• Graham

Aeroplan Visa card with a $599/year fee? Crazy, until you do the math.

Updated: Nov 24, 2020

this is not a sponsored post, all views are my own and this article was written without any sponsorship or input from TD, Aeroplan or any other entity.


We don't talk much about credit cards on this site, it's just not part of my focus, but in this case it's absolutely a part of my frequent-flyer strategy for 2021. For a detailed look at all the different options for Aeroplan-branded credit cards, check out this great guide from our friends at Prince of Travel.


Along with the launch of the new Aeroplan program comes a new series of Aeroplan-branded Visa and American Express cards, ranging from entry-level cards with no annual fee, that basically earn 1 Aeroplan point per dollar spent, all the way up to "premium cards" with a host of travel benefits, points-per-dollar multipliers and a considerable "signing bonus" of tens of thousands of Aeroplan points and a hefty annual fee.


If you don't already hold Air Canada Elite status, any of the premium cards will give you many of the same benefits before you've flown a mile, like a free checked bag, priority check-in, security and boarding, and lounge access.


Of all the various Aeroplan-branded credit cards, the "big three" are premium cards from TD, CIBC and American Express. I got good and nerdy with all three, and landed on the aptly-named TD Visa Infinite Privilege, with an annual fee of $599 CAD. What kind of lunatic would pay that, you ask?

...well, the kind who did the math, and worked out that the card comes with benefits worth at least twice what the card costs. Here's how I get there:


- $1,000 - estimated value of the sign-up bonus of 50,000 Aeroplan points

- $200-1,000 - minimum-to-average value of the sign-up bonus of an Air Canada Buddy Pass

- $??? - value of the Companion Pass, for those spending >$25,000 a year AND buying premium fares.

- $100 - actual value of the NEXUS credit

- $60 - estimated value of the included Priority Pass lounge credits


Altogether, I'm confident in getting *at least* $1360 in value for the $599 I spent, and I consider this a worst-case, conservative estimate. I also haven't counted any value for the free checked bags, airport priority services or Maple Leaf Lounge access, since those already come with my Aeroplan 75K status. That's not me bragging, I'm saying anyone who doesn't already have that status gets additional value I'm not counting here.


So, now that I've made my bold claim, let's get into the math and I'll explain how I reached these values, while I walk you through the various travel benefits that come with this card.



PART ONE - THE BENEFITS WITH ACTUAL DOLLAR VALUES


Aeroplan Sign-Up Bonus - Estimated value $1,000


Your first purchase with the card triggers a welcome bonus of 20,000 Aeroplan Points, and if you spend a total of $1,000 within the first 90 days, they throw in another 30,000, for a total signing bonus of 50,000 Aeroplan points.


Under the new variable-pricing system a round-trip Standard Economy ticket from Montreal to Vancouver *should* usually cost about 25,000 points plus ~$80 in taxes and fees, while the same flight would cost about $550-600 in cash. So, by this metric I'm suggesting that 50,000 Aeroplan points are worth a rough minimum of $1,000 CAD, *if* you're a person who would normally pay for a flight like that.


...then again, if you're not planning to travel that much, you're probably not reading this.


It's also worth noting that Aeroplan executives have been saying publicly in November 2020 that premium credit-card holders should expect to see slightly better discounts on Aeroplan award flights in the coming year, but until we see how that unfolds in real life I'm leaving it out of my valuation.



Aeroplan Earning Rates - Estimated value $0


- 2 points per $1 spent on Air Canada and Air Canada Vacations

- 1.5 points per $1 spent on Travel, Gas, Grocery and Dining

- 1.25 points per $1 spent on all other purchases


The value here isn't actually $0, but since you can get most of the same Aeroplan points-earning rate from a basic or first-year-free Aeroplan-branded credit card, I'm not going to claim an extra bonus here just for the sake of clickbait.


To work out what this is actually worth to you, you'll need at least a rough idea of what you're already going to spend on your credit card in a given year - and if you don't know those numbers by heart, you should absolutely learn them before you go dropping $599 on a premium-branded credit card!


For reference, in this year of massively reduced COVID travel, where both my businesses are almost completely shut down, along with all my business travel, my qualifying spending would be worth maybe 15,000-20,000 Aeroplan points, or an effective value of about $400.



Buddy Pass and Companion Pass - Minumum value $200, Maximum value $2000+


As soon as you hit the $1,000 CAD minimum spending requirement on this card, you'll receive an Air Canada Buddy Pass - see my detailed review and value analysis here. This benefit alone should have a benefit of anywhere from $200 to $2,000 if used carefully.


It's a bit confusing, but if you spend $25,000 CAD in any 12-month period, you'll also receive an Air Canada Worldwide Companion Pass, which works sort of like the Buddy Pass, but with so many restrictions on pricing for international travel that I'd call it nearly worthless for travel outside Canada.


Worthless, that is, unless you're buying premium fares like Latitude, Premium Economy or Business, in which case it gets very valuable, very fast. Since this benefit only kicks in after you spend more than $2,000 each month (average) on the card, I'm not calling an automatic win for everyone, and therefore I'm leaving it out of my valuation above.



NEXUS fee credit - Fixed value $100


Once every 48 months, you can get a rebate of up to $100 CAD to cover the cost of your application for a NEXUS card. As this includes Global Entry and also gets you into the faster, keep-your-shoes-on security lineup and NEXUS customs lineups at most major Canadian airports, I would call this one a must-have for anyone who travels outside Canada on a regular basis.



