Why the New Arrival Premier is Underappreciated

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Last month Barclays introduced the new Barclays Arrival Premier World Elite Mastercard.

The internet panned it, but that reaction was wrong. The card wasn’t the silver bullet some hoped for when word came out Barclays would enter the transferable points space. But it’s much better than most people gave credit for. What’s interesting to me is why it’s gotten a bad wrap.

A Good Value Proposition

Any card that earns a 2% rebate to spend on travel is a ‘good’ card, whether or not it has a place in your wallet. And where this card is a player is in reward for continued spend. You earn 2 miles on everything. And then $15,000 spend in a year earns 15,000 bonus miles, $25,000 (i.e. an additional $10,000 spend) spend earns an additional 10,000 bonus miles.

If you spend exactly $15,000 or $25,000 you’ve earned 3 miles per dollar. Those miles are worth a penny apiece towards travel, or can be transferred to airline frequent flyer programs at a ratio of 1.4 to 1 with most programs and 1.7 to 1 with JAL.

Program Name Conversion Ratio
(Premier Points : Points)
Air France and KLM Flying Blue 1.4 : 1
Aeromexico Club Premier 1.4 : 1
China Eastern Airlines Eastern Miles 1.4 : 1
Etihad Guest 1.4 : 1
EVA Air Infinity MileageLands 1.4 : 1
JAL Mileage Bank 1.7 : 1
Jet Airways JetPrivilege 1.4 : 1
Malaysia Airlines Enrich 1.4 : 1
Qantas Frequent Flyer 1.4 : 1


Etihad A380 First Apartment

Cards that earn more than one point per dollar on all spend are generally considered good rewards cards. Here are the terms and conditions for the card.

Anchoring to the Old Arrival Plus

The old Arrival Plus frequently offered a 50,000 point signup bonus, 2 points per dollar on all spend, and a 5% rebate when spending points for travel. So it was a 2.1% rebate card for travel. This card is a 2% (or 3%) rebate card.

Arrival Premier has a $150 annual fee. That’s higher than the old Arrival Plus and higher than competitors with a similar value proposition. It’s hard to pay more for a card that’s similar.

The add-on here is airline miles transfers, but in terms of sheer points-accumulation the old value proposition — that came less expensively — seemed better. If you spend $25,000 on Arrival Premier you earn 75,000 points. But spending $25,000 on the old card in the first year with a 50,000 point initial bonus netted 100,000 points. You have to spend $25,000 on the card two years in a row before you ‘break even’ in terms of total points earned, because the new card doesn’t have a signup bonus.

Never mind that these are better points because they’re more flexible points, the gap in number of points creates a messaging problem.

The Wrong Narrative

Barclays no doubt feels like it’s hard to make back the initial investment acquiring a customer with a big signup bonus. When they’re spending almost as much as they make on each transaction rewarding customers it’s hard to ever turn the product profitable, making back the cost of the signup bonus.

And a big signup bonus is likely to attract people more interest in the bonus than the card itself, so the theory may be that customers getting the card without a bonus will commit to the card long-term. These aren’t people chasing bonuses.

However there’s a few things wrong with this thinking.

  • You need to catch a consumer’s attention. A big initial bonus makes a card focal. Even a good value proposition may not get someone to apply, since even if they’re convinced the card is good it’s something to do later. How do you get them to pay attention and take action now? A big bonus is motivating, a limited-time offer is even more motivating because the customer feels they may lose out if they don’t act now. No signup bonus makes it hard to acquire customers.

  • It takes a long time to earn enough points for a big reward without a bonus. Cardmembers will heavily discount the future when calculating the benefit of the card, the bonus lets a customer see that they’ll earn a reward quickly, commit to the card, see the benefit and then keep spending.

What’s more they focused on earning a lot of points — two points per dollar on all spending, and up to three points per dollar if you hit specific spend thresholds. That’s actually heavily rewarding. But their model has points worth a penny apiece, and to make themselves indifferent whether you redeem those points for travel directly or transfer them to miles (which are costing more than a penny) they didn’t offer one-to-one transfers.

It’s still a good miles-earning card: you earn a minimum of 1.4 miles per dollar with a variety of airlines. And this includes Japan Airlines, the card is the best way in the U.S. to earn Japan Airlines miles — and these are some of the best miles, with the fewest points required for roundtrip Europe business class or first class from the US East Coast to Southeast Asia (and on top products including Emirates).


Emirates A380 First Class Shower

But not having a 1:1 ratio, but awarding more points, give the card a great value that looks like it isn’t as good.

Arrival Premier In a Nutshell

This is a card that’s in the top quartile of products for sure, it’s not the very best for most use cases but it’s ‘good’ and should be viewed as higher status than many frequent flyers have accorded it.

The marketing on the product is off. The annual fee is too high, it should be $95 and not $150. And they should have saved some money on things like airport lounge access (where they’re not covering the cost of visits, just paying for the card) and Global Entry reimbursement and put that into the acquisition bonus. And they probably should have reduced the number of points earned and increased the value of each point so that they could offer mileage transfers at 1:1.

