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Giddy up: 2 banks may issue new American / US Airways credit cards

by on Tue April 30, 2013 • No Comment

With the American / US Airways merger we have a unique credit card situation not present in the most recent United / Continental merger:

2 separate banks issue the credit cards for the standalone airlines – Citibank for American and Barclays for US Airways.

Conventional wisdom is that the new American will select just one bank to handle the credit cards with an exclusive relationship, the way United and Delta are handled.

But what if 2 banks, like Citibank and Barclays, were allowed to continue issuing credit cards for the new American?

In an article on Bloomberg News, the prospect of this happening appears meaningful. In fact, there is precedent.

Qantas allows nearly every major bank in Australia to issue cards that earn Qantas miles.

Many Qantas credit card providers

Many Qantas credit card providers

The result – a variety of products – some with unique bonus categories, and others with differing perks. In fact, the Platinum Card from Amex in Australia, which transfers into Qantas, has an 80,000 point bonus offer (though with a $900 annual fee!).

In other words, competition can be very good for the consumer. And good for the airline – according to the article, Qantas earns 15% more revenue per passenger from its credit cards than United and Delta. And that’s in a market where credit card generally carry higher annual fees and have lower adoption.

The management team leading things in the merger is US Airways – which has a relationship with smaller player Barclays. If anyone is keen to upend the traditional exclusive model it may be the US Airways team.

So hope for 2 banks to get the new American’s business. It will mean a lot more variety and plenty of offers to come.

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