Iberia Visa Card Review: OK for Iberia, but Not the Ticket for Earning Avios

Iberia, the major airline in Spain, offers the Iberia Visa Signature® Card, a credit card probably only Iberia devotees should consider getting.

The card is a close cousin of two others from European airlines that earn the same type of frequent flyer rewards, called Avios. They are the British Airways Visa Signature® Card and Aer Lingus Visa Signature® Card.

One of the highlights of the Iberia Visa Signature® Card is a $1,000 discount voucher after spending $30,000 on the card, which sounds great until you dive into all its rules and restrictions. However, its 10% discount on flights is a potentially valuable benefit, along with a generous sign-up bonus.

Still, if you’re not loyal to Iberia or the Avios rewards program, a general travel rewards card may be a better fit. And even if you’re racking up Avios as your preferred frequent flyer currency, you have better long-term choices in credit cards. That leaves the Iberia Visa Signature® Card as a niche product.

Iberia Visa Signature® Card: Basics and benefits

Card type: Airline.

Annual fee: $95.

Sign-up bonus: Earn 100,000 Avios after you spend $5,000 on purchases within the first 3 months from account opening.

Ongoing rewards:

The Iberia Visa Signature® Card earns Avios, a currency it shares with British Airways and Aer Lingus. (Avios is both singular and plural.)

• 5 Avios per $1 spent on purchases with British Airways, Aer Lingus, Iberia, and LEVEL within your first 12 months from account opening, thereafter earn 3 Avios.

• 3 Avios per $1 spent on hotel accommodations when purchased directly with the hotel within your first 12 months from account opening, thereafter earn 2 Avios.

• 1 Avios per $1 spent on all other purchases.

The value of Avios vary based on redemption, but they're worth roughly 1 cent apiece.

» MORE: NerdWallet guide to earning British Airways Avios

Foreign transaction fee: None.

Interest rate: The ongoing APR is 15.99% - 22.99% Variable APR.

Benefits:

• Save 10% on Iberia flights purchased on iberia.com/Chase10.

• Earn a discount voucher of $1,000 to use toward two tickets on the same flight for each year you make purchases of $30,000 on your card.

• Travel coverages, such as auto rental collision damage waiver, baggage delay insurance and lost luggage reimbursement.

Where the Iberia Visa Signature® Card shines

Potentially huge sign-up bonus

Earn 100,000 Avios after you spend $5,000 on purchases within the first 3 months from account opening. That's a generous bonus, especially if you can spend enough to earn the second tier of it.

10% off Iberia flights

Getting 10% off all your Iberia flights can be pretty valuable assuming you fly the airline often. Spending $2,500 on flights a year would reap a cool $250 discount that more than covers the annual fee.

Note some restrictions: The discount doesn’t apply to taxes, fees and carrier charges or to excess baggage fees or seat assignment fees. And the discounts are good for round trips on Iberia only, not partner airlines, and must be booked at the qualifying Iberia website: iberia.com/Chase10.

Travel and consumer protections

These protections are nothing special, especially among travel credit cards that charge an annual fee, but it’s nice to have them.

• Auto rental collision damage waiver. Secondary coverage to your personal auto insurance policy.

• Baggage delay insurance. Reimburses you for essential purchases like toiletries and clothing for baggage delays over six hours, up to $100 a day for three days.

• Lost luggage reimbursement. If you or your immediate family members' checked or carry-on bags are damaged or lost, you're covered up to $3,000 per passenger.

• Purchase protection. Covers new purchases for 120 days against damage or theft up to $500 per claim and $50,000 per account.

• Extended warranty. Extends a U.S. manufacturer's warranty by an additional year, on eligible warranties of three years or less.

No foreign transaction fees

Like any decent travel credit card, this card doesn't charge foreign transaction fees for purchases made outside the U.S. That could add up to solid savings for frequent travelers. It also runs on the the Visa payment network, so the card will be widely accepted anywhere you travel.

Iberia Visa Signature® Card: Drawbacks and alternatives

Lack of flexibility

For international travel, redemption options abound on this card: Iberia is a member of the Oneworld airline alliance, and you can redeem points with other Oneworld airlines, as well as with a few additional partner airlines. But for domestic trips, you’re limited to American Airlines and Alaska Airlines. And when redeeming for Alaska Airlines, you have to book over the phone rather than online. Looking for more options within the U.S.? The Chase Sapphire Preferred® Card could be a stronger choice.

With the Chase Sapphire Preferred® Card, you can trade in points at a 1:1 value for Avios, for the times you really want to redeem with Iberia. But you'll also have the option of transferring your points to several other hotels and airlines. Because transfer partners include members of all three major airline alliances — SkyTeam, Star Alliance and Oneworld — as well as U.S.-based airlines, like Southwest, JetBlue and United Airlines, this card offers an abundance of redemption opportunities. The card charges an annual fee of $95.

More broadly, points from American Express Membership Rewards and Chase Ultimate Rewards transfer to Avios. So, you can consider credit cards that earn those rewards currencies to be competitors.

» MORE: Airline and hotel transfer partners: Chase Ultimate Rewards vs. American Express Membership Rewards

Rewards can expire

Avios expire if you don't collect, spend, share or purchase any for 36 consecutive months. That could be a rude surprise later, especially for those who want to earn the sign-up bonus and run.

Plenty of cards offer rewards that don't expire. Consider the Capital One Venture Rewards Credit Card, which gets you miles that remain active as long as your account is open. With these miles, which can be redeemed either through statement credits against travel purchases or through Capital One’s rewards program, you can book any seat you want on any airline. That flexibility means you might find it a lot easier to use often.

This card also comes with several transfer partners, including some in the Oneworld alliance, such as the loyalty programs associated with Finnair, Qantas and Qatar Airways. You can transfer miles at a rate of 2 Venture miles to 1.5 frequent flyer miles. The card charges an annual fee of $95.

Limitations on the discount voucher

Getting a $1,000 discount on future flights can be a valuable award. But it might be difficult for some cardholders to use because of all the rules and restrictions.

• You must make $30,000 in purchases in a single calendar year. And some purchases don’t count, such as cash-like transactions (travelers checks, foreign currency, money orders, for example.) Also excluded: the card’s annual fee and gambling, including lottery tickets.

• You must buy two tickets. The discount voucher comes as a code that you apply for a discount of $1,000 when purchasing two tickets for the same flight in the same class of travel. The companion must travel with you on the outbound and inbound flights and be booked at the same time for both directions.

• Vouchers apply to flights operated by Iberia only. It’s no good for code-share flights or alliance airlines.

• Expires in 12 months.

• Taxes and fees apply to the full value of the ticket.

• The voucher must be redeemed online at Iberia’s website.

And for many people, the discount voucher is inferior to partner airlines that offer similar credit cards that also earn Avios. But with them, spending $30,000 gets you a companion pass.

• British Airways Visa Signature® Card: Every calendar year you make $30,000 in purchases on your card, you'll earn a Travel Together Ticket good for two years. (The required spending is $20,000 for first-year cardholders.)

• Aer Lingus Visa Signature® Card: Every calendar year you make purchases of $30,000 on your card, you'll receive a Commercial Companion Ticket good for 12 months.

» MORE: NerdWallet's top credit cards with companion tickets

No airport perks

You won’t find additional checked baggage waivers, priority boarding or access to airport lounges with this card like you do on many credit cards from U.S.-based airlines.

Should you get the Iberia Visa Signature® Card?