Citi AAdvantage Executive 125K Offer: Big Bonus, But Should You Pass?

125,000 American Airlines AAdvantage miles certainly gets your attention. But once you get past that number, Citi's latest offer on the Citi® / AAdvantage® Executive Mastercard® becomes considerably less exciting for many travelers.

The new offer is:

• 125,000 AAdvantage miles
• $15,000 in purchases within the first five months
• $695 annual fee
• The annual fee is not waived the first year

This is the highest bonus we've seen on the card, according to Doctor of Credit, which deserves credit for bringing the offer to our attention. The previous high was 100,000 miles, although that offer required only $10,000 in spending.

But bigger isn't necessarily better.

For someone who flies American Airlines regularly and can make good use of Admirals Club lounges, this could be a compelling offer. For everyone else, I'd probably pass.

$15,000 Is a Lot of Spending

The first problem is obvious: $15,000 in five months.

That's an average of $3,000 per month that needs to go on this card.

If you're going to spend that money anyway, fine. But there's an opportunity cost. That same $15,000 could potentially be used to earn signup bonuses on multiple other credit cards, many of which have substantially lower annual fees.

That's particularly important for people playing the points-and-miles game.

Instead of looking only at the 125,000 AAdvantage miles, ask:

What else could I earn with $15,000 of credit card spending and $695 in annual fees?

For many travelers, the answer may be quite a lot.

Then There's the $695 Annual Fee

The second problem is the $695 annual fee, and unlike some airline cards, Citi isn't waiving it for the first year.

You're effectively paying $695 for the privilege of pursuing that 125,000-mile bonus.

Of course, you're getting much more than the bonus. This is American Airlines' premium consumer credit card, and its centerpiece is Admirals Club membership.

That's where the economics of this card start to make sense — if you actually use the lounges.

The Admirals Club Is the Key

The Citi/AAdvantage Executive card includes an Admirals Club membership for the primary cardholder. Citi says the membership provides access to more than 100 Admirals Club and partner lounges, and the primary cardholder can generally bring immediate family or up to two guests when the applicable access requirements are met.

For a regular American Airlines flyer who frequently visits Admirals Clubs, that's a legitimately valuable benefit.

In fact, I'd argue that this is primarily an Admirals Club card that happens to come with a very large signup bonus.

If you're flying American a few times a year and rarely encounter an Admirals Club, paying $695 annually becomes considerably harder to justify.

There Are Other Benefits

Citi has loaded the Executive card with credits and benefits that can potentially offset the annual fee, including:

• Up to $500 annually toward eligible American Airlines Vacations purchases, divided into two $250 earning periods
• Up to $120 annually on eligible prepaid Avis and Budget rentals
• Up to $100 annually on eligible inflight and Admirals Club purchases
• Lyft credits for qualifying users
• Global Entry/TSA PreCheck application fee credit
• First checked bag free on eligible domestic American Airlines itineraries
• Enhanced airport benefits
• Loyalty Point bonuses
• Omni Hotels benefits
• Avis status

There is plenty of potential value here.

But don't make the mistake of valuing a $100 credit at $100 unless it's something you would have purchased anyway.

The American Airlines Vacations credit is a good example. If you already book AA Vacations packages, great. If you have to change the way you book travel just to use the credit, its real value to you is substantially lower.

The same principle applies to virtually every coupon-book premium credit card.

Earning Rates Don't Justify $15,000 of Everyday Spending

The card earns a strong 4X AAdvantage miles on eligible American Airlines purchases and elevated rewards on certain eligible hotel and rental-car bookings through American Airlines.

But ordinary purchases earn just 1 AAdvantage mile per dollar.

That matters while you're working toward the bonus.

If much of your $15,000 is everyday spending, you'll earn the signup bonus, but you're giving up the potentially better category bonuses and flexible currencies you could have earned elsewhere.

And once you've earned the signup bonus, this becomes an even bigger consideration.

There are plenty of credit cards with much lower annual fees — and sometimes no annual fee — that can produce substantially better returns on dining, groceries, gas, travel and other everyday spending.

Who Should Consider This Offer?

I think this offer makes the most sense for a fairly specific traveler:

Someone who flies American Airlines regularly, values Admirals Club membership, can naturally spend $15,000 in five months, and expects to use enough of the card's other benefits to offset a meaningful portion of the $695 annual fee.

If that's you, the record 125,000-mile bonus makes an already-useful card substantially more attractive.

It's particularly compelling if you were already considering buying an Admirals Club membership.

Who Should Probably Pass?

For the more casual American Airlines traveler, I'm considerably less enthusiastic.

If you:

• Fly American only occasionally
• Don't regularly use Admirals Clubs
• Would struggle to naturally spend $15,000 in five months
• Already have lounge access through other means
• Prefer flexible points such as Chase Ultimate Rewards, Citi ThankYou Points or Capital One miles
• Could use that $15,000 to earn two or three other signup bonuses

...then 125,000 miles shouldn't distract you from the $15,000 spending requirement and $695 annual fee.

There are simply too many other ways to earn large quantities of points and miles without committing this much spending to a single card.

Trash Panda Take

This is an excellent bonus attached to a card that makes sense for a relatively narrow group of travelers.

If you're a regular American Airlines customer and Admirals Clubs are part of your normal travel routine, take a serious look at it. The 125,000-mile bonus could make the first year particularly rewarding.

But if your primary motivation is simply, "Wow, 125,000 miles!", I'd probably keep walking.

A $15,000 minimum-spend requirement represents a substantial amount of opportunity cost, and the $695 annual fee starts immediately. You could potentially use that spending to earn several other bonuses while paying far less in annual fees.

Don't chase the biggest number. Chase the best return on your money and your spending.

For many points-and-miles travelers, that means passing on this one.

Source

Hat tip to Doctor of Credit for reporting the 125,000-mile offer.