Battle of the Best Credit Cards: American Express AIR MILES Platinum vs. TD Aeroplan Visa Infinite

Jordann Brown
by Jordann Brown July 8, 2015 / No Comments

A common saying is that you should spend your money on experiences, not things, and travel is one of the most worthwhile experiences in the world. Spending your hard earned money on visiting new and exotic locales is one of the best ways to make sure you’ll have memories that last a lifetime.

But the costs of flights, hotels and car rentals can add up fast, and that’s why you should consider getting the most value for your dollar by putting everyday purchases on a travel rewards credit card. As long as you pay off the balance at the end of every month, this is a great way to earn points/miles and save big on your next big trip!

Two of the oldest travel rewards programs in Canada are Aeroplan and AIR MILES. Here’s a side-by-side comparison of two of the best credit cards in these programs to see which one comes out on top.

American Express AIR MILES Platinum TD Aeroplan Visa Infinite
Annual Fee $65

(annual fee waived for the first year)

$120

(receive annual fee rebate of $120 for the first year)

Value of Sign-Up Bonus 2,000 Bonus Miles when you spend $500 = $242 15,000 Bonus Miles with first purchase = $180

5,000 Bonus Miles when you add an Authorized User = $60

Total Value = $240

Value of 1 Mile $0.121 $0.0120
Annual Income Requirement $40K individual $60K individual or $100K household
Interest Rate 19.99% 19.99%
Special Features Earn double miles at participating AIR MILES sponsors Earn double miles when you present your Aeroplan Membership Card at partner brands

At first glance, it’s hard to tell which credit card is better. Both the cards offer competitive sign-up bonuses. The TD Aeroplan Visa Infinite has a higher annual fee and the American Express AIR MILES Platinum’s has a higher average value of a single mile. To determine once and for all which credit card is the better choice, we came up with this typical monthly spending profile and applied it to both cards. Here’s who came out on top.

Monthly Spending Profile
$500 on groceries
$400 on gas
$250 on pharmacy
$1,600 on everything else
Total per month: $2,750
Total per year: $2,750 x 12 = $33,000

 

1. TD Aeroplan Visa Infinite Card

TD Aeroplan Visa Infinite Card

td-aeroplan-visa-infinite

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  • $120 annual fee rebate for the first year if you apply before September 2, 2016
  • Receive up to 20,000 bonus Aeroplan miles
  • Earn 1.5 Aeroplan miles for every $1 spent on gas, grocery and drugstore purchases and eligible purchases on aircanada.com
  • Earn 1 Aeroplan mile for every $1 spent everything else

 

Annual Fee Sign-Up Bonus Spending Rewards Monthly Spending First Year Return Subsequent Years Return
$120 $240 1.5 miles for $1 spent on gas, groceries, & pharmacy

1 mile per $1 on everything else

1.5 miles x $1,150 on gas, groceries, & pharmacy= 1,725 miles

1 mile x $1,600 on everything else = 1,600 miles

Value of 1 mile = $0.0120

3,325 x 0.012 = $39.90/month

Sign-up: $240

Spending Rewards: $39.90 x 12 = $478.80

Annual Fee: $0

Total: $240+$478.80-0 = $718.80

$478.80-$120= $358.80

No matter how much you spend on this card, the higher volume of miles you’ll earn with the TD Aeroplan Visa Infinite offsets the lower average value of an Aeroplan Mile ($0.0120). With this credit card, you earn 1.5 Aeroplan Miles for every $1 you spend on pharmacy, gas and groceries, and 1 Aeroplan Mile for every $1 you spend on everything else. Based on this example, you would earn 39,900 miles just for your spending + 20,000 in the sign-up bonus. With the first year annual fee waived the first year (value of $120), that’s a $718.80 or 2.2% ($718.80/$33,000) return in the first year.

2. American Express AIR MILES Platinum

American Express AIR MILES Platinum Credit Card

american-express-air-miles-platinum

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  • $65 annual fee (waived the first year)
  • Earn 1 reward mile for every $10 in card purchases at Air Miles sponsors as well as grocery stores, gas stations, and drugstores in Canada
  • Earn 1 reward mile for every $15 in card purchases everywhere else
  • Receive a welcome bonus of 2,000 Air Miles when you charge $500 in the first three months

 

Annual Fee Sign-Up Bonus Spending Rewards Monthly Spending First Year Return Subsequent Years Return
$65 $242 0.1 miles for $1 spent on gas, groceries, & pharmacy

0.067 miles per $1 on everything else

0.1 miles x $1,150 on gas, groceries, & pharmacy= 115 miles

0.067 mile x $1,600 on everything else = 107.2 miles

Value of 1 mile = $0.121

222.2 miles x $0.121 = $26.89/month

Sign-up: $242

Spending Rewards: $26.89 x 12 = $322.68

Annual Fee: $0

Total: $242+$322.68-0 = $564.68

$322.68-$65= $257.68

 

While the average value of an AIR MILE is higher, at $0.121 per mile, the actual number of miles you earn per dollar on this card is low. You’ll only earn 1 mile per $10 spent on gas, groceries and pharmacy, and 1 mile per $15 spent on everything else. Altogether, in this example, you would earn 2,666.40 miles for your spending + 2,000 miles through the sign-up bonus. Since there’s no annual fee for the first year, that means you’d earn $564.68 in the first year – a 1.7% return ($564.68/$33,000).

So, which card should you choose? If your monthly spending resembles the profile we used, and you earn over $60,000 per year, the TD Aeroplan Visa Infinite is a good choice for you. You’ll earn more rewards immediately and in subsequent years, and even if your spending habits change, you’ll still earn at least 1 Aeroplan Mile for every $1 you spend.

Flickr: Sarah Ackerman