American Airlines to Pick Citi Exclusive Card Issuer
American Airlines is in talks to make Citi its exclusive credit card partner. American Airlines credit cards are currently issued by Citi and Barclays, so the new deal means that the airline would drop Barclays as a partner.
Barclays was the issuer of US Airways cards, and it started issuing American Airlines credit card after the two carriers merged more than a decade ago.
The deal between the three companies is unusual, as most rewards programs have just one credit card issuer. But it can be beneficial to customers, who have more options to earn welcome bonuses on new credit cards.
CNBC says that talks are ongoing and the timing of an agreement is unknown, citing people with knowledge of the negotiations. Any deal would also be subject to regulatory approvals, and it is possible that regulators could delay or scrap it altogether.
Co-branded credit cards are quite valuable for airlines as as well as the issuing banks. But the details of the arrangements can make a big difference in how profitable the deal is for either party.
Airlines earn billions of dollars a year from banks in exchange for miles that cardholders earn for using their cards. American Airlines is possibly looking for e better deal as it currently has the largest loyalty program. But it only brought in $5.2 billion last year from its credit card partnership, compared to Delta Air Lines that made nearly $7 billion.
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