December 27, 2004 12:31 PM
Frequent-Flier Cards Delay Fee Collection
Excerpt: Hefty annual fees have led thrifty consumers to steer clear of credit cards that dole out frequent-flier miles. But a few airline-sponsored cards -- which usually charge annual fees of $30 to $100 right off the bat -- are offering to hold off on collecting those fees from new applicants for six months to a year.
Hefty annual fees have led thrifty consumers to steer clear of credit cards that dole out frequent-flier miles. But a few airline-sponsored cards -- which usually charge annual fees of $30 to $100 right off the bat -- are offering to hold off on collecting those fees from new applicants for six months to a year.
American Airlines' Citi Gold AAdvantage World Master Card, issued by Citibank, recently advertised on its Web site that it will waive the $50 annual fee for six months after the account is opened. New cardholders still get 10,000 bonus miles six to eight weeks after making an initial purchase on the card.
Other airline cards, such as United's Mileage Plus Visa, target only certain customers via mail or even at the airport with similar delayed-fee promotions, says Robert McKinley, chief executive officer of CardWeb.com, which tracks credit cards and their rates.
With competition growing among reward-card offers, and card issuers hoping to reel in customers who keep a revolving balance, the new tactics offer a way to attract customers who normally wouldn't sign up for airline-reward cards.
"The fee was always the barrier," Mr. McKinley says. Now, card issuers are "trying to open up their programs to more consumers." Some cards also are pitching similar deals to small-business owners.
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