Co-Brand and Affinity Credit Cards in the U.S. 6th Edition, provides deep insight into a market contributing some $860 billion in purchase value to U.S. payments.
The report emphasizes co-branded credit card program features and benefits analysis, partner and issuer co-brand card strategies and competitive trends, co-brand growth trends among issuers and networks, and related trend and opportunity spotting.
Against a backdrop of increasing rewards and renewals expenses, issuers have tools at their disposal to make co-brand programs work, including higher-than-average interchange, affluent relationship-building opportunity, and building lower-risk credit card loan balances. But in more and more respects, super-premium own-branded credit cards look more and more like co-branded airline credit cards; and mega-banks have the firepower to develop their own card portfolios to sufficiently leverage them.
Twelve co-branded credit card issuers that significantly participate in co-branding include nine of the ten largest credit card issuers by purchase value. Among them, co-branded share of consumer and small business credit card purchase value is 41%. The airline and hotel segments comprise 28% of co-branded credit card programs but contribute an outsized share of purchase value, underscoring the importance of travel and entertainment to co-branding.
However, airline co-brands have faced growth challenges, while hotel co-brands may be leaving too much on-site spend on the table. Echoing a private label trend, retail-co-branding is in growth mode, as issuers and networks tap purchase value opportunity and retailers leverage the programs to maintain or grow loyalty amidst an intensely competitive landscape.
More specifically, the report:
Identifies and segments the number of co-brand card programs and program partners by network, issuer, and partnership segment.
Assesses issuer co-brand/affinity and own-branded (proprietary) credit card program strategies, with specific co-branded card program market sizing, for Alliance Data Systems, Bank of America, Barclays, Capital One, Citibank, First National Bank of Omaha, JPMorgan Chase, Synchrony Financial, U.S. Bank, TD Bank and Wells Fargo.
Assesses the co-branding card strategies being employed by American Express, MasterCard and Visa.
Provides market segment analysis for co-branded airline cards, including partnership changes, revenue, passenger and revenue passenger miles analysis for airlines having co-branded programs; loyalty program usage trends; survey analysis focusing on the relationships among frequent flyer membership, frequent flyer redemption, frequent fliers, airline credit card usage and demographics; profiles for Delta Air Lines, American Airlines, United Airlines and Southwest Airlines, including loyalty program and co-brand credit card program revenue analysis, and program-related trends; and co-brand card program and program partner counts by network and issuer.
Provides market segment analysis for co-branded hotel cards, including cardable opportunity, detailed analysis of the Marriott-Starwood merger and its ramifications, as well as co-brand card and loyalty program market sizing; survey analysis focusing on the relationships among hotel loyalty program membership, frequent hotel users, hotel credit card usage and demographics; and co-brand card program and program partner counts by network and issuer.
Provides market segment analysis for co-branded retail cards, including co-brand card program and program partner counts by network, issuer and retail category; analysis of the Costco co-branded credit card program, including 2015-2017 program market sizing and profitability discussion; analysis of the Amazon co-branded credit card program, including the cards' relationship to Amazon Prime, purchase value estimates and forecast through 2020, and related survey analysis; and assessment of the role retailer-specific apps have in the Target and Macys loyalty and card programs.
Key Topics Covered:
CHAPTER 1: EXECUTIVE SUMMARY
MARKET SIZE AND FORECAST Co-branded credit card program purchase value Number of co-branded credit card programs
TRENDS AND OPPORTUNITIES Own-branded competition Upping the rewards ante Upping the expense ante Making it work Airlines in focus
MARKET SEGMENTATION ANALYSIS The airline co-brand segment The hotel co-brand segment The retail co-brand segment: a tale of four card programs
CO-BRAND AND AFFINITY CREDIT CARD ISSUERS Alliance Data Systems Bank of America Barclays Capital One Citibank JPMorgan Chase Synchrony Financial U.S. Bank
CARD ASSOCIATION CO-BRAND AND AFFINITY CREDIT CARD STRATEGIES American Express MasterCard Visa 26
CREDIT CARD USAGE TRENDS Rewards credit cards: usage trends over time Airline and hotel co-branded credit cards: usage trends over time
CO-BRAND AND AFFINITY CARD USERS Types of credit cards used Demographic analysis
CO-BRAND CREDIT CARD APPLICATION INFLUENCERS
REWARDS IMPORTANCE & CO-BRAND CARD SWITCH FACTORS The power of rewards Co-brand credit card used most: card switching motivators
CHAPTER 2: MARKET SIZE AND FORECAST
CO-BRANDED CREDIT CARD MARKET SIZE Co-branded credit card purchase value, by network Co-branded credit card purchase value, by issuer Co-branded credit card purchase value, by issuer and network Number of co-branded credit card programs Partnership industry segments
CHAPTER 3: TRENDS & OPPORTUNITIES
OWN-BRANDED COMPETITION Is this the peak of the co-brand credit card market?
