The competition in the travel credit card market is all set to get fierce with the launch of three new travel cards by Bank of America Corporation (BAC). The new credit cards – BankAmericard Travel Rewards, BankAmericard Privileges with Travel Rewards and WorldPoints Travel Rewards for Business – are intended to satisfy high demand from frequent travelers.
The travel cards were designed keeping in mind the consumers’ need for flexibility in using points for travel-related expenses. The recently unveiled cards provide ample flexibility in point usage along with enhanced reward rates.
By issuing travel cards with better reward rates and additional new features, BofA is geared up to further solidify its foothold in the market. According to The Nilson Report, currently, BofA is the third-largest credit card issuer by purchase volume in the United States. JPMorgan Chase & Co. (JPM) and American Express Company (AXP) are the top two position holders of this list.
The benefits, common to all the three new cards, include absence of foreign transaction fees, no expiry date on points earned, no blackout dates, complimentary concierge service, and 24-hour travel and emergency assistance.
The BankAmericard Travel Rewards and WorldPoints Travel Rewards for Businesscredit cards provide cardholders with1.5 points on every dollar spent, while the BankAmericard Privileges credit card rewards 2 points.
Customers having $50,000 worth of deposits with either BofA or any of its subsidiaries are not required to pay annual fees. Moreover, cardholders of BankAmericard Travel Rewards and BankAmericard Privileges with Travel Rewards, who have multiple accounts with BofA, are entitled to a 10% point bonus each year on their total purchases.
Redemption can be made either by paying of travel expenses or by redeeming up points towards all or part of the travel expenses.
Certain features of these cards are common to those issued by Capital One Financial Corp. (COF) and JPMorgan.
With the issuance of new travel cards, BofA is trying to capture a huge share of the ever growing credit card market. Moreover, by offering bonus incentive it is eyeing a significant increase in its deposits to sustain its revenue, which was affected by BofA’s plans to charge customers for debit card usage.
This particular step by the company made many of its customers opt out. The incentive can be viewed as the company’s strategy to get back those customers.
BofA currently retains its Zacks #3 Rank, which translates into a short-term Hold rating.Read the Full Research Report on BAC
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