Airline cards are worth it for status

Of the big three US airlines -- American, Delta and United -- no credit card that I'm aware of grants automatic elite status in the frequent-flyer program.

There are cards available which, if you hit a spend threshold, will convert some of the redeemable miles into status-qualifying miles, and this can assist with reaching status, but the thresholds are set high enough that this is out of reach of many people.

The closest any card that I'm aware of comes to automatic status is the Delta Reserve Amex; if you spend $60,000 on the card in a calendar year, it converts enough redeemable miles into Delta MQMs to award the lowest tier of status in Delta's frequent-flyer program. But the cost of this is spending $60,000 each year on the card, and all you get in return is near-worthless Silver Medallion status.

In general, the airlines have learned their lesson on this one: redeemable miles are an inflationary currency they can give away by the millions and not have to worry since they can adjust the redemption charts any time they like. But genuine elite status in the frequent-flyer program is more expensive to give away, and they've worked to make that hard to get.

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For those unfamiliar with the world of airline programs, the general idea is (again, in terms of the US big three -- America, Delta and United):

* Elite status is what gets you things like free first-class upgrades, access to the fancy lounges, etc.

* There are two classes of miles you can earn. Redeemable miles are simply what the name implies: you can exchange them for a ticket to fly. Redeemable miles are handed out like candy.

* Qualifying miles ("Elite-Qualifying Miles" or "EQM" on AA, "Medallion-Qualifying Miles" or "MQM" on Delta, "Premier-Qualifying Miles" or "PQM" on United) are how you get to elite status. Within the frequent-flyer community they are often referred to as "BIS" miles, short for "Butt-In-Seat", as actually purchasing a ticket with cash and flying is the primary way they can be earned. There are other ways to earn them, but not many and the amount you can earn is usually too limited to be a viable way to earn/maintain status.

* All three now also impose a requirement of qualifying dollars; remember I said the airlines learned their lesson? There is now a minimum dollar amount per year you must spend on tickets in order to obtain each level of status, and that amount is weighted by fare class to prevent hitting the threshold from super-discounted fares.

* Airline-branded credit cards which earn miles will only earn you redeemable miles. Some high-end cards (as mentioned above) convert fixed quantities of redeemable miles to qualifying if you spend a lot of money on the card. Most cards will also either get you a credit toward a qualifying-dollar threshold, or waive the qualifying-dollar threshold, which can make qualifying for status easier.

* Airline-branded credit cards can give you some perks which resemble those of elite status -- priority boarding, free checked bag, etc. -- but this is not the same as having status and many of the nicer benefits are not available in return for simply holding a credit card; you must actually fly enough to achieve the upper status tiers.

* Low-level status (AAdvantage Gold, Delta Silver Medallion, or United Premier Silver) is close to worthless. Your upgrade privileges -- for both first-class and for extra-legroom economy seats -- are largely theoretical at this level, the additional redeemable miles earned are not enough on their own to justify maintaining the status, and the other benefits typically are all available to credit-card holders.