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

Published: November 10, 2017 - 252 Pages

Table of Contents

  • Executive Summary
    • Report scope
    • Report summary
      • Market size and forecast
      • 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
    • 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
  • Market Size and Forecast
    • Co-branded credit card market size
      • Co-branded credit card purchase value, by network
        • Table General-Purpose Credit Card Purchase Value, Co-Branded Credit Card Share, by Network, 2016
      • Co-branded credit card purchase value, by issuer
        • Table 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 Top Co-Branded Credit Card Issuers: Co-Brand Credit Card Purchase Value, by Network, 2016
        • Table 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 U.S. Consumer Co-Branded Credit Card Programs, by Segment: Companies, Brands and Programs, 2017
        • Table U.S. Consumer Co-Branded Credit Card Programs, by Segment and Network, 2017
        • Table U.S. Consumer Co-Branded Credit Card Programs, by Segment and Issuer, 2017
  • 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
  • Market Segmentation Analysis
    • The airline co-brand segment
      • Overview and key trends
      • Programs and partners
        • Table Consumer Airline Co-Branded Credit Card Programs, by Airline, Network, Reward and Issuer, 2017
        • Table Business Airline Co-Branded Credit Card Programs, by Airline, Network, Reward and Issuer, 2017
      • Wins and losses
        • Table Airline Co-Branded Credit Card Program Partnership Changes, 2014-2017
      • The business of airline loyalty programs
        • Table Top Four U.S. Airlines: Ancillary Revenue, Loyalty Program/Co-Branded Card Share, 2016
      • Sizing up the Big Three
        • Table American Airlines, Delta Air Lines and United Airlines: Revenue and Loyalty Metrics, 2016
      • Delta Air Lines
        • Table Delta Air Lines Co-Branded Credit Card Program Revenue, 2014-2020
        • Table Delta SkyMiles Loyalty Program: Key Revenue Metrics, 2014-2016
        • Table Delta SkyMiles Loyalty Program: Key Usage Metrics, 2014-2016
      • American Airlines
        • Table American Airlines AAdvantage Loyalty Program: Key Revenue Metrics, 2014-2016
        • Table American Airlines AAdvantage Loyalty Program: Key Usage Metrics, 2014-2016
      • United Airlines
        • Table United Airlines MileagePlus Loyalty Program: Key Revenue Metrics, 2014-2016
        • Table United Airlines MileagePlus Loyalty Program: Key Usage Metrics, 2014-2016
      • Southwest Airlines
        • Table Southwest Airlines Co-Branded Cards, Features and Benefits, by Card, 2017
      • Airline revenue and passenger analysis
        • Table Airlines with Co-Branded Credit Card Programs, by Passengers Flown and Card Issuer, 2016
        • Table Airlines with Co-Branded Credit Card Programs, by Revenue Passenger Miles and Card Issuer, 2016
        • Table U.S. Airline Operating Revenue: Total and Top 11 Passenger Airlines, 2016
        • Table U.S. Airline Revenue: Total and Top 11 Passenger Airlines, by Revenue Category, 2016
      • Frequent flyer membership over time
        • Table Frequent Airline Travel: Percentage Usage, Domestic and International, 2007-2017
      • Airline credit card users, by flying frequency
        • Table Airline Credit Card Users, by Domestic and Foreign Airline Travel Frequency, 2017
        • Table Airline Credit Card Users, by Domestic and Foreign Airline Travel Frequency Share, 2017
      • Frequent flyer program usage
        • Table Frequent Flyer Member Last Domestic Round Trip, by Airline Loyalty Program and Airline Flown, 2017
        • Table Frequent Flyer Members: Have Airline Credit Card, by Airline Loyalty Program, 2017
      • Airline credit card users, frequent flyer program membership and program redemption
        • Table Airline Credit Card, Frequent Flyer Program Members and Redeemers, and Frequent Flyers: Gender, Age and HH Income, 2017
        • Table Airline Credit Card, Frequent Flyer Program Members and Redeemers, and Frequent Flyers: Cross Usage, 2017
        • Table 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 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 Hotel Credit Card Users, by Domestic Personal and Business Nights Stayed, 2017
      • Hotel credit card users, hotel loyalty program membership and redemption
        • Table Hotel Credit Card Users and Hotel Loyalty Program Members and Redeemers, 2017
