WARNING: Before you apply for a US Airways credit card, there are a several things our review exposes that you should know about. Is it a ripoff or not? Well technically it's not, but many cardholders still feel it's a sucker's deal...

For starters, you should know that a different bank recently acquired a majority ownership stake in the U.S. Airways Dividend Miles card program from Bank of America. When Credit Card Forum reported this on our blog, we received an all-time record number of complaints from existing cardmembers. The company which now controls it has reportedly been imposing high fees and unfair terms on customers. We’ll discuss some of them below:

Rewards & Annual Fees
You would expect to receive fantastic rewards on a airlines card such as this, right? Well think again. When you look at their official site, you will notice it is extremely difficult to find information on exactly what the reward structures are on their credit cards. However if you read the small print in the “Terms and Conditions” you will find that you will earn only 1 mile for every 1 dollar spent. Now this in itself isn’t bad. In fact, earning back 1% is what you can expect to find with any card. However, if you take into account the fact that the annual fees run as high as $79, it doesn’t really make sense. Unless you are spending hundreds of thousands of dollars per year and only travel on this airline, there’s really no justification for paying an annual fee.

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Bankruptcy Dangers
Did you know during the last decade alone, US Airways has filed for bankruptcy protection twice? At the time of publishing, the company is currently losing over $2 billion per year. They also have billions in debt. Now how long do you think they can continue at that pace? With today’s ultra-tight lending market and higher oil prices, it’s safe to say that the outlook for the company, unfortunately, is not looking bright.

What does this mean if you are a cardholder? Well, if they were to file for bankruptcy a third time, it is a possibility that any accrued miles you have could be at risk. The last thing you want to do is lose out on all those miles earned from your spending. And in today’s troubled economy, this scenario seems more likely now than ever before.

Unfair Practices
As mentioned, the Dividend Miles card has received a high number of complaints on our site. The problems are widespread: In the past few weeks, the annual fee has allegedly been raised on existing customers to $90. Many people had this same complaint. Other recurring complaints involved issues along the lines of “their customer service does not exist” and “close to 30% interest.” Reports run rampant of unfair practices when processing payments – one customer claims that his available credit limit is not adjusted to reflect his online payment until ten days after it is made. In fact, I don't recall a single response on our blog involving positive sentiment, which is very alarming.

Other Options
Fortunately, there are quite a few other airline reward credit cards on the market. The most highly rated on our site is from Discover. To be transparent, we do have a financial connection with them since we advertise their products, but the reason we choose to do so is because we truly believe they offer the best value... the evidence speaks for itself. Every purchase earns you at least one mile for every dollar spent. And unlike other cards, there is no annual fee. Right now, there is also a great signup bonus of 12,000 free miles going on. To learn more read our Discover Miles review.