How will the airline merger affect my US Airways miles?
Dear Cashing In,
I have a US Airways credit card and almost all my miles are with that airline. What's going to happen to my miles and my credit card now that American Airlines is merging with US Airways? I'm hearing that US Airways is going to be taken over by American. -- Concerned Flier
Dear Concerned Flier,
It's too early to know exactly how the merger between American and US Airways will play out. The union could eventually lead to a turf war between the credit card issuers affiliated with each airline -- Citi offers a number of American Airlines cards and Barclays issues US Airways cards.
But you won't see changes to your credit card or your frequent flier program any time soon. The merger won't be finalized until later this year and loyalty programs probably won't be affected for a quite a while after that.
Here's what we do know. US Airways will become part of the American brand, so Dividend Miles members like you will become AAdvantage members. In its presentation to investors Feb. 14, American Airlines announced that Dividend members will join AAdvantage, "the first and best developed loyalty program in the world."
If United and Continental are any indication, it could take up to two years for that to happen. That airline merger was announced in March 2010, but the two frequent flier programs remained separate until May 2012, when Continental's frequent flier members were absorbed into United's MileagePlus. It's impossible to know how long the current process will take, of course.
You won't lose any of your miles. They will simply become AAdvantage miles. Some time after that, you'll be reissued a new credit card to reflect that, but whether it will come from Barclays or Citi -- or whether both banks will issue versions -- remains to be seen.
Right now, if you had to trade your US Airways credit card for the AAdvantage card, your perks and annual fee would not be much affected. If anything, the AAdvantage card offers a couple things the US Airways card doesn't -- including a 10 percent annual dividend on miles redeemed.
One option to consider is signing up for an AAdvantage card now and collecting the sign-up bonus (up to 30,000 miles). Ultimately, you'll end up with one new, reissued card, but you'll have stashed the extra miles. As with any credit application, signing up for the AAdvantage card now will result in a hard pull on your credit report, which will have a slight negative impact on your credit score.
Either way, you will eventually be part of a much larger frequent flier program. Both US Airways and American are sizable airlines, and the combination will create the world's largest carrier, with a frequent flier membership that's triple the size of Dividend Miles. The US Airways program has about 30 million members, while AAdvantage has about 70 million. Combined, the two programs will have 100 million members.
Those US Airways flights you've been taking won't disappear, they'll just become American flights -- which a lot more frequent fliers will be able to access. This could impact your ability to score seat upgrades on those flights. On the other hand, you'll have access to all of American's flights, encompassing 130 destinations that US Airways doesn't service.
The merged airlines are expected to go with American's partner alliance, oneworld, instead of US Airways' Star Alliance, which will reduce your access to other airlines, mainly overseas. (United is also a member of Star Alliance.) oneworld has 13 member airlines compared to Star Alliance's 27. On the plus side, you'll be able to use your miles to purchase flights on American to 336 destinations in 56 countries, including 53 U.S. cities US Airways does not reach.
Meet CreditCards.com's reader Q&A expertsDoes a personal finance problem have you worried? Monday through Saturday, CreditCards.com's Q&A experts answer questions from readers. Ask a question, or click on any expert to see their previous answers.
Published: March 5, 2013
- You splurged for the Chase Sapphire Reserve card. Now what? – Use the card's points and perks before that $450 annual fee kicks in again ...
- Making the most of flexible airline rewards programs – Several programs allow transfers to airlines and hotels, and there may be more possibilities than you realize ...
- Save money on gas, at Costco and elsewhere – Using the new Citi Costco card can make sense at the pump, but there are other ways to save on gas ...