PaymentsJournal
No Result
View All Result
SIGN UP
  • Commercial
  • Credit
  • Debit
  • Digital Assets & Crypto
  • Digital Banking
  • Emerging Payments
  • Fraud & Security
  • Merchant
  • Prepaid
PaymentsJournal
  • Commercial
  • Credit
  • Debit
  • Digital Assets & Crypto
  • Digital Banking
  • Emerging Payments
  • Fraud & Security
  • Merchant
  • Prepaid
No Result
View All Result
PaymentsJournal
No Result
View All Result

Airline Co-branded Credit Cards: This Ain’t Peanuts

By Brian Riley
April 30, 2018
in Analysts Coverage
0
3
SHARES
0
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn
credit cards

credit cards

Today’s NYT hits on rewards, one of Mercator’s favorite topics.  With Delta now indicating that their rewards program brought in $3 billion in 2017 and will achieve $4 billion by 2021, it is no wonder that Amex is rolling out yet another Delta co-brand card plan. That is a lot of revenue when you consider Delta’s pre-tax income was $5.7 billion in 2017.

  • It’s been more than 30 years since the first credit card offering frequent-flier miles made its debut, so you’d think that the market for plastic passports bearing the promise of free trips would be mature by now.

  • But consider the numbers that Delta Air Lines has been throwing around recently in investor presentations. It generated $3 billion from its relationship with American Express in 2017 and expects to hit $4 billion by 2021. Even as competition intensifies for big-spending cardholders with rewards lust in their hearts, spending on the Delta Amex cards rose at a compound annual growth rate of 12 percent from 2013 through 2017.

Card companies love point programs because there is a logical connection to points spent and dollars charged.  Barclays bought the JetBlue program and supposedly doubled the business in two years.

  • When they first emerged in the 1980s, half a decade or so after the invention of the frequent-flier mile, airline cards offered one mile for every dollar spent.

  • But with all of the reward currency that was soon floating around, airlines had to either raise the number of miles required to get free seats or restrict the availability of those tickets (or both).

One of the nice things about airline rewards is that you can work towards an aspirational trip.  Regular cash back can be diverted for a spousal present or consumable gift card, rather than building towards that dream Hawaiian trip.  But, whatever it takes, do not revolve the balance because that will quickly dissolve any reward upside!

Overview by Brian Riley, Director, Credit Advisory Service at Mercator Advisory Group

3
SHARES
0
VIEWS
Share on FacebookShare on TwitterShare on LinkedIn

    Get the Latest News and Insights Delivered Daily

    Subscribe to the PaymentsJournal Newsletter for exclusive insight and data from Javelin Strategy & Research analysts and industry professionals.

    Must Reads

    supply chain payments

    The Payment Process: The Supply Chain’s Most Overlooked Cyber Risk

    July 17, 2025
    Navigating Global Fintech Regulations Through Strategic Regulatory Arbitrage

    Navigating Global Fintech Regulations Through Strategic Regulatory Arbitrage

    July 16, 2025
    AI Is Turning Accounts Receivable Into a Strategic Powerhouse

    AI Is Turning Accounts Receivable Into a Strategic Powerhouse

    July 15, 2025
    Embedded Finance

    Embedded Finance: Bringing Payments Under a Single Umbrella

    July 14, 2025
    Making Real-Time Payments a Reality

    Fulfilling the Promise: Making Real-Time Payments a Reality

    July 10, 2025
    mortgage

    The Rich Benefits of In-House Payment Systems

    July 9, 2025
    digital cards

    Beyond Plastic: Why Digital Cards Are the Future

    July 8, 2025
    What Premium Card Overhauls by Chase and Amex Reveal About the Credit Card Market

    What Premium Card Overhauls by Chase and Amex Reveal About the Credit Card Market

    July 7, 2025

    Linkedin-in X-twitter
    • Commercial
    • Credit
    • Debit
    • Digital Assets & Crypto
    • Digital Banking
    • Commercial
    • Credit
    • Debit
    • Digital Assets & Crypto
    • Digital Banking
    • Emerging Payments
    • Fraud & Security
    • Merchant
    • Prepaid
    • Emerging Payments
    • Fraud & Security
    • Merchant
    • Prepaid
    • About Us
    • Advertise With Us
    • Sign Up for Our Newsletter
    • About Us
    • Advertise With Us
    • Sign Up for Our Newsletter

    ©2024 PaymentsJournal.com |  Terms of Use | Privacy Policy

    • Commercial Payments
    • Credit
    • Debit
    • Digital Assets & Crypto
    • Emerging Payments
    • Fraud & Security
    • Merchant
    • Prepaid
    No Result
    View All Result