topic American Airlines in Credit Cards

American Airlines

TheBoondocks — Thu, 07 Nov 2019 17:09:24 GMT

Hey guys, I was wondering how come Citi and Barclay have AA, and it seems like no other lenders have the same product like maybe SouthWest or United, JetBlue, etc. Is it worth picking up the AA cards and also why do they push their credit card offers in the flight when I was flying with them? Thanks.

Re: American Airlines

Anonymous — Thu, 07 Nov 2019 20:42:04 GMT

They push the cards in flight, because AA makes majority of its profit from selling miles to Citi and Barclay.

AA has two banks issuing cards because its a compromise when it merged with US airways years back.

If you fly AA somewhat regularly (4 times a year ish), picking up AA cards is probbaly a good idea. It has excellent SUB, some okay earning rate, and decent perks (priority boarding, free checked bags, reduced mileage award).

Re: American Airlines

FinStar — Thu, 07 Nov 2019 17:47:51 GMT

@TheBoondocks wrote:
Hey guys, I was wondering how come Citi and Barclay have AA, and it seems like no other lenders have the same product like maybe SouthWest or United, JetBlue, etc. Is it worth picking up the AA cards and also why do they push their credit card offers in the flight when I was flying with them? Thanks.

Actually, there's a few hotel/airlines (at least here in the US) that have dual partnerships with some financial institutions. For instance, the Hilton card (in its own flavors) used to be offered by both Citi and AmEx before AmEx became the exclusive issuer. The Marriott/Bonvoy CC is offered by Chase and AmEx. Likewise, Chase and First Hawaiian Bank also offer the United CC. Just some examples @TheBoondocks.

Re: American Airlines

Aim_High — Thu, 07 Nov 2019 18:02:15 GMT

@TheBoondocks wrote:
I was wondering how come Citi and Barclay have AA, and it seems like no other lenders have the same product like maybe SouthWest or United, JetBlue, etc. Is it worth picking up the AA cards and also why do they push their credit card offers in the flight when I was flying with them?

CITI and Barclays have AA cards for same reason that Chase has United and Southwest and American Express has Delta and Bank of America has Alaska, etc etc. It's a partnership and normally one lender peddles cards for one airline. As pointed out, Barclays has the Aviator cards as a carry-over from American-US Air Merger a few years ago. Maybe at some point, they'll go back to a single lender.

They push the card offers in flight because it's overall a money-making program for the airline. People may neglect to claim their miles or they end up purchasing additional miles or tickets to complete a trip. The $99 AF is only waived in year one. Moreover, getting a customer to carry your credit card (whether it's an airline, a hotel, or a retail store) builds brand loyalty and gives that business a way to stay in touch with you to build more revenue. They give you some freebies in exchange for the hopes that you'll come back more frequently or prefer them over competitors. Same reason Starbucks Coffee or Jersey Mikes Subs or Kohl's department store gives special discounts to people who sign up for their loyalty programs or credit card offers. It's a marketing tool.

Re: American Airlines

wasCB14 — Thu, 07 Nov 2019 18:01:57 GMT

@Anonymous wrote:
They push the cards in flight, because AA makes majority of its profit from selling miles to Citi and Barclay.

AA has two banks issuing cards because its a compromise when it merged with US airways years back.

If you fly AA somewhat regularly (4 times a year ish), pickuping up AA cards is probbaly a good idea. It has excellent SUB, some okay earning rate, and decent perks (priority boarding, free checked bags, reduced mileage award).

"Priority" is a relative term. If you're flying between two cities with a lot of elites, 80% of passengers can quite easily board before you.

Barclays and Bank of Hawaii both issued the Hawaiian Airlines card not so long ago. And MF discussed some other AA card issued in the Carribean or Central America not that long ago.

Re: American Airlines

mongstradamus — Thu, 07 Nov 2019 18:12:21 GMT

I don't know if it has anything to do with it but when barclays was first issuing the card it was a us airways card, and then they got bought up by AA , and they kept issuing the same card.

Re: American Airlines

FinStar — Thu, 07 Nov 2019 18:17:12 GMT

@wasCB14 wrote:
@Anonymous wrote:
They push the cards in flight, because AA makes majority of its profit from selling miles to Citi and Barclay.

AA has two banks issuing cards because its a compromise when it merged with US airways years back.

If you fly AA somewhat regularly (4 times a year ish), pickuping up AA cards is probbaly a good idea. It has excellent SUB, some okay earning rate, and decent perks (priority boarding, free checked bags, reduced mileage award).
"Priority" is a relative term. If you're flying between two cities with a lot of elites, 80% of passengers can quite easily board before you.

Barclays and Bank of Hawaii both issued the Hawaiian Airlines card not so long ago. And MF discussed some other AA card issued in the Carribean or Central America not that long ago.

