The Wall Street Journal has just publish a post saying that Delta, US Airways and TPG are exploring options to buy AMR Corp – the parent of American Airlines. TPG is the private equity firm that had a stake in America West before they were bought out by US Airways. According the Wall Street Journal, Delta has hired Blackstone to explore the opportunity to buy Delta. Given that American Airlines is not the biggest player and did not go through any bankruptcy like the other airlines in the last few year to get rid of legacy cost, this development should not come as a surprise. What is more interesting if how would their combined hubs look like should a merger happen? What would happen to their frequent flier programs? In this post, I will try to piece a few information together and take a stab at this.

Hubs – First let us take a look at the hubs of Delta, US Airways and American Airlines.

For Delta, their hubs include Minneapolis St Paul, New York, Detroit, Memphis, Atlanta, Mexico City, and Salt Lake City.

American Airlines hub include New York, Chicago, Dallas/Fort Worth, Miami, Los Angeles.

US Airways hubs include Charlotte, Philadelphia and Phoenix.

So as far as domestic hubs go, only New York would be overlapping hub if Delta bought AMR.

On International routes, Delta officially has “more hubs” (in Amsterdam, Paris, Rome, Prague, Tokyo and Seoul). Though American Airlines has international flights, it does not consider itself to have any hubs.

How Will New Frequent Flier Program Work? – Whenever an airline merges, their frequent flier programs will eventually merge as well. And existing members will always be left wondering which program will the combined entity more resemble like. Let us now take a quick look at the Delta Skymiles, Dividend Miles and American Airlines AAdvantage miles program.

The first feature we will have to look at is the elite level qualification levels. At present, skymiles has four levels while AAdvantage has three levels. For Delta Skymiles, the levels are silver (20,000 MQMs required), gold (50,000) and Platinum (75,000) and Diamond (125,000). AAdvantage levels are Gold (25,000), Platinum (50,000) and Executive (100,000). Since the first two levels are identical in terms of miles required, one issue will be how will the upper tier evolve. US Airways, like Delta, has four tiers in their elite program: Silver (25,000), Gold (50,000), Platinum (75,000) and Chairman (100,000).

If AMR is bought by either Delta or US Airways, then there is a good chance that AAdvantage members will now be facing four elite tiers.

Million Miler Benefits – Another issue is their million miler club awards as there are some differences. In my opinion, AAdvantage ha a much better million miler benefits than Skymiles. Here is how the skymiles million miler club works. If you get a million miles, you will get an annual complimentary Silver Elite level. When you reach two million miles, you will get an annual complementary gold membership. When you reach four million miles, you will get an annual Platinum Medallion Status. Previously, the language that Delta site says you get lifetime status when you reach the million mile milestone. And folks still get to keep their status after a year. But with the new language, there is always a fear that it could be yanked away before you know it.

US Airways has the worst million miler benefit among these three airlines. Those who reach a million miles will get lifetime Silver award as long as their account is active within three years (ie you earn miles with them, credit cards or partner airlines).

In contrast, AAdvantages’ language on their page has always been that their million milers are given their million miler “lifetime” Gold Status and 35,000 bonus miles. When you reach two million miles, you get lifetime Platinum status and four one-way system wide upgrades. One each additional million miles you earn you will get four one-way system wide upgrades.

American Airlines million milers will not be happy if there would be any changes made to their million miler benefits. But I guess they would be happier with a Delta takeover than a US Airways takeover (especially those who are well on their way to earning two million miles or more).

Award Charts – When we compare the two award charts, it is clear that AA requires fewer points than Delta to similar destinations. After Delta merged with NorthWest (more like they tookover NorthWest), the new Skymiles used the then Delta Award Charts rather than NorthWest charts. It left many Worldperks members fuming because of Delta’s three tier award system. US Airways has the worst award chart among the three.

I suspect that American fliers would rather merge with Delta if they are going to lose their award system.

Delta’s Award Booking System – Delta’s award booking system has been broken forever and many workaround have been documented around the web. If there is a merger between Delta and AMR, then perhaps Delta might just used the AA system as it works and it is easy to book flights on partner airlines.

