Middle Age Miles

Keep or Cancel – Chase British Airways Visa Card

Chase British Airways Visa card

Executive Summary

After my $95 annual fee posted, I canceled my Chase British Airways Visa card after holding it for one year.

Analysis

I was approved for the Chase British Airways Visa card a little over a year ago, in May 2017.  The sign-up bonus was a total of 100,000 Avios — 50,000 Avios after $3,000 spend within 3 months of opening the account, then an additional 25,000 Avios after $7,000 more spend within a year of opening the account (cumulative total $10,000), and finally yet another 25,000 Avios after $10,000 more spend within a year of opening the account (cumulative total $20,000).  The annual fee on the card is $95.

Over the next several months after approval, I hit the spend thresholds for the sign-up bonus levels.  However, I stopped spending once I hit $20,000 in cumulative spend and collected the entire 100,000 Avios sign-up bonus.  I never saw any opportunity where the card would generate best value beyond getting the sign-up bonus.  The only bonus category on the card is 3x Avios on purchases with British Airways (and now, two other IAG-controlled airlines, Iberia and Aer Lingus).  All other purchases earn 1 Avios per dollar of spend.  Our baseline value for Avios is 1.2 cents per Avios, and there are many cards out there that generate greater value.

The BA Visa card also has a benefit of a “Travel Together” ticket awarded upon completion of $30,000 in spend during a calendar year.  I analyzed at length whether it made sense to spend the $30,000 to get the Travel Together ticket, particularly since I would already be hitting $20,000 to qualify for the entire sign-up bonus and would only need $10,000 in incremental spend in 2017 to get the Travel Together ticket.  Even at that, I concluded that it wasn’t worth doing the additional spend.

The Travel Together ticket allows you to redeem Avios for one award seat and get a second ticket on the same flight in the same cabin (including first class or business class), by paying “only” the taxes, fees and carrier charges for the second ticket.  But “only” the taxes/fees/charges adds up to a lot.  For example, a round-trip business class ticket from DFW to London Heathrow (LHR), at off-peak pricing, would cost 125,000 Avios and more than $1,200 in additional taxes/fees/charges.  Thus, even using the Travel Together ticket benefit, this one trip would burn our entire stash of Avios (we earned 120,000 from the 100k sign-up bonus plus 1 Avios/dollar for the $20,000 in spend, plus we’ve earned a few extra through the BA shopping portal), plus cost approximately $2,500 out of pocket.  If you value the Avios at 1.2 cents each, that’s a total of $4,000 in value, plus the flights won’t earn redeemable miles or elite status.  We can do better.  I decided to save our Avios for use elsewhere, such as on short-haul flights on American or other oneworld carriers.

Two other factors went into my keep-vs-cancel decision for the Chase BA Visa card.

  • One, the card includes a benefit of a 10% discount on round trip flights operated by British Airways or OpenSkies that are booked through ba.com/Chase10 when you use your BA Visa card with the promotion code CARDOFFERU.  If you’re going to fly British Airways or OpenSkies (JFK to Paris Orly only), this could be a useful benefit.  [I would note that at the moment, the landing page for this promotion says that it ends as of June 30, 2018.  It has been extended in the past, but there is certainly no guarantee of a further extension and the promotion is in its final days.]
  • Two, the card cannot be immediately churned.  The sign-up bonus is only available if you do not currently hold the card and have not received a sign-up bonus on the card in the past 24 months.

These two factors tell me a couple of things – first, that I’m not giving up the possibility of a sign-up bonus if I hold the card for another year; and second, that there could be some potential benefit to having the card if I purchase a BA flight (unlikely, but possible).  Given that I’m not giving up any churning possibilities, the only downside of keeping the card is the $95 annual fee.  [I would also consider the impact of holding onto the card on my total credit limit with Chase.]

So, I decided to try a retention call and see if I received any offers to incentivize me to keep the card.  I reached a nice customer service rep at the Chase Executive line.  She checked for retention offers but didn’t have anything to offer me.  I proceeded to close the card.  The rep confirmed that the annual fee will be automatically refunded, and there is no need for me to pay the statement balance and wait for a refund (my annual fee posted on 6/1/2018, and the statement containing the annual fee closed on 6/16/2018).

One other note from my retention/closing call – the customer service rep noted the credit limit on my BA Visa card and proactively asked if I’d like to transfer all or part of my limit to another Chase personal card before I closed the account.  I actually took advantage of this to move some of my limit over to my Chase Marriott Rewards Visa personal card, as its limit was fairly low.

Going forward, I’ll wait and see whether I want to churn the card and re-apply once my 24-month waiting period has passed.  I received the last part of the sign-up bonus on January 16, 2018, so by my calculation I would be eligible for a sign-up bonus on this card again in February 2020.  I also have other options available in the Chase/Avios family, as I’ve never had the fairly new Chase Iberia or Aer Lingus co-branded cards and am eligible for the sign-up bonus on each of those cards (currently also up to 100,000 Avios with $20,000 spend).

 

Do you agree or disagree with my decision to close my Chase British Airways Visa card?  What is your strategy with respect to the Chase British Airways Visa card and the other Chase/Avios co-branded cards for Iberia and Aer Lingus?  Let us know in the comments!

 

Leave a Reply

Your email address will not be published. Required fields are marked *

%d bloggers like this: