What I learned at the Co-Brand Credit Card Conference yesterday
Links on Head for Points may pay us an affiliate commission. A list of partners is here.
Anika and I were at the UK’s only annual co-brand credit card conference yesterday where representatives from most of the card groups we discuss on Head for Points meet up to discuss what is happening in the industry. Which, at the moment, is obviously quite a lot.
If you are interested in seeing what I spoke about – none of which will be a surprise to regular readers – you can download my slides (PDF) by clicking the image below.
I would like to be able to say that we came away with an exciting new vision for where the co-brand card market is going, but we didn’t. “No-one knows nuffin” it seems, so far.
This is what we did pick up:
One consultant felt that the impact of 0.3% interchange fees is not as bad as expected. His logic was this:
30% – 40% fall in interchange revenue, but offset by
15% – 20% recovered through interest rate rises, annual fee rises, other tweaks
I am not convinced, partly because I do not feel that interest rate revenue is that high, and because only one card (BA Premium Plus) has hiked its fee. I doubt MBNA would have killed its entire airline product line if the net revenue drop was only 20%. This view only holds water if the card companies ditch their highest spending customers and attempt to sign up more people who pay interest – and there are few of those in the core London business traveller market.
Other interesting titbits:
One of the longer established co-brand travel cards has just started a root and branch review which is likely to see a substantially changed product emerge. In this particular case it might actually be positive.
We may see cards try to reign in costs via benefit cuts (no 2-4-1 voucher?) or caps on points earning – or perhaps staggered earning tiers which reduce depending on how much you charge. Big spenders are now a problem as the marginal miles cost exceeds the marginal interchange fee.
Cardholders are seen as insensitive to rises in fees and interest rates – seemingly true in the case of the BA Premium Plus fee rise, I agree
The current operating model (airline takes all its revenue via sign-up commissions and a ‘pence per mile’ payment) is broken. Future co-brand agreements should be treated as ‘open book’ joint ventures with a 50 / 50 profit split, with the airline or hotel group having to accept that it is now in the credit card business.
Card data needs to become a greater source of value. Apparently American Express has never delivered on the promises of ‘big data’ it made to British Airways. The ability to use card data – perhaps using PSD2 to add data from other cards – must improve. This may involve doing things which seem illogical, eg if the BAPP Amex offered double Avios on all airline purchases – not just with BA – then BA would get a better picture of how much you were spending with other carriers and could act accordingly.
‘Card linked offers’ such as the Avios and Virgin ‘in-store earning’ deals are seen as a valuable source of revenue going forward. (Off the point, but apparently Head for Points is entirely responsible for the many changes to the Virgin / Waitrose in-store deal, because it went so crazy after we originally wrote about it that the budget was blown very quickly and emergency action was required).
The good news is that there was not a major sense of despair in the room. All of the parties have too much at stake.
Want to earn more points from credit cards? – March 2023 update
If you are looking to apply for a new credit card, here are our top recommendations based on the current sign-up bonuses.
In February 2022, Barclaycard launched two exciting new Barclaycard Avios Mastercard cards with a bonus of up to 25,000 Avios. You can apply here.
SPECIAL OFFER: Successfully apply for either of the Barclaycard Avios credit cards by 2nd April 2023 and you will be entered into a free draw to win ONE MILLION AVIOS! Full details are on the application forms here (free) and here (paid). This competition is exclusive to Head for Points readers. T&C apply.
You qualify for the bonus on these cards even if you have a British Airways American Express card:
Barclaycard Avios Plus Mastercard
25,000 Avios for signing up and an upgrade voucher for spending £10,000 Read our full review
Barclaycard Avios Mastercard
5,000 Avios for signing up and an upgrade voucher for spending £20,000 Read our full review
You can see our full directory of all UK cards which earn airline or hotel points here. Here are the best of the other deals currently available.
British Airways American Express Premium Plus
25,000 Avios and the famous annual 2-4-1 voucher Read our full review
American Express Preferred Rewards Gold
Your best beginner’s card – 20,000 points, FREE for a year & four airport lounge passes Read our full review
The Platinum Card from American Express
30,000 points and unbeatable travel benefits – for a fee Read our full review
Virgin Atlantic Reward+ Mastercard
15,000 points bonus and 1.5 points for every £1 you spend Read our full review
Earning miles and points from small business cards
If you are a sole trader or run a small company, you may also want to check out these offers:
Until 30th March 2023, the sign up bonus on American Express Business Platinum is increased to 120,000 Membership Rewards points – click here. The bonus on American Express Business Gold is increased to 60,000 Membership Rewards points – click here. T&C apply, see the application forms for details.
American Express Business Platinum
Crazy 120,000 points bonus (to 30th March) and a £200 Amex Travel credit every year Read our full review
American Express Business Gold
60,000 points sign-up bonus (to 30th March) and free for a year Read our full review
British Airways Accelerating Business American Express
30,000 Avios sign-up bonus – plus annual bonuses of up to 30,000 Avios Read our full review
Capital On Tap Business Rewards Visa
Get a 10,000 points bonus plus an extra 500 points for our readers Read our full review
For a non-American Express option, we also recommend the Barclaycard Select Cashback card for sole traders and small businesses. It is FREE and you receive 1% cashback on your spending.
Barclaycard Select Cashback credit card
1% cashback (3% for 3 months if you apply by 31st March) and no annual fee Read our full review