The US Airways Card from Barclaycard is NOT Going Away Due to the Merger

The US Airways card from Barclays will take applications until US Airways and American combine into a single airline in early 2015. After that, the card will be re-branded as an American card.

There will be two issuers of American Airlines co-brand credit cards. However, Barclaycard will not issue any new cards once the airlines have combined into one. That way Citibank will be the exclusive issuer of American’s co-brand card cards.

That’s the news, citing Dennis Nealon, Barclaycard’s managing director of co-brand partnerships.

Nealon specifically denied the rumor that existing US Airways cards would become Arrival cards (earning and redeeming Barclaycard’s proprietary points) as was done when they lost the Virgin America relationship.

“We are not planning to rebrand any US Airways card member to Arrival,” Nealon says. “They will become American AAdvantage card members and they will have all the benefits that come along with that.”

And they’re going to be as aggressive as possible signing up new cardmembers until their right to do so goes away.

“We have a unique opportunity before the brands merge for us to go out there and continue to acquire new card members for the US Airways Dividend Miles program,” Nealon says. “We continue to be the exclusive providers of a card that gives US Airways-specific benefits when you fly US Airways.”

“Our goal over the period between merger and frequent flier program integration is absolutely to maximize the number of new cardholders that we can bring in,” he adds.

(Emphasis mine.)

When US Airways and America West merged, Barclaycard provided funding for the transaction and got the co-brand relationship. But Bank of America had an existing contract, their card remained in place for some time. They even sued, but eventually Barclaycard bought out their portfolio.

It’s otherwise quite uncommon for a travel brand to have to co-brand card issuers. The only travel provider in the U.S. that I can think of in that situation is Hilton, which has both American Express and Citibank issuing cards that award Hilton benefits and points.

How long will this dual relationship last? That’s uncertain. There could be lawsuits, or one bank buying out the other (it’s hard to imagine Barclaycard squeezing out Citi, it would almost have to be the other way around). But supposedly the contracts provide the potential for the existing US Airways card to last for quite some time.

In 2008, Barclaycard’s contract with US Airways was extended to March 2017. After US Airways merged with American Airlines, Nealon says Barclaycard’s contract was extended again. Nealon declined to provide details about the duration of the most recent extension, but says American’s contracts with the two card issuers expire at the same time.

Assuming that Barclaycard is providing the complete picture here, this is very very interesting.

Folks should have until early next year to apply for the US Airways card. And the opportunity to apply will go away after that, but not the opportunity to keep and use the card.

At some point I’d expect Barclaycard to bow out. Their cardholder portfolio will get less value over time through aging and attrition. Citi has access to more capital and might well buy out the remainder of their deteriorating asset that Barclaycard cannot replenish. Or they could last until the end date of the co-brand contract that Barclaycard has in place.

Developing… but still more information and less speculation than we were dealing with before!


About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. If this information holds true, this is fantastic news!!

    No more worrying about whether to keep/cancel the US Airways card in fear of it becoming an Arrival card.

    And at least another year to acquire another (or maybe 2) US Airways card(s).

  2. I fully expect MileValue to post about this at least thirty times as an excuse to push his crappy US link. Probably more like fifty.

  3. That middle market link is really interesting. It seems to imply lots of things about the AA FF program are more likely to survive than Dividend Miles post-merger.

    What do you think happens on March 2017, is that the time the card dies?

  4. Well according MileValue, this is still just a few weeks away…

    Please tell me he isn’t speaking at FTU again. If so, do you offer refunds on tickets

  5. Interesting commentary about wanting to take in as many apps as possible in the interim. Methinks it’s going to be open season on card approvals. But it’s wrong to think Citi is somehow the “big” bank here. Barclays is significantly larger, has more assets and better access to capital at cheaper prices. There US credit card division is not as mature, but that does not mean the parent entity can’t step in with more capital if it thinks the opportunity is worth it

  6. Hurry and apply through my link! 2015 is only weeks away!

    There, I just wrote tomorrow’s MileValue blog post.

  7. You guys are being a little rough on milevalue, the card following a similar path to the Virgin card was a pretty reasonable assumption and there is no better blog to find creative redemptions.

  8. So if I read this right this could be an easy way to pad your AA miles balance as the 2 programs are for sure merging into the AA plan correct?

