Covid-19 has altered consumer behaviour and credit card issuers’ revenues are declining as a result, prompting them to seek ways to make benefits relevant to the Covid era.
The card providers are now scrambling to update customer benefits as the international travel ban drags on. Reduced air travel during the coronavirus pandemic is making the air miles offered by credit cards less enticing for consumers.
Go deeper with GlobalData
Airline miles aren’t the reward they once were. How about cash back for Uber Eats?
Little tolerance for unhappy customers
Card providers can’t afford unsatisfied customers, particularly those that pay for cards with hefty travel-rewards programs, said Brian Kelly, the founder and chief executive of travel website The Points Guy.
“All these reward cards are based on aspirational perks, like access to a lounge at the airport, and that rug was pulled out from underneath customers who were paying like $550 for a travel card,” he said.
“Travel programs are huge profit centres, so all of the issuers have made pretty quick moves on rewards to stave off mass card cancellations,” Mr. Kelly added.
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By GlobalDataAmerican Express wants you to remain jolly
American Express is trying to make customers feel like they are still getting a good deal while grounded at home.
It has rolled out a number of limited-time offers on some of the cards it co-brands with travel firms, offering Marriott Bonvoy Business cardholders 10 points per dollar spent at domestic gas stations and restaurants, for example.
It also has issued Business Platinum customers with extra statement credits for purchases from Dell Technologies, and is giving all U.S. consumer and corporate cardholders a complimentary yearlong premium subscription to the meditation app Calm.
Other players are taking similar strategies
Capital One, for example, began letting its Venture and VentureOne customers redeem their miles on restaurant delivery, takeout and streaming services from certain merchants until 30 September.
HSBC Bank USA also spoke to customers to figure out what they wanted benefits to look like in the Covid era, rather than relying solely on spending data, said Nancy Armand, the bank’s senior vice president and head of cards portfolio management for wealth and personal banking.
JPMorgan and Mastercard., meanwhile, are introducing a new product on 15 September in response to consumers’ demand for rewards, particularly on digital transactions.
