Building a compelling co-branded credit card offer in a revenue-based loyalty program can be a challenge. Cash-back cards are more prevalent than ever and the loyalty proposition can be a difficult sell. JetBlue Airways stepped up to the challenge this week, unveiling its long-awaited portfolio of new cards in partnership with MasterCard and Barclaycard. The three new cards span a range of customer use cases and, in true JetBlue fashion, do things just a little bit differently than everyone else – to the customers’ benefit.
This approach fits with the company’s ethos. As VP marketing Jamie Perry explained during the product unveiling, “We go out of our way to do things not only differently than our competitors do them but also better. We believe that over the years the customer has been increasingly shortchanged by airlines and we see it as very much our mission to change that and redress the balance and give our customers more than the other guys give them.” Big words, but the new credit card lineup backs them up.
There are three versions of the new card launching this week:
- The JetBlue Card,
- The JetBlue Plus Card, and
- The JetBlue Business Card
Each targets a specific demographic. This is in line with JetBlue’s business model of providing a compelling offering at the entry-level and then offering additional features on top of that as customers are willing to buy up. Explaining the range of products, Perry says, “We’ve tried to find common elements which appeal to everybody, including the no foreign exchange fees and multiplier earnings on certain categories, and then layer on incremental benefits on top of that.” This is congruent with the way the company has approached other recent product rollouts, including offering free wifi to all passengers with an up-sell option for those who need VPN access or other special services.
Here’s how the card benefits stack up:
The JetBlue Card
The entry-level card is fee-free, a significant move in the world of co-branded cards where annual fees are the norm. The sign up bonus offer is relatively weak at only 10,000 points for $1,000 in spend over the first 90 days but the card makes up for that in the suite of benefits it includes, a collection which outshines other cards at the free price point. Most significant is that there are no foreign transaction fees for using the card outside the United States, even on the free version. This is a benefit typically reserved for the higher cost cards in vendor portfolios and is a huge win for the value-conscious consumers. The card also includes double points earning (2/dollar spent) on restaurants and grocery stores and 3x earning on JetBlue purchases. Inflight purchases made with the card realize a 50% discount and it comes with the Barclaycard Chip + PIN capability, another feature beneficial to international travelers and one which is hard to find on many cards.
The JetBlue Plus Card
Moving up the product ladder, the Plus card offers 6x earning on JetBlue spend, a 10% rebate on all redemption activity and a free checked bag for the primary cardholder and up to three additional passengers on the same itinerary. There is a $100 statement credit against any JetBlue Getaways vacation package, offsetting the $99 annual fee the card carries. The Plus card also offers the ability to earn Mosaic status in the TrueBlue program with $50,000 in annual spend on the card. That’s a relatively high number for earning the status but it is one of the rare options which allows a customer to earn airline status wholly on credit card spend.
For a customer who has Mosaic status and who purchases JetBlue flights on the company website the earning proposition from carrying the Plus card is impressive. Buying online nets 6 points per dollar as does using the card. Add in the 3 bonus points for Mosaic status and that’s 15 points earnt per dollar spend on JetBlue tickets. With a current TrueBlue point valuation resting between 1.0-1.5 cents that becomes a roughly 20% yield on the ticket spend, plus a 10% rebate on awards when redeemed. That is a compelling set of numbers, far surpassing my expectations for the card.
The Business card is similar to the Plus card in benefits and cost. The most notable difference is that rather than 2x points at grocery stores the Business card earns that multiplier for office supply purchases.
There are other features on all the cards, including limited travel insurance coverage, extended warranty on purchases and access to a global assist hotline. But, at the end of the day, the compelling feature, at least to me, is an offering which competes well with the cash-back card rates, depending on purchase patterns, and some advanced features even on the free version. For the die-hard TrueBlue customer the Plus card and its potential 20% yield is a very, very strong offering. This re-launch has been a long time coming and it appears to have been worth the wait.