The US affinity credit card market is excellent for brands and for banks. Several offer excellent bonuses, yet the Japanese carriers are woefully inadequate and offer more points indirectly than directly. What’s wrong with them?
***Live And Let’s Fly writers are not paid a commission by credit card issuers and our opinions are solely our own. Many peer bloggers do receive a commission from credit card sign-ups and if you decide you would like to pursue one of the cards I mention, try their site before going straight to the issuer.***
Bonuses Are So Bad
Gary Leff writes occasionally about the signup offers from Japan Airlines (JAL) credit card offers in the US. The last one I recall incentivized would-be cardholders with a stuffed animal-style airplane. Seriously. ANA has a huge bonus out for their card right now. Prepare yourself.
You can earn 5,000 ANA miles when you open a new card and spend on your first purchase.
That’s enough points… for nothing. Don’t lose sleep dreaming of all the place you can go when you finally cross 11,000 points, the minimum redemption value. Not to be outdone, JAL matches the offer, but, with a caveat naturally. To receive your 5,000 JAL Mileage Bank miles you need to fly JAL on an international ticket and presumably, that will be trans-Pacific given that this card is for the US-only.
By comparison, the American Airlines Citi card or the Aviator from Barclays both offer enough miles on their signup bonus for a round trip to Japan in coach – on Japan Airlines (no less) if you would like. On the JAL Card website, they map how to achieve 20,756 miles. In order to beat the normal rate of any JAL Mileage Bank member you would need to take the flight, get the one time bonus, plus a 10% and spend $5,000 on the card. Doing all of that will earn you enough points to upgrade one-way trans-Pacifically from Economy to Premium Economy.
But wait, there’s more!
For a limited time, the JAL card offers… 10,000 bonus points for spending on the card. How much you ask? Great question, $5,000, or two miles per dollar spent. If you spent $15,000 during the promotion you would have enough to get a return upgrade from coach to… premium economy – on a paid ticket. That is to say, you would need to both spend the $15k and buy a coach ticket you hope to upgrade to premium economy in cash. By comparison, similar spending (with the international ticket, sign up bonus, spending bonus) could net JAL flyers with the American card a business class one way and coach return, and wouldn’t require you to buy the coach ticket.
Is it Japanese Custom?
Some may speculate that the crazy high US credit card bonuses run counter culture to Japanese customs and that should explain the disparity. While there may be some merit to differences in approach, I tend to believe it’s not the primary driver in holding back bonuses from making either card one worth having.
Cathay Pacific has a US affinity card that recently re-vamped to increase its bonus and put themselves on the map. Korean partners with US Bank and achieves a reasonable 20,000-40,000 points (depending on when you sign up), completely respectable in my eyes from a small national bank (comparatively) and in line with other foreign carriers. While Japanese culture is entirely different from Cantonese or Korean, the carriers are not adverse to selling their miles through other resellers including other banks. By coincidence, I found a very high bonus for Cathay Pacific’s Asia Miles credit card while in Hong Kong recently which demonstrates to me that big bonuses may not be limited to the US market.
It Is The Partner Bank’s Fault?
First National Bank of Omaha is small (nationally), I should know. Originally from Omaha, I used the bank for many years and if you live in Omaha or Nebraska generally – they are the bank of choice. They have spread their footprint to some other locations in Dallas and Denver, mostly through acquisitions and because of Omaha connections nearby, but JP Morgan Chase they are not.
This is where I feel like some if not all of the blame rests. It’s not that First National Bank of Omaha (or in this case their credit card subsidiary, Firstbank Card) is not big enough to offer something legitimate, it’s that they just don’t think they need to. As Firstbank Card owns both JAL and ANA credit cards with the same bonus (and occasional spending bonuses) they compete with no one for Japanese-US travelers. The carriers don’t even compete with each other despite fiercely competing in their home market of Japan and from their competing alliances.
It’s a shame to me that Firstbank Card won the contract for both ANA and JAL and have put no effort into marketing them or turning them into worthwhile cards outside of the endless emails I receive from ANA about nothing promotions. The issuer holds a lot of card contracts. I called in to see what they had and the customer service agent (seriously friendly) discussed how she and her husband have an older Dodge vehicle and may take advantage of the “great bonus” they are offering on the Dodge credit card. It’s $100.
But what’s odd is that a couple of the cards they offer have a reasonable incentive associated with it. They offer 50,000 Best Western points with the BW Premium card and while I would love to tell you how much value that can deliver, the Best Western website is down as I type this. Giving them the benefit of the doubt, let’s say it’s worth $300, just like the Sun Country card that offers 30,000 points though if you go to Mexico at the end of their schedule, that may only be a one-way trip. That’s where the premium offers lie, and by premium, I mean limited to $300-ish. However, even if the bank offered $300 in JAL or ANA miles I would assume we would see a bonus closer to 15-20,000 miles up front. That would be at least reasonably competitive with other Asian carriers though the least generous of them all.
The bank offers a bunch of cards where $50 bonuses make sense, particularly Orvis, Ducks Unlimited, Scheels (all outdoor stores). However, Firstbank Card also offers a pair of China Airlines cards that I have to believe a bigger bank would offer a more meaningful signup bonus (2500 or 7500 points from Firstbank Card).
Don’t Japanese airlines know they can achieve higher revenue through other partners? In turn, if Firstbank had pared back their number of partners and focused on those that may generate a higher volume of business it could be surmised that they may find themselves in a stronger position with higher-end customers as opposed to spreading themselves so thinly across a wide net of niché card products.
If You Want to Fly ANA or JAL on Awards, Don’t get Their Co-Branded Cards
American Express directly offers more points as a signup bonus than the carrier’s own affinity card if you choose to transfer your Membership Rewards Points to ANA. Instead of a 5,000 point bonus after spending on an ANA card with only the possibility to earn and spend those miles on ANA, why not treat other partner card bonuses as an ANA bonus of 100,000 with American Express?
Likewise, you could just go out and get the Bank of America Alaska Airlines card for access to JAL awards at 30,000 miles. Better still, how about one of the new Marriott/SPG cards which will net you as much as 50,000 points to either program with transfer bonuses. British Airways offers an excellent credit card from Chase that if one spent the same (as they would to achieve shopping bonuses with the JAL card) they could use their British Airways Avios to fly farther, faster to and from Japan on JAL.
Why are Chase and American Express willing to give the miles to entice customers when Firstbank (their branded card partner) isn’t? The carriers are clearly willing to sell their miles to banks and partner programs (like hotels) in bulk other than to their specific card partner bank. Why won’t Firstbank Card make a real offer for their customers?
What do you think? Should Firstbank Card offer something real? Are the airlines to blame?