A new travel rewards credit card is mixing up how things are done when it comes to sign-up bonuses. Barclays (recently rebranded from Barclaycard) launched its new Arrival Premier World Elite Mastercard this week, and it's notably different from other "hot" elite travel rewards cards.
Travel rewards cards have amped up sign-up bonuses in recent years, peaking with the 100,000 points offered by the Chase Sapphire ReserveSM Card a few summers ago. And while the Reserve is the only card to go that high (and has since cut its sign-up bonus in half), bonus offers of 50,000 to 60,000 points have become increasingly common. To earn them, customers typically have to spend a certain amount of money on the card in the first three months after opening it.
Bonuses for Loyalty, Not Signing Up
Barclays has deviated from that approach altogether. The new card offers 2 miles on every dollar spent (with no caps), similar to its Arrival Plus card. But instead of a sign-up bonus, cardholders can earn 15,000 bonus points when they spend $15,000 in one cardholder year. Spend another $10,000 and earn an additional 10,000 bonus miles.
That means a total of $25,000 spent (or $2,083 each month) can result in a total of 25,000 bonus miles. The biggest difference, however, is that unlike sign-up bonuses, the reward is not a one-time thing. Cardholders have the opportunity to earn the bonus each year.
This strategy by Barclays is clearly an attempt to curtail "churn"—when customers sign up for new cards in order to accumulate bonus points and then stop using the card once they've milked that opportunity. Barclays wants to reward its customers for loyalty to their credit card, and it just might work.
The redemption rate for miles earned is pretty standard: They are worth 1 cent each on statement credits against travel purchases, like airfare, hotels, and car rentals. That means that if you do spend $25,000 in one year on the card, you'll earn a total of 75,000 miles (2 for every dollar spent, plus the 25,000-mile bonus)—worth a total of $750 in annual rewards. (You'll want to subtract the card's annual fee of $150, of course, which means your net earnings on the card would equal $600.)
But the card offers one additional twist in terms or redemption: Users can transfer the miles they earn on the card to the frequent flier programs for nine different airlines (so far—it's likely that Barclays will add an additional partner in the future):
- Air France/KLM Flying Blue
- China Eastern
- EVA Air
- Japan Airlines
- Jet Airways
- Malaysia Airlines
You will have to transfer 1.4 of the Premier miles to get 1 mile on these frequent flier programs, with the exception of Japan Airlines which will require 1.7 Premier miles to get 1 mile. Because cardholders earn 2 miles for every dollar spent, transferring miles means you're earning 1.42 miles per dollar with most airlines in the Premier card's program and 1.18 miles for Japan Airlines. (The cardholder bonus will increase this earning rate, of course.)
Other Card Benefits
Additional perks seem to mirror what you'd find on other elite travel rewards cards: no foreign transaction fees, a $100 credit towards your Global Entry program application, and membership to Lounge Key, which offers access to 800 airport lounges for just $27 per visit.
The card also offers baggage delay and trip cancellation insurance, extended warranty on purchases, and travel and shopping discounts and perks through the World Elite Mastercard program.
Is This Credit Card For You?
If you like the straightforwardness of getting 2 miles on all purchase without having to keep track of different categories that offer higher rates, this card could be a good bet. You'll have to spend at least $7,500 a year (or $625 a month) on the card to earn enough rewards to cover the card's $150 annual fee. And if you spend at least double that amount each year, you'll start earning significant bonuses that could really make the card worthwhile.
If you don't think you'll spend enough to earn the bonus, however, you can find other travel rewards credit cards that offer double miles on purchases—and will reward you with a big sign-up bonus right out of the gate (like the Capital One Venture Rewards card). When getting a new credit card, it's always a good idea to assess your own spending habits and figure out which credit card is right for you.
Editorial Disclaimer: Opinions expressed here are author's alone, not those of any bank, credit card issuer, or other company, and have not been reviewed, approved or otherwise endorsed by any of these entities. All information, including rates and fees, are accurate as of the date of publication.