Love Travel, but Hate Airline Miles? Try AmEx's Blue Sky Preferred
Sometimes, the best way to earn a free flight with a reward credit card is to avoid frequent flier miles altogether. Cards that offer cash back and other benefits are often more valuable than frequent flier miles, as these rewards can be used for any flight at any time. In addition, those who make advanced reservations and those who travel shorter distances rarely see as much value from their airline reward card spending as they would from a good cash back card.
American Express offers its Blue Sky Preferred card that returns points worth 1.33 cents per dollar spent on all purchases, and points worth 2.66 cents per dollar at restaurants, hotels, and car rentals. In addition, it offers some additional features and benefits not found on most airline reward cards.
How This Card Works
New cardholders earn 15,000 points after spending $1,000 on their card within three months of opening an account. Each point is worth 1.33 cents each as a statement credit towards any travel purchase, so this sign up bonus can be valued at $200. Most purchases then earn one point per dollar spent, while transactions at U.S. restaurants, hotels, and car rentals earn two points per dollar spent.
Once 7,500 points are accumulated, cardholders can redeem the points for a $100 statement credit towards travel expenses such as airfare, hotel rooms, and rental cars.
Blue Sky Preferred offers more than just rewards for spending; it also provides a broad slate of benefits such as:
- Promotional financing rate on new purchases. New cardholders receive 12 months of 0% APR financing on new purchases. After that, the standard APR will be a variable rate, currently 17.24%, 20.24%, or 22.24%, depending on the applicant's credit worthiness.
- Annual airline allowance. Cardholders will receive a statement credit up to $100 for airline incidental fees such as checked baggage charges, in-flight food, and entertainment.
- Return protection. If a retailer will not accept a returned item within 90 days of purchase, American Express will reimburse cardholders for up to $300 per eligible item, with a limit of $1,000 annually.
- Extended warranty coverage. This policy will extend a manufacturer's warranty coverage for up to one year.
- Travel accident insurance. This policy provides a benefit for death or dismemberment resulting from an accident on any plane, train, boat, bus, or other common carrier transport.
There is a $75 annual fee for this card and a 2.7% foreign transaction fee on all charges processed outside the United States.
- This card offers a respectable 1.33% return on most spending, and a very competitive 2.66% return on restaurant, hotel, and rental car spending.
- I like how travelers can purchase tickets the way they normally would, and then get reimbursed by this credit card rewards program. In this way, travelers earn points and miles for their travel and are eligible for upgrades.
- In addition, the $100 annual airline fee credit takes a bite out of the myriad of airline fees while nicely offsetting this card's moderate $75 annual fee. And finally, the purchase protection and travel insurance policies are a welcome addition to this feature filled card.
- I strongly dislike foreign transaction fees, especially in a credit card aimed at frequent travelers. These fees are pure profit for card issuers while offering no benefit to cardholders. Many credit cards are now dropping this fee, while American Express continues to impose it on almost all their products.
- While the rewards program is generous, it is unnecessarily complex. I don't see the logic in creating a new point system that results in statement credits when a cash back program would be much simpler.
- But most importantly, this card's rewards simply don't add up to those offered by the similar Capital One Venture Rewards card. Capital One offers two "miles" per dollar spent in a similar program where each mile is worth one cent each as a statement credit towards travel related expenses, and no foreign transaction fees. Therefore, the Capital One card comes out ahead everywhere but domestic charges at restaurants, hotels, and car rental agencies.
Who This Card Is Best For
This is the ideal card for domestic travelers who have had enough of frequent flier miles that are hard to redeem. And although other similar cards may offer more valuable rewards for most purchases, the airline fee credit and other benefits may make this card a winner for those who plan on utilizing them. By offering competitive rewards and valuable benefits, American Express's Blue Sky Preferred may be some people's easiest path to travel rewards.
(Note: There is a no annual fee version of this card, but the signup bonus is for 7,500 points instead of 15,000. Click here to apply for the regular Blue Sky.)