U.S. Airlines Elevate Co-Branded Credit Cards to New Heights

The U.S. travel and hospitality industries are driving consumer use of co-branded and affinity credit cards, according to Packaged Facts.

In the recently released report Co-Branded and Affinity Cards in the U.S., 7th Edition, Packaged Facts estimates that co-branded credit cards generated $990 billion in purchase value last year. Travel and entertainment brands commanded 55% of spending, 70% of which was attributable to airline-branded credit cards. Packaged Facts further estimates that 44% of co-branded/affinity credit card users have a credit card affiliated with a travel and entertainment entity, most prevalently those affiliated with airlines, followed by hotels.

Co-branded credit cards play a very important role for airlines and their card issuers and networks, each of which benefit from credit card engagement and purchasing behavior. The cards play an integral role in frequent flyer loyalty programs, helping to drive flyer loyalty while generating billions of dollars of revenue for the airlines, much of it from partnerships with card issuers.  Issuers gain revenue from interchange, card fees, and loan interest while also obtaining detailed information about not only their affluent card users but also about the broader swath of airline partner loyalty program members, which is generally shared with them as part of their partnership agreements. This information opens broad possibilities for credit card acquisitions and bank product and services cross-selling. Networks benefit from billions in card spending that travels through them.

Approximately 26 airline brands have U.S. co-branded credit card programs. All major U.S. airlines offer a co-branded credit card, as do smaller players such as Allegiant and Sun Country, for a total of 12 U.S. carrier card programs. Packaged Facts also counts 14 foreign carriers that offer co-branded cards issued in the U.S., bringing the total number of U.S.-based airline co-branded partners to 26.

“The U.S. airline co-branded credit card market is very well-developed. U.S. carriers lead the world in loyalty program and associated co-branded credit card revenue,” says David Sprinkle, research director for Packaged Facts. “American, Delta, Southwest, and United are the four U.S. airlines who each generate billions of dollars annually in revenue from loyalty programs, much of it from co-branded cards.”

About the Report

Co-Branded and Affinity Cards in the U.S., 7th Edition (published 07/2019, 168 pages) is available for $4,750 from Packaged Facts.

 To purchase the report please contact Research Specialist Mark Hyer at [email protected] or visit https://www.packagedfacts.com/updates/Affinity-Reward-Card.