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It’s common knowledge that airline/hotel credit cards have huge bonuses and that’s where you get the best head start for your mileage account. Look at the British Airways Chase 100,000 Avios bonus for a great example. If you use your BA Avios account for short US domestic redemptions (stop doing that) then this card might as well stop listing a 100,000 mile bonus and just round it to a bajillion, see this post about how 9,000 Avios = one free roundtrip US ticket (less than 650 miles each way in distance).
But this is not a post about opening credit cards. I got in trouble with a card once, and while it wasn’t a catastrophic situation, it burned me a little, and though it was completely my fault, I am still a little gun shy. Debit cards and checking accounts are a great solution for those who want to earn miles but don’t want to open up a line of credit. There are some costs associated with them and some minor hassle, but if you pay attention, this may be the cheapest way to obtain a large volume of miles.
Here are two current offers:
American Airlines Citibank Checking Account is a great way to get a mileage bonus, and start earning one mile per dollar for your everyday purchases. This is a special signup, go to this link and enter in the code: CYKS ( There are some additional offers under the code CYYW but the bonuses are lower.). There are three checking account tiers: Basic, CitiBank, and Citibank Gold.
Mileage bonuses:
Basic = 5,000
Citibank = 15,000
Citibank Gold = 30,000
In order to get that bonus you need to set up a direct deposit for at least two months, and hold the account open for no less than three months. There are also either account minimums or maintenance fees – depending on your situation and some spending thresholds but the highest is $750 which anyone should be able to hit. Here are your options:
Account Minimum Balance or Monthly Maintenance Fee:
Basic = $1,500 or $10/month
Citibank = $15,000 or $20/month
Citibank Gold = $50,000 or $30/month
So for the college student with even a part time job, if they move their direct deposit over, and start an account they can earn 5,000 miles with a pretty low balance or a negligible fee! For the Citibank Account I know a few people with $15,000 in cash lying around, but it’s not usually left in a checking account. That being said, if you had $15k in savings, the benefit of moving your money for three months from savings to this new Citi checking account may outweigh your interest gained. For the Citibank Gold account, I am kind of at a loss for words… no I’m not – who leaves $50k in a checking account? I know there are some folks that may do this, but I am not one of them. By making the bar so high, Citi has made the third category almost exclusively for people who are going to pay the maintenance fee, earn the miles and shut the account down. Why not just charge an annual fee and then keep those customers who are willing to pay $90 for 30,000 miles but are not willing to pay $360/year for the same amount of miles? Rumor also has it that the first two months are waived on the Citibank Gold offer but I couldn’t find it in black and white so I assume it’s not.
There is one more element of the equation, Citi issues out 1099 forms whenever they give a mileage bonus. This requires you to pay taxes on any benefit or prize you receive over $650. Citi is the ONLY one who does this and the single largest detractor for me pursuing the cards. The IRS values a mile at $.02/per. Citi for some reason values a mile at $.025 (25% higher than the government)! Because of the threshold of $650 the Citibank Gold account means you would pay basic income tax on the benefits of $750 for 30,000 miles (apply your own tax rate). But if you go with the middle account, you pay $0 in taxes. Assuming you were going to sign up for these accounts exclusively for the mileage bonuses, here is what your costs would look like vs. your benefit.
Basic Account = $10/month @ 3 months for 5,000 miles, Hassle level = minimal, just move your direct deposit over for two cycles
Citibank Account = $20/month @ 3 months = $60 for 15,000 miles (0.4 cents per mile – CPM!); Hassle = minimal, direct deposit setup, close account after three full months have billed for maintenance fee
Citibank Gold Account = $30/month @ 3 months = $90 for 30,000 miles (0.3 CPM); Hassle = moderate, direct deposit setup, close after three maintenance fees, then claim income from mileage benefit on $750 (average income tax rate of 20% = $150 in taxes). When you add (for our example) $150 + $90 = $240 for 30,000 miles —– WAY TOO EXPENSIVE. If your tax rate is going to be low this year, than this may still be a great value for you, if not this is a terrible way to earn bonus miles. You could also try disputing the rate.
Final Verdict: Basic Account, close after three months – Sherpa thumbs up
Final Verdict: Middle Account, close after three months – Sherpa thumbs up
Final Verdict: Expensive Account – Sherpa thumbs down
SunTrust Delta SkyMiles Checking Account
This one DID have a 30,000 mile bonus for personal accounts and 25,000 for business accounts (you were allowed one each), but now the bonus for the personal account is only 5,000 SkyMiles but I am still posting about the offer because this has come and gone before I am relatively confident it will be back again at some point. SunTrust uses an annual fee model which I prefer. It’s $75 for the personal card and $120 for the business account. There is an account balance minimum, but it is a far more reasonable $3,000 and if you go below that the maintenance fee, again much more palatable at $12/month. You also earn one SkyMile for every dollar spent on the card. The first two months on the maintenance fee are waived so if you can get your card, make a purchase, and setup your direct deposit to receive the bonus miles, even at $75 fixed it’s likely worthwhile.
Personal Account = $75 for 30,000 5,000 bonus miles (0.25 CPM! 1.5 CPM). Hassle = low, just set up a direct deposit
Business Account = $120 for 25,000 5,000 bonus miles (.48 CPM 2.4 CPM). Hassle = low, just set up a direct deposit
BUT… if you have a SkyMiles account and are trying to build the balance, this still makes sense. How?
