Chase Ends Foreign-Transaction Fee On Continental Cobranded Credit Card

Adding more benefits to its fee-based cards, JPMorgan Chase & Co. has eliminated the foreign-transaction fee on its Continental Airlines Presidential Plus MasterCard credit card, giving cardholders a break on the 3% transaction fee, the company announced earlier this month.

This is the second cobranded airline card Chase has recently freed from its foreign-transaction fee. The issuer in November removed the fee from its British Airways Signature Visa credit card (see story).

The bank also removed the foreign-transaction fee from its United Mileage Plus Visa credit card, David Gold, senior vice president, Chase Card Services, tells PaymentsSource.

Chase eliminated the fee from the Presidential Plus card because research suggested doing so is what cardholders wanted, Gold says. “We want to be able to meet all their needs in a competitive marketplace,” he adds.

Moreover, issuers do not want to “lose their best customers, which usually are more affluent and lower risk,” says Megan Bramlette, director of knowledge management for New York-based Auriemma Consulting Group. “Charging these cardholders an extra fee for foreign transactions is a fast way to alienate them,” Bramlette says.

And while eliminating fees is not an industry trend, “we are moving into an era where fee-based lending is likely to be increasingly prevalent,” Bramlette says. The challenge for issuers is how to position those fees, she notes.

Most cobranded airline cards already carry a “fairly high” annual fee, so issuers do not really need to add the 3% foreign-transaction fee on top of that, Bramlette adds.

Additionally, as the economy continues to recover, many consumers are traveling more. Recent survey results from TripAdvisor.com suggest that 36% of U.S.-based consumers plan to increase their travel this year, while 69% said they plan to travel internationally.

Chase launched the Continental Presidential Plus Card, which carries a $395 annual fee, in 2006.

Chase’s Hyatt Visa Card introduced in September with Hyatt Hotels Corp. also carries no foreign-transaction fee (see story).  Additionally, the issuer also provides the perk for its Priority Club Select Visa card cobranded with Intercontinental Hotels Group, which it introduced in July (see story).

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