These days with so many credit card companies luring consumers with offers for free travel and points redemption it is hard for consumers to figure out which is the best. In particular CIBC and now American Express both offer cards giving anywhere from 1 to 1.5 Aeroplan points for each dollar you spend on your credit card. This sounds like a good deal but is it? Originally when CIBC first introduced the Aeroplan Card it became quite popular with many people saving their points for that next big trip. With their classic program Aeroplan definitely offers the best bang for the buck. Looking at their reward chart we can see that from Vancouver to Germany would cost 60,000 points for Economy and 80,000 in Business class.  Now if we were to look for the rates on Air Canada or Lufthansa in the offseason the fare would be approx CAD732 plus taxes for Economy.   That equals to 1.2 cents/point in value.   Buisness class in offseason is CAD$5353 which equals 6.7 cents/point.   Now if we look at the busy summer season on the same flights an economy fare goes for CAD$1291 with business class being the same at CAD$5353.  The value per point of economy increases to 2.15 cents/points and stays the same for Buisness class.   So to get the most value for your points depends when you are travelling and if you want business or economy class.   

Air Canada has realized this point and as a result offers only a few seats on each flight for people redeeming points.  At first this wasn’t a problem as it took people awhile to accumulate enough points on their cards to even purchase these flights.  However now it is very hard to get seats on any flights especially in Buisness class to Europe and other long haul destinations.    As seats were filling up on all flights people complained and Aeroplan introduced Classicplus.  Basically it means that for higher points they will get you a seat that normally they would have charged someone for.  To do this they had to increase the number of points to redeem a seat.  An economy Classicplus seat on the same routing during the summer is 113 000 points and a value of 1.14 cent / point.    Business class goes to 442 250 points a value of 1.21 cents/point.   Both of these are substantially less value than redeeming on classic.   However Classicplus are becomming more common as the classic seats are scooped up at 11 months prior.  Aeroplan also offers merchandise for your points which is the biggest waste of points.  As an example a $50.00 gift certificate will cost you about 6,000 points a value of .8 cents / point.   

To really understand what is the best credit card lets looks at one of their competitors RBC Avion card.  They way avion works is they buy regular tickets however your points have a dollar value that can be used to offset this cost.  Lets look at our example from Vancouver to Germany again but this time using Avion.   An economy ticket with Avion would cost 65,000 points to travel from Vancouver to Frankfurt of which the maximum they will pay is $1,300 for a ticket.  Therefore the value of each point in low season is 1.12cents/point and 1.98 cents/point in high season.  For buisness class they will offer it at a rate of 1cent/point which would mean 535,300 points. 

Lets compare the above now with a Dividend card where you get cash back to spend however you want.   With CIBC they offer a 2% platinum dividend card however upon reading the fine print it is more like 1.47% if you spend 50,000 on your card in a year.  This amount goes down if you spend more or less than this amount.   You do get a better return on each dollar spent than the Classicplus with Aeroplan and the low season flights with Avion.   You do also get the most flexbility but unless you spend 50,000 dollars in a year on your credit card it is not worth it.  

All of the figures above show one thing to use your points most effectively you need to know what kind of travel you are going to do.  If you want to fly business class you need to go with Aeroplan as even with their Classicplus rates you are still doing better than Avion.  If you can get their Classic space you are doing really well.  As for Economy tickets you are still better with Aeroplan for economy tickets at classic rates only.   If you have to go to Classicplus rates then you would be better off with Avion. 

Other considerations to keep in mind is that Aeroplan does expire points and you need to keep getting points into your account to keep it active.  With Aeroplan you can only book Air Canada and Star Alliance partners versus with Avion you have freedom to book most other airlines.  If you are receiving points through American Express you can get anywhere from 1.25 to 1.5 points for each dollar spent.   This allows you to accumulate points much faster and makes Aeroplan points more attractive.  Dividend cards if you spend enough are a good average and allows you flexibility if you are not travelling some years.  Remember to choose a card that works best for you and the type of travel that you do. 

Frontier Airlines filed today for bankruptcy protection. The Airline maintains that all financial obligations will be met and flights will operate as scheduled. According to Frontier the move was brought about because the principal credit card processor is going to withhold larger amounts of the proceeds from ticket sales as of April 11.
“This change in established practices would have represented a material change to our cash forecasts and business plan. Unchecked, it would have put severe restraints on Frontier’s liquidity and would have made it impossible for us to continue normal operations.” Frontier CEO Sean Menke said.
As all US Airlines, Frontier has struggled amid rising fuel prices and aggressive competition at Denver International Airport. It blamed a 16.3 per cent jump in fuel costs for a third-quarter loss that more than doubled from the previous year.