Consider the following monthly expenses:
Mortgage/rent = $1,000
Car = $300
Insurance = $150
Groceries = $300
Total = $1,750
When you earn one SkyMile per dollar spent, that means that every month you are earning 1,750 miles for money you are already spending, and even if you have to pay a $12/month maintenance fee, this is still a cheap way to build your account. After the end of the year you will have paid $120 in monthly maintenance fees (assuming your balance stayed below $3,000 every month) + $75 for the card = $195 for 21,000 regular spend miles + 5,000 bonus miles = 26,000. That’s back down to .75 CPM! If your expenses are higher than these or you could put more on the card, the cent per mile rate will only go down, making it an even better deal.
Final Verdict for the SunTrust Delta SkyMiles personal card: Sherpa Thumbs Up
Final Verdict for the SunTrust Delta SkyMiles business card: Sherpa Thumbs Indifferent
BankDirect Mileage Checking with Interest (American Airlines)
This one has potential and could be more lucrative if you are willing to stick with it as your primary account. We should get one thing clear right off the bat however. This is called the “Mileage Checking with Interest” account, and there have to be 1.3 million better names than that for this account. Check out the lucrative interest rates you can expect to earn:
If BankDirect had instead called the account Mileage Checking Plus or Mileage Checking and More or AAdvantage Checking Account, they would all be much more enticing and would not draw ire. Once you say “with Interest” you have to believe people are going to check the rates. I don’t really even expect to earn an interest rate from my checking account, but if it is called a “Checking Account with Interest” I certainly do! Also, did anybody else notice that if you have more than $2,500 but less than $10,000 you earn and pay as much in maintenance fees as if you have more than $10,o00? I am sure at one point in time those numbers were different, but isn’t anyone paying attention in their marketing department? If you or a friend work for BankDirect and you are hiring, I know an interested party that could help you make some changes. There is one other bit that sticks out from this image but it’s not the end of the world. If you close within the first 90 days you get hit with a $15 charge.
There are a lot of statements about how many miles they will give you if you load a bunch of cash into your checking account, but this likely won’t apply to you so I will move along. Here are the bonuses I would expect to receive if I made this my primary account:
– 200 miles: 100 miles per $1,000 you open the account with (let’s use $2,000 as an example, I don’t want to complicate this example with the BIG interest earning accounts!)
– 10,000 miles: Direct Deposit bonus (just like all the account require)
– 1,000 miles: Signup bonus just for being a new account
– 5,000 miles: Only AFTER one full year using the bill pay service, I take that to mean I need to sign up for bill pay the day I open the account if I want to close it in 367 days (it’s a leap year).
Then it gets a little confusing. Here is what the AAdvantage site shows:
They show another 5,000 bonus miles for using your BankDirect Visa (registered trademark symbol here) CheckCard, but on the BankDirect website, it doesn’t mention this. See:
It shows the bonus miles for bill pay, and then separately lists it as a “Free Bill Pay Service” above. There is no bonus statement for the check card like there is on AA’s website. You are smart though, you see that it’s a hyperlink so for the avoidance of doubt I clicked it and to save space, there’s nothing about a mileage bonus on the linked page. I have contacted BankDirect regarding this and I am awaiting a response, I will update this post when I get one. For now, I am going to have to assume that this is a benefit I will not receive.
Also missing from this… how about a mile per dollar spent? Nope. Nada. So where are we up to?
After one year (without any CheckCard bonus) I will gain 16,200 miles for $240 in maintenance fees. That’s 1.4 CPM – OUCH! Just for the sake of argument (though I have never been known as one to argue) if the CheckCard bonus was accidentally missing from the page but it is included in the offer, the rate would drop to 1.1 CPM and increase my balance to 21,200 and that is a dramatically different picture.
My issue with the account is not their egregiously dated website (though this is seriously something that reminds of AOL dial-up days), it’s not even the terrible title for the account. The earning rates are not great, but for the casual traveler this almost a free domestic US ticket (don’t ever redeem for a domestic US ticket) and it’s lower than what I value AAdvantage miles at ($.02) by almost either 30% or almost half (depending on the CheckCard bonus), so this should be a thumbs up situation. Right?
Not really.
The problem is that it takes for-eh-ver to post these miles. I have to bill pay for a year before I get either 1/3 or 1/4 of the miles and that is crazy! The whole point of signing up for one of these accounts is the effect of an instant mileage boost and this does the opposite! If you are not nearly as impatient as I am then here is the sign-up page – by all other accounts it is a fair offer.
But most of my readers are looking for loop holes, blackout dates and any other reason to doubt a deal that could be “too good to be true”. There are just too many red flags with the confusion about the card bonus, the odd “interest” portion, the dated website, and quite frankly my inability to wait for anything (though I have written a mile long post that I expect others to read!).
Final Verdict for the BankDirect Mileage Checking with ‘Interest’: Sherpa thumbs down
Okay Sherpa, but what about the other US airlines?
Great rhetorical question anonymous reader, the answer is simple. No one offers them. US Airways did in the past with Bank of America, but that ship has sailed. Southwest, Frontier, United – no, no, and no.
Conclusion – Get the SunTrust Account but try calling them and negotiating for a better rate, even with the maintenance fees, it is a pretty good deal. For fun, I wanted to include an image for the BankDirect home page that is very current and does not in any way remind me of a 1996 Compaq Presario Desktop Computer, here it is for your enjoyment.
-Sherpa
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