The Best US Airways Credit Card is a Discover Card?

Today US Airways announced a very lucrative bonus on shared miles. Southern Travel Girl wrote a great post about it this morning. This same bonus has been around a few times, but the basics are that you share miles, and you end up getting double after the share.

  • Share 10,000 miles, give 20,000 miles
  • Share 30,000 miles, give 60,000 miles
  • Share 50,000 miles, give 100,000 miles

You don’t have to share at these levels, you can do a 23,000 mile share and end up with 46,000 miles.  However there is a $30 processing fee–which will have a lower sting on the higher transfers.

You’ve likely heard about this offer from many different blogs today.  Milenomics loves this US airways promo when it comes around.  Why? Because it turns all your cash back cards into Mile earning cards.

The bonus runs through October 15th and accounts have to have been open for 12 days. If you only have one USDM account open one for your share partner today. This will still give you time to do the trade.

New Cards

These don’t really exist. Also, how incredibly ugly is the Capital One VentureOne Card? It is the flashiest cheapest looking card ever–embarrassing to use.

The New US Airways Cards: Capital One, Amex Blue Cash & Discover Card

The following works with any type of card that earns cash back.  I’ll use the following three examples but the process is the same.  You’re buying these miles at the top end for 1.13 CPM.  That means 50,000 miles can be had for $567 or so.

Capital One: If you have been collecting Capital one “miles” at a rate of 1.25 per purchase, and have 20,000 of these (enough for $200 worth of travel). You could redeem those for 16,000 US Airways miles using the share promotion.  Another way of thinking about it is that your 1.25 Capital one Miles per dollar cover the 1 USDM mile, so you’re earning 1 US airways Dividend Mile per dollar spent on this card.

American Express: Your Blue Cash or Blue Cash preferred is a monster of a US airways card.  The no annual fee card earns 3% at grocery stores, the annual fee Preferred version 6%.  If you use the card for day-to-day purchases as well, and gas your average cash back percentage is likely somewhere below these 3%/6% thresholds.  I’ll say 2% and 4% conservatively.  You’re looking at a card that generates between 1.5 and 3 USDM miles per average dollar spent.

Discover cards: Milenomics loves Discover cards.  They have rotating 5% categories, which are good for $75 per quarter per card.  You also have 1% cash back on other purchases, and access to the discover shopping portal.  Using this card for nothing but promo purchases and the occasional Shop Discover I’ve already racked up $190 this year.  That’s a solid 15,000 USDM using the share miles promotion.  My spending to do this is crazy low, something like $4200. This means I’m earning an average 3.5 USDM per dollar I’ve spent on that card.

Discover and Amex let you just take a statement credit–so you could do the mileage trade, and pay for it and then credit yourself back your cash back bonus.  Capital One makes you ensure a purchase is travel related to get the full 1% cash back out of your “miles.” You can use the hotel trick I’ve outline here to get at your points.

Should You Speculatively Do This?

What I’ve described is useful if you know you want to take a trip somewhere, and your point balances are low.  If you’re flush with US miles, and are speculatively buying because the price is so low, I recommend you stop and think about this before you proceed.   If you are using the leapfrog method and have a goal in mind, and a cashback card with points/miles on it sitting and collecting dust this could work for you. Without a doubt a #101 Milenomic who only flies domestic flights should not do this. For more on domestic travel see here.

Like Shifting Deck Chairs

The above process, trading cash back for miles is great, but it does have one major negative.  You’re trading cash for miles.  I realize that’s confusing but the basics are this: cash is infinitely flexible.  Miles are not.  If you’re using your cash back for these miles, what will you be using when it comes time to need cash for a trip?  If you’re only doing this trade because someone wrote that it is a great “Deal” stop, and think about if it is a great deal for you.  

Remember: pigs get fat, but hogs get slaughtered.  Take what you need, not what you can. [rule]