JPMorgan Chase & Co. is upping the ante in the competition for travel-related credit card rewards by offering one-to-one points transfers with the newly combined United Airlines/Continental Airlines mileage program.
Chase has added Mileage Plus Holdings LLC, a subsidiary of United Continental Holdings Inc., as a point-transfer partner for its Ultimate Rewards program, the issuer announced Oct. 20. The deal enables affluent Chase Sapphire Preferred cardholders and small-business Ink Plus and Ink Bold cardholders to transfer their Ultimate Rewards points to United Continental’s MileagePlus accounts at full value.
“I see this as a really great enhancement for [these Chase products,] and it’s clear Chase is going head to head with American Express Co.’s Membership Rewards program,” says Megan Bramlette, director at Auriemma Consulting Group.
This continues to follow a trend for card issuers to maintain portfolios with the best cardholders, Bramlette says. “The appetite in the card market to recruit and retain the affluent cardholder, i.e. the low-credit-risk cardholder, is huge,” she says.
American Express’ gold card is more expensive than the Chase cards, whose fees start at $95 per year, Bramlette says.
Sean O’Reilly, Chase Sapphire general manager, agrees that its travel points-transfer initiative is designed to target consumers who might also consider using an Amex card. Ink and Sapphire cardholders also may transfer Ultimate Rewards points at full value to other travel partners, including Amtrak, British Airways, Hyatt Hotels and Resorts, and Marriott.
The Chase program modification is good because it is flexible for the consumer, a selling point that may help the bank regain its hold in the credit card market as it eases up credit restrictions and consumers start to spend on credit again, says Dennis Moroney, research director at TowerGroup. The affluent market is “extremely competitive,” and issuers have to differentiate themselves to gain business from creditworthy consumers, he contends.
Amex also offers similar points transfers for airlines, including Delta, Aeroplan, Aeromexico, Alitalia, ANA, British Airways, Virgin Atlantic, Air France and Hawaiian, an Amex spokesperson said in an email statement.
Regarding Chase’s efforts, Amex touts its Membership Rewards, saying other programs do not match its benefits, features and services, especially considering its redemption options, which includes 60,000 hotel properties and nearly 200 airlines.
“Our competitors have been copying our playbook for years, but they have a long way to go before they have the kind of high-caliber, high-spending customers we have and they want,” said the Amex spokesperson.”
As of this month, Amex customers no longer can transfer Membership Rewards points to Continental, and United MileagePlus was not part of the program, both companies confirm. However, Amex cardholders still may use rewards points to buy tickets on any airline, including United Continental, through its Pay With Points feature, the Amex spokesperson said.
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