What happens To Their Credit Cards – As with all airline mergers, there are always opportunities in credit card sign up bonuses. AAdvantage credit cards are issued by Citi while Delta credit cards are issued by American Express. And both these issuers couldn’t be more different in terms of how lenient they are to frequent flier card churners. American Express keeps pretty good records about their customer sign ups and you generally cannot sign up for a card, get the sign up bonus, cancel the card and then apply months later for another round.

US Airways has their credit card issued by Barclays. Previously, it was Bank of America who issued them. As I’ve never had a Barclays card, I’m not too familiar with their credit card policies with regards to folks who churn their cards for miles.

Citi, on the other hand, has been much more lenient. They also offer more “targeted sign up bonuses”. There are many folks who have simply been churning Citi AAdvantage credit cards every year. To make things even more interesting, they have a Visa, and Amex, Gold and Platinum version as well as a business version.

If AMR Corp is sold to either Delta or US Airways, chances are that either American Express or US Airways gets to keep their credit card business. And that would spell the end of the Citi churning game.

Ending Thoughts – When American filed for bankruptcy in November, the common assumption was that they are likely to be able to shed and revamp their cost structure and emerge a more competitive company. There is always a risk (though small) that they might be liquidated. Another possibility is that they might be taken over. Regardless, if you have lots of AA miles, use it. Because if they were to be taken over (if we assume Delta or US Airways), their value will erode (miles always devalue and more so in AA’s case).

United has been targeting certain Mileage Plus members through snail mail with a 60,000 bonus miles offer the last couple of months. You get 50,000 after the first spend and then an additional 10,000 miles if you spend $25,000 within one year. I knew of this because my neighbor has the old United Visa and she keeps telling me that she has been getting mail after mail with the 60,000 offer.

But recently, it appears that United have expanded their targeting to more people from their Mileage Plus website. There are already a few threads on the web about this. But the way to find out if you have been targeted is to simply log on into your United account. Here are the precise steps.

1. Go to United.com

2. Under the top navigation, under Mileage Plus, go to My Mileage Plus and sign in. (you should get your United Mileage Plus number in front of you).

After, you sign into your account, there will be a credit card offer on the right side of the page. If you have been targeted for the 60,000 offer, you will clearly see it there. If you have not been targeted, then you will see the standard 40,000 bonus miles promotion that is going on now. From reading comments on other forums and sites, it appears that you need to have some United miles in your account to receive the targeted offer. But even that is not a sure thing. So I decided to check my account and my neighbor’ account and show you folks some screen shots.

But first, here is a screen shot of a reader who has got the 60,000 offer.

1. United Account With No Miles But Continental OnePass Gold Member – One of our readers got the 60,000 offer when she logged into her account. Her background is that she is a Continetal OnePas Gold member and has close to 50,000 OnePass miles in her account. Her Mileage Plus account has no miles. She does not have either the Continental or United card. When she logged into her Continental OnePass account, you got the 40,000 offer. But in her United account she got the 60,000 offer.

Here is the screen shot of the 60,000 bonus miles offer:

2. United Mileage Plus Account With No Miles – My United account has no miles. I last flew with United to Hawaii with my family a few years ago and I told myself I’ll never fly United again. I think their service in economy class is really the worst (that’s just me). So my account has zero miles. And true enough, I was not targeted for the 60,000 bonus miles offer. Instead, I was targeted for the regular 40,000 bonus offer.

3. United Account With Miles and Snail Mail Offer but No Online Offer – My neighbors’ account was interesting. She had over 100k miles (see screen shots). She flew United to Hong Kong and used their miles for free tickets (coach class). What was interesting is that she has been receiving the 60,000 offers in the mail was did not really bother. She is only interested now because I mentioned it to her! But when she logged into her account, there was no 60,000 targeted offer even though she has a lot of miles in her account and she already received the offers in snail mail.

She then called United to see if she could apply online and get the 60,000 offer. But she was told that she needed the “unique code” that was in her mail offer letter to sign up!

Others Have Had Success – Despite the two examples here, there has been lots of folks who have said they have received the 60k offer. Some have just a few miles in their account and are not elite members.

