Citi tires of throupling. Will AA & Citi go exclusive? | Card Talk Ep7 | 9-26-24
Sep 26, 2024
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The discussion dives into the implications of Citi potentially becoming the only issuer of American Airlines credit cards. Experts weigh the pros and cons of such exclusivity, including its effects on welcome bonuses. The conversation emphasizes the advantages of the Barclays Aviator Silver card and its exclusive perks. Listeners are guided on how to prepare for potential changes in credit card offerings, highlighting a tantalizing promotion with 70,000 bonus points. It's a blend of strategy and insights for frequent flyers and credit card enthusiasts.
The potential exclusive partnership between Citi and American Airlines may diminish competition, impacting cardholder benefits and welcome bonuses.
If Citi becomes the sole issuer, it could enhance its rewards program by allowing ThankYou points to transfer to American Airlines, thus increasing appeal.
Deep dives
Potential Exclusive Partnership Between Citi and American Airlines
There are ongoing discussions between Citibank and American Airlines that could lead to Citi becoming the sole issuer of American Airlines credit cards. This change would result in Barclays no longer offering these cards, a significant shift in the landscape of airline credit cards. An exclusive partnership could benefit both parties; Citi would face less competition and possibly charge higher fees for miles, while American Airlines might generate more revenue from this arrangement. Nevertheless, the timeline and certainty of this development remain unclear, as it is still based on rumors from industry sources.
Impact of Exclusivity on Competition and Benefits
If Citi becomes the exclusive issuer, the competitive dynamics in the credit card market could change drastically. Currently, competition between Citi and Barclays facilitates attractive welcome bonuses and ongoing perks for cardholders, which could diminish if there is only one issuer. For example, Barclays offers welcome bonuses that often require just a single purchase to earn, which are highly beneficial for new cardholders. Losing Barclays would mean potential cardholders miss out on other opportunities like the Aviator Silver card, which is highly regarded for gaining loyalty points and other perks.
Possible Benefits of Citi's Exclusive Role
Despite potential downsides, there are conceivable advantages to Citi's exclusive role with American Airlines. If this partnership materializes, it may lead to the ability for Citi ThankYou points to transfer one-to-one to American Airlines, enhancing the value of Citi’s rewards program. Such a transfer capability could render Citi’s credit cards more appealing, particularly for those already invested in the ThankYou points ecosystem. This change could create a scenario where the inclusion of transferrable points offsets the loss of competition, although there is skepticism about whether this transfer feature will indeed be implemented.
There are two issuers of American Airline's credit cards - Citi and Barclays. But recent reports suggest American Airlines may be considering an exclusive arrangement with Citi as their only credit card issuer.
(00:10) - Citi is in talks with American Airlines to become the sole issuer of American Airlines credit cards.
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Music Credit – Beach Walk by Unicorn Heads
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