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.
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