Should You Sign Up For This? – They key question is whether you should apply for this if you are targeted. All I would say is that 60,000 miles is a good sign up bonus and even if you do not intend to spend the $25,000 on the card for the first year, 50,000 United Mileages is plenty. Because United is a member of Star Alliance, savvy folks will be able to get some good deals for international flights. As a best practice, please print the 60,000 sign up screen on your computer when you apply for the card (as proof should things go awry).

Personally, I could not be bothered because I have no plans to go abroad any time soon. My next sign up bonus card will probably be the Chase Ink Bold (also 50,000 but with $5,000 spend within three months). There are also other great deals like the Chase Sapphire Preferred 50,000 bonus sign up so it’s not like it is the only mega deal around.

If you are not targeted and want to get the Explorer Card, then you have two choices. You could get the standard United Explorer with 40,000 sign up bonus or wait until the 60,000 offer becomes available to everyone. If you already have a Continental One Card, that might complicate things if you apply for a United card now (check this post about Continental United Card strategy).

If you do not have any miles in your Mileage Plus account and want to try your luck, you could transfer some Continental Miles over (if you have a OnePass account) or transfer from your Chase Ultimate Rewards account (if you have the Chase Sapphire Preferred or Ink Bold). That might just do the trick and trigger the targeted offer.

Lastly, I would like to thank readers who have tipped me on this and also to say that I’m contacting a few friends of mine who are Continental or United members and to see if they have got the 60k offer. And if they do, I hopefully will be able to provide more screen shots. Please also share your stories regarding this offer.

Aside from Hilton HHonors Credit Cards from American Express and Citibank, there are other ways that HH members can get points through other sign up bonuses. The opportunity arises because there are a few programs that allow you to transfer miles or points that you have earned to Hilton HHonors points (and often at 1:2 ratio!). So the trick is to know which programs also partner with Hilton and if there are big sign up bonus opportunities in their credit cards.

1. Amtrak Guest Rewards – 1:2 Transfer to HH – If you are a member of the Amtrak Guest Rewards program, you can transfer points to Hilton HHonors at a 1:2 ratio. However, you have to be a Select or Select Plus member. Just to be thorough, to be a Select member, you need to earn 5,000 Qualifying Tier Points in a year. You can only Qualifying Tier Points by traveling on Amtrak or by any specific Qualifying Tier Points Bonus. Other regular bonuses or points earned by not traveling on Amtrak do not count towards qualifying status.Select Plus status require 10,000 Qualifying Tier Points.

If you are not a Select or Select Plus member, you can still transfer points if you are a Chase Amtrak cardholder and have spent $200 a year on the card. You are limited to transferring 25,000 Amtrak points to your HH account.

If you are a Select or Select Plus member, you are allowed to transfer a maximum of 50,000 Amtrak Points to your HHonors account in a year (up to 35,000 points in a day). The minimum number of points you can transfer is 5,000 Amtrak points (which will get you 10,000 Hilton HHonors points.

Sign Up Bonus Opportunity With Amtrak Rewards – Because of the favorable 1:2 transfer ratio, there are a couple of sign up bonus opportunities for Amtrak Rewards. The first obvious one is to sign up for a Amtrak Rewards Card from Chase. At this moment, the sign up bonus is 12,000 points after the first purchase (which is not very attractive from a Hilton HHonors objective point of view).

The real big opportunity now is from getting the Chase Sapphire Preferred Card and the Chase Ink Bold. Both offer 50,000 sign up bonuses for the Ultimate Rewards program when you meet their spending criteria. The reason this opportunity exist is because you can transfer Ultimate Reward points on a one for one basis to Amtrak Guest Rewards. Then, if you are a Select or Select Plus member, you can transfer 50,000 points to your Hilton HHonors account (though the maximum is 35,000 points a day as mentioned earlier). That means if you get 100,000 Hilton HHonors points just from signing up for any one of these cards.

If you are not a Select or Select Plus member, then you can simply get the Chase Amtrak Guest Rewards MasterCard, spend $200 and then transfer up to 25,000 Amtrak points to your HH account for 50,000 HH points in a year. Since Ultimate Reward points do not expire, you can wait to transfer the next batch the next year.

