The competition in the travel credit card market is set to
intensify with the launch of new credit cards by
Bank of America Corporation
) in collaboration with Miami-based
Royal Caribbean Cruises Ltd.
). The two companies renewed their multi-year affinity
partnership with the launch of credit cards, which will offer
benefits to loyalists of the cruise company.
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The new credit cards offer exclusive benefits and are aimed to
meet the growing demand from frequent users of the Azamara Club
Cruises, Celebrity Cruises, and Royal Caribbean International
The travel related credit cards were designed keeping in mind
consumers' need for flexibility in using points for
travel-related expenses. The recently unveiled cards provide
ample flexibility in point usage and enhanced reward rates.
The cards - "MyCruise Rewards" - give cardholders the ability to
redeem points not only with the cruise brand that they choose,
but also across the other two brands in the Royal Caribbean
Additionally, cardholders can earn concessions on cruise-related
packages and redeem points for cruises, stateroom upgrading,
specialty gifts, and onboard credit across Azamara Club Cruises,
Celebrity Cruises, and Royal Caribbean International. Further,
the cards offer double points for purchases on all three cruise
lines and one point for every dollar used on making other
purchases. All these benefits come without an annual fee.
Another novelty is that the credit cards provide a
points-donation opportunity. Cardholders will be able to
contribute the cash value of their points to each of the brands'
non-profit associates. Celebrity Cruises has partnered with The
Breast Cancer Research Foundation, while Royal Caribbean is
associated with Make-A-Wish Foundation.
By issuing credit cards with better reward rates and additional
new features, BofA is geared to further consolidate its foothold
in the market. According to The Nilson Report, at present, BofA
is the third largest credit card issuer by purchase volume in the
United States, trailing
JPMorgan Chase & Co.
American Express Company
Moreover, by offering bonus incentives, the company expects a
significant increase in its deposits to sustain revenues, which
was adversely affected by its plans to charge customers for debit
card usage. This particular step by the company made many of its
customers opt out of using its debit cards. The credit card
incentives can hence, be viewed as the company's strategy to win
BofA currently carries a Zacks Rank #3 (Hold).