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Banking industry

Co-Branded Credit Cards in the U.S. Experience Significant Growth Amidst COVID-19 Pandemic

Strategic Insights

— 2 min read

Co-branded credit cards, often tied to specific retailers, airlines, or hotels, have emerged as a lifeline for many consumers during the COVID-19 pandemic. According to research, these cards have experienced significant growth, driven by consumer loyalty programs and marketing strategies. The "Co-Branded Credit Cards in the U.S., 8th Edition" report, provided by ResearchAndMarkets.com, highlights key trends, partnerships, and consumer behavior in the industry.

Key Takeaways:

  • Credit card receivables and purchase volume have seen a significant increase, with digital and contactless trends gaining momentum, reaching $1.2 trillion in 2020, up from $972 billion in 2019.
  • The retail and travel sectors, heavily impacted by the pandemic, have driven growth in co-branded credit cards, with rewards categories such as travel and cashback proving most popular among consumers.
  • Leading co-branded card issuers, including American Express, Capitol One, Chase, Citibank, and Synchrony Financial, have adapted their strategies to combat card churn and retain customer loyalty, with 30% of consumers holding co-branded cards.
  • Digital commerce and contactless payments have increased, with 35% of consumers using digital methods, and 22% using contactless payments in 2020.
  • Key retailer programs and initiatives, such as Amazon Prime, Costco, and Target's co-branded cards, have seen significant growth, with Amazon's membership surge driving revenue and net income.
  • The largest co-branded credit card programs, including American Express, Chase, and Synchrony Financial, have seen an increase in purchase volume, with American Express achieving acceptance parity with Visa and Mastercard.

Statistics:

  • 30% of consumers hold co-branded cards, with digital advertising and promotions playing a crucial role in driving card acceptance.
  • The impact of COVID-19 on the retail and travel sectors has led to a sharp rebound in hotel occupancy, with Marriott International's Bonvoy loyalty program experiencing a significant increase in bookings.
  • Revenue dropped by $76 billion at the five largest U.S. airlines in 2020, with airline loyalty programs playing a crucial role in driving revenue.
  • Global aviation industry losses reached $370 billion in 2020, with airlines like American Airlines, Delta, JetBlue, Southwest, and United shifting to digital marketing strategies to retain customer loyalty.
  • 35% of consumers have used digital methods for transactions, and 22% have used contactless payments in 2020.
  • Industry leaders, such as American Express, have introduced new loyalty programs, such as AAdvantage, to increase customer retention and drive revenue.

Sources:

  • ResearchAndMarkets.com, "Co-Branded Credit Cards in the U.S., 8th Edition"
  • American Airlines, "AAdvantage Loyalty Program"
  • Delta Air Lines, "Delta SkyMiles and Flyer Loyalty"
  • Hilton Worldwide, "Hilton Honors Members Fill Rooms"
  • Marriott International, "Marriott Bonvoy Loyalty Program"

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