Should You Apply For El Al’s New US Credit Card? Here’s Why It’s A Hard Pass For Me

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Airlines around the globe have tapped the lucrative US credit card market to sell tens of billions of dollars worth of miles to major banks. It’s a win-win-win situation where the banks gain from consumers using their credit cards, consumers are awarded with lucrative miles, and airlines make a fortune selling those miles to the banks.

American, Delta, and United have been able to stay afloat during the COVID-19 crisis by mortgaging their mileage programs for billions of dollars in low interest loans thanks to lucrative credit card deals. Mileage programs are far more profitable than regular airline operations and you can even say that airlines exist today to support the credit card and miles business.

Enter El Al.

Their convoluted Matmid mileage program doesn’t use miles like practically every airline in the world. Rather it obfuscates its program with confusing point levels and restrictions that require a PhD to understand and seems designed to hide its shortcomings.

Unlike most US programs, Matmid has points that expire after 36 months regardless of activity, and awards have hefty fuel surcharges. That makes the program a poor value compared to the US competition and it discourages consumers from investing in it. It also lacks redemption partners or the ability to redeem for flights that don’t begin or end in Israel. As Israel has blocked most foreigners from entry since March, that means there’s no way to take advantage of those points now for many people.

El Al also killed the ability to easily search for saver level Matmid award tickets when they redesigned their website to make it even worse than the mess it was beforehand. The saver award tickets are the least expensive way to book awards and they price according to the award chart rather than dynamic pricing. However now you can only see saver award rates if you already have sufficient points in your account, otherwise you are shown much more expensive dynamically priced awards! That makes it nearly impossible to even have a goal to redeem for as you don’t know what’s available until you have enough points for it.

If I were Eli Rozenberg, El Al’s new controlling shareholder, I would burn Matmid down to the ground and create a brand new loyalty program along with compelling US and Israeli credit card offerings. A reimagined and innovative frequent flyer program could prove to be more lucrative than the entire airline.

But El Al will launch their own US credit card product called Fly Card Preferred based on its Matmid program. Targeted mailers are being sent to Matmid members to apply for the new card.

The USBank issued El Al card has an intro bonus of 800 Matmid points after spending $3,000 in 90 days.

Currently it takes 40K AMEX points to transfer into 800 Matmid points. However El Al has announced that they will sever ties with AMEX on 1/1/21.

If you transfer 5,000 AMEX points into 100 Matmid points you get 12 months of Executive status, which gets you roughly 20% off of award flights. However, going forward, only El Al cardholders will have access to that discount due to the end of AMEX point transfers to El Al.

The card claims to offer up to 20% off award tickets, but that’s just the standard Executive status discount that is available now to people who transfer 5K AMEX points.

El Al’s award chart is truly one of a kind. While every other award chart out there is based on regions or distance, El Al’s has a different price for every city and for every season.

Here’s a rough guide to El Al award pricing for Executives (those who have an El Al card or have transferred 5K AMEX points to El Al in the past 12 months) and for non-executives. Note that in addition to the points listed below, taxes and fuel surcharges will add another $200-$500 onto each round-trip ticket.

