April 10, 2008
Visa Canada now has American Express squarely in its sights. Last month, it launched a new high-end credit card in Canada: the Infinite Card. The target market is well-heeled folk who want the equivalent of an Amex Platinum card in their wallets.
Amex introduced its Platinum card in 1984, first by invitation only but now for anyone who qualifies on a credit check and is willing to pay the $399 annual fee. For more than 20 years, it has dominated the high-end field.
Is American Express worried? Not for a moment, says Barclay Hancock, director of the charge portfolio at Amex Canada.
"Platinum cards appeal to a large and growing market," he says. "Considerable wealth has been created in Canada during the past half-decade. It is only natural that card issuers would look for ways to tap into it."
But, as Hancock points out, Amex Platinum is more than just accelerated rewards. It is also about services. "What it comes down to is, who delivers the best value to customers. That will be the deciding factor."
Patrick Sojka, who runs the rewardscanada.ca website from Calgary, says the high-end battle will depend on which card issuers come up with the best strategy to lure cardholders.
"I don't think Amex is particularly worried," he says. "To date, each of the banks issuing Infinite Visa cards has set its own standards for annual fees, services included and target markets."
The Infinite Card has so many faces that there is no uniformity in annual fees or services attached to it. At TD Canada Trust, for example, the TD First Class Travel Infinite Card will cost $120 a year and focus on those spending between $25,000 and $30,000 a year on their credit card. It will, in fact, replace the current gold card.
A newly introduced wrinkle sweeping the industry is the ability to book travel with any agent. "The idea of flexibility in choice when it comes to booking travel is ... a really big change in the industry this year," Sojka says.
Royal Bank of Canada's new RBC Infinite Card for private clients will cost $399 a year and be available only to high-personal-wealth private banking clients. They book travel and redeem rewards through a new, dedicated personalized travel service.
"We feel that personal service is what our private banking clients want," says Sean Amato-Gauci, RBC's vice-president of credit cards. "They also get a range of special services, such as access to about 500 airport lounges around the world."
CIBC, meanwhile, has used the Infinite category to strengthen its enormously successful Aeroplan Visa line with an Aerogold Visa Infinite Card and a new Aventura Gold Visa Infinite Card.
"The new cards focus on baby boomers who now have considerable personal wealth, travel a great deal and want a card with a lot of extras," says Ernie Johannson, CIBC's senior vice-president of marketing for retail markets. "We think the new category lets us go better head to head with Amex Platinum."
MasterCard Canada has yet to join the fray, although Bank of Montreal has launched its own Gold Air Miles Mosaik MasterCard and HSBC bank has an HSBC Premier MasterCard available only to its personal banking customers.
Visa card issuer The Bank of Nova Scotia is still deciding whether to join the action.
"We are looking at the opportunity a new Infinite Card represents," a spokesperson says.
Showing posts with label Toronto Star. Show all posts
Showing posts with label Toronto Star. Show all posts
Thursday, April 10, 2008
Good things for reward-point holders who wait
When it comes to collecting points, Canadians are more patient than U.S. peers
April 10, 2008
Terrence Belford
Stephen Brown loves his Aeroplan rewards miles. They've taken him to Whistler, B.C., for three days of skiing, to Italy for two weeks, including a week of cycling in Tuscany, and to Australia with his mother for a family wedding. This fall, they will pay his way to Athens.
Louis Intini, a retired schoolteacher, says his two sons laughed when he first got an Air Miles card a decade ago.
"They said I would never use the points," Intini says. But his rewards points have taken him and his wife, Geri, to Rome and Barcelona. They paid for his flight to Singapore in 2002. He even gave his mother-in-law a $100 food certificate.
Gary Himmel, a chartered accountant and entrepreneur, just wishes he had more time to take advantage of all the rewards points he has toted up on his Royal Bank Avion Platinum Visa. In the past, before he launched his new venture, Ezone, a corporate team-building centre in Etobicoke, he could get away on a holiday at least once a year.
