Co-Branded and Affinity Cards in the U.S., 6th Edition

Nov 10, 2017
252 Pages - Pub ID: LA15476360
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Co-Branded and Affinity Cards in the U.S., 6th Edition

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.

Co-Branded and Affinity 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. More specifically, the report:
  • Provides a market size for U.S. general purpose credit cards and co-branded credit cards, by network and by issuer. Co-brand issuer market sizes are further segmented by network.
  • 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 Macy‘s loyalty and card programs.
  • Via survey analysis, the report:
  • Trends credit card usage, usage engagement, and usage share by card network over time, focusing on age and HH income trends; and trends rewards vs. non-rewards, co-brand airline and co-brand hotel credit usage trends over time, focusing on HH income trends. General trends are tracked back to 2008; other trends are tracked back to 2010.
  • Identifies the types of co-branded and affinity credit cards used, used in the past 30 days, and used most; includes engagement analysis and demographic analysis by co-branded and affinity credit card category; and analyzes monthly credit card spend, loan balances and credit score by co-branded credit card category.
  • Assesses the degree a range of features and benefits influence credit card users and co-branded credit card users to sign up for a co-branded credit card, including perks, discounts, rewards fees, interest, financing and other card benefits. Analysis by gender, HH income and credit score is included.
  • Identifies the rewards-related factors important to rewards credit card users and the factors that influence co-brand credit card users to switch from the co-brand credit card they use most to another card.
CHAPTER 1: EXECUTIVE SUMMARY
REPORT SCOPE
REPORT 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
Table 2-1: General-Purpose Credit Card Purchase Value, Co-Branded Credit Card Share, by Network,2016
Co-branded credit card purchase value, by issuer
Table 2-2: General-Purpose Credit Card Purchase Value, Co-Branded Credit Card Share, by Issuer,2016
Co-branded credit card purchase value, by issuer and network
Table 2-3: Top Co-Branded Credit Card Issuers: Co-Brand Credit Card Purchase Value, by Network,2016
Table 2-4: Top Co-Branded Credit Card Issuers: Co-Brand Credit Card Purchase Value Share, by Network, 2016
Number of co-branded credit card programs
Partnership industry segments
Table 2-5: U.S. Consumer Co-Branded Credit Card Programs, by Segment: Companies, Brands and Programs, 2017
Table 2-6: U.S. Consumer Co-Branded Credit Card Programs, by Segment and Network, 2017
Table 2-7: U.S. Consumer Co-Branded Credit Card Programs, by Segment and Issuer, 2017
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
Table 4-1: Consumer Airline Co-Branded Credit Card Programs, by Airline, Network, Reward and Issuer, 2017
Table 4-2: Business Airline Co-Branded Credit Card Programs, by Airline, Network, Reward and Issuer, 2017
Wins and losses
Table 4-3: Airline Co-Branded Credit Card Program Partnership Changes, 2014-2017
The business of airline loyalty programs
Table 4-4: Top Four U.S. Airlines: Ancillary Revenue, Loyalty Program/Co-Branded Card Share, 2016
Sizing up the Big Three
Table 4-5: American Airlines, Delta Air Lines and United Airlines: Revenue and Loyalty Metrics, 2016
Delta Air Lines
Table 4-6: Delta Air Lines Co-Branded Credit Card Program Revenue, 2014-2020
Table 4-7: Delta SkyMiles Loyalty Program: Key Revenue Metrics, 2014-2016
Table 4-8: Delta SkyMiles Loyalty Program: Key Usage Metrics, 2014-2016