Flying between Tel Aviv and:El Al points for a round-trip for Executives in the winterEl Al points for a round-trip for Non-Executives in the winterEl Al points for a round-trip for Executives in the summerEl Al points for a round-trip for Non-Executives in the summer
NYC 1,600 Economy
2,800 Premium
5,100 Business
2,000 Economy
3,500 Premium
​6,000 Business
1,760 Economy
3,600 Premium
5,100 Business
2,200 Economy
4,500 Premium
​6,000 Business
Boston 1,200 Economy
2,800 Premium
4,250 Business
1,500 Economy
3,500​ Premium
5,000 Business
1,760 Economy
3,600 Premium
4,250 Business
2,200 Economy
4,500 Premium
5,000​ Business
Chicago 1,600 Economy
3,680 Premium
5,950 Business
2,000 Economy
4,600 Premium
​7,000 Business
1,760 Economy
3,600 Premium
5,950 Business
2,200 Economy
4,500​ Premium
​7,000 Business
Toronto 1,600 Economy
2,000 Premium
3,570 Business
2,000 Economy
2,500 Premium
4,200 Business
1,760 Economy
2,000 Premium
3,570 Business
2,200 Economy
2,500​ Premium
4,200 Business
Miami 1,600 Economy
2,800 Premium
5,950 Business
2,000 Economy
3,500 Premium
​7,000 Business
1,760 Economy
3,600 Premium
5,950 Business
2,200 Economy
4,500​ Premium
​7,000 Business
Los Angeles 2,000 Economy
3,680 Premium
5,950 Business
2,500 Economy
4,600 Premium
​7,000 Business
2,240 Economy
4,00​0 Premium
5,950 Business
2,800 Economy
5,000 Premium
​7,000 Business
San Francisco 1,600 Economy
2,800 Premium
5,950 Business
2,000 Economy
3,500​ Premium
​7,000 Business
2,240 Economy
3,600 Premium
5,950 Business
2,800 Economy
4,500​ Premium
​7,000 Business
London 640 Economy
960 Premium
1,870 Business
800 Economy
1,200 Premium
2,200 Business
800 Economy
1,000 Premium
1,870 Business
1,000 Economy
1,250​ Premium
2,200 Business
Johannesburg 1,200 Economy
2,000 Premium
2,800 Business
​1,250 Economy
2,500 Premium
3,500 Business
1,400 Economy
2,000 Premium
2,800 Business
1,750​ Economy
2,500​ Premium
3,500 Business
Hong Kong 1,600 Economy
​2,000 Premium
4,250 Business
2,000 Economy
​2,500 Premium
5,000 Business
1,400 Economy
2,000 Premium
4,250 Business
1,750 Economy
2,500​ Premium
5,000​ Business
Bangkok 1,200 Economy
​2,000 Premium
4,250 Business
1,500 Economy
​2,500 Premium
5,000​ Business
1,400 Economy
2,000 Premium
4,250 Business
1,750 Economy
2,500​ Premium
5,000​ Business

The El Al card will earn 1 point for every $40 spent on everyday items and 3 points for every $40 spent on El Al tickets. Yup, just try to wrap your head around that…

It’s hard for most people to compare the value of those points to every other points and miles currency, but you can follow the card’s lead of earning 1 point per $40 spent and say that regular miles are 40 times an El Al Matmid point. That means the card’s 800 point intro bonus is worth about 32,000 regular miles, a weak signup bonus.

The 800 Matmid point signup bonus will get you about 45% of the way to a round-trip coach ticket (1,760 points in the summer) or 15% of the way to a round-trip business class ticket (5,100 points) from NYC to Israel. Note that you will still owe about $350 in fuel surcharges and taxes.

Compare that to United, where a new credit card will get you about 75K miles or 88% of the way to a round-trip coach ticket using the award chart (85K miles) or 50% of the way to a round-trip business class ticket (150K miles) to Israel. And with United you will only owe about $50 in taxes and no fuel surcharges.

For arguments sake, let’s say the value of the NYC-TLV capacity controlled award ticket is $850 and the business class ticket is $2,500. After about $350 in taxes and surcharges that would mean 1,760 points are worth $500 and 5,100 points are worth $2,150, a value of 28-42 cents per point.

Let’s say the value is at the high end of the equation, or 40 cents per point.

Since you need to spend $40 to get a point worth 40 cents, you are effectively earning just 1% back everywhere or 3% back on El Al flights. And it’s locked into a currency that expires after 3 years.

If you value the points at 35 cents per point you are effectively earning just 0.88% back everywhere or 2.63% back on El Al flights.

If you value the points at 30 cents per point you are effectively earning just 0.75% back everywhere or 2.25% back on El Al flights.

