JPMorgan Chase & Co. is boosting rewards on its credit card with United Continental Holdings Inc. as the airline seeks to strengthen its loyalty program.
United executives have openly complained to investors that the company’s co-brand credit card had fallen behind those of competitors American Airlines Group Inc. and Delta Air Lines Inc. It vowed to work with JPMorgan to make the offering more attractive to customers.
For airlines, “the credit card portfolio is mission critical,” Luc Bondar, vice president of loyalty at United, said in a phone interview. “What we had was a very competitive card but we were no longer the best. And now we’re back to the No. 1 position,” Bondar said, referring to the new benefits.
Starting Friday, United Explorer cardholders will receive two miles per dollar spent on hotels and restaurants along with a $100 statement credit for TSA Pre-Check or Global Entry, JPMorgan said in an emailed statement. The $95-a-year card will also come with a 40,000-mile sign-up bonus if customers spend $2,000 in the first three months. And the bank will offer a $100 statement credit after users’ first purchase.
Airline cards have become increasingly lucrative for both card issuers and carriers, which sometimes count on the products to produce more than half of all profits. Delta, for instance, has said it expects to reap about $4 billion in cash from its partnership with American Express Co. by 2021.
For banks, airline cards typically become “top of wallet” for consumers -- their first choice when shopping, said Leslie Gillin, JPMorgan’s president of co-brand cards. That behavior typically leads to five times the spending on a card, doubling revenue for banks, she said.