You can get both the Sapphire and the Ink Bold and get a total of 200,000 Hilton HHonors points (though this has to be spaced out over at least two years).

2. Hawaiian Airline Miles 1:2 Transfer Ratio To Hilton – Hawaiian Miles is another program that allows you to transfer points to Hilton HHonors at a 1:2 ratio. Unlike Amtrak, there does not seem to be any hurdles you have to cross to do the transfer. There is no cap either. Therefore, if you are savvy, you could wait for a mega sign up bonus deal from Hawaiian Airlines credit card issued by Bank of America and then transfer the Hawaiian Miles to your HHonors account.

Sign Up Bonus Opportunity For Hawaiian Miles – Right now, Hawaiian Airlines Visa is issued by Bank of America. The Visa Signature version has a 35,000 sign up bonus whereby you get 20,000 bonus miles after the first purchase and an additional 10,000 bonus miles after you spend $1,000 within four months. There is a catch when you apply for this card. If you do not get approved for the Visa Signature version, you will be instead be approved for the Platinum version. The Platinum version has a lower sign up bonus: just 10,000 bonus miles after first purchase!

Aside from Bank of America, Bank of Hawaii also issues a Hawaiian Airlines credit card (also with a 35,000 sign up bonus miles at the moment).

Virgin Atlantic FlyClub 1:2 Hilton HHonors Transfer – Virgin Atlantic Flying Club is another frequent flier program that allows you to transfer Virgin miles to Hilton HHonors points and vice versa. The transfer ratio is 1:2. You have to transfer a minimum of 10,000 Virgin Flying Club Miles and then in increments of 5,000. And just to be complete, you could also transfer Hilton points to Flying Club miles. But the transfer ratio is 10,000 HH points for 1,500 Flying Club. So never transfer HHonors points to Virgin!

Sign Up Bonus Opportunities With Virgin Flying Club Miles – There are a few ways to actually get sign up bonus for Virgin Miles (directly or indirectly). The most obvious way is the get a sign up bonus from the Virgin Atlantic credit card from Bank of America. Right now, the sign up bonus is only 20,000 so I do not think this is the right time as they have had 50,000 promotions before.

Another way to indirectly get Virgin miles is through getting the Starwood credit card. That is because Starwood Preferred Guest allows you to transfer Starpoints to Virgin miles at a 1:1 ratio. You also get 5,000 bonus miles when you transfer 20,000 points. However, Starwood seldom has mega sign up bonuses. I also suspect that most Starwood Preferred Guest credit card applicants are more interested in Starwood points (at least for the immediate use).

American Express Membership Rewards also allows you to transfer MR points to Virgin miles at a 1:1 ratio. Recently, both the Amex Premier Rewards Gold Card and the Business Gold Card offered 50,000 sign up bonus. So that is a viable way to transfer points to Virgin and then to Hilton HHonors. It is a rather cumbersome way, but if there is a huge sign up bonus, it might be worth doing so.

Does This Mean You Do Not Get The Regular Hilton HHonors Credit Card? – With all these opportunities, it appears that at first glance that may getting the Hilton HHonors credit card (either from Citi or Amex) may not be worth it. From a sign up bonus point of view, you cannot beat the Chase Sapphire or Hawaiian at the moment because of the 1:2 transfer ratio.

But the Citi and Amex cards comes with Elite Status and with that comes VIP Awards. So the strategy for Hilton HHonors members is to get these card with huge decent sign up bonuses in addition to your regular HH card from either Citi or Amex.

If you already have a “proper” Hilton credit card, then right now, the Chase Sapphire Preferred Card and the Chase Ink Bold offer the best sign up bonus opportunity for HH points as you can get 50,000 Ultimate Rewards, transfer to 50,000 Amtrak Guest Rewards and then transfer to Hilton HHonors where it becomes 100,000 HH points!

Which is the best card to get when you live in Minneapolis and want to fly to Mexico as well as domestically? Well, we had a reader ask this question and so here is the question and my thoughts on this.

Dear Mr. Credit Card,

I buy, renovate and sell homes for my business. I spend a lot of money each year for materials etc. ($60k plus). Do you have a recommendation of which card would get me the most miles for travel?

