Has the BA card just become a “must have” Chase card?

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UPDATE: Terms for the surcharge credit are now live.  Please see: BA Visa $200 Award Fee Credit. 8 things you need to know.

British Airways’ Club Suites (business class seats) on their new A350 aircraft include doors that close for privacy.

I recently posted a list of “must have” cards from Chase.  Chase has a lot of great cards but, thanks the 5/24 Rule, you can’t have them all.  In my prior post on this topic, I listed the following as “must have” cards (see the original post for more details):

If you are able to sign up for business cards, then I recommend the following line-up of Chase cards:

  1. Sapphire Reserve: Earn 3X Ultimate Rewards points for travel & dining.  Points worth 1.5 cents each towards travel.  It may make sense to start with the Sapphire Preferred card (since it has a higher signup bonus) and then upgrade to the Sapphire Reserve later.
  2. Ink Business Cash: Earn 5X Ultimate Rewards points at office supplies and 5X cellular/landline/cable (on up to $25,000 in total purchases in 5x categories annually); and 2X gas and restaurants.
  3. Ink Business Unlimited: Earn 1.5X Ultimate Rewards points for all other spend.
  4. United Explorer: When the annual fee comes due after a year, consider downgrading to the no-fee United card which preserves this card’s best features: Improved economy saver award availability, and last seat standard economy award availability.
  5. World of Hyatt:  Keep for the annual free night certificate.  Consider spending $15K per year for a second certificate, especially if you pursue Hyatt status since you’ll earn 2 elite qualifying nights with each $5K spend.

If you are not interested in signing up for business cards, then I recommend the following Chase cards:

  1. Sapphire Reserve: Earn 3X Ultimate Rewards points for travel & dining. Points worth 1.5 cents each towards travel.  It may make sense to start with the Sapphire Preferred card (since it has a higher signup bonus) and then upgrade to the Sapphire Reserve later.
  2. Freedom Unlimited: Earn 1.5X Ultimate Rewards points for all other spend.
  3. United Explorer: When the annual fee comes due after a year, consider downgrading to the no-fee United card which preserves this card’s best features: Improved economy saver award availability, and last seat standard economy award availability.
  4. World of Hyatt:  Keep for the annual free night certificate.  Consider spending $15K per year for a second certificate, especially if you pursue Hyatt status since you’ll earn 2 elite qualifying nights with each $5K spend.

The only airline-specific card I included int he above lists was the United Explorer card.  And I included that one because it’s remains valuable even after downgrading to the no-fee version of the card.  But now I’m wondering if the British Airways Visa ought to be added to the list?

New card features

According to One Mile at a Time, Chase and British Airways have announced enhancements to the BA Visa card:

  • 2X on hotel purchases
  • Up to $600 per year in rebates for carrier imposed surcharges on awards
    • $200 for BA first or business class
    • $100 for BA premium economy or economy
    • Max 3 rebates per year

2X on hotels is not interesting at all.  Many cards offer that much or more for travel purchases.  But the fuel surcharge rebate is very interesting.

Why the fuel surcharge rebate is interesting

If you’ve ever searched AA.com for business or first class awards to Europe, then you already know why this matters.  At first, you’ll see a wonderful calendar full of promise, like this:

Wow, saver level business class awards are available almost every day!

But when you click through to a particular day, reality hits.  All of the overseas flights are on BA metal:

This matters because BA flights include absurd surcharges.  In this example, you would have to pay $628.70 for the privilege of using your miles for a one-way business class flight.  If you can find a flight on AA metal, you’d pay only $5.60 in fees!

Surcharges are lower going in the opposite direction, especially if you don’t start in London.  For example, if you book Rome to Washington DC via London, the taxes and fees currently come to $382.33:

While the number of miles will usually differ a lot, taxes and fees are usually similar when you book the same flights with British Airways Avios.  In this case, a search on BA.com revealed a slightly higher point price, but very similar fees: 62,750 Avios plus $384.12 in fees.