American Airlines
Table 4-9: American Airlines AAdvantage Loyalty Program: Key Revenue Metrics, 2014-2016
Table 4-10: American Airlines AAdvantage Loyalty Program: Key Usage Metrics, 2014-2016
United Airlines
Table 4-11: United Airlines MileagePlus Loyalty Program: Key Revenue Metrics, 2014-2016
Table 4-12: United Airlines MileagePlus Loyalty Program: Key Usage Metrics, 2014-2016
Southwest Airlines
Table 4-13: Southwest Airlines Co-Branded Cards, Features and Benefits, by Card, 2017
Airline revenue and passenger analysis
Table 4-14: Airlines with Co-Branded Credit Card Programs, by Passengers Flown and Card Issuer,2016
Table 4-15: Airlines with Co-Branded Credit Card Programs, by Revenue Passenger Miles and Card Issuer, 2016
Table 4-16: U.S. Airline Operating Revenue: Total and Top 11 Passenger Airlines, 2016
Table 4-17: U.S. Airline Revenue: Total and Top 11 Passenger Airlines, by Revenue Category, 2016
Frequent flyer membership over time
Table 4-18: Frequent Airline Travel: Percentage Usage, Domestic and International, 2007-2017
Airline credit card users, by flying frequency
Table 4-19: Airline Credit Card Users, by Domestic and Foreign Airline Travel Frequency, 2017
Table 4-20: Airline Credit Card Users, by Domestic and Foreign Airline Travel Frequency Share, 2017
Frequent flyer program usage
Table 4-21: Frequent Flyer Member Last Domestic Round Trip, by Airline Loyalty Program and Airline Flown, 2017
Table 4-22: Frequent Flyer Members: Have Airline Credit Card, by Airline Loyalty Program, 2017
Airline credit card users, frequent flyer program membership and program redemption
Table 4-23: Airline Credit Card, Frequent Flyer Program Members and Redeemers, and Frequent
Flyers: Gender, Age and HH Income, 2017
Table 4-24: Airline Credit Card, Frequent Flyer Program Members and Redeemers, and Frequent Flyers: Cross Usage, 2017
Table 4-25: Frequent Flyer Airline Credit Card Use & Frequent Flyer Program Membership and
Redemption, by Age and HH Income, 2017
THE HOTEL CO-BRAND SEGMENT
Co-branded hotel credit card programs
Table 4-26: Hotel Co-Branded Credit Cards, by Company, Issuer and Network, 2017
Cardable opportunity
What can the Marriott/Starwood merger tell us?
Hotel credit card users
Table 4-27: Hotel Credit Card Users, by Domestic Personal and Business Nights Stayed, 2017
Hotel credit card users, hotel loyalty program membership and redemption
Table 4-28: Hotel Credit Card Users and Hotel Loyalty Program Members and Redeemers, 2017
Table 4-29: Hotel Credit Card, Hotel Loyalty Program Membership and Redemption: Cross Usage,2017
Hotel credit card users, hotel loyalty program membership and program redemption
Table 4-30: Hotel Credit Card, Hotel Loyalty Program Membership and Redemption, by Gender, Age and HH Income, 2017
Table 4-31: High-Frequency Domestic Hotel Users: Business vs. Personal Use, by Gender, Age and HH Income, 2017
THE RETAIL CO-BRAND SEGMENT
Co-branded retailer credit cards
Table 4-32: Consumer Co-Branded Retail Credit Card Programs, by Segment, 2017
Table 4-33: Club, Department and Discount Store Co-Branded Credit Cards, by Company, Issuer,
Network and Segment, 2017
Table 4-34: E-Commerce Co-Branded Credit Cards, by Company, Issuer, Network and Segment, 2017
What the Costco card program can tell us
Table 4-35: Costco AnyWhere Visa vs. American Express True Earnings, 2015 vs. 2017
What the Amazon card program can tell us
Amazon credit cards
Table 4-37: Amazon Credit Cards: Purchase Value and Share of U.S. Net Sales, 2015-2010
Table 4-38: Amazon Credit Card Purchase Value by Card Type, 2015-2010
Table 4-39: Amazon Rewards Visa and Amazon Store Card Usage, 2015-2017
What can Macy’s and Target teach us about loyalty and app engagement?
