What do Airline Mergers Mean for Credit Card Users?

Yesterday, Delta Airlines and Northwest Airlines announced their proposed merger.

Since both have their own credit card reward programs with separate banks, one of these programs will likely change. Delta has a strong relationship with American Express, and the Northwest Airlines WorldPerks card is offered by US Bank.

Even though it may take a while to determine the fate of the Delta and Northwest credit cards, we can assume that there will likely only be one card and one issuer for the new company. Either way, some cardholders will probably be left with a canceled card and will have to make a change.

Since Northwest is merging with Delta and the new company will be called Delta, more than likely, American Express will be the credit card issuer for the merged airlines.

If you currently have a WorldPerks card, you should start to consider what card you would want to replace that one. The natural choice would be one of the American Express Cards that award miles on the Delta Frequent Flyer program.

Some airline industry analysts anticipate at least one or two more mergers in the immediate future. The next one may very well be United and Continental. In this case, both airlines use Chase for their credit card reward programs so there should not be that much of a problem. Continental also has an agreement with the American Express Membership rewards program. That agreement may not survive a merger.

If you have an airline reward card, this may be a good time to evaluate your card and compare it with other reward cards. Airline reward cards typically have higher interest rates and some charge an annual fee.

If the airlines reward card is your only reward card, you may consider getting another type of reward card. Booking a flight with frequent flyer miles can be frustrating right now. With fewer carriers and less competition, it may be even more difficult to use your miles to book a flight. A great number of miles doesn’t help you if you can’t get the flight that you want. You may save just as much money with a good hotel rewards card and hotel rooms are usually easier to book. A straight cash from a cash back credit card is hard to beat.

Some airline reward cards like Citi PremierPass or CapitalOne No Hassle Miles are not tied to a specific carrier, so you can use them on most airlines. You also have the flexibility to use the miles for other rewards.

Another good choice is the American Express Starwood Preferred Guest Credit Card. It allows you to get 25,000 miles for every $20,000 you spend and you can deposit those
miles into a number of different airline frequent flyer programs.

If you carry a balance, you should not have an airline reward card. The miles are not worth the extra you pay in interest.

Also take this time to review the miles you have accumulated in your frequent flyer accounts. Miles may expire within 18 months if there has been no activity in your account. The merged airlines may also change their policies and adapt to the more restrictive policy of the two airlines.

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