The author maintains a website where the full article can be viewed.
Air Miles and Aeroplan points. The two biggest travel rewards programs. There is always the decision on which one to go with.
This will provide a bit of an analysis on them and which one I think is better. Personally, I think you should sign up for both, since the programs are free. There are credit cards that allow you to collect more miles and that is what I am going to focus on. For the record, I am going to assume points were obtained from a credit card alone and that the individual put $10,000 on their credit card in one year. I will also assume they are using their rewards for travel.
Basically, both programs are good. They are free to sign up and free to collect for most situations. Using the credit cards and paying fees change things though. Air Miles is the only one with a "no fee" credit card (Bank of Montreal's Mosaik Mastercard) and whether paying the fees is worth it to you or not, you need to read my other articles to figure that out.
The basic air miles Mosaik Mastcard is free so that is a no brainer if you want it. I figure you need to put at least $3600/year on the basic CIBC AeroClassic Visa card (the Aeroplan credit card) to make it worth your while there. For most people, that isn't a problem.
I wrote two articles that show how much an air mile is worth and how much an aeroplan point is worth. They are in both of these two articles...
Collecting Air Miles and Their Value
Collecting Aeroplan Points and Their Value
In my other articles, I value an Air Mile at 23 cents/mile for flights and I value an Aeroplan point at 1.6 cents/mile for flights. You can read them to see how I figure that out (links above). Using the $10,000/year situation, it would be in my best interest to pay the fee for the best credit cards. That would be the $120/year CIBC AeroGold Visa and the $80/year BMO Gold Mosaik Mastercard.
The Visa card would give me 15,000 aeroplan miles. These are valued at 15,000 times 1.6 cents or $240. Since I had to pay $120 for the yearly fee I would get $120 back from my spending.
The Mastercard would give me 666 Air Miles. These are valued at 666 times 23 cents or $153.18. Since I had to pay $80 for the yearly fee I would get $73.18 back from my spending.
I'm getting better value out of my Aeroplan Visa card? Yes, in this situation you are. I used the "travel rewards" scenario where an Air Mile is worth around 23 cents.
However, Air Miles has a variety of rewards and entertainment rewards are worth up to 45 cents/mile. You can only get these with an Air Miles card (this isn't totally true, but there are so many more rewards with Air Miles you can't really compare them). In that scenario the Air Miles card actually would give you $220 back from your spending (after deducting the $80 fee).
Go to the full article using the link below to see the pros and cons and further comparisons that are not covered here.
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