American Express (Amex) is gearing up to launch the Blue Delta SkyMiles credit card, aiming to court consumers who do not fall into the category of frequent travelers.
According to a report in Bloomberg, the travel card will give customers two frequent flyer miles per every dollar spent at restaurants in the U.S. and on Delta Air Lines purchases. Customers receive one mile for every dollar spent outside those two categories. Bloomberg noted there will be no annual fee associated with the credit card, which is rare for co-branded offerings.
“No annual fee — that is one of the key things that we’re excited about,” said Eva Reda, Amex’s executive vice president of consumer partnerships and product development, in an interview with Bloomberg. “This product is really for those who are just starting to travel.”
As such, unlike other Delta cards, this no-fee credit card will not include free baggage check, access to airport lounges and priority boarding. The partnership is expected to be a boon for Delta which has projected it will see $4 billion in earnings related to the partnership by 2021, noted the report.
American Express isn’t the only payment processor targeting the travel market with a new credit card. Bloomberg noted JPMorgan Chase is launching a co-branded product with United Continental. The United TravelBank Card gives customers 2 percent in TravelBank cash when using it to make United purchases and 1.5 percent on all other transactions. It, too, has no annual fees.
“We noticed an opportunity in this space for United customers — a no-annual-fee card with compelling travel benefits,” Leslie Gillin, president of co-brand cards at JPMorgan, told Bloomberg.
Amex’s Blue Delta SkyMiles credit card release comes as the company looks to appeal to more budget-conscious travelers. It’s launching features that will allow customers to separate big purchases — like furniture, medical expenses, airplane tickets or weddings — from smaller, everyday items like cups of coffee and even to pay immediately for small purchases from their bank accounts. The new option essentially allows cardholders to decide which purchases merit interest payments so they can better manage their budgets in real-time, noted Jeff Chwast, head of global lending new products and capabilities at American Express.