Sunday, May 24, 2009

Choosing an Airline - By Credit Card Offers...

For about 3 decades Northwest Airlines has been my airline of choice. Last year they agreed to be acquired by Delta. OK. 3 weeks ago I received a letter in the mail from US Bank stating that they were immediately ending their Visa Signature Card alliance with Northwest. Now things are impacting me. In reality Delta kind of ended it for them by choosing to partner exclusively with American Express, but they weren't going to end the contract until August. US Bank choose to pitch a hissy fit and ended things earlier. Well, until Northwest filed suit and forced US Bank to continue the program for a bit longer.

In any case, it's interesting to me that my own choice of preferred airline going forward, whether I continue with Delta/Northwest or switch to someone else, isn't really a choice between the airlines themselves, but which credit card partner of theirs I prefer. In choosing between Delta, United, Continental, and American I'm actually deciding based on American Express (Delta), Chase (United), Citi (American) or Chase (Continental). What's most interesting is that the airlines themselves are driving me to do this. Rather than each airline selling frequent flyer and elite qualifying miles to several credit card companies and letting them duke it out, they're placing their future in the hands of a single card issuer.

In this particular case Delta may very well loose my (and others?) business because of Amex. 'And they don't take American Express' is more than just a commercial, it's true. I can't charge nearly as much on an Amex card, and thus receive as much frequent flyer benefit, as on the Visa or Mastercard offerings of other airlines. For many people Amex is a good card, for my spending habits it doesn't appear that it would be. Stories are also swirling on discussion forums that Amex is severely limiting credit lines of former Northwest flyers switching over from the Visa Signature to an Amex.

This isn't a rant against any airline or card issuer, just something that I found rather fascinating. I wonder how many others choose an airline primarily based on their preferred card issuer rather than on how well the airline provides their own service?


Anonymous said...

I would be interested in your comparative analysis of the credit card offers.

The only drawback to the Skymiles Amex is the 'Amex', as far as I can see. (Yes, it's a big deal, especially for international travelers).

I was actually considering the Amazon card.

Crusty said...

Still working on it. Aside from the ability to earn EQM's or MQM's I'm thinking at this point that a cash back card is really the better option. Cash can still, at least for the near future, be used for anything and in much of what analysis we've done thus far we can get just as much and often more with the cash back than we can with miles or points.

Much could change on this front in the next couple of years though. If CC companies are limited in the rates and fees they can charge higher risk customers many may choose to subsidize some of the costs of higher risk customers by decreasing the perks on lower risk customers. The question mark is if they will be limited in their ability to provide services to higher risk customers. If they are forced to provide credit to them then perks will decline, if they can choose to not offer credit to higher risk customers then we will only see a slight decline in the perks offered. More on this next week!

Anonymous said...

Good day, sun shines!
There have been times of troubles when I felt unhappy missing knowledge about opportunities of getting high yields on investments. I was a dump and downright stupid person.
I have never imagined that there weren't any need in large starting capital.
Now, I feel good, I begin to get real income.
It gets down to choose a correct companion who utilizes your funds in a right way - that is incorporate it in real business, and shares the profit with me.

You can ask, if there are such firms? I'm obliged to tell the truth, YES, there are. Please get to know about one of them: [url=]Online Investment Blog[/url]