        • Table Hotel Credit Card, Hotel Loyalty Program Membership and Redemption: Cross Usage, 2017
      • Hotel credit card users, hotel loyalty program membership and program redemption
        • Table Hotel Credit Card, Hotel Loyalty Program Membership and Redemption, by Gender, Age and HH Income, 2017
        • Table 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 Consumer Co-Branded Retail Credit Card Programs, by Segment, 2017
        • Table Club, Department and Discount Store Co-Branded Credit Cards, by Company, Issuer, Network and Segment, 2017
        • Table E-Commerce Co-Branded Credit Cards, by Company, Issuer, Network and Segment, 2017
      • What the Costco card program can tell us
        • Table Costco AnyWhere Visa vs. American Express True Earnings, 2015 vs. 2017
      • What the Amazon card program can tell us
      • Amazon credit cards
        • Table Amazon Credit Cards: Purchase Value and Share of U.S. Net Sales, 2015-2010
        • Table Amazon Credit Card Purchase Value by Card Type, 2015-2010
        • Table Amazon Rewards Visa and Amazon Store Card Usage, 2015-2017
      • What can Macy's and Target teach us about loyalty and app engagement?
        • Table Retailer-Specific Mobile App Usage: Smartphone Users, by Demographic, 2017
        • Table Usage and Interest in Retailer-Specific Mobile Apps, by Feature, 2017
      • Macy's
        • Table Macy's Credit Card: Rewards Tiers and Benefits, 2017
      • Target
  • Co-Brand and Affinity Credit Card Issuers
    • Bank of America
      • Own-brand strategy: refining the brand proposition
        • Table Bank of America, Consumer Own-Branded Credit Cards, by Network and Rewards Type, 2017
      • Co-brand and affinity card programs
      • Co-brand cards
        • Table Bank of America Consumer Co-Branded Credit Cards, by Network, Rewards Type and Affiliation, 2017
      • Still some affinity programs left
        • Table Bank of America, Major Affinity Credit Cards, 2017
    • Barclays
      • Co-brand credit card growth and trends
      • A travel and entertainment skew
        • Table Barclays Co-Branded Credit Cards: Consumer, Business, Rewards Type and Affiliation, 2017
      • JetBlue
      • Performance analysis
        • Table Barclays U.S. Credit Card Purchase Value and Loans Outstanding, 2014-2016
    • Capital One
      • Co-brand moves
        • Table Capital One Financial: Co-Brand Credit Card Program Partners, by Affiliation, 2017
      • Cabela's: The last independent crown jewel
        • Table Capital One Financial: Co-Brand Credit Card Program Purchase Value and Loans Outstanding, 2015-2016
    • Citibank
      • Competitive strategy
      • Own-brand moves
        • Table Citi Consumer Own-Branded Credit Cards, by Network and Rewards Type, 2017
      • Co-brand moves
        • Table Citi Co-Branded Credit Cards, by Network, Rewards Type and Affiliation, 2017
      • American Airlines
      • Costco
        • Table Costco Credit Card Metrics, 2015-2017
    • JPMorgan Chase
      • Value proposition
      • Own-branded card moves
        • Table JPMorgan Chase, Consumer Own-Branded Credit Cards, by Network and Rewards Type, 2017
      • Co-branded card moves
        • Table 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 Synchrony Financial Retail Card Partners, by Segment & Start, Renewal and Contract Expiration Date, 2017
      • Co-brand credit card performance analysis
        • Table 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 U.S. Bank Consumer Own-Branded Credit Cards, by Network and Rewards Type, 2017
      • Co-branded strength and stability
        • Table U.S. Bank Consumer Co-Branded Credit Cards, by Network, Rewards Type and Affiliation, 2017
    • Other players
      • Alliance Data Systems
        • Table Alliance Data Systems Co-Brand Credit Card Purchase Value and Loans Receivable, 2015-2016
      • Commerce Bank
      • First National Bank of Omaha
        • Table First National Bank of Omaha Consumer Co-Branded Credit Cards, by Partner, Network and Affiliation, 2017
      • TD Bank
        • Table Nordstrom Private Label and Co-Brand Credit Cards, Loans Outstanding and Payment Value, 2012-2016
        • Table Target Private Label and Co-Brand Credit Cards, Loans Outstanding and Payment Value, 2016
      • Wells Fargo
  • 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 American Express Own-Branded Credit Cards: Consumer, Business and Rewards Type, 2017
      • Co-branded credit cards