Table 4-40: Retailer-Specific Mobile App Usage: Smartphone Users, by Demographic, 2017
Table 4-41: Usage and Interest in Retailer-Specific Mobile Apps, by Feature, 2017
Macy’s
Table 4-42: Macy’s Credit Card: Rewards Tiers and Benefits, 2017
Target
CHAPTER 5: CO-BRAND AND AFFINITY CREDIT CARD ISSUERS
BANK OF AMERICA
Own-brand strategy: refining the brand proposition
Table 5-1: Bank of America, Consumer Own-Branded Credit Cards, by Network and Rewards Type,2017
Co-brand and affinity card programs
Co-brand cards
Table 5-2: Bank of America Consumer Co-Branded Credit Cards, by Network, Rewards Type and Affiliation, 2017
Still some affinity programs left
Table 5-3: Bank of America, Major Affinity Credit Cards, 2017
BARCLAYS
Co-brand credit card growth and trends
A travel and entertainment skew
Table 5-4: Barclays Co-Branded Credit Cards: Consumer, Business, Rewards Type and Affiliation, 2017
JetBlue
Performance analysis
Table 5-5: Barclays U.S. Credit Card Purchase Value and Loans Outstanding, 2014-2016
CAPITAL ONE
Co-brand moves
Table 5-6: Capital One Financial: Co-Brand Credit Card Program Partners, by Affiliation, 2017
Cabela’s: The last independent crown jewel
Table 5-7: Capital One Financial: Co-Brand Credit Card Program Purchase Value and Loans
Outstanding, 2015-2016
CITIBANK
Competitive strategy
Own-brand moves
Table 5-8: Citi Consumer Own-Branded Credit Cards, by Network and Rewards Type, 2017
Co-brand moves
Table 5-9: Citi Co-Branded Credit Cards, by Network, Rewards Type and Affiliation, 2017
American Airlines
Costco
Table 5-10: Costco Credit Card Metrics, 2015-2017
JPMORGAN CHASE
Value proposition
Own-branded card moves
Table 5-11: JPMorgan Chase, Consumer Own-Branded Credit Cards, by Network and Rewards Type,2017
Co-branded card moves
Table 5-12: JPMorgan Chase Co-Branded and Affinity Credit Cards, by Network, Rewards Type and
Affiliation, 2017
Key co-brand accounts
SYNCHRONY FINANCIAL
Growth strategies
Retail Card segment
Table 5-13: Synchrony Financial Retail Card Partners, by Segment & Start, Renewal and Contract Expiration Date, 2017
Co-brand credit card performance analysis
Table 5-14: Synchrony Financial: Retail Card Co-Branded and Private Label Credit Card Purchase Value and Loan Receivables, 2015-2016
Key co-brand credit card programs
U.S. BANK
Own-branded credit card trends
Table 5-15: U.S. Bank Consumer Own-Branded Credit Cards, by Network and Rewards Type, 2017
Co-branded strength and stability
Table 5-16: U.S. Bank Consumer Co-Branded Credit Cards, by Network, Rewards Type and Affiliation,2017
OTHER PLAYERS
Alliance Data Systems
Table 5-17: Alliance Data Systems Co-Brand Credit Card Purchase Value and Loans Receivable, 2015-2016
Commerce Bank
First National Bank of Omaha
Table 5-18: First National Bank of Omaha Consumer Co-Branded Credit Cards, by Partner, Network and Affiliation, 2017
TD Bank
Table 5-19: Nordstrom Private Label and Co-Brand Credit Cards, Loans Outstanding and Payment Value, 2012-2016
Table 5-20: Target Private Label and Co-Brand Credit Cards, Loans Outstanding and Payment Value,2016
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
Table 6-1: American Express Own-Branded Credit Cards: Consumer, Business and Rewards Type, 2017 .. 187
Co-branded credit cards
Table 6-2: American Express Co-Branded Credit Cards: Rewards Type and Affiliation, 2017
Co-brand purchase value analysis
Table 6-3: American Express Co-Branded Credit Card Purchase Value, by Card Partner, 2015-2016
Tale of the tape
Account departures
Table 6-4: American Express Costco Credit Card Metrics, 2015-2016
Core accounts
Table 6-5: American Express Delta SkyMiles Credit Card Metrics, 2014-2016
Global Network Services: co-brand connection
MASTERCARD
Co-branded credit card purchase value and programs
Table 6-6: Co-Branded Credit Cards: Purchase Value and Programs, by Network, 2016/2017
VISA 202
Co-branded credit card purchase value and programs
Table 6-7: Co-Branded Credit Cards: Purchase Value and Programs, by Network, 2016/2017
CHAPTER 7: CREDIT CARD USAGE TRENDS
GENERAL-PURPOSE CREDIT CARD USAGE TRENDS OVER TIME
Table 7-1: General-Purpose Credit Card Usage, by Network, 2008-2017
General-purpose credit card usage in past 30 days
Table 7-2: General-Purpose Credit Card Usage in Past 30 Days, by Network, 2008-2017
