a 5 month window for 20 top routes on each airline.
Dividend miles = last place?
This is a reason why some people skip paying the $89 annual fee for the US Airways credit card and instead, apply for the Chase Sapphire Preferred and its promotion for up to $500 worth of free airfare. I hear from plenty of US Airways aficionados going that route, since they can spend the Sapphire’s rewards on any airline, without restrictions or blackout dates.
You will notice the marketing for the US Air MasterCard touts the benefit of getting award flights for 5,000 fewer miles (at 20,000 miles versus the typical 25,000). That is a major plus, but the question is, does having that perk outweigh the drawback of below-average availability for award seats?
And the other benefits?
This card does offer some fairly respectable benefits.
What’s noticeably missing from the list – something that many people have voiced complaints about – is that there is no benefit for first-checked bags. As you know some major carriers like the Delta Airline's American Express give cardholders their first-checked bag for free. With the typical $25 charge each way per bag, that saves a traveling couple $100 per roundtrip. In my opinion, that’s one of the biggest reasons to get an airline-branded card so to see it missing from the Dividend Miles is a letdown.
- Priority boarding. Unfortunately it’s not zone 1, but cardholders still get to board during zone 2. During check-in the first class line can also be used.
- 1 Club pass per year (valid for a one-day visit). Getting to use the lounge only once per year isn't ideal, but it's better than nothing.
- $99 companion ticket certificates. 2 of these are given per year, though black-out restrictions do apply with these. Please note you will still have to pay any applicable taxes/fees on the companion tickets.
Barclaycard also has a more basic version of the US Airways card for a $49 fee. The rewards are the same but it doesn’t include the zone 2 boarding, first class check in, or the one-day Club pass. There is a companion ticket (x1) per year and it costs $149 + taxes/fees if used. Its signup bonus is smaller too (last I checked it was 25k miles instead of the 40k with premier).
The rates and other fees?
Most credit cards have 3 or 4 interest rate tiers but there are only 2 with this:
As you see even the lowest tier listed on the application is still relatively high. I've seen comments posted by people who get stuck in that 24.99% tier and feel they deserve better. Here is one such example:
Obviously whether that allegation is accurate or not, there's no way to know without actually seeing their credit score and report. Regardless, remember if you don't carry a balance you won't pay interest. Simple as that.
If you travel internationally, an expense you need to be aware of is that both of these credit cards will charge you a 3% foreign transaction fee. During the last couple years a lot of the travel cards which are in similar price points (around $100) have dropped this fee, but US Airways is still changing it.
Is it the right choice for you in 2013?
The benefits (especially the companion airfare perk) will make sense for a lot of people. If you're one of them, then here is the sponsored promotion going on right now for the card.
On the other hand, if you prefer a travel card that does not restrict you to a specific airline, then I would highly recommend this sponsored offer from Capital One.