Does the world really need another travel rewards card?

I spend a lot of time helping consumers understand and navigate the intricacies of travel rewards programs. By far the most perplexing area within the programs is the credit cards. It used to be pretty simple. Sign up for the credit card affiliated with your primary airline program and charge, charge, charge. But the success of the programs, and of the cards linked to them, has spurred an outpouring of variations on the theme—new alliances, new benefits, new cards.

And there are entirely new categories of cards as well. In particular, the independent rewards cards like the Capital One No Hassle Miles, the American Express Blue Skies, and the Citibank PremierPass cards, now compete for space in consumers’ wallets, based largely on the promise of award tickets free of the capacity controls which have so aggravated members of the airline programs.

Consumer choice has become consumer overload.

So, do we need another rewards card? American, Citibank, and American Express think we do. The new Citi/AAdvantage American Express card is now being promoted alongside the venerable Citi/AAdvantage MasterCard.

As with the MasterCard, there are two flavors of the American Express version, a regular and a Select. Both regular cards come with a $50 annual fee, waived for the first year, and a 15,000-mile bonus. Both Select cards charge an annual fee of $85, also waived for the first year, plus a bonus of up to 40,000 miles over two years.

The annual percentage rate is the same for both cards, currently 17.49%.

So except for a few extra hotel benefits associated with the American Express card, the MasterCard and American Express cards are identical except for the logos in the bottom-right corner.

What’s the point of having two cards which barely differ?

From Citibanks’s perspective, there’s the obvious motivation: more cards translate into more card fees. Same for American Express. And for American, which sells AAdvantage miles to Citibank and other program partners, there’s the potential for more revenue as well.

But for consumers? Why carry a second AAdvantage credit card? A colleague who is savvy in these matters suggested that there is an argument to be made for having Visa, MasterCard, and American Express credit cards, in order to be eligible for promotions targeting those specific cards.

Fair enough. But for those who feel the need to carry a card with the American Express logo on it, there’s a better choice than the AAdvantage card: The Starwood Preferred Guest credit card, issued by American Express. With a $45 annual fee, waived the first year, the Starwood card is cheaper than either American Express AAdvantage card. And Starwood points can be exchanged for miles in the programs of more than 30 airlines, including American.

In fact, the Starwood card might be a better option for AAdvantage members than either the Citi/AAdvantage MasterCard or the Citi/AAdvantage American Express card. A hotel card that is a superior choice for earning airline miles? No wonder consumers are confused.