This year, the flight rewards have gone to his wife, Paula, and their two sons, both university students. Those RBC rewards points have paid for each of them to fly to stay with family in Fort Lauderdale, Fla., and will cover Paula's airfare from Toronto to Warsaw next month, then on to Tel Aviv.
What ties these three very different men together is their passion for collecting travel rewards. It is a distinct Canadian trait, says a recent survey by Colloquy, a market research company based in Cincinnati, Ohio.
"Canadians are very different from their U.S. counterparts when it comes to loyalty programs," says Rick Ferguson, editorial director for Colloquy.
Canadian consumers are more patient, more willing to accumulate large numbers of points to get the reward they want, instead of going for quick redemptions for small items, says the survey.
Canadians favour travel first and then merchandise when it comes to rewards, while 55 per cent of Americans go for loyalty programs offering cash back.
The survey also found that Canadians are more generous than their U.S. counterparts. They are about twice as likely to redeem a reward for someone else and they like to share rewards with family and friends.
So, who collects loyalty rewards? Colloquy breaks Canadian consumers into five groups and finds that 96 per cent of Canadians with incomes of more than $125,000 collect; 95 per cent of women with incomes between $50,000 and $125,000 belong to rewards programs, as do 90 per cent of seniors, 78 per cent of young adults and 86 per cent of the general adult population.
"Canadians are much more savvy loyalty program players than their U.S. counterparts," Ferguson says. "They are more likely to belong to and participate in competing programs. That means makers are under constant pressure to create differentiated, unique offerings."
Brown would rank himself among the affluent collectors and agrees you have to be clever about maximizing reward benefits.
At 40, he is vice-president and general manager of a marketing company with clients such as CIBC, Canadian Tire and GE. He collects about 100,000 Aeroplan miles a year on his CIBC Aeroplan Gold Visa card.
"It is mostly through spending," he says. "I do get miles from flights but they are mainly short haul. I put all my business and all my personal spending on my Visa card. I have an Air Miles membership as well but seldom use it.
"To get the most benefit, you really have to concentrate all your spending on just one card and one program."
Intini knows all about concentrated spending. He may be retired but "I spend like mad; I just love shopping."
He has an Air Miles card, a BMO Mosaik MasterCard with Air Miles reward plus, an Aeroplan membership and a CIBC Aeroplan Gold Visa. The Air Miles cards he uses for everyday shopping and the Aeroplan cards for travel.
"I used to use my debit card for most things, then I started using that Mosaik MasterCard and boy, once I saw how the Air Miles added up, I switched to putting everything I could on credit cards," he says.
"Right now, my wife and I are saving points for a trip for two back to Europe. I would guess we collect maybe 6,000 or 7,000 Air Miles a year and right now I have 90,000 points on my Aeroplan card."
Himmel sees the points he collects on his RBC Avion Platinum Visa as a terrific way for his wife and sons to stay in touch with family. His in-laws have a place in Fort Lauderdale and the points he accumulates by putting $5,000 to $10,000 a month on his credit card are usually more than enough to cover air fares twice a year.
He puts almost everything he can for personal and business use on the card. With five cellphones and sophisticated Internet and cable service from Rogers, that mundane monthly bill can sometimes approach $1,000.
"What I do is go on the web, search out flights and prices and then, when I choose the one I want, I just call the RBC travel office, book the flights and pay for them with points," Himmel says. "I know that 30,000 points equals $750, which is a great rate, so redemption is easy for me.
"Paula's trip to Warsaw and Tel Aviv will be the first time we paid for Europe on the points. I am still trying to figure out if I can get away long enough to go with her," he says.
April 10, 2008
Terrence Belford
Stephen Brown loves his Aeroplan rewards miles. They've taken him to Whistler, B.C., for three days of skiing, to Italy for two weeks, including a week of cycling in Tuscany, and to Australia with his mother for a family wedding. This fall, they will pay his way to Athens.
Louis Intini, a retired schoolteacher, says his two sons laughed when he first got an Air Miles card a decade ago.
