Forget Points – Think No Fees

by Patricia Hewitt 0

In mid-November, Chase announced a re-launch of their BritishAirways card with a new benefit – no foreign transaction fees oninternational purchases.This is, in effect, a savings of threepercent on these transactions and, for frequent travelers,represents a bottom-line value that requires no accumulation orredemption to enjoy.Early this year, Pentagon Federal Credit UnionOfficials announced that their PenFed Premium Travel RewardsAmerican Express card will no longer charge foreign transactionfees. The American Express SkyMiles card offers a “no bag fee”benefit for their cardholders, which translates into a savings of$100 for two round-trips with one bag checked on each flight – morethan offsetting the $95 annual fee for frequent fliers, who caneasily rack up two round trip flights in a month.

As the economy slowly recovers, travel is increasing and thecompetition is on for travel-related spend.This is one segment thatissuers have always counted on to deliver on profitable transactionactivity and travel card users are well known as serious rewardsgeeks.Automatic fee waivers also count as “real-time” rewards, atrend that we expect to continue to grow in years to come.Inaddition, not having to pay fees can be positioned as a privilege,and one that raises the consumer to a “preferred” level, where allfrequent travelers aspire to be.As issuers and merchants try towrestle more fee income from consumers, we may see the fee waiverbenefit take its place beside points, miles, and cash back as amainstay strategy in the market.