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Since this story originally published, American Airlines removed the carry-on bag restriction for tickets purchased or flown as of Sept. 5, 2018.
American Airlines has introduced a class of bare-bones, "Basic Economy" fares that offer lower prices but eliminate several privileges for fliers, including access to overhead bins for carry-on luggage. But for holders of the airline’s co-branded credit cards, there's good news in the fine print: They won’t suffer some of the most painful cuts.
Most significant: Holders of eligible AAdvantage credit cards can buy the cheap fares with their cards and continue to have access to overhead bins and priority boarding. An example is the Citi® / AAdvantage® Platinum Select® World Elite Mastercard®.
American's move follows United Airlines’ announcement two months earlier of its own no-frills fares, also called "Basic Economy." Both airlines said they would limit Basic Economy passengers to a single carry-on item that fits under the seat in front of them. That allows for a purse, briefcase or small backpack, but essentially prohibits standard roll-aboards and duffels. Customers must check other baggage — for a fee.
The other major network carrier, Delta Air Lines, already offers no-frills fares, but it doesn't restrict overhead bin access.
Airline executives have said Basic Economy seating is an attempt to cater to price-sensitive infrequent fliers and keep them from defecting to ultra-low-price discounters such as Spirit, Allegiant and Frontier.
The case for airline credit cards
The new Basic Economy fares make airline cards more valuable than for just earning frequent-flier miles. They allow cardholders to pay less for a plane ticket but not suffer some of the worst downsides to no-frills fares.
Luggage room: Besides being exempted from overhead bin space restrictions, cardholders typically get their first checked bag free. The privilege often extends to others traveling on the same flight itinerary. With the Citi® / AAdvantage® Platinum Select® World Elite Mastercard®, it covers the cardholder and up to four others.
At $30 each way for a checked bag, a cardholder could make up the typical $95 annual fee on an airline credit card in a single round trip with a companion, if each checked a bag. While several general travel credit cards offer higher rewards rates and more flexible redemption options, airline cards are the only ones to offer free checked bags.
Priority boarding: Although Basic Economy fliers will board the plane last, those who paid the fare with their AAdvantage credit card will still get priority or preferred boarding. So, if they do have carry-on luggage, they are more likely to find a place for it before the overhead bin space is full.
The Citi® / AAdvantage® Platinum Select® World Elite Mastercard® has an annual fee of $0 intro for the first year, then $99. The Citi® / AAdvantage® Executive World Elite Mastercard® offers more perks, including airport Admirals Club membership, for a much higher annual fee. The business version is the CitiBusiness® / AAdvantage® Platinum Select® Mastercard®, with an annual fee of $0 intro for the first year, then $99.
Basic Economy downsides
Purchasers of American’s Basic Economy fares will lose other privileges, even if they're cardholders.
Seat assignments. Basic Economy customers will not receive a seat assignment until check-in, meaning they could be headed for an undesirable middle seat and might not be able to sit with travel partners. (American says it will continue to try to seat children under age 13 with an adult.) Basic Economy passengers can pay extra for seat assignments 48 hours before the flight.
Flight changes. Basic Economy passengers won’t be eligible for upgrades or same-day standby or flight changes, making the tickets “use it or lose it.”
Loyalty earnings. Basic Economy customers will earn half as many frequent-flier miles or segments toward elite status as customers who buy regular fares.
Aside from overhead bin space and seat selection, in-cabin service is the same: the same seats and free entertainment options, soft drinks and snacks.
Besides credit card holders, travelers with elite status on American will also be exempted from some restrictions that come with Basic Economy fares.
In its mid-January announcement, American said Basic Economy fares would go on sale the next month in 10 markets, with the first flights shortly after. The airline said it expected to expand to more markets later in 2017. Not all American Airlines flights will offer the new Basic Economy fares.
Information related to the Citi® / AAdvantage® Executive World Elite Mastercard® has been collected by NerdWallet and has not been reviewed or provided by the issuer of this card.