Cardholders of JPMorgan Chase & Co.’s British Airways Signature Visa credit card no longer have to pay a foreign-transaction fee, expanding Chase’s array of cobranded travel rewards cards giving customers a break on the 3% fee, the company announced Nov. 4.

The elimination of the foreign-transaction fee is a first for a cobranded airline card, Naney Pandit, director of the British Airways partnership for Chase Card Services, tells PaymentsSource.

Chase also offers an exemption from foreign transaction fees to cardholders of its Hyatt Visa Card introduced in September with Hyatt Hotels Corp. (see story). Additionally, the issuer also provides the perk to its Priority Club Select Visa card cobranded with Intercontinental Hotels Group, which it introduced in July (see story).

Cards carrying no foreign transaction fees remain relatively rare. Among 500 cards the credit card comparison website analyzed in July, only five had no foreign-transaction fee, including Capital One Financial Corp.’s cards that for years have charged no overseas transaction fees.

In addition to the new perk, Chase is offering new cardholders 50,000 bonus British Airways miles, which is enough for a transatlantic flight, the company says. For the new cardholders, the first 25,000 miles are awarded after the first purchase and an additional 25,000 miles is awarded after cardholder spends $2,500 within the first three months.

Chase is focusing on its cobranded airline cards because they enable consumers to receive Visa benefits as well as the British Airway benefits, Pandit says. Cardholders may earn miles for hotels and car rentals as well as any of its oneworld Alliance partners such as American Airlines and Alaska Airlines, Pandit notes.

The British Airways cobranded card draws a mix of frequent business travelers as well as affluent consumers and cardholders who “enjoy the simplicity of the benefits because they always know how many miles they earn,” Pandit says.

This is the second cobranded airline card Chase has updated this year. In June, it launched the Continental Airlines OnePass Plus Card and added new benefits to its existing Continental Airlines Presidential Plus Card (see story).

Additionally Chase last year enhanced benefits to the British Airway Visa card, including increasing miles earned for every dollar spent as well as a program enabling cardholders to more easily redeem a flight voucher for a companion with no additional miles (see story).

The bridge between the loyalty that cobranded airline and credit cards bring has long since been the “foundation of business” for many issuers, Brian Riley, senior research director at Needham, Mass.-based TowerGroup, tells PaymentsSource. And for cardholders, “there is a logical relationship to connect miles to dollars,” which can appeal to a majority of consumers, Riley adds.

Additionally, for many issuers as well as airlines, updating card programs “is all about [frequent] utilization,” Ron Shevlin, an analyst for Boston-based Aite Group LLC, tells PaymentsSource. Most issuers need to come up with other ways for cards to generate revenue because spending and profits took a hit during the recession, he notes.

Issuers now are focused on getting consumers to use a specific card on a regular basis to help increase their credit card interchange revenue, Shevlin says.

The main challenge is that many consumers routinely use credit cards that also offer grocery and fuel discounts, so convincing consumers to switch to a cobranded airline card may be tough, Shevlin contends.

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