Is the BMO Air Miles World Elite MasterCard a good deal? The current promotion in effect from August 15 to November 30, 2017 is not just a good deal. It’s a very good deal. For collectors who redeem miles for air travel, it’s a great deal. Here are ten reasons why I applied on the promotion.
1. First year Free (FYF)
The annual fee of $120 is waived for the first year. A FYF promotion and an attractive sign-up bonus are key features of a tempting credit card offer.
2. Sign-up bonus of up to 3,000 Air Miles
The card earns a bonus of 1,000 Air Miles on the first purchase. A minimum spend of $3,000 within the first three months earns an additional 2,000 Air Miles. This is the highest sign-up bonus of any Air Miles credit card on the market.
Air Miles is useful as a secondary frequent flyer program. I use it for short flights from my home airport of Halifax to Montreal, Ottawa, Toronto or New York. These flights with Aeroplan typically cost 25,000 Aeroplan miles. I prefer to use 25,000 Aeroplan miles for longer flights within Canada and the Continental USA, or accumulate them for international flights in business class. This strategy results in a higher redemption value of Aeroplan miles.
Air Miles is also useful for short flights to hubs with access to international flights with other frequent flyer programs.
Air Miles offers attractive itineraries with Air Canada, WestJet and Porter Airlines, and access to U.S. carriers for U.S. destinations. The sign-up bonus of 3,000 miles is enough to redeem for at least two short flights, and perhaps as many as four.
The minimum spend of $3,000 is higher than that of the average premium credit card. It’s achievable by switching everyday spend to the card for the first three months. One disadvantage of doing so is that other programs won’t benefit from points from a $3,000 spend. In my case, I’ll shift everyday spend on purchases earning one point per dollar. This will amount to a loss of up to 3,000 AMEX Membership Rewards, or 3,000 Aeroplan miles. It’s a sacrifice I’m willing to make because I can leverage greater value from the 3,300 Air Miles (3,000 sign-up bonus plus 300 earned from the minimum spend).
3. The sign-up bonus is worth at least $300
The prevailing view is that an Air Mile is worth between 10 and 15 cents. Air Miles can be redeemed for cash (Cash Rewards). Or they can be used for travel, experiences, and merchandise (Dream Rewards).
The value of an Air Mile redeemed for in-store “cash” is 10.5 cents (95 Air Miles for $10). The value is higher when redeemed for flights – around 15 cents. This makes the value of the sign-up bonus somewhere between $315 and $450.
4. 25% discount on Air Miles flights within North America
Holders of the BMO Air Miles World Elite MasterCard have access to a 25% flight discount. The discount applies to miles, not the taxes and fees. Once you’re approved, BMO notifies Air Miles that you’re a cardholder. When you search for flights within North America, the discount will appear in your search results. You don’t need to use your card to pay the taxes and fees to be eligible for the discount.
Here’s an example. I’m planning a return trip from Halifax to Toronto in November. I found an attractive itinerary with WestJet for 1,700 miles and $143.54 in taxes and fees. The 25% discount reduces the redemption to 1,275 miles.
I could book the same itinerary at WestJet for $382.74.
5. Miles rebate on a one-time Companion Pass
If you book two tickets via airmiles.ca before November 30, 2018, you’ll score a rebate of miles on the second ticket. Taxes and fees are paid on both tickets. Travel can be to anywhere in the world, but the reality is that most collectors don’t have enough Air Miles for redemptions outside of North America. Both tickets must be booked at the same time on the same itinerary. The 25% discount on North American flights can be used in conjunction with the Companion Pass.
Here’s an example. My partner and I are keen to visit New York. Low-season redemptions are very attractive, and February dates work well with other plans. With the 25% flight discount, a return flight from Halifax to LaGuardia costs 1,125 Air Miles. Taxes and fees are $139.22. This means that two return tickets to New York will cost $278.44 (2 x $139.22 in taxes and fees). The cost in Air Miles is 1,125 (after the rebate is applied on the second ticket).
The exact flights with Delta Airlines cost $606 ($303 x 2). This redemption places the value of an Air Mile at 29 cents ($606 minus $278.44 in taxes and fees = $327.56 divided by 1125 Air Miles = 29 cents per mile).