"They said I would never use the points," Intini says. But his rewards points have taken him and his wife, Geri, to Rome and Barcelona. They paid for his flight to Singapore in 2002. He even gave his mother-in-law a $100 food certificate.
Gary Himmel, a chartered accountant and entrepreneur, just wishes he had more time to take advantage of all the rewards points he has toted up on his Royal Bank Avion Platinum Visa. In the past, before he launched his new venture, Ezone, a corporate team-building centre in Etobicoke, he could get away on a holiday at least once a year.
This year, the flight rewards have gone to his wife, Paula, and their two sons, both university students. Those RBC rewards points have paid for each of them to fly to stay with family in Fort Lauderdale, Fla., and will cover Paula's airfare from Toronto to Warsaw next month, then on to Tel Aviv.
What ties these three very different men together is their passion for collecting travel rewards. It is a distinct Canadian trait, says a recent survey by Colloquy, a market research company based in Cincinnati, Ohio.
"Canadians are very different from their U.S. counterparts when it comes to loyalty programs," says Rick Ferguson, editorial director for Colloquy.
Canadian consumers are more patient, more willing to accumulate large numbers of points to get the reward they want, instead of going for quick redemptions for small items, says the survey.
Canadians favour travel first and then merchandise when it comes to rewards, while 55 per cent of Americans go for loyalty programs offering cash back.
The survey also found that Canadians are more generous than their U.S. counterparts. They are about twice as likely to redeem a reward for someone else and they like to share rewards with family and friends.
So, who collects loyalty rewards? Colloquy breaks Canadian consumers into five groups and finds that 96 per cent of Canadians with incomes of more than $125,000 collect; 95 per cent of women with incomes between $50,000 and $125,000 belong to rewards programs, as do 90 per cent of seniors, 78 per cent of young adults and 86 per cent of the general adult population.
"Canadians are much more savvy loyalty program players than their U.S. counterparts," Ferguson says. "They are more likely to belong to and participate in competing programs. That means makers are under constant pressure to create differentiated, unique offerings."
Brown would rank himself among the affluent collectors and agrees you have to be clever about maximizing reward benefits.
At 40, he is vice-president and general manager of a marketing company with clients such as CIBC, Canadian Tire and GE. He collects about 100,000 Aeroplan miles a year on his CIBC Aeroplan Gold Visa card.
"It is mostly through spending," he says. "I do get miles from flights but they are mainly short haul. I put all my business and all my personal spending on my Visa card. I have an Air Miles membership as well but seldom use it.
"To get the most benefit, you really have to concentrate all your spending on just one card and one program."
Intini knows all about concentrated spending. He may be retired but "I spend like mad; I just love shopping."
He has an Air Miles card, a BMO Mosaik MasterCard with Air Miles reward plus, an Aeroplan membership and a CIBC Aeroplan Gold Visa. The Air Miles cards he uses for everyday shopping and the Aeroplan cards for travel.
"I used to use my debit card for most things, then I started using that Mosaik MasterCard and boy, once I saw how the Air Miles added up, I switched to putting everything I could on credit cards," he says.
"Right now, my wife and I are saving points for a trip for two back to Europe. I would guess we collect maybe 6,000 or 7,000 Air Miles a year and right now I have 90,000 points on my Aeroplan card."
Himmel sees the points he collects on his RBC Avion Platinum Visa as a terrific way for his wife and sons to stay in touch with family. His in-laws have a place in Fort Lauderdale and the points he accumulates by putting $5,000 to $10,000 a month on his credit card are usually more than enough to cover air fares twice a year.
He puts almost everything he can for personal and business use on the card. With five cellphones and sophisticated Internet and cable service from Rogers, that mundane monthly bill can sometimes approach $1,000.
"What I do is go on the web, search out flights and prices and then, when I choose the one I want, I just call the RBC travel office, book the flights and pay for them with points," Himmel says. "I know that 30,000 points equals $750, which is a great rate, so redemption is easy for me.
"Paula's trip to Warsaw and Tel Aviv will be the first time we paid for Europe on the points. I am still trying to figure out if I can get away long enough to go with her," he says.
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