Credit cards with airport lounge access?

[Cdnewmanpac]

Dustin,

Help me understand this. The transaction (or "swipe") fee is exactly the same for the Chase Freedom as it is for the United Club card. You want Chase to offer both cards for the same (zero) annual fee. This will completely diminish the value of the lounges themselves, since now everyone you are trying to get away from will be inside with you. It will also eliminate the air of exclusivity that helps United actually sell club memberships (without the card) and will drive the frequent flyers for whom the lounge was originally built to other airlines. Chase will still have to pay United something for each card member, since the free drinks, snacks and services United are providing also cost money ( a lot of money, actually, which is why so many airlines have closed their lounges in the last 10 years). Even if they aren't paying the $400+ you would pay, they are going to have to pay something. This means that, since in your model they cannot recoup any of this expense, they lose money every time someone uses the club card instead of a freedom. Do you seriously expect a credit card company to offer a card that will lose money relative to their other offerings?

Bottom line, clubs work BECAUSE of their exclusivity. Many frequent flyers believe clubs should ONLY be open to those who earn access through flown miles. The idea that United and Chase would allow that exclusivity to be destroyed in order to have the opportunity to LOSE money is absurd.

I am fine with people who don't want to pay annual fees for credit cards. But there is ZERO economic reason for Chase or any other issuer to add luxury benefits to those cards without significantly more spend than a drop in the bucket like $15k and there is REAL economic value in preserving exclusivity through high fees.

[Anonymous]

Banks always want customers that make them money.  Just keeping an account open costs money, they might not say it, but banks don't really care about people who get no annual fee cards and barely use them.  Yeah, if the person was guaranteed to spend $20, 30, or 40K on their card, they might be able to give lounge access without an annual fee.  But what about the people who never use the card, except to access lounges?  They'd have to institute spending thresholds, which some cards have, but do people want to have to keep track of how much they've spent on a card and which benefits kick in at which threshold?

Frankly, how much money Chase makes isn't relevant.  Neither is the fact that they could lower the annual fee and "still profit just fine."  It's their product and they're going to set it at the price point that makes them the most profit, and you shouldn't expect anything else, they aren't operating a charity.  There's nothing wrong with deciding a product isn't for you or trying to find the best price.  The problem is in the thinking that all annual fees are a waste of money or that banks should offer their products at lower prices, because they could "still profit just fine."  Like you have the ability to determine someone has made "too much" profit and they should now provide their services to you without agreeable compensation.

I hope you find a card that suites you; but don't expect to find a bank that's willing to absorb too many costs to get customers.

[Dustink]

They can still create exclusivity through credit requirements, minimum spend requirements, account package requirements, deposit requirements, or they can require you to buy the lounge access with points, they do not need the AF to create exclusivity.

The freedom offers other things such as no interest promotions that the club card does not, so there would still be diversity between products. There are many ways they can adjust the products to create diversity between products and still offer lounge access on different products, reward differences, check bag waivers, foreign transaction fee's ect.

I understand your reasoning, but still see ways they could create exclusivity and diversity.

[Dustink]

This thread is about finding a card that offers lounge access at a more affordable rate. It is intended to benefit people who are spending high dollar on their AF, and people in search of a new card. Maybe somebody knows of a card that offers the feature for less money. I see cards that offer all of the other features of these premium cards except the lounge access.

[Anonymous]

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@Cdnewmanpac wrote:

Dustin,

Help me understand this. The transaction (or "swipe") fee is exactly the same for the Chase Freedom as it is for the United Club card. You want Chase to offer both cards for the same (zero) annual fee. This will completely diminish the value of the lounges themselves, since now everyone you are trying to get away from will be inside with you. It will also eliminate the air of exclusivity that helps United actually sell club memberships (without the card) and will drive the frequent flyers for whom the lounge was originally built to other airlines. Chase will still have to pay United something for each card member, since the free drinks, snacks and services United are providing also cost money ( a lot of money, actually, which is why so many airlines have closed their lounges in the last 10 years). Even if they aren't paying the $400+ you would pay, they are going to have to pay something. This means that, since in your model they cannot recoup any of this expense, they lose money every time someone uses the club card instead of a freedom. Do you seriously expect a credit card company to offer a card that will lose money relative to their other offerings?

Bottom line, clubs work BECAUSE of their exclusivity. Many frequent flyers believe clubs should ONLY be open to those who earn access through flown miles. The idea that United and Chase would allow that exclusivity to be destroyed in order to have the opportunity to LOSE money is absurd.