No matter how you slice it, that is one horrendous value proposition.

El Al does occasionally have award sales, but typically those are for coach travel where the value isn’t great in the first place.

You also have to take into account that points expire after 36 months and can’t be renewed with activity.

Did I mention the card also has a $99 annual fee?

Compare that to a no annual fee card like Chase Freedom Unlimited that earns between 1.5-3 points per dollar everywhere, where every point earned is worth 1.5 cents or more, for an effective 2.25%-4.5% back everywhere with the ability to earn more via mileage transfers.

Or compare that to the no annual fee Citi Double Cash Card that offers 2% cash back and the ability to earn more via mileage transfers, such as flying United round-trip to Tel Aviv in coach for free after $32,000 in spending or flying United round-trip to Tel Aviv in business class for free after $47,000 in spending. On the El Al card you would need $70,400 in spending for an El Al coach ticket or $204,000 in spending for an El Al business class ticket and you would still need to pony up some $350 in fuel surcharges and taxes.

Plus, with cards that issue bank points you are shielded from points expiration policies and the ability for any one airline to devalue your points.

Granted, there are other El Al card benefits that some may find valuable:

  • Cardholders can request seats like exit rows at checkin at no charge if available and they will be assigned at the gate. However cardholders will be prioritized behind elites and customers paying for those seats.
  • 20% of points earned from spending will count towards earning El Al status, but this is capped to keep you far from earning each level.
  • If you spend $200,000/year you’ll earn Gold status and if you spend $400,000/year you’ll earn Platinum status. But that comes at a massive opportunity cost for spending on more lucrative cards.
  • Standard World Mastercard benefits like cell phone insurance and a $10 monthly Lyft credit if you take 5 Lyft rides apply.
  • There are no foreign transaction fees.
  • You get 40 points, worth about $12-$16, every card anniversary.

But overall based on El Al’s notoriously weak Matmid program, I can’t think of any compelling reason for Americans to carry the El Al credit card under its current value proposition.

Will you apply for and spend money on the El Al credit card?

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58 Comments On "Should You Apply For El Al’s New US Credit Card? Here’s Why It’s A Hard Pass For Me"

All opinions expressed below are user generated and the opinions aren’t provided, reviewed or endorsed by any advertiser or DansDeals.

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moe8555

Other key factors to consider about the card and program:

1) Birthday redemption discount: decent deals on your b-day month for buy one ticket cash, add a companion for a tiny number of points (usually 100-400).

2) Periodic redemption sales: These can drop the points required way down, sometimes half or even less.

3) (Unknown if actually true) Access to FlyStore for those in Israel: Sometimes you can buy stuff for 59-88 cents a point.

4) Will US Bank ever offer periodic spend bonuses like the other issuers do?

I think adding a couple KDL passes would vastly improve the value proposition.

Eli

Perhaps add the only USA matmid accounts can become executive with an amex transfer?

Glushtygiz

So y hasnt Rosenberg reached out to u yet so he can help his company

Chaim

Half baked – wasted opportunity, got the mailer and threw straight in garbage ;(

BubbyK

I got the mailer too – but didn’t throw it straight into the garbage. The math was too difficult for me; I waited for this article. Now mine goes into the trash too!
Thanks Dan!

Josh

I received a mailer and was really excited at first, thought El-Al was making a huge change. After opening it, the only redemptive value it had was a one-way flight into the trash.

friedmal

Excellent summary – thank you.
The card makes no sense. (And Flystore sells things at prices you can find retail – without having to use your Matmid points).

Yitz

Compare that to UA….. Where you just had a post that a RT to IL is 49k! So the 75k sign up bonus is 150% of the way there potentially!

BT

The free exit row seat is a nice perk

Something Fishy

Honestly I was on the fence, but that $12 anniversary bonus makes it a no-brainer. That alone is worth the $99 annual fee.

chinagel

“Cardholders can request seats like exit rows at checkin at no charge if available.”
LOL on getting an El Al gate agent to honor this.