  9. Well, looks like i had better give this one another go in a few months to see if I can complement the two I already have. Wonder if it will be like the Citi feeding frenzy of last summer where they give the cards out like Halloween candy?

    Of course, all of this dumping of new currency into the market* is just going to give AA a reason to devalue even more than it was probably already planning to…

    *I understand that this is not technically new currency because the banks buy the miles up front. But since that currency was never in circulation the effect is the same.

  10. Interestingart is both cities and Barclays expire at same time, but citi will have 5 years to build up their relationship until 2020 for new card holders. There could be a huge bidding war. Citi is huge, but so is Barclays. They’ll have to see how much they want to bid. I’d imagine the Amex/delta relationship would be reevaluated too

  11. This card’s bonus is going to 50k, I would wait until then, and I would have put the emphasis on this part of the Nealon quote:

    “We have a unique opportunity before the brands merge for us to go out there and continue to acquire new card members for the US Airways Dividend Miles program,” Nealon says

  12. Might be a good idea to use the card redemption benefits before they re-brand it I’m thinking. Just my opinion.

  13. @ABC – Eventually Citibank will be the only one left. And Citi will be the only one able to issue new cards. But this outcome does surprise me.

  14. @Leftpinky Barclays *US* is actually quite small in comparison to citi. They’d have to start spending UK money over here. And remember that they start off with a much smaller card base, and can’t grow that base after the airlines begin operating as one.

  15. Good reason to make sure you get a Barclays US card with the 10,000 mile bonus EVERY anniversary, not just the FIRST anniversary.

    And slightly off topic: What strange crossbreeding created the Citi AA Amex card?!

  16. Thinking toward next renewal: Barclay’s card comes with club pass, companion certificate, first class check in and 5,000 mile award discount, and 10k annual bonus. Citi’s card gets a free checked check up to 4 people, and 10% rebate on award miles up to 10k per year. And the reduced mileage awards (but frankly I’d rather burn avios for those anyhow.)

    For me (I don’t check bags) Barclays is a better card. Thoughts?

  17. Charlie, US Airways discount is only valid on US Airways metal, and the award availability is a lot better on the partners. Citi 10% rebate is good on ANY mile expenditure.

    If you can choose, choose both. 🙂

  18. Charlie nailed it. The takeaway is that no respectable blogger should promote a link for the US card going foward unless it has the 10K bonus at every anniversary, but I suspect there will still be excuses to slip in the affiliate link.

  19. My goal this year is to get this card 3 times, so I will do my best to assist them in gaining customers.

  20. Is it clear what benefits the US Airways card will offer after it becomes rebranded to AAdvantage? Will it keep the same perks as we currently have on US Airways, or will the perks change?

  21. I see comments about getting this card multiple times. Are people getting additional cards while still holding one (like Alaska). Or closing and reopening accounts? And is Barclay’s still offering a USAir business card? My luck with Barclay’s has not been good. I’d be interested to hear how others are maximizing these offers.

  22. @ Miles: Appears you are correct about the 5,000 mile US discount. I just tried a domestic booking and it priced at 25,000 and said “alert: your dividend miles select benefits do not apply to these flights.” for the AA metal.

    But won’t these benefits start to cross over at some point? I would think I could use the US Club day pass at an Admirals Club after March 22 or so.

  23. @Charlie – Probably, but they still won’t be any good on the many AA/US partners. But then, will they update it for one-way awards? I was also told that the 5000 mile discount didn’t apply towards other mile redemptions (like upgrades) although I have not tried it.

  24. Just applied for 30k at signup, 10k anniversary bonus, 10k with balance transfer, no fee first year and was immediately approved. This is my 2nd US Airways CC, and the other one is still open.

  25. The comments about citi having access to more capital, while perhaps true, are out of place. The amount of capital needed to support the AA/US-branded card platform of either bank is trivial to their overall lending capacity.

    Capital isn’t a differentiator on this one.

  26. @NYBanker – Any bank will need to front about a billion dollars for this, and Barclays — which is large worldwide but much smaller in the US — has no history of spending that sort of money through its US credit card arm.

  27. “But Bank of America had an existing contract, their card remained in place for some time. They even sued, but eventually Barclaycard bought out their portfolio.”

    I STILL (4/23/14) have a BofA card branded for US Airways and it Provides US Airways miles currently. No baggage or status perks, but it still accrues miles.

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