Cover Image
市場調查報告書

高級旅行回饋信用卡:備受矚目但持續困難

Premium Travel Reward Credit Cards: High Profile but Unsustainable

出版商 Mercator Advisory Group, Inc. 商品編碼 532782
出版日期 內容資訊 英文
商品交期: 最快1-2個工作天內
價格
Back to Top
高級旅行回饋信用卡:備受矚目但持續困難 Premium Travel Reward Credit Cards: High Profile but Unsustainable
出版日期: 2017年07月25日 內容資訊: 英文
簡介

本報告提供會費高利潤也大的高級旅行回饋信用卡的永續性調查,由4項理由表達這個經營模式的難以持續。

本調查的重點

  • 利潤收益動態相關討論
  • 美國的互換收費高和高級利潤卡的失敗
  • 首位層級產品的市場掃描
  • 顯示經營模式有風險的4個理由
  • 對高級旅行利潤卡的應採取的行動

調查對象企業

  • American Airlines
  • American Express
  • Barclaycard
  • Capital One
  • City National
  • Citi
  • Discover
  • First Data
  • FIS
  • Fiserv
  • HSBC
  • M&S Bank
  • MasterCard
  • NatWest
  • Royal Bank of Canada
  • Royal Bank of Scotland
  • Santander
  • Tesco
  • TSYS
  • US Bank
  • USAA
  • Visa
目錄

Are high-fee/high-reward premium travel credit cards a sustainable business model?

New Mercator Advisory Group questions the sustainability of high-priced travel reward credit cards and sees year-2 attrition challenges.

The latest in premium credit card products, travel credit cards targeted to consumers with strong credit scores and above-average income, grab headlines with sky-high introductory rewards and fees. Consumers are attracted by rewards and the 24-karet gold-plated cards, but is this an unrealistic business model? Will customer attrition occur in the second year when $450 fees come due with only a fraction of the first-year benefits available?

Mercator Advisory Group's latest research report, ‘Premium Travel Reward Credit Cards: High Profile but Unsustainable’, discusses the long-term proposition of these high-reward/high-fee cards and presents analysis pointing to four reasons the model will not stand the test of time:

  • Top-tier issuers are already reducing their rewards. Points per dollar spent set at 100,000 one day are 50,000 the next, causing market confusion.
  • Year-2 benefits are nowhere near as attractive as year-1 benefits, which will likely cause attrition.
  • A potential shift from accounts transacting (cardholders paying off balances monthly) to revolving (cardholders paying over the course of time) could upset issuer revenue expectations.
  • The reliance on interchange works in the U.S. market today, but if regulators follow the example of Australian, Canadian, or European regulators' standards, the source for funding card rewards will end.

According to the report, U.S. households are adding new credit despite sky-high volumes of outstanding credit card debt as well as auto finance and student loans. Winning new customers and coming up with new payment tools is exciting, but issuers need to keep their eye on the ball particularly since the lending growth is outpacing household income growth.

“Everyone loves credit card rewards. They attract customers and drive product preference. But a $450 annual fee is a big commitment for a credit card, even if the first-year cost is offset by points per dollar spent,” commented Brian Riley, Director, Credit Advisory Service, Mercator Advisory Group. “Issuers need to think about the second year and beyond. Once the luster of that flashy metallic card is gone, will the cardholder commit to $450 the next year? When you consider that bank card accounting allows the expense to be allocated over seven years. If the customer leaves in year 2 or 3, that's a pretty expensive proposition.”

This research report contains 17 pages and 5 exhibits.

Companies mentioned in this report include: American Airlines, American Express, Barclaycard, Capital One, City National, Citi, Discover, First Data, FIS, Fiserv, HSBC, M&S Bank, MasterCard, NatWest, Royal Bank of Canada, Royal Bank of Scotland, Santander, Tesco, TSYS, US Bank, USAA, and Visa.

One of the exhibits included in this report:

Highlights of the research report include:

  • Discussion of reward revenue dynamics
  • A review of why US interchange, among the highest in the world, could be decisive in unraveling premium reward cards.
  • Market scan of top tier products
  • Four reasons the business model is at risk
  • How the industry should react to premium travel reward cards
Back to Top