Sg

Wow Dan! Looks like you do have a PhD… just put it to better use then deciphering matmid’s value (or lack thereof)

Gus

Mad-made Matmid is an effen’ joke.
Appropriate for an airline named ELOL.

Juryduty

Does Rozenberg have anything to do with this? Seems like a sad attempt at a cc if yes, and we were hoping for real change that isn’t coming

Kachnik

I have the Israeli Matmid credit card which offers substantial discounts on OW and RT award tickets as well as a much higher earning rate than almost any other Israeli credit card. They also extended the expiration date on my points that were to expire in the summer. In my case also having this card makes sense since I can combine the two. Some of the values are outright amazing but are opaque to those that don’t have the Israeli card

Leahl613

Why doesnt someone fw this post to eli rozenberg?

SSH

Oh, we all thought you already forwarded to him. My bad.

Let’s go!

Misread the title at first as “hard to pass” – LOL

chaz

lets be honest here folks credit card issues aside. There is no other airline that offers,
a. someone approaching you for a minyan.
b. being asked to change seats for tznius reasons.
c. do you have extra diapers!?
d. can i borrow a tehilim.
e. collecting for a yeshiva.
f. we will be landing in some random Canadian city for shabbos.
g. a stopover in Cleveland for pizza!
h. cafe tea bevakashah? (in Israeli accent)
i. some huge man blocking the screens (olden days)
j. The absolute most pleasant courteous professional flight attendants in the industry!!!

Tiger

We must show gratitude to El Al for being one of the few airlines to fly to Israel when Obama banned American airlines from flying to Israel. Note: British Airlines continued to fly.

BR.

C’mon Dan! You have millions of chase points to fly United business for the rest of your life…
You wouldn’t stoop to fly on a lesser airline like ELAL anyways so there’s no gravita in this card for you…
We all (enviously) follow you on your luxurious trips around the world and kudos to you for accomplishing that…I’m honestly happy for you!
But the ELAL card, to be honest does nothing for you…. 😉

Dave

There are travelers who live in cities where LY is the only non-stop option to TLV (I’m talking about you MIA, BOS, LAX, certain European cities– all pre-covid). Although many aspects about LY are subpar, the ability to travel non-stop (especially with children) is a huge perk, at times it’s the biggest perk. There is value to learning whether this credit card would be worthwhile or not, as not everyone is looking to connect to EWR just to sit in a United cabin.

BR.

Absolutely!
And noone does it better than Dan….
He takes the time and effort to break it down for us regular flyers and spenders (or is it spenders and flyers:) in a way that cuts thru all the garbage and clearly sets out the pros and cons in a way that we can easily use….
And even though he will personally not gain anything whether you sign up for it or not he knows that inquiring minds want to know….
So thanks Dan for your always astute breakdowns.
We all much appreciate it.
Bigly! 🙂

Bbe

Isn’t this the only airline you can get status just by using the card?

yair

seems to me like someone on the LY product development team got lazy, and decided to copy the product development from the Israeli cards. They just forgot that the US credit card market is much more competitive than the garbage we have here in Israel.

Shia

@Dan
I sent you an email about the Etihad – El Al codeshare agreement.
Will this change the picture?

JD

I just want to know if I can buy a bottle of water on El Al with the idiotic 30 matmid points they gave me for asking for a refund?

Lcm

It also lacks redemption partners or the ability to redeem for flights that don’t begin or end in Israel. As Israel has blocked most foreigners from entry since March, that means there’s no way to take advantage of those points now for many people.

As per today’s post, maybe not

sh

I just ordered a round trip ticket with Delta NYC_TLV (was able to use Elal as well but they charge for changes) for 46 UR points. Thank You Dan!

sh

46K UR points

Future Israeli

What is KDL?

BR.

Kosher Delight?

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