6. Earning rate of 1 mile for each $10 spent
Accumulating Air Miles based on total spend is a long and tedious struggle. Credit card sign-up bonuses and point-boosting promotions are the best ways to accelerate earning rates. The earning rate of 1 mile for each $10 spent isn’t a key reason I jumped on the deal, but it doesn’t hurt. It’s the best of any Air Miles credit card. Some cards have a two-tier earning system with one rate for shopping at Air Miles merchants and another rate for all other spending. The BMO Air Miles World Elite Master Card has one rate for all purchases: 1 mile for each $10 spent (and 2x reward miles per $10 spent at participating National Car Rental and Alamo Rent-A-Car locations).
The minimum spend of $3,000 adds 300 Air Miles to an account.
7. What I can do with 3,300 “free” Air Miles
The two examples (Halifax to Toronto and Halifax to New York) result in three round-trip tickets for 2,400 Air Miles (1,275 + 1,125). That leaves 900 (3,300 – 2,400) to contribute to a fourth short-haul flight.
8. Fast track to Gold or Onyx status
Collectors who earn 1,000 Air Miles in a calendar year reach Gold status. This provides access to select flights requiring up to 30% fewer miles. Collectors who earn 6,000 Air Miles in a calendar year reach Onyx status. Onyx members have access to select flights requiring up to 40% fewer miles.
Apply for another Air Miles credit card with a high sign-up bonus and you’re within easy reach of Onyx status. Take a look at the American Express Air Miles Platinum Credit Card with a $65 annual fee and a sign-up bonus of 2,000 miles. Great Canadian Rebates has a current promotion with a $50 rebate, making the cost of acquiring the card just $15.
9. Airport lounge access
The card comes with an annual Priority Pass membership and two complimentary passes per year to more than 1,000 worldwide airport lounges. This has a value of $153 USD. The passes can be used for yourself and a travelling companion. After the two passes have been used, lounge access can be purchased for $27 USD per person per visit.
In the welcome letter that comes with your credit card you’ll receive an invitation code to register for the free membership.
10. A full suite of insurance benefits
The BMO Air Miles World Elite Travel and Medical Protection Certificate of Insurance includes coverage for:
- out-of-province/out-of-country emergency medical treatment;
- trip cancellation;
- trip interruption;
- lost, damaged or delayed baggage; and
- car rentals.
These benefits are consistent with the industry average for cards with an annual fee of $120 or $150.
The trip cancellation insurance exceeds the industry average. It has $2,500 coverage when the full or partial costs of the trip are charged to the card. Many premium credit cards don’t have any trip cancellation insurance, and others have only $1,500 of coverage. After emergency medical coverage, I consider trip cancellation to be the most important of any travel insurance.
For example, my TD Aeroplan Visa Infinite has trip cancellation coverage limited to $1,500 per insured person. For most of my trips, $1,500 is enough to cover all non-refundable expenses. For my last trip, my non-refundable bookings amounted to close to $2,500. The extra $1,000 of coverage would have cost $100. This enhanced benefit is worth giving cards such as the BMO Air Miles World Elite Master Card and the Scotiabank American Express Gold Card a second look.
A few other attractive features...
- Purchase protection and extended warranty covers most items purchased with the card.
- It’s easy to set up preauthorized payments from your bank account (it doesn’t need to be a BMO account). You don’t need to complete a form or mail a voided cheque. Simply call the service centre and provide the number of your bank account.
- The wait time to reach a service centre representative isn’t as long as that to reach TD and CIBC. It’s not as good as wait times for American Express, but it’s not excessive.
- The online application took approximately five minutes to complete. I was approved within one minute.
Is the BMO Air Miles World Elite MasterCard a good deal?
It’s a great deal if you have your earning preference set to Dream Rewards, use your miles for air travel and take advantage of the companion pass.
If you’re reading this after November 30, 2017, you might want to wait until the next FYF promotion. I’ll update this post at that time. In the meantime, if you plan on jumping on this deal, please consider using an affiliate link from one of the bloggers who spend countless hours researching, writing and educating readers on miles and points. I applied on Patrick Sojka’s link at Rewards Canada.
If you collect Aeroplan miles, these articles might be of interest: