Barclaycard U.S. and Travelocity Global have launched a travel-based American Express rewards credit card that offers cardholders lower point-redemption options and points on nontravel purchases.
Travelocity will roll out the card officially on June 1 for both new and existing customers. Currently, Travelocity has a rewards card with MasterCard Worldwide but will be switching existing cardholders over to the AmEx card, a Travelocity spokesperson tells PaymentsSource.
After looking closely at data and speaking directly with Travelocity customers, “we realized that our company and AmEx would be a good fit,” the spokesperson says. Moreover, “AmEx has been the preferred card for Travelocity over the last year as we offered exclusive deals to AmEx cardholders,” the spokesperson adds.
The new card carries a $39 annual fee and enables cardholders to earn five points per dollar spent at Travelocity. Cardholders also may choose from either restaurant, grocery or petroleum categories to earn an additional two points per dollar spent in the specified category and one point per dollar spent on all other purchases, Southlake, Texas-based Travelocity states in a recent news release.
Consumers who do not wish to pay the annual fee may earn three points per dollar spent at Travelocity and one point per dollar spent for all other purchases, the spokesperson notes.
Cardholders may redeem points faster compared with other programs that usually require a minimum of 25,000 miles before only earning a “saver award,” the spokesperson says. For the Travelocity Rewards AmEx card, point redemption options start as low as 5,000 points, which earns cardholders $50 off their travel booking. Cardholders may earn free travel worth $400 with only 20,000 points, the release notes.
Additionally, the card has no blackout dates, limited seat availability or specific brand choice. Cardholders may choose any airline, hotel, rental car company, or hotel and flight packages, Travelocity states in the release.
To promote the card launch, Travelocity is giving away 5 million bonus points, and new cardholders will receive up to 2,500 bonus points upon being approved for the card until the 5 million points available during the promotion have been given away. Both new and existing cardholders also will receive a specific number of points for their first purchase if they use the card by Dec. 31. Point amounts will vary by cardholder, the spokesperson says.
Though travel-based rewards are not new, they are becoming “a popular strategy with issuers,” Ron Shevlin, a senior analyst with Boston-based Aite Group, tells PaymentsSource.
“From the traveler perspective, Travelocity is competing with other travel sites such as Expedia Inc., and by offering a card the company helps drive more loyalty,” Shevlin says.
The rewards structure is generous, and the annual fee is not very high, Shevlin notes. For cardholders that do a fair amount of travel, “they can either pass the cost off to their employer or make up the fee from traveling so often,” he says.
Generally, issuers target travel-based reward cards to a specific niche, Shevlin says. In this niche, “the cardholder values travel rewards more than other types of rewards, and if the value of [this new card] is right, it can potentially be a very attractive program,” he says.