I am fine with people who don't want to pay annual fees for credit cards. But there is ZERO economic reason for Chase or any other issuer to add luxury benefits to those cards without significantly more spend than a drop in the bucket like $15k and there is REAL economic value in preserving exclusivity through high fees.

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+1  You bring up a good point about exclusivity.  Lounges only work because of the limited number of people who can get in.  It may sound counter-intuitive, but many times the fact that something is expensive is the reason to buy it; if it were cheaper, it wouldn't be worth it.  Lounges wouldn't work if anyone could just go in.  It's the same reason I like to drive all the way to the expensive shooting range in the country compared to the cheap one in the city; the drive and high price keep certain types of people away and keep the range in tip-top shape, whereas the cheap, close one, not so much.

[Dustink]

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@Anonymous wrote:

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@Cdnewmanpac wrote:

Dustin,

Help me understand this. The transaction (or "swipe") fee is exactly the same for the Chase Freedom as it is for the United Club card. You want Chase to offer both cards for the same (zero) annual fee. This will completely diminish the value of the lounges themselves, since now everyone you are trying to get away from will be inside with you. It will also eliminate the air of exclusivity that helps United actually sell club memberships (without the card) and will drive the frequent flyers for whom the lounge was originally built to other airlines. Chase will still have to pay United something for each card member, since the free drinks, snacks and services United are providing also cost money ( a lot of money, actually, which is why so many airlines have closed their lounges in the last 10 years). Even if they aren't paying the $400+ you would pay, they are going to have to pay something. This means that, since in your model they cannot recoup any of this expense, they lose money every time someone uses the club card instead of a freedom. Do you seriously expect a credit card company to offer a card that will lose money relative to their other offerings?

Bottom line, clubs work BECAUSE of their exclusivity. Many frequent flyers believe clubs should ONLY be open to those who earn access through flown miles. The idea that United and Chase would allow that exclusivity to be destroyed in order to have the opportunity to LOSE money is absurd.

I am fine with people who don't want to pay annual fees for credit cards. But there is ZERO economic reason for Chase or any other issuer to add luxury benefits to those cards without significantly more spend than a drop in the bucket like $15k and there is REAL economic value in preserving exclusivity through high fees.

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+1  You bring up a good point about exclusivity.  Lounges only work because of the limited number of people who can get in.  It may sound counter-intuitive, but many times the fact that something is expensive is the reason to buy it; if it were cheaper, it wouldn't be worth it.  Lounges wouldn't work if anyone could just go in.  It's the same reason I like to drive all the way to the expensive shooting range in the country compared to the cheap one in the city; the drive and high price keep certain types of people away and keep the range in tip-top shape, whereas the cheap, close one, not so much.

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+1 alright...point taken...same reason to drive across the street and spend $0.20 more a gallon instead of waiting in line.

Maybe a credit card company or network of some kind could create a lounge that is better than the terminal but still not as exclusive as the other lounges. A sort of middle ground. I think it could lead to some profit for the banks and a bit better conditions to mid level customers.

[MrShush]

cdnewmanpac hit the nail on the head. The lounge is to escape from the pajama pant wearing, coffee toting, unaware, boneheads that roll out of bed and head to the airports! Sure you can hit a bar inside, but they are there too! It like Occupy the airport. Ive had enough of that. I dont fly frequently but when I do, I want so peace and free cocktails before im herded onto a flying bus.

That out of the way, AMEX Plat is still the best bet for lounge access and flexibility of lounges.

[MrShush]

Excuse the typos...stupid phone!

[Dustink]

Haha nice post.

[CreditScholar]

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@MrShush wrote:
cdnewmanpac hit the nail on the head. The lounge is to escape from the pajama pant wearing, coffee toting, unaware, boneheads that roll out of bed and head to the airports! Sure you can hit a bar inside, but they are there too! It like Occupy the airport. Ive had enough of that. I dont fly frequently but when I do, I want so peace and free cocktails before im herded onto a flying bus.

That out of the way, AMEX Plat is still the best bet for lounge access and flexibility of lounges.

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+1. This is exactly it. Airport lounges are wonderful because they keep plebs out.

When I fly in business/first I'm segregated from everyone else, but that's only on the plane. Airports are hectic enough as it is, and being able to distance yourself from the chaos outside is what people want. After a 15 hour flight, I definitely don't want to deal with screaming kids and huge families all clogging space, having to watch where I walk because I might step on someone sleeping on the floor, etc.