Thank you.

Mr Credit Card (me): I need to know :

where do you buy your materials from?
do you mind paying an annual fee for the card?
are you travels mainly domestic?
what is the average cost of your ticket?
any airline that you prefer?

Mr. Credit Card,

My purchases are typically from Home Depot & Menards.

I don’t mind paying an annual fee if the benefits are worth it.

I mainly travel domestic or Mexico.

My tickets for travel are usually under $400.

I usually fly Delta as they are our main carrier in Minneapolis.

Thank you.

Answer: – Your flights to Mexico and around the US from Minneapolis cost you less than $400. That means if you spend $60,000 on a typical 1% cash back or rewards card, you will be able to get at least one ticket to Mexico a year, and maybe two depending on the price. But let us now look at a couple of alternatives.

Delta Credit Card – Since you mostly fly Delta, let’s see how many Delta Skymiles are needed for your Mexico trip. To do that, let’s look at the Delta Ticket Award chart.

As you can see from the chart above, an economy class “low” ticket award is 17,500 one-way, which makes it 35,000 for a roundtrip to Mexico. The “middle” award requires 50,000 miles for a round trip and a “high” economy award requires 70,000 miles for a round trip.

For domestic round trips, a round trip on the “low” economy requires 25,000 skymiles. You need 40,000 skymiles for the “medium” economy and 60,000 skymiles for the “high” economy.

If you use your “low” award, you could possibly get two tickets a year (either domestic or to Mexico). Otherwise, you will only be able to redeem for one ticket a year. With Delta Skymiles, you could also use some points and pay the rest with cash as well.

Home Depot Credit Card – Since you shop at home depot, we will also look at the Home Depot credit card since you can actually use points for travel. Below is the chart.

With the home depot rewards, you are getting about one percent rebate or less. For example, you can use 20,000 points to get $200 discount. Do that twice and that is $400 (about the price of your ticket). That means you will be able to redeem one ticket a year and maybe two if you get two really cheap tickets.

Regular Reward Cards – Aside from these two cards, one can also use regular rewards card. There are two types, the ones with no annual fee and the ones that come with annual fees.

The ones without annual fee typically let you earn one point for every dollar that you spend on the card. Example of such cards include the Chase Freedom, Chase Sapphire, Discover Miles Card. What you get is typically 1% return because you either have to use your points to book your travel with their portal or in the case of Discover Miles, you simply book with whoever you want and you will get back a statement credit (worth 1%). The Chase Freedom allows you to earn more than 1% rebate in a variety of ways so you might end up with slightly more than 60,000 points if you use it wisely.

There are a couple of travel reward cards with annual fee that are worth considering. For example, the Discover Escape Card. It has a $60 annual fee, but you earn double miles on every $1 of purchase on the card. That means that you will get 120,000 miles in your account – which will be worth $1200 in tickets to Mexico. That means you could get three tickets in a year based on a $400 prices (which obviously varies). There is also no foreign transaction fee with this card. You can also earn double miles when you shop online at HomeDepot.com from your Discover account.

Recommendations – Based on the above analysis, I would recommend getting the Discover Escape Card because with the ability to earn double miles, you can earn more than 120,000 miles based on your annual spend of $60,000. At a 1% return, that is worth $1,200 in airline ticket value. Based on your average ticket price of $400 and less, it means you can get three round trips to Mexico.

The other cards like the like Delta and Home Depot will get you at most two tickets a year. And for Delta Skymiles, that means being very flexible on your departure dates as you will be using the most flexible “low” economy award tickets. The other no annual cards also will get you at most two tickets a year.

American Express Gold, Platinum or Centurion card holders can get discounts at Equinox gym memberships. This is a lesser know perk of Amex. In this article, we will look at the Equinox benefits of the different cards and compare them to the usual discounts given to non cardholders.

I will also be sharing my experiences of joining a gym last year so that you can make a more informed decision as to whether to join a gym or not.

Complimentary Benefits Without Amex Cards

Before we look at the equinox benefits you would get if you were an Amex charge card holder, let us examine the offers that Equinox is presently giving (January 2012) to new members who sign up. If you sign up for their membership, you will get a free fitness evaluation (which is a standard practice for most gyms), one personal training session (also very standard), two one-week guest passes and 10% off any spa services.