General-purpose credit card engagement rates over time
Table 7-3: General-Purpose Credit Card Engagement Rate, by Network, 2008-2017
Demographic analysis: 2008 vs. 2017
Table 7-4: Active General-Purpose Credit Card Usage Share, by Age and Card Network, 2008 vs. 2017
Table 7-5: Active General-Purpose Credit Card Usage Share, by HH Income and Card Network, 2008 vs. 2017
REWARDS CREDIT CARDS: USAGE TRENDS OVER TIME
Table 7-6: General-Purpose Credit Card Usage: Rewards vs. No Rewards, 2010-2017
Table 7-7: General-Purpose Rewards Credit Card Usage, by Card Network, 2010-2017
AIRLINE AND HOTEL CO-BRANDED CREDIT CARDS: USAGE TRENDS OVER TIME
Table 7-8: Airline Co-Branded Credit Card Usage, by Card Network, 2010-2017
Table 7-9: Hotel Co-Branded Credit Card Usage, by Card Network, 2010-2017
Demographic analysis: 2010 vs. 2017
Table 7-10: Credit Card Usage Share: Any Card, Airline Card and Hotel Card, by HH Income, 2010 vs.2017
Table 7-11: Airline Co-Branded Credit Card Usage, by HH Income, 2010-2017
Table 7-12: Hotel Co-Branded Credit Card Usage, by HH Income, 2010-2017
CHAPTER 8: CO-BRAND AND AFFINITY CARD USERS
TYPES OF CREDIT CARDS USED
Table 8-1: General-Purpose Credit Cards Users: Own-Branded vs. Co-Brand/Affinity, 2017
Table 8-2: Co-Brand/Affinity Credit Cards Users, by Category, 2017
Table 8-3: Co-Brand/Affinity Credit Cards Used, Used in Past 30 Days and Used Most, by Type of Partner/Affiliation, 2017
Table 8-4: Co-Brand/Affinity Credit Card Engagement Rate, by Card Category and Type of Partner/Affiliation, 2017
DEMOGRAPHIC ANALYSIS
Co-branded/affinity credit card users, by card category
Table 8-5: Co-Brand/Affinity Credit Cards Users, by Card Category and Demographic, 2017
Co-branded/affinity credit card users, by monthly credit card spend & loans outstanding
Table 8-6: Co-Brand/Affinity Credit Cards Users, by Card Category, Monthly Credit Card Spending and
Credit Card Loans Outstanding, 2017
Co-branded/affinity credit card users, by co-brand/affinity credit card partner/affiliation
Table 8-7: Cardholder Gender, by Co-Brand Credit Card Partner/Affiliation, 2017
Table 8-8: Cardholder HH Income, by Co-Brand Credit Card Partner/Affiliation, 2017
Table 8-9: Cardholder Monthly Credit Card Spending, by Co-Brand Credit Card Partner/Affiliation,2017
Table 8-10: Cardholder Credit Card Loans Outstanding, by Co-Brand Credit Card Partner/Affiliation,2017
Table 8-11: Cardholder Self-Reported Credit Score, by Co-Brand Credit Card Partner/Affiliation, 2017
CHAPTER 9: CO-BRAND CREDIT CARD APPLICATION INFLUENCERS
Overview
Co-branded credit card application influencers
Table 9-1: Co-Brand Credit Card Application Influencers, 2017
GENERAL-PURPOSE CREDIT CARD USERS: CO-BRAND USERS VS. NON-USERS
Application influencers: perks, discounts and rewards
Table 9-2: Co-Branded Credit Card Application Influencers: Perks, Discounts and Rewards, Co-Branded Credit Card Holders vs. Non-Holders, 2017
Application influencers: fees, interest and financing
Table 9-3: Co-Branded Credit Card Application Influencers: Fees, Interest and Financing, Co-Branded
Credit Card Holders vs. Non-Holders, 2017
Application influencers: other card benefits
Table 9-4: Co-Branded Credit Card Application Influencers: Other Card Benefits, Co-Branded Credit
Card Holders vs. Non-Holders, 2017
CO-BRANDED CREDIT CARD USERS: DEMOGRAPHIC ANALYSIS
Gender
Table 9-5: Co-Branded Credit Card Users: Co-Branded Credit Card Application Influencers, by Gender, 2017
HH income
Table 9-6: Co-Branded Credit Card Users: Co-Branded Credit Card Application Influencers, by HH Income, 2017
Credit score
Table 9-7: Co-Branded Credit Card Users: Co-Branded Credit Card Application Influencers, by Credit Score, 2017
CHAPTER 10: REWARDS IMPORTANCE & CO-BRAND CARD SWITCH FACTORS
THE POWER OF REWARDS
Table 10-1: Rewards-Related Factors Important to Rewards Credit Card Users, 2017
Table 10-2: Rewards-Related Factors Very Important to Rewards Credit Card Users, by Demographic,2017
CO-BRANDED CREDIT CARD USED MOST: CARD SWITCHING MOTIVATORS
Table 10-3: Factors Influencing Switch from Co-Brand Credit Card Used Most, 2017
APPENDIX
METHODOLOGY
Consumer survey methodology
Market size and forecast methodology
TABLE INDEXES
TERMS AND DEFINITIONS

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