The Messiness of Credit Cards and Airline Mergers (One Airline Will Soon Have FOUR Card Partners!)

When Delta and Northwest merged, American Express was the surviving co-brand card issuer. They had a 20 year relationship with Delta, and Delta was the surviving carrier. The head of Northwest Worldperks wound up going to work for Northwest’s co-brand credit card issuer, US Bank, which launched the ‘FlexPerks’ programs aimed at retaining the customers they had through the Northwest relationship.

When a bank is at risk losing its customers, and another one is looking to obtain customers, it’s great for consumers. The need to acquire lots of customers in a short period of time means tons of marketing spend, often in the form of signup bonuses.

We’ve seen the bonus on the US Airways credit card issued by Barclays go up — first to make the 40,000 point signup bonus broadly available, and most recently to bump that up to 50,000. Barclays has a limited window during which time they can still issue new cards. Once the American-US Airways programs get combined, and there’s only AAdvantage, Barclays will no longer be able to acquire new customers. Existing Dividend Miles cardmembers will get new American AAdvantage credit cards issued by… Barclays. Even if they also have a Citibank American Airlines card. Some members will have more than one card.

It occurs to me that there’s an interesting ‘party trick’ among frequent flyers. The dorkiest amongst us can be fond of sharing obscure knowledge about aircraft and loyalty programs.

Which loyalty program has the most co-brand partners issuing consumer credit cards in the U.S.?

Most people ‘in the know’ will reflexively answer Hilton, of course! They have both a Citibank relationship and an American Express relationship. No other program currently has more than one bank issuing consumer credit cards.

Once the US Airways Dividend Miles program gets folded into AAdvantage, many readers know that American will partner with both Citibank (for existing and new card accounts) and Barclays (for existing card accounts). But American will partner with Bank of America as well.

When America West and US Airways merged, Bank of America was the issuer of US Airways cards. Juniper Bank, now Barclays, provided cash to help fund the merger and became the exclusive issuer of new US Airways cards. But there was an existing Bank of America contract, there was a lawsuit, and Bank of America managed to be able to retain and service existing card accounts.

Bank of America will continue to service those accounts, I understand, even once US Airways goes away. I believe that Bank of America will issue an American Airlines credit card, for their existing legacy cardholders only. Any readers out there still have one of those?

There’s apparently still a low five figure number of customers with the card, but they’re high spenders and worth continuing to service in this manner for BofA.

Interestingly, American also has a fourth banking relationship issuing payment card products, just not on the consumer side — American Express issues the American Express Business ExtrAA corporate card.


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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Comments

  1. In the obscure arcana department: Don’t forget that Northwest did have a relationship with Amex years before. In the late 80s/early 90s the Amex student cards had a perk of a $99 NW flight voucher.

  2. The UK Avios scheme works with 4 issuers – Amex (for BA), Lloyds and TSB for avios.com as well as MBNA (BOA) for the legacy BMI cards.

    You can throw in Tesco Bank and HSBC as well as their proprietary points schemes transfer to Avios at very competitive rates – far better than the official MC / Visa offerings.

  3. @Chill Palmer and Northwest was a Membership Rewards transfer partner at one point, and Amex Platinum/Centurion granted Northwest Worldclub access when traveling the airline same-day

  4. More arcana. That same certificate was also issued by Amex for use on Continental in the early 90s too, so once used that for a late winter ski trip to Durango. Of course at some point (IIIRC) CO and NW had that warm relationship too.

    Interesting thing is that BofA is transferring some accounts to Barclays (which happened before with the US-HP merger). Mine stayed with BofA last time, but this time I’m part of the transfer to Barclays. So I’ll have two Barclays cards for US – and then eventually whatever they’ll do for the new American.

    Still a BofA customer with another card (ironically a legacy card from Wachovia when their issuer was sold to BofA) though.

  5. I haven’t gotten an offer from Barclay’s for the new EQM earning card with American (or even the basic card). I will need the Barclay EQM earning card to maintain status. Any suggestions on what to do or any links to an offer for it (I thought it was invitation only).

  6. Actually, no, it won’t. As one who still holds a Bank of America US Air credit card, I received the following in yesterday’s mail:

    “We are proud to announce an exciting change to your US Airways Dividend Miles Visa card account. Your US Airways Visa card account is being transferred to Barclays Bank Delaware (Barclaycard) on January 26, 2015 and as a result your current Visa card account is being replaced with a US Airways Dividend Miles MasterCard account issued by Barclaycard. Please note that your new US Airways Dividend Miles MasterCard will have a different account number than your current US Airways Visa credit card.”

    A MasterCard Guide to Benefits was included with the mailing, and the letter offers a summary of what is changing re both the Credit Card Agreement (they are NOT increasing the APR) and the Reward Program (e.g., “you will no longer earn Preferred-qualifying Miles and First Class check-in will no longer be available. Also, the Annual US Airways Club day pass and Compoanion Certificate benefits will be discontinue. The Welcome Kit you receive from Barclaycard will include a new Club day pass which will be valid for one year from issuance. The Club day pass from Barclaycard will replace any existing Club day passes previously issued by Bank of America. Your Welcome Kit will also include a Companion certificate, which will be the final Companion Certificate provided under the rewards program. This final Companion Certificate will be subject to your current rewards terms. Tickets must be purchased by September 30 2015 and travel must be completed by December 31, 2015. Effective March 31, 2015, any outstanding Companion Certificates previously issued by Bank of America will no longer be valid.

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