PART TWO - TRAVEL BENEFITS


Lounge Access


Any time you're flying Air Canada or any Star Alliance airline, you'll have access to any Air Canada Maple Leaf Lounge in North America. This is mainly useful to people without Aeroplan Elite 35K status or higher; if you already hold 50K status or higher, or Star Alliance Gold status with another airline, you already get this benefit, and if you have 35K status, you have access to Domestic and Transborder (US-bound) lounges.


You'll also get a free Priority Pass membership, with six credits for lounge visits anywhere in their global network. Don't confuse this with the unlimited Priority Pass membership that comes with other premium cards like the American Express Platinum, but it's still a great deal if you travel outside Canada. Since I do, I'm giving this one a nominal value of $60, since it'll save me $10 on a sandwich and a drink on six of the times I'm flying without access to a Star Alliance lounge.



Aeroplan Elite Status Benefits


- For every $5,000 in net purchases (minus returns etc) you'll earn 1,000 Status Qualifying Miles and 1 Status Qualifying Segment towards the following year's Elite Status qualifying totals. It's not a life-changing benefit, but I've absolutely had years where I needed to spend $200 on a December mileage run to hit the next status tier up.


- If you qualify for Aeroplan Elite status, all Status Qualifying Miles above what you needed to qualify for your status level, will roll over towards next year's qualification.


- If you requalify for Aeroplan Elite status, you can roll over up to 50 unused eUpgrade credits into the following status year.



Free Checked Bags


When your trip starts with an Air Canada flight, your first checked bag (up to 23kg / 50lbs) is free, same for up to 8 other people booked on the same reservation number. This still works if you're flying Toronto-Newark-Singapore, with only the first short hop on Air Canada, but it doesn't work if you're flying Chicago-Toronto-Tokyo with the first leg on United.



Priority Airport Services


You and up to 8 other people booked on the same reservation can use Air Canada's priority check-in counters at the airport, your luggage will be tagged Priority, and you'll have Priority boarding with Zone 2 on any Air Canada flight.


You'll also have priority over other similar travelers when you're on standby for a flight, or waiting to clear an eUpgrade. To be clear - if you're a 50K elite member, you'll have priority over other 50K members who don't have a premium Aeroplan-branded credit card. If you have no status, you'll be lower on the list than Aeroplan Elite members, but higher on the list than other passengers with no status.


You'll have access to the Priority Security Lanes at Vancouver, Toronto, Ottawa and Montreal Airports. This is not the same thing as the NEXUS lane, but it's still a definite time-saver at rush hour.


You'll have access to priority airport taxi and limo lanes, choice parking spots at Vancouver and Ottawa Airports, and 20% off airport parking at Vancouver, Ottawa and Montreal Airports.



PART THREE - TRAVEL INSURANCE


Pay for at least 75% of your whole trip with this card and/or Aeroplan points, and you'll have:


- $2,500 in Trip Cancellation coverage for you and a companion if you need to come home early due to a covered cause.


- $1,000 in Flight / Trip Delay coverage: If your trip is delayed for over 4 hours, you'll have up to $1,000 coverage for "reasonable hotel, motel and/or restaurant expenses". In my personal experience, what credit-card companies call "reasonable" usually covers a Marriott but not the Four Seasons, etc.


- $1,000 in Delayed / Lost Baggage insurance: If your baggage is delayed more than 4 hours, each insured person on your trip has coverage for up to $1,000 for the purchase of essentials, such as clothing and toiletries. Again, generally speaking this will cover a change of clothes and a trip to the drugstore, but I wouldn't advise trying to cover the purchase of a $900 handbag.


- $2,500 in Hotel/Motel Burglary Insurance for items stolen from a hotel/motel room registered in the name of the Cardholder. In my personal experience, the best practice to ensure this insurance will cover you, is that the same day the theft is discovered, you immediately file a formal police report, notify the hotel's management in writing, and notify the credit-card company.


- Car Rental Collision / Loss-and-Damage coverage for up to 48 days. This is a solid benefit that can save a regular traveller hundreds of dollars a year, but it's *incredibly* important to read the fine print on exactly what's covered and not covered, like Third-Party Liability which is required in several states and countries.


- This card also covers certain repair, replacement and theft costs for purchases charged to the card, as well as extended warranty coverage, but that's a whole other rabbit hole and as this is a travel blog I won't go into that detail. Definitely worth a look, but I'd definitely consider it a fringe benefit.



PART FOUR - CONCLUSION


I wasn't initially sold on a premium Aeroplan card, until I did the math in detail, and just based on the benefits I listed above, this card is a clear winner for what I expect will be a partial return to travel in 2021.


Aside from the financial outcome, I'll also get to roll forward dozens of eUpgrade credits, which is especially helpful when combined with the new "Latitude trick" I'll be covering in another article, essentially leveraging my Air Canada Elite status to go anywhere Air Canada flies, in business class, for about 60,000 Aeroplan points round-trip.


Even the conservative valuation makes this a good option in my case, but I'll close with the same advice I give anytime we talk about any form of travel promo on this site:


Do the math carefully: make sure you're taking advantage of the promo, not the other way around!


Safe travels!

- G

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