UPPING THE REWARDS ANTE Higher rewards rates Cash back gets serious What is cash back without loyalty? Soft benefits must shine through
UPPING THE EXPENSE ANTE Rewards expenses continue to climb Acquisition levers, too Renewals more expensive
MAKING IT WORK Higher annual fees Help wanted: well-qualified revolvers
AIRLINES IN FOCUS Elite status gets more difficult; frequent flyer miles losing value Entry-level cards to make up the difference? Not just flight awards
CHAPTER 4: MARKET SEGMENTATION ANALYSIS
THE AIRLINE CO-BRAND SEGMENT Overview and key trends Programs and partners Wins and losses The business of airline loyalty programs Sizing up the Big Three Delta Air Lines American Airlines United Airlines Southwest Airlines Airline revenue and passenger analysis Frequent flyer membership over time Airline credit card users, by flying frequency Frequent flyer program usage Airline credit card users, frequent flyer program membership and program redemption Flyers: Gender, Age and HH Income, 2017 Redemption, by Age and HH Income, 2017
THE HOTEL CO-BRAND SEGMENT Co-branded hotel credit card programs Cardable opportunity What can the Marriott/Starwood merger tell us? Hotel credit card users Hotel credit card users, hotel loyalty program membership and redemption Hotel credit card users, hotel loyalty program membership and program redemption
THE RETAIL CO-BRAND SEGMENT Co-branded retailer credit cards Network and Segment, 2017 What the Costco card program can tell us What the Amazon card program can tell us Amazon credit cards What can Macy's and Target teach us about loyalty and app engagement? Macy's Target
CHAPTER 5: CO-BRAND AND AFFINITY CREDIT CARD ISSUERS
BANK OF AMERICA Own-brand strategy: refining the brand proposition Co-brand and affinity card programs Co-brand cards Still some affinity programs left
BARCLAYS Co-brand credit card growth and trends A travel and entertainment skew JetBlue Performance analysis
CAPITAL ONE Co-brand moves Cabela's: The last independent crown jewel Outstanding, 2015-2016
CITIBANK Competitive strategy Own-brand moves Co-brand moves American Airlines Costco
U.S. BANK Own-branded credit card trends Co-branded strength and stability
OTHER PLAYERS Alliance Data Systems Commerce Bank First National Bank of Omaha TD Bank Wells Fargo
CHAPTER 6: CARD ASSOCIATION CO-BRAND AND AFFINITY CREDIT CARD STRATEGIES
AMERICAN EXPRESS Value proposition Challenges and strategies Hard benefits and soft benefits Card portfolio Own-branded credit cards Co-branded credit cards Co-brand purchase value analysis Tale of the tape Account departures Core accounts Global Network Services: co-brand connection
MASTERCARD Co-branded credit card purchase value and programs
VISA 202 Co-branded credit card purchase value and programs
CHAPTER 7: CREDIT CARD USAGE TRENDS
GENERAL-PURPOSE CREDIT CARD USAGE TRENDS OVER TIME General-purpose credit card usage in past 30 days General-purpose credit card engagement rates over time Demographic analysis: 2008 vs. 2017
REWARDS CREDIT CARDS: USAGE TRENDS OVER TIME
AIRLINE AND HOTEL CO-BRANDED CREDIT CARDS: USAGE TRENDS OVER TIME Demographic analysis: 2010 vs. 2017