Fidelity Switches to Visa for Credit Card Branding

by Alex Johnson 0

“Fidelity, one of the few credit card issuers that reward cardholders with a lucrative 2 percent in cash back on every dollar they spend, is making changes to its program.”

“Fidelity is ending a 12-year partnership with American Express, and will offer Visa-branded cards through U.S. Bank.”

The decision, which surely came as a blow to AMEX on the heels of losing similar partnerships with Costco and JetBlue last year, was motivated primarily by brand concerns.

“The company said it believed that the new Fidelity Rewards Visa Signature card would be attractive to a wider group of people, including the coveted millennial generation, generally viewed as people born from about 1980 through the ’90s. Visa cards are more broadly accepted by merchants than American Express cards, which was one of the big drivers behind the change.”

Setting the acceptance issue aside, multiple reports on this decision have pointed to brand alignment as a key factor. That’s concerning for AMEX given that the Fidelity brand is, I presume, targeted at the same affluent (and emerging affluent) consumer segment that AMEX has traditionally owned.

Overview by Alex Johnson, Senior Analyst, Credit Advisory Service at Mercator Advisory Group

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