Is SPG really the best for American Airline redemptions?

When looking to earn and directly transfer points over to American Airlines, there is only one card that allows you to do so, the SPG credit card. I personally don’t have this card and have no intention on opening it. Recenty, Citi making some aggressive moves, with the Citi Prestige and improving Citi Premier I couldn’t help but wonder, is the SPG card really the best for American Airline redemptions? 

Many hold the SPG as a top card and give their points some high value as well (For AA, a mile is valued around 1.7 cents per mile). Also one transfer partner they have that nobody else has is American Airlines. When you transfer in 20,000 increments you receive an extra 5,000 points. If you were to transfer to American Airlines in 20,000 chunks, you basically earn AA miles at 1.25 miles per every dollar spent (this brings the earning rate to about 2.1 cents per dollar spent for American Airlines).  Sounds awesome, right? When you use the SPG credit card though you only earn 1 point per every dollar spent, unless you stay at their hotels, in which you earn extra. So to earn 20,000 SPG points you need to spend $20,000! I think that is ridiculous!

Citi has really made some awesome improvements to their credit card portfolio. They have increased their bonuses, changed bonus categories, added transfer partners (still waiting for a domestic transfer partner), and a list of additional benefits. The addition of the Citi Prestige and changes to the Citi Premier, I think has moved Citi up the ladder for rewards credit cards. I don’t think their done yet either.

Although Citi Thank You points do not directly transfer to American Airlines, you can redeem your Thank You points with your Citi Prestige on American Airlines for 1.6 cents per point (or 1.33 cents on any other airline). The Citi Premier can be redeemed at 1.25 cents per point on any airline, including American Airlines.

Quick breakdown of earning rates:

Screen Shot 2015-04-27 at 10.52.15 AM
SPG Credit Card- 1 SPG point on all transactions and up to 5 SPG points when booking hotel stay directly at SPG properties. Annual fee of $65, waived for year 1.

Screen Shot 2015-04-27 at 10.54.16 AM

Citi Prestige- 3 Thank You points on air and hotel, 2 Thank You points on entertainment and dining, 1 Thank You point on all other transactions. Annual Fee of $450, not waived for first year. $250 airline credit each calendar year, so year 1 of having this card actually makes you $50.

Screen Shot 2015-04-27 at 10.55.17 AM

Citi Premier- 3 Thank You points for travel including gas, 2 Thank You points on entertainment and dining, 1 Thank You point for all other transactions. Annual fee of $95, waved for year 1.

I looked up the average American spending breakdown according to the Bureau of Labor Statistics. For transactions you could put on your credit card, the breakdown was:

  • Gas- $2,400
  • Entertainment- $2,500
  • Groceries- $4,000
  • Dining Out- $2,600
  • Apparel- $1,600
  • Transportation/Travel- $6,600
  • Healthcare expenses- $3,600
  • All other expenditures- $3,300

This chart shows the amount of points earned in a year based upon average spending by Americans:

Category Yearly Amount SPG Citi Premiere Citi Prestige
Gas $2,400 2,400 7,200 2,400
Entertainment $2,500 2,500 5,000 5,000
Groceries $4,000 4,000 4,000 4,000
Dining Out $2,600 2,600 5,200 5,200
Apparel $1,600 1,600 1,600 1,600
Transportation/travel $6,600 6,600* 19,800 19,800
Healthcare expenses $3,600 3,600 3,600 3,600
All other expenditures $3,300 3,300 3,300 3,300
Total points $26,600 26,600 (with bonus 56,600) 49,700 (with bonus 102,700) 44,900 (with bonus 97,900)

*When making this table I didn’t try to guess how much money of travel on the SPG card would be at an SPG hotel, so I kept everything at 1 point.

For the first year, even though you need to pay the annual fee upfront on the Citi Prestige you actually make $50, since the $250 airline credit is based on a calendar year, not cardmember year. All others cost $0 for year 1.

SPG:
In year 1, including the bonus when opening the card, you would have a total of 66,600 AA miles after transferring from SPG (10,000 mile bonus), making the estimated value on American Airlines around $1,333.22.

If in year 2, spending stays the same, you would have a total of 31,600 AA miles (5,000 mile bonus), making the estimated value on American Airlines around $633.20.

Citi Premier:
In year 1, including the bonus when opening the card, you would have 102,700 Thank You points. You can purchase American Airline flights for 1.25 cents per Thank You point. Making the estimated value on American Airlines around $1283.75.

If in year 2, spending stays the same, you would have a total of 49,700 Thank You points, making the estimated value on American Airlines around  $621.25.

Citi Prestige:
In year 1, including the bonus when you open this card, you would have 97,900 Thank You points, You can redeem these for 1.6 cents per Thank You point on American Airlines. Making the estimated value on American Airlines $1,566.40. 

If in year 2, spending stays the same, you’d have a total of 47,900 Thank You points. Making the estimated value on American Airlines $766.40.

Conclusion:
In year 1, the Citi Prestige looks like it could be the better option for redeeming on American Airlines at 1.6 cents per point. In year 2, it really depends on your use of the additional benefits of the card to justify the annual fee. I think as Citi continues to increase its list of transfer partners,  American Airlines will eventually be one. Citi is the company that is co-branding American Airline credit cards.

I think the earning power and benefits of the Citi Prestige are better than SPG and when redeeming for American Airlines is currently a better option.

What do you think? Is SPG points really the way to redeem for American Airline flights?

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6 thoughts on “Is SPG really the best for American Airline redemptions?

  1. I want the Citi Prestige badly, but I want to go to a branch (none local) to get the in-branch sign up bonus (slightly higher)

    1. You could always try to apply over the phone, let them know there are no branches in the area. See if they will match the in branch offer, since you’re not able to apply at a branch

      1. Maybe–most of the forums say that it was a no-go to try and get that offer over the phone.

        Reasoning is that the in-branch offer was designed to cater to Citi Gold Checking account customers. The idea is “if you don’t have a local citi branch, then you’re OBVIOUSLY not a Citi Gold checking customer.”

  2. I want the Citi Prestige badly, but I want to go to a branch (none local) to get the in-branch sign up bonus (slightly higher)

    1. You could always try to apply over the phone, let them know there are no branches in the area. See if they will match the in branch offer, since you’re not able to apply at a branch

      1. Maybe–most of the forums say that it was a no-go to try and get that offer over the phone.

        Reasoning is that the in-branch offer was designed to cater to Citi Gold Checking account customers. The idea is “if you don’t have a local citi branch, then you’re OBVIOUSLY not a Citi Gold checking customer.”

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