Spirit Airlines Card Bucks Travel Card Trends

Many airline rewards cards, including the Capital One Venture credit card, tout “no blackout dates,” but one airline is going the opposite direction by limiting ticket rewards to “off-peak” trips.

Miramar, Fla.-based Spirit Airlines is offering a Bank of America Corp.-issued credit card that earns two miles for every $1 spent on all card purchases. Cardholders can earn 15,000 bonus miles after the first qualifying purchase, which is enough for three free “off-peak” tickets, the company said in a press release. Cardholders may redeem miles at reduced levels for roundtrip tickets starting at 5,000 miles. The card comes with a $59 annual fee.

“Bucking the trend” presents a new opportunity for credit card issuers to gain market share, one market analyst contends.

Tim Chen, founder and CEO of NerdWallet, a website that evaluates credit cards, lauds the program’s target market.

“I really think that targeting the flexible traveler is a smart strategy, given how difficult it is to compete with huge budgets and entrenched relationships that the likes of American Express and Chase have developed with travel partners,” he says. “Capital One and Discover seem to approach the problem by offering miles that are redeemable against any travel purchase you make, with the Venture Rewards and Escape card respectively.”

Because Spirit is a self-proclaimed “Ultra Low Cost Carrier” serving the United States, Latin America, and the Caribbean, it is a great fit for an underserved niche of credit card offerings: budget travelers with flexible schedules, says Chen.

Indeed, other travel credit card issuers and airlines are taking a different tack to target customers who travel.

JPMorgan Chase & Co. and British Airways, for example, announced April 6 a promotion in which the partners will give 100,000 miles free to new cardholders (see story).  The card comes with a $95 annual fee but imposes no foreign-transaction fees and generally targets the “lifelong traveler” and those who travel internationally, according to Chase.

Chase also has eliminated the foreign-transaction fee for seven of its cards, which are mostly travel-related products (see story).

And American Express Co. is targeting the international traveler with new perks to its Platinum card, including eliminating the foreign-transaction fee (see story).

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