Airline Miles Cards Losing Their Luster?

Is there an airline miles rewards card in your pocket? If yes, what do you expect of it? Some time ago frequent flyer programs and affiliated credit cards widely available online were a real windfall for banks and their customers but now their popularity and profitability seem likely to fall into oblivion. Travelers and business people will probably be affected most. Some have already seen a reduction in the value of miles rewards and greater seat restrictions. What then?

While the reason for the poorer frequent flyer programs stays vague for consumers, it is more than obvious to card companies partnering with airlines. The ever high gas prices, shrinking flights and workforce led to trillions of rewards miles devalued and thousands of customers frustrated.

The question is, are we going to loose the benefits of such a lucrative rewards program as frequent flyer miles rewards? As long as the airlines seem to be sluggish - people will continue flying no matter what - companies affiliated are going to handle the situation. The amount of revenues major banks and companies make from sign-up and other fees associated with mileage card offers are nearing astronomical and issuers will never afford loosing them.

It's been estimated that U.S. Bank, issuing millions of airlines-affiliated cards, earns up to $65 million in annual membership fees and tens of millions in merchant and other fees. Likewise, American Express, with its 3.7 million products attached to the Delta SkyMiles program generates up to $300 million in annual fees.

Banks count money perfectly well and they evidently won't allow loosing such a high-profit customer base. Aware that what they need is to preserve customers, banks and companies are turning their clout to airlines, pressuring them to improve the rules and resuscitate their loyalty programs up to the level it used to be.

Now the well-being and first quality service of airline miles rewards programs will be provided and supervised by U.S Bank and American Express (with cards affiliated to Northwest's WordPerks and Delta SkyMiles programs), Chase Bank affiliating with Continental and United airlines, Citibank issuing American's cards and some others.

The funds to contribute to the airlines' bottom lines at the time when they fear insolvency allow for the greatest pressure on their behavior. Without the millions of dollars buying miles from airline companies, the latter would probably face a much harder loss than just winding up their frequent flyer programs.

Credit companies have a clear concern in getting the airlines back onto a consumer-friendly path and are ready to pay for it.

You can already find and compare some new programs indicating to positive changes in relationships between airlines and their customers. One example - the recently initiated Pay with Miles program by Delta and American Express allows the enrolled members to redeem miles for Delta tickets at a value of each point for 1 percent. Doesn't seem to be of great significance, does it?

But for some other factors about best airline miles cards, the new programs like this one might not preserve customers' loyalty. Take business cards. They can give other valuable perks besides miles. Generous discounts on business items alone can keep a customer using the plastic affiliated to an airline. Of course it's not long till the customer decides to apply for a more lucrative cash back rewards plan.

Share Opinion: