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
). 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
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
JPMorgan Chase & Co
American Express Company
) 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
) 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.
AMER EXPRESS CO (AXP): Free Stock Analysis
BANK OF AMER CP (BAC): Free Stock Analysis
CAPITAL ONE FIN (COF): Free Stock Analysis
JPMORGAN CHASE (JPM): Free Stock Analysis
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