American Express Gold And Equinox Rewards

If you have the American Express Gold Card or the Premier Rewards Gold Card, you will be able to get “special membership pricing”. That would be a discount, though it is not stated on their website what the discount or special pricing was. You will get one one-week guest pass (which is less than the regular offer), and a 15% discount off a single spa service and a 15% discount off a one-time purchase at their THE SHOP store. I was not able to find out if these benefits were in addition to the ones offered to regular new members. If it was, then you would get an extra training session. The best benefit would be the special pricing for the first year’s membership. So there is some savings there to be made.

American Express Platinum Card and Equinox Rewards

American Express Platinum Card holders have a higher level of award than gold members. Not only do you get “special pricing”, but you also get four free training sessions. You also get one 50 signature massage or facial. In addition, you will get “benefits” throughout the year ( I would assume that it will be discounts for classes and products). To figure out the value of this, we have to find out the price of their training sessions. I called up a couple of their gyms and what I found out was that different locations have different prices. Their personal trainers are also classified into various tiers, 1, 2, 3 and 4. Tier 4 are the most experienced trainers who have gone through more training and they charge a higher price. What made it more confusing was that the prices also vary depending on the package that you buy. For example, you would get a cheaper per session rate if you bought 48 training packs version buying 24 training packs. From the conversations that I had with their sales representatives, the prices range from $80 to $120 a session.

So since Platinum card holders get two additional training sessions, that is worth about $200 “on average”. The free spa treatment is worth probably about $100. So for the first year, Platinum card members get about $300 worth in value (note: my Philadelphia sports club gym which I am a member gave me four free training session when I joined. Hence, we can argue that perhaps having four complimentary sessions is no big deal. I will leave that judgement to you).

What is more important about Platinum card members who join the gym is that you get additional annual benefits as well. If you buy a 6 session personal training program, you get two additional sessions for free. That is worth about $100 “on average”. If you buy a 12 session package, you get 4 additional sessions. That is worth about $400. If you buy a 24 session package, you will get 6 additional sessions, which is worth about $600. And if you buy the 48 session package, you will get 12 additional sessions, which is worth about $1200.

You will also get 2 coupons that will save you some money if you buy stuff from their “THE SHOP”.

American Express Centurion and Equinox Rewards

Centurion card members get all the benefits of Platinum card members. In addition, you will get two free massages when you buy a 10 massage pack.

Beware of the Beginning Of Year Resolution – Especially Fitness! – Gyms make most of their money in the beginning of the year. That is because most of us make a new year’s resolution to lose weight, but never follow through. Mrs Credit Card and myself joined the Philadelphia Sports Club last year because Mrs Credit Card tore her ACL in her knee while we were skiing in Colorado the previous year. So we both signed up for the personal training pack (48 sessions I think).

This is what I liked about the personal training pack. It forces you to work out because you have to see your trainer and you get fit very fast. However, you need to buy enough sessions to make it worthwhile. What I did was to work out once a week with my trainer and twice a week myself to make sure I improved my fitness and strength and be better prepared to work out with him the next time.

However, I feel that to make the best progress, you have to train with a trainer twice a week. That way, you really improve very fast. If you do not buy enough training sessions, what ends up happening is that you will train either once a week or once in two weeks with your trainer. But unless you are disciplined, your progress will be slow.

Towards the end of the year, I started doing yoga and pilates and I love it (I can now touch my toes).

So if you do decide to sign up for a gym membership, I would suggest signing up for bulk personal training sessions in advance (unless you are the type who are really disciplined or if you know you would go for their classes consistently). Otherwise, you will most likely be throwing money down the drain.

If there is an Equinox gym near you and you have either the Amex Gold, Amex Platinum or Centurion card, then it pays to at least check it out. If you plan to sign on a fair bit of personal training sessions, then you could actually save quite a bit of money (more than the Platinum annual fee in some cases).

And if you do not have any of these cards, the Citi Dividend Card pays 5% rebates for gym memberships during the first quarter. If you have this card, then use it to get what is effectively a 5% discount.