Barclays has rolled out the Barclays Arrival® Premier World Elite Mastercard, a new hybrid travel/cashback rewards card with miles that can be redeemed for both cash or transferred to select mileage partners. The “miles” are now more flexible, similar to American Express Membership Rewards and Chase Ultimate Rewards points. This card replaces their discontinued “Arrival Plus” card. Here are the highlights:
- Earn unlimited 2X miles on every purchase. Miles don’t expire as long as your account is open, active and in good standing.
- No upfront sign-up bonus. Instead, each year, earn 25,000 loyalty bonus miles after spending $25,000 on purchases.
- $100 Global Entry credit. Automatically credited for the cost of one Global Entry application fee every five years.
- No foreign transaction fees.
- International Chip and PIN compatible.
- Redeem your miles for travel or cash back statement credits, gift cards and merchandise. Redeeming miles for travel statement credits offers the best value.
- Transfer your miles to participating travel loyalty programs.
- Complimentary online FICO® score access.
- $150 annual fee.
Bonus details. Currently, there is no upfront sign-up bonus. Instead, they have spending bonuses – Spend $15,000 on purchases, get 15,000 miles. Spend an additional $10,000 on purchases, get an additional 10,000 miles, for a total of 25,000 miles after $25,000 in purchases. My guess is that they are trying to cut down on the people who sign up for the bonus and then cancel shortly thereafter.
Cash back towards travel analysis. You can redeem 10,000 miles for $100 toward all or a portion of your qualifying travel purchase of $100 or more made within the last 120 days. Basically, you pay for any eligible travel purchase on your card (buy airfare, book a hotel, rent a car, etc) and then you use your “miles” afterward to get a cash credit towards that purchase. The rate is 1 cent per point with a $100 minimum redemption. Travel purchases eligible for redemptions are defined as “airlines, hotels, motels, timeshares, campgrounds, car rental agencies, cruise lines, travel agencies, discount travel sites, trains, buses, taxis, limousines, ferries and your account annual fee”.
So if you spent $15,000 in a year, you could get the 2x miles (30,000 miles) plus the 15,000 miles bonus for a total of 45,000 miles worth $450 towards travel. That’s effective 3% back towards travel on all credit card purchases. The same thing occurs at $25,000 in annual total spending (50,000 miles + 25,000 bonus = 75,000 miles total). 3% back towards travel is a very competitive rate.
But wait! There is also a $150 annual fee. At $15,000 annual spend, you would net $300 towards travel (2% back overall). At $25,000 annual spend, you would net $600 towards travel (2.4% back overall). Therefore, if you spend exactly $25,000 a year (average $2,083 a month), then you could 2.4% back on travel on all purchases. I’m a geek, so I plugged the numbers into a spreadsheet to get the chart above of effective cash back towards travel vs. annual spending. There are basically three zones.
- If you don’t spend at least $15,000 a year on this card, you will net worse than 1% cash back towards travel! This card is horrible for light spenders!
- If you spend between $15,000 and $25,000 a year on this card, you will net a flat 2% cash back towards travel. Not bad, but there are other cards that earn 2% flat with no annual fee..
- If you spend exactly $25,000 a year on this card, you will net exactly 2.4% cash back towards travel. As you go above that level, your cash back will start to drop slowly but still remain above 2%.
Miles transfer options. The transfer ratio is 1.4 Arrival “miles” to 1 airline mile for the following partners. Note that you earn 2x miles per dollar spent, so that works out to earning 1.43 airline miles per dollar spent. If you spend $15,000 a year on this card, the bonus results in a total of 2.14 airline miles per dollar spent. These numbers do not include the $150 annual fee.
- Air France/KLM Flying Blue
- China Eastern
- EVA Air
- Jet Airways
- Malaysia Airlines
The transfer ratio is 1.7 Arrival “miles” to 1 airline mile for the following partners. Note that you earn 2x miles per dollar spent, so that works out to earning 1.18 airline miles per dollar spent. If you spend $15,000 a year on this card, the bonus results in a total of 1.76 airline miles per dollar spent. These numbers do not include the $150 annual fee.
- Japan Airlines
You may only transfer miles if you are a primary cardmember, and only to a participating travel loyalty program account belonging to you.
Bottom line. The new Barclays Arrival® Premier World Elite Mastercard card has a couple of narrow windows of benefit. If you want cash back towards travel, you must spend more than $25,000 annually on the card to achieve an effective rate above 2%. Aim for between $25,000 and $33,000 annual spend, and you’ll get between 2.3% to 2.4% net cash back towards travel after taking into account the annual fee. If you are good at the airline miles game and can use one of the internationally-based airlines listed above (no domestic airlines), the earn rate is good there as well. Ideally, you’ll want to hit the $15,000 or $25,000 annual spending marks. I prefer simplicity over complexity, so I would point out these alternative cards:
- If you like airline miles and travel perks: Chase Sapphire Reserve Card Review – 50,000 Ultimate Rewards points bonus (worth $750 towards travel), and $450 annual fee is offset by the $300 annual fee credit, Priority Pass free lounge access.
- If you like simple cash back: Citi Double Cash Card Review – Simple and flat double cash back, no tiers, no annual fee.
- If you like cash back towards travel and have $100k in a bank/brokerage account: BankAmericard Travel Rewards Card Review – Up to 2.6% cash back towards travel through Preferred Rewards Program ($100k+ in assets at Bank of America).
To make this card more competitive in the current premium travel card landscape, I would like to see them (1) add a lounge benefit or travel credit to better justify the annual fee, (2) lower the annual fee, or (3) add a sign-up bonus.
© MyMoneyBlog.com, 2018.