Banks continue fight to win former WorldPerks usersby Martin Moylan, Minnesota Public Radio
St. Paul, Minn. — There's been an intense fight going on to win the wallets of some 1 million folks who carried the Northwest Airlines WorldPerks Visa credit card.
The combatants, American Express and U.S. Bank. And while U.S. Bank is declaring an overwhelming victory, American Express says it's not about to surrender.
The WorldPerks Visa cardholders came into play with the Delta Air Lines acquisition of Northwest Airlines. Delta decided it would tap American Express, not U.S. Bank, as the credit card partner for the combined airline.
However, American Express has had to win over people who carried the Worldperks credit card, and do so despite a big disadvantage. U.S. Bank knew who held WorldPerks credit cards, but American Express isn't allowed to have access to the information.
For its part, all U.S. Bank had to do was send its new air travel reward cards, called FlexPerks, to current WorldPerks credit card holders.
"Far and away, the vast majority of them have activated their cards," said Bob Daly, senior vice president of retail payment solutions at U.S. Bank. "It's just unprecedented."
Daly argues the bank's new FlexPerks travel card is better than what Delta and other airlines offer.
With the U.S. Bank FlexPerks card, customers earn at least one point for every dollar spent. For 20,000 points, they can get a ticket, but only if it's worth $400 or less. More expensive tickets require more points.
American Express has mounted an intense media campaign to reach former WorldPerks cardholders and it has bombarded millions of frequent fliers with direct mail solicitations, sending them not credit cards, but applications for credit cards.
American Express won't say how many have signed up, but a spokesman said the company is happy with the results so far.
"It's just beginning," said David Rabkin, who oversees the Delta credit card portfolio for American Express.
David Rabkin argues that most former WorldPerks cardholders eventually will want an American Express card. He said only the American Express card allows travelers to earn miles from the world's biggest airline both in the air and at the cash register.
"We just believe that if a card member signed up for the Northwest WorldPerks card, they wanted a card that earned miles on their airline," Rabkin said. "So as people learn that the card they are now being sent in the mail does not earn miles on their airline and cannot be combined with the miles they earn from flying, we believe that they will stop using it."
With the American Express card, travelers can get a ticket for 25,000 to 60,000 miles, depending on when they book a flight.
U.S. Bank contends its Visa FlexPerks card is much more widely accepted than American Express. But Rabkin said the American Express card can handle over 90 percent of a typical user's spending.
Martin Kvam said he wasn't overwhelmed by the American Express card, but he chose it over the U.S. Bank card. He said he doubts the FlexPerks card would get him the tickets he wants, and Kvam wants to add to his stash of frequent flier miles with Delta, Northwest's owner.
"I'm just used to getting the miles and being used to the airline that I fly on," Kvam said. "And that was the reason."
But Kvam will also be using a Southwest Airlines credit card to earn travel on that airline. That card is a Visa and likely will be accepted where American Express is not.
Sam Myers of Minneapolis rejected American Express' sales pitches.
"The way I see it, Visa is the best for me," he said.
Myers says he doesn't fly anywhere near as much as he once did, so he's not as motivated to add to his bank of frequent flier miles earned with Northwest. There's also the issue of how widely he can use an American Express card.
"The problem is some people don't take American Express," Myers said. "But Visa is pretty much accepted every place."
One card that's accepted nowhere now is the WorldPerks Visa credit card. All those cards were deactivated earlier this month.
But it's hard to imagine anyone who held a WorldPerks credit card wouldn't know that, given the marketing efforts of U.S. Bank and American Express.
- Morning Edition, 07/27/2009, 7:20 a.m.