Just to clarify Bank of Hawaii and Barclays have a financial partnership to issue the Hawaiian Airlines CC, since Bank of Hawaii does not presently have that infrastructure. In the past, Bank of Hawaii partnered with BoA to issue the same card 🙂

Re: American Airlines

TheBoondocks — Thu, 07 Nov 2019 18:48:17 GMT

Here's the thing, with AA when I flew with them, constantly they keep changing gates and they're always late. I mean as long as I get from point A to B it's what matters, however it takes way too long, I got like 2-3 hrs layover. If I stopped in Chicago and I want to explore, guess what once I leave and want to go back into the airport for my connecting flight, I have to check in at the security all over again. Might as well, stay in the airport but... The food over there is crazy expensive... I saw a flight which I wanted to go at 10K AA+ $11. So, if I spend $5K/y I get a RT ticket. But, if I spent $5K/y on a 3% card, I'll hit $180 CB. I believe the value of AA is 1.4c, so even if I did get the $180 CB, I still have to pay out of pocket maybe like $150 or so. Not bad.

Re: American Airlines

Anonymous — Thu, 07 Nov 2019 19:52:04 GMT

FYI, the AA card gets 25% off food purchased in flight. ^

If you fly AA primarily, then it can be a useful card. If you're SUB hunting for a one off use, maybe not the best choice.

Re: American Airlines

wasCB14 — Thu, 07 Nov 2019 20:09:23 GMT

@FinStar wrote:
@wasCB14 wrote:
@Anonymous wrote:
They push the cards in flight, because AA makes majority of its profit from selling miles to Citi and Barclay.

AA has two banks issuing cards because its a compromise when it merged with US airways years back.

If you fly AA somewhat regularly (4 times a year ish), pickuping up AA cards is probbaly a good idea. It has excellent SUB, some okay earning rate, and decent perks (priority boarding, free checked bags, reduced mileage award).
"Priority" is a relative term. If you're flying between two cities with a lot of elites, 80% of passengers can quite easily board before you.

Barclays and Bank of Hawaii both issued the Hawaiian Airlines card not so long ago. And MF discussed some other AA card issued in the Carribean or Central America not that long ago.
Just to clarify Bank of Hawaii and Barclays have a financial partnership to issue the Hawaiian Airlines CC, since Bank of Hawaii does not presently have that infrastructure. In the past, Bank of Hawaii partnered with BoA to issue the same card 🙂

Ahh. Depending on which link a person followed, the card image would have a BoH or Barclays logo, so I assumed the issuers were competing.

Re: American Airlines

imaximous — Thu, 07 Nov 2019 20:15:43 GMT

Let's not forget the other reason why they push it hard while on a flight: Flight attendants get a commission for every person they get to sign up.

Re: American Airlines

Aim_High — Thu, 07 Nov 2019 20:37:31 GMT

@imaximous wrote:
Let's not forget the other reason why they push it hard while on a flight: Flight attendants get a commission for every person they get to sign up.

True, but that is a symptom and not the root of the reason.

The Flight Attendants only get a commission because it's profitable for the airline when customers carry their card. So the real reason that airline credit cards (for all airlines, not just American) exist and that they are promoted in whatever manner (by Flight Attendants or advertising in the airport or advertising in magazines) is that they are profitable for the airlines and banks. They attract customers and add to the the revenue stream. Otherwise, the FA commissions would not exist. The Flight Attendants promote it because not only is it part of their job, but they are also sharing in the profits. But that is only fair. It's the same as any sales pitch you get for any product; someone is making money to take time and energy to pitch it. The commissions are just an incentive for them to remember to do it regularly and with enthusiasm.

Re: American Airlines

TheBoondocks — Thu, 07 Nov 2019 22:52:24 GMT

But, only time that I did see SW promote their credit card was when I was at the airport, they had a tablet with a rep I think from Chase. But then again, it's how people make their money too, like how they promote it at Kholes, Walmart, etc.

Re: American Airlines

Aim_High — Thu, 07 Nov 2019 23:10:50 GMT

@TheBoondocks wrote:
But, only time that I did see SW promote their credit card was when I was at the airport, they had a tablet with a rep I think from Chase. But then again, it's how people make their money too, like how they promote it at Kholes, Walmart, etc.

Yes, just a choice in manner of marketing it.

Maybe Southwest was being greedy and didn't want to pay their Flight Attendants a commission to promote it. Or maybe the American deal is more lucrative relatively speaking and they can afford to do it.

However, I wouldn't be surprised if the money for the American Flight Attendant's commission comes directly out of the advertising and sales budget for Barclays separately from the money the airline makes, so maybe Chase didn't want to share the commissions with Southwest but American convinced Barclays to give them promotional money to cut advertising costs in other media. It's a lot cheaper to pay a Flight Attendant to plug a card after it sells than to buy national advertising space up-front. But it could be any combination of the above.

Re: American Airlines

Anonymous — Fri, 08 Nov 2019 00:48:44 GMT

@TheBoondocks wrote:
But, only time that I did see SW promote their credit card was when I was at the airport, they had a tablet with a rep I think from Chase. But then again, it's how people make their money too, like how they promote it at Kholes, Walmart, etc.

I am pretty sure I heard the marketing push on both WN and DL flight at some point in the last 3 years.