One Mile at a Time says that it’s not yet known whether the surcharge rebates will work on one-way awards.  If it does, though, the ability to get back $200 per one-way flight on up to three flights per year is great.  It won’t make BA awards cheap, but it will make them somewhat reasonable.

Update: It appears that one-way awards do work, but only those that originate in the US.  See: Please see: BA Visa $200 Award Fee Credit. 8 things you need to know.

It’s worth noting too that booking BA awards as two one-ways rather than one round trip can save you money (this works with Virgin Atlantic awards too).  For example, consider flying from Washington DC to Rome and back in business class, booked as two one-way awards:

  • DC to Rome, May 25, 2020: 75000 Avios + $ 641.82
  • Rome to DC, June 1, 2020: 62,750 Avios + $384.12 (off-peak award pricing)
  • 2 One-Way Total: 137,750 Avios + $1,025.93

Compare the above to booking a single round-trip award:

  • Round Trip Total: 137,750 Avios + $1,341.55

In this example, you would pay $315 more for the privilege of booking round trip instead of as two one-way awards!

With the BA credit card rebate, the difference will be even greater ($200 more).  If rebates work on one-way awards, then you would get two rebates for this flight by booking the flights separately.  Your new total when booking one-way would be:

  • DC to Rome, May 25, 2020: 75000 Avios + $ 641.82 – $200 = $441.82
  • Rome to DC, June 1, 2020: 62,750 Avios + $384.12 – $200 = $184.12
  • 2 One-Way Total: 137,750 Avios + $625.94

Vs. the following round-trip cost:

  • Round Trip Total: 137,750 Avios + $1,341.55 – $200 = $1,141.55

After the $200 rebates, the difference between booking two one-way awards and one round trip award has grown to $515!

The possible round-trip requirement would make the rebate worthless

If the BA card requires round trip awards in order to get the surcharge rebate, then the rebate would be practically worthless.  I didn’t realize this nuance until I wrote the above section.  Consider the flights I detailed above.  Before considering the rebate, booking two one-way awards results in saving $315 over booking round-trip.  If the new card perk requires booking round trip, then all it will do is reduce the round-trip penalty from $315 to $115!  In other words, even with the rebate you would pay more than by booking two one-ways without the BA Visa card.

I imagine that there are some awards with little or no penalty for booking round-trip.  For example, I’d guess that intra-Europe awards don’t have this issue.  But then those awards also don’t include high surcharges in the first place.

Update: It appears that one-way awards do work, but only those that originate in the US.  Further, intra-Europe awards won’t work.  See: Please see: BA Visa $200 Award Fee Credit. 8 things you need to know.

Assuming one-way rebates, is the card a “must have”?

If it turns out that one-way awards can trigger the rebate, then this new feature is obviously valuable to anyone who frequently books BA transatlantic awards.  You could save up to $600 per year in exchange for the card’s $95 annual fee.  That’s a nice win.

Update: It appears that one-way awards do work, but only those that originate in the US.  See: Please see: BA Visa $200 Award Fee Credit. 8 things you need to know.

What if you don’t already book these awards regularly?  In my case, I’ve almost always found other better options than to pay BA’s high surcharges.  If I had the BA card, though, I would consider booking BA, especially for one-way return flights from Europe.  This would be nice since I can use Virgin Atlantic miles to book Delta One one-way to Europe very cheaply (50K miles + $5.60), but Virgin Atlantic charges hefty surcharges for the return flight.  I’d still prefer to fly back on a Star Alliance carrier using Avianca Lifemiles or United miles in order to avoid surcharges altogether, but at least BA would be a not-horrible option if I can’t find Star Alliance availability.

The last phrase answers my question.  Is the new BA card a “must have”?  For most of us, I think that the answer is “no”.  The ability to turn an awfully expensive option into a not-horrible option does not make this a “must have” card.  Not to me.  Don’t get me wrong, if they allow rebates on one-way awards I’d like to have this card.  I just wouldn’t prioritize it above the others on my current “must have” list.

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