Ultimately the problem Barclays faces is the same one other issuers are facing, several cards are cutting costs where they can because the market has gotten so competitive issuers are spending more than they’re taking in to attract customers and encourage their spend. They need to make money on a product, but a product that makes money on each transaction is one that’s hard to convince consumers to get and use.

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. The value of transfer partners is one very important consideration for many customers. And for a card issued in the US, very hard to believe they don’t even have a US airlines partner. For the general American cardholders, I don’t think many of them have very strong intent to accumulate any of the listed airlines miles, unless you have very specific long-term travel partner to a certain country, e.g. European immigrants who go back to Euro very frequently and would like to redeem for Air France.

    So why I should signup for this card, whenever “I” know most of my family travels are within the US (including Hawaii), and most likely, we fly UA, AA, Delta, SW, JetBlue, etc?

    1.4:1 transfer rate, not 1, gives me a very bad impression that this bank is not generous enough to offer me the most values (Definitely not like Chase, who is generous and makes everything straightforward to understand in terms of using my reward.)

  2. For bloggers, every card for which they have an affiliate link is at least a “good” card!

  3. All of the points you made are very valid but you missed one which I think undermines Barclay’s credibility which is the fact that this product is marketed under the Arrival banner with an earning of 2 miles per dollar on all spend plus the ability for bonus miles with certain spend threshold yet transfers to airline partners at a less than 1 to 1 rate. As such, Barclay’s who has for years with their arrival product been trying to convince people that their arrival product with 2 miles is so much better than an airline credit card that earns 1 mile per dollar now is effectively saying that the miles earned on this card are worth less than an airline mile. As such, it confuses their target audience who was led to believe that these miles were equal to airline miles in value and had additional flexibility. They instead should have come up with a new product line not associated with the Arrival brand and marketed the earnings as points instead which would have likely changed the perception of potential cardholders. Add on top the points you mentioned about no signup bonus which reduces an individuals impulse to apply for the card immediately since the offer doesn’t change depending on when they apply and I would guess that this card is underperforming their expectations.

    Also, the threshold for additional bonus points ends at $25k in spend which encourages cardmembers to move spend to another card after this spend since they are effectively earning less. They should have taken a page out of the American Express playbook and offered bonus points until at least $50k in spend.

    Lastly, as you mentioned there are very few cards at this annual fee price point which makes it difficult to attract consumers who have been conditioned to expect annual fees just south of $100 or in the $400 to $550 range so they lose a lot of their target audience. They would have been better off adding a few extra perks to the card, charging a $450 annual fee with a $300 statement credit per card membership year for travel instead because there would be some breakage of the $300 fee depending on how they designed it which could fund those additional perks.

  4. The issue I see is that even with no signup bonus, what value proposition does it bring to one’s wallet? The Japan Airlines program is good for Emirates bookings, but is it good for anything else? The Etihad program also has some uses, yes, and one can build up a balance at places that do not accept AMEX. Even for the more commonly used Air France program, one can already transfer in points from AMEX, Chase, and Citi. The points that this card earns are less versatile than UR, MR, TY points, as most of the other programs that they can transfer to are nothing special or worthless, and one can already transfer into said programs with TY points. Even if one were to want to focus on these programs, it would only be feasible to build up a balance in these programs by using this card in conjunction with a TY accruing card, like a Chase FU card in combination with a Sapphire Reserve or Preferred. I’m not willing to completely write off this card as of yet, because it has the potential to be somewhat compelling. All it needs are some more compelling transfer partners, preferably ones that are exclusive to the card. A signup bonus would also be a nice addition as well but I’d rather see a focus on the former since even with a bucketload of points, if they are not useful, then I’d say why bother accruing them…

  5. Gary,

    You make some decent points, but here are some issues

    1) No US transfer partners means that you can “top off” an account where you are already earning miles through normal flying. AA should really be a transfer partner for this program.

    2) As you point out, without a sign up bonus, it takes a while to earn enough points to be able to book a trip

    3) The annual fee is too high

    4) It is a 2-3% cashback card. Many cashback cards (Double Cash, PayPal, Discover It with Cashback Match) offer 2% or more, have no annual fee and are more flexible.

    5) The old Arrival Plus gave you the kicker on travel redemptions, which was useful

    JC makes a good point – the original Arrival made the claim that travel rebates were more flexible than actual miles. Which is true. To really capture that, make a bigger move. Do something like pay 4 points per dollar spent and add some unique travel perks while charging a $500 annual fee. Also add a sign up bonus.

  6. I have the original Arrival car, have had it for 3 or 4 yrs after downgrading from the Arrival+. Any likelihood I could qualify for this new card and the bonus? I presume my other option is to upgrade to it if I really wanted it. Thoughts? Thanks

  7. Part of the problem here is that it not only takes quite a while to make enough points to be of value, but it also depends upon the reliability of Barclays. I had an original Arrival Plus and I still remember getting hooked and after about a year suddenly being faced with a points downgrade in earnings. It’s difficult to commit to a card that requires long term spending, and then the bank can devalue at any time, and has a history of doing so–especially in the same card family.

  8. For those folks complaining of no US transfer partners, remember that Etihad Guest miles can be used to book AA flights. And at very good rates. Domestic AA flights too.

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