banktime.com

JPMorgan Chase has a huge share in the American credit card industry, but it’s not nearly as big here as in the United Kingdom, where Chase is the undisputed king of plastic. Chase has officially thrown down the gauntlet to its competition with the roll-out of an impossibly generous new air mileage rewards offer that is sure to have flyers on both sides of the pond flocking to Chase if they have not done so already. Along with British Airways, Chase will award one hundred thousand airline miles upon new customers who are approved for their co-branded rewards card and enroll in the program, then go on to spend at least two thousand dollars in the first quarter of the account being open. The battle for spendy cardholders (the safest bets for banks in this troubled economy) is on, and Chase has a running head start.

Ten thousand miles in airline rewards is worth a free transatlantic flight for Chase cardholders who use the new British Airways Signature Visa cards within the first three months, according to a statement issued by the company. In America, the specter of tightening new federal regulations has card companies cutting back drastically on perks to which cardholders have become long-accustomed, such as bestowment of air miles. Yet companies like Chase and American Express have been increasingly wooing their most affluent spenders with special deals like this one, since these cardholders shoulder a tremendous percentage of the lenders’ annual profits.

Some credit card industry watchdogs are incredulously declaring Chase’s offer to the best of which they have ever heard. Companies that evaluate credit cards en masse for consumer consumption say that they have never seen anything so blatantly appealing coming from the credit card industry. That’s without seeing the complete terms of the offer, which have not yet been publicly released by Chase and which could dilute the value of the offer if they prove to be unrealistically demanding. Still, the company has at least gotten piles of attention already with just the initial promotion.

Cardholders of the Signature Visa who spend at least thirty thousand dollars on the plastic in the first year from date of issue will receive another free voucher, this time for a friend or loved one. Going forward after the thirty thousand dollar year, cardholders will be rewarded with one and a quarter air miles per dollar spent on the Visa. That’s a twenty-five percent increase over the one-to-one mile-to-dollar ratio that cardholders will receive at the point of the card being issued. The card will carry a seventy-five dollar annual fee, which is not bad at all for the elite travel rewards cards with which the British Airways Signature Visa is so obviously trying to compete. Executive Club members of the airline’s VIP category may enroll in the card program immediately, and nonmembers will be offered a shot at the promotion later in the month.

A general manager for Chase Card Services, Tony Glover, told press that the Signature Visa promotion and card enhancements represent Chase’s commitment to giving customers what they want. Apparently, cardholders have been rallying for more valuable rewards. Glover said that the British Airways ten thousand mile promotion does exactly that: give consumers amazing value for the dollars they are planning on already spending. Glover did not deny that the promotion’s November rollout was deliberately targeted towards holiday spending, a time period during which generous consumers might easily put themselves over the threshold for a second free ticket before a full month has ever passed!

Chase has proven itself to be an aggressive competitor in the war for the credit card business of rich consumers. Back in August, the card issuer unrolled a brand new card product with no pre-set spending limit and a one-to-one point-based rewards scheme. The Chase Sapphire card is to date the flashiest and newest entrant in the uber-selective coterie of elite cards founded by the ubiquitous American Express Centurion. But AmEx is not willing to rest on its laurels, either. Back at the beginning of last month the company introduced its Premier Rewards Gold Card. Offering triple points on airfare purchases and double points on fuel purchases, the Premier Rewards Gold card offers a boon of fifteen thousand bonus reward points for cardholders maxing that thirty thousand dollar threshold within the first year. American Express has also waived the Premier Rewards Gold Card’s normal one hundred seventy-five dollar annual fee for the first twelve months as a gift for new enrollees. The company also elected to do away way with the previous sixty thousand mile cap on its extremely popular Delta SkyMiles Card back in February and five quadruple points for purchases with select online retailers. To put this largesse in perspective, a credit card mile or point generally carries a cash value of one cent.

Experts warned that the Obama administration’s draconian new rules on credit card industry practices would see plastic merchants torching many of their consumer perks and rewards. But that has not completely proven true, at least not when it comes to card companies’ richest customers. The credit card issuers giveth and taketh away in equal measures, and are throwing out some of the juiciest new perks yet even as they jack interest rates to unprecedented highs, slash credit limits, and tightly restrict availability. But credit cards don’t actually want to lose business as a result of the new laws. They will likely continue to protect their profits by squeezing customers in a ludicrous fashion with exorbitant new fees and charges (at least, until Congress puts an end to the ridiculousness), but they will continue to try and seduce new business with alluring deals. It’s kind of like the old stereotype of the kidnapper holding out candy and smiling at innocent small children, in a way! It remains to be seen how many consumers will take a bite out of offers like the British Airways Signature Visa and its ten thousand free miles, knowing what size hook lies behind the yummy bait. Practically no cardholder in the U.S. has been spared the trouble of unpleasant credit card account changes, and it’s virtually guaranteed that more will come in the next months unless Congress bumps up the effective date of new legislation. Will consumers continue to be suckered in large numbers? We’ll have to just wait and see.