Miles Fly as British Carriers Wage Credit Card War

(Editor’s Note: As of January 12, the British Airways 100,000-mile credit card promotion has been terminated, replaced by a significantly less generous offer.)

I recently called the current bonus for the British Airways Visa credit card the most lucrative such offer I could remember seeing. That remains the case. But as you might expect, given the fierce and sometimes nasty competition between the two largest British airlines, there’s now a compelling counter-offer in place from Virgin Atlantic for the American Express card linked to its Flying Club program.

On offer for new cardholders are the following:

• 45,000 bonus miles after the first purchase
• Up to 15,000 bonus miles every anniversary (7,500 miles after spending $15,000 within the anniversary year, and an additional 7,500 miles after spending $25,000)
• Up to 5,000 bonus miles for adding additional cardholders to the account (2,500 miles for each of the first two authorized users)
• Three miles per dollar spent on Virgin Atlantic purchases and at Regus business centers
• 1.5 miles per dollar spent on other purchases
• A 50 percent discount on a companion award ticket after spending $25,000 in a year
• One elite tier point per $2,500 in purchases (maximum of two points per month)

The card’s annual fee is $90. The annual percentage rate (APR) is variable, based on adding 8.99 percentage points to the U.S. Prime Rate, currently 12.24 percent.

Deal or No Deal

The British Airways card wins the headline battle, offering as many as 100,000 bonus miles for new cardholders who charge $2,000 within three months of opening their accounts.

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At $75 per year, the annual fee for the British Airways card beats the $90 fee for Virgin Atlantic’s.

But the Virgin card comes with a lower APR.

A point-by-point comparison of the two cards’ bullet points misses the big picture, however. The real-world value of the two airlines’ bonus miles must also be factored into the calculation.

British Airways miles can be redeemed for free flights on any of the many airlines participating in the oneworld global airline alliance, including American. Virgin Atlantic miles can only be redeemed on a handful of other airlines. Their U.S. partners are Continental, Hawaiian, and US Airways. Advantage: British Airways.

On the other hand, Virgin Atlantic is one of those airlines that has managed, through a combination of clever marketing and solid service, to develop a core of fiercely loyal customers. For them, this offer has “sign up” written all over it.