        • Table American Express Co-Branded Credit Cards: Rewards Type and Affiliation, 2017
      • Co-brand purchase value analysis
        • Table American Express Co-Branded Credit Card Purchase Value, by Card Partner, 2015-2016
      • Tale of the tape
      • Account departures
        • Table American Express Costco Credit Card Metrics, 2015-2016
      • Core accounts
        • Table 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 Co-Branded Credit Cards: Purchase Value and Programs, by Network, 2016/2017
    • Visa
      • Co-branded credit card purchase value and programs
        • Table Co-Branded Credit Cards: Purchase Value and Programs, by Network, 2016/2017
  • Credit Card Usage Trends
    • General-purpose credit card usage trends over time
      • Table General-Purpose Credit Card Usage, by Network, 2008-2017
      • General-purpose credit card usage in past 30 days
        • Table General-Purpose Credit Card Usage in Past 30 Days, by Network, 2008-2017
      • General-purpose credit card engagement rates over time
        • Table General-Purpose Credit Card Engagement Rate, by Network, 2008-2017
      • Demographic analysis: 2008 vs. 2017
        • Table Active General-Purpose Credit Card Usage Share, by Age and Card Network, 2008 vs. 2017
        • Table Active General-Purpose Credit Card Usage Share, by HH Income and Card Network, 2008 vs.2017
    • Rewards credit cards: usage trends over time
      • Table General-Purpose Credit Card Usage: Rewards vs. No Rewards, 2010-2017
      • Table General-Purpose Rewards Credit Card Usage, by Card Network, 2010-2017
    • Airline and hotel co-branded credit cards: usage trends over time
      • Table Airline Co-Branded Credit Card Usage, by Card Network, 2010-2017
      • Table Hotel Co-Branded Credit Card Usage, by Card Network, 2010-2017
      • Demographic analysis: 2010 vs. 2017
        • Table Credit Card Usage Share: Any Card, Airline Card and Hotel Card, by HH Income, 2010 vs. 2017
        • Table Airline Co-Branded Credit Card Usage, by HH Income, 2010-2017
        • Table Hotel Co-Branded Credit Card Usage, by HH Income, 2010-2017
  • Co-Brand and Affinity Card Users
    • Types of credit cards used
      • Table General-Purpose Credit Cards Users: Own-Branded vs. Co-Brand/Affinity, 2017
      • Table Co-Brand/Affinity Credit Cards Users, by Category, 2017
      • Table Co-Brand/Affinity Credit Cards Used, Used in Past 30 Days and Used Most, by Type of Partner/Affiliation, 2017
      • Table 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 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 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 Cardholder Gender, by Co-Brand Credit Card Partner/Affiliation, 2017
        • Table Cardholder HH Income, by Co-Brand Credit Card Partner/Affiliation, 2017
        • Table Cardholder Monthly Credit Card Spending, by Co-Brand Credit Card Partner/Affiliation, 2017
        • Table Cardholder Credit Card Loans Outstanding, by Co-Brand Credit Card Partner/Affiliation, 2017
        • Table Cardholder Self-Reported Credit Score, by Co-Brand Credit Card Partner/Affiliation, 2017
  • Co-Brand Credit Card Application Influencers
    • Overview
    • Co-branded credit card application influencers
      • Table 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 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 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 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 Co-Branded Credit Card Users: Co-Branded Credit Card Application Influencers, by Gender, 2017
      • HH income
        • Table Co-Branded Credit Card Users: Co-Branded Credit Card Application Influencers, by HH Income, 2017
      • Credit score
        • Table Co-Branded Credit Card Users: Co-Branded Credit Card Application Influencers, by Credit Score, 2017
  • Rewards Importance & Co-Brand Card Switch Factors
    • The power of rewards
      • Table Rewards-Related Factors Important to Rewards Credit Card Users, 2017
      • Table Rewards-Related Factors Very Important to Rewards Credit Card Users, by Demographic, 2017
    • Co-branded credit card used most: card switching motivators
      • Table 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

Abstract

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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.

Market Trends & Opportunities


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.

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