Sunday, April 26, 2009

New Credit Card for Old Northwest Visa Holders (and Others)

With Northwest being absorbed into Delta, the Northwest Visa that was offered by U.S. Bank will be disappearing – just like the terminals, signs, and paint jobs on anything that said Northwest. With that change, the only Delta affiliated credit card will be from American Express.

But U.S. Bank isn’t sitting still. If you’re a current Northwest WorldPerks Visa card holder, you should be receiving a new U.S. Bank FlexPerks Visa card – with the same account number (thus, no interruption in auto payments, etc.). Of course, U.S. Bank will also be offering the card to new customers.

The card is a “fake miles” card, which basically awards points you can redeem for a ticket on “more than 150 airlines.” The Signature Visa earns the equivalent of up to 2% return (“up to $400 ticket value for 20,000 miles”) and carries a $49 annual fee (waived the first year; also waived for $24K annual spending). There are also some bonus point categories and other perks/benefits. U.S. Bank also has a lower-tier Visa, with no annual fee but a reward ratio coming in at 1%. There is also a business Visa available.

It’s not clear how rewards are handled. The U.S. Bank website mentions redeeming via a user’s account page. This may mean that the card redemptions are similar to Capital One or Amex FreedomPass, where you receive a statement credit for a ticket purchase. Alternately, it may function more like the old Capital One or the current Merrill+ plans, where you need to contact the reward center to book a ticket.

Bottom line: 2% isn’t too bad, but you should be able to get that return or better with other cards. With this type of card, you generally need to redeem at the top of each reward level, or your reward percentage effectively declines. (Those 20,000 points are for a ticket “up to” $400 value. If your ticket only costs $250, you’ll still pay 20,000 points.) We’re less than impressed with these fake miles cards, but for some travelers they can be useful travel reward tools. Finally, if you’re a new customer interested in this card... wait a bit. The U.S. Bank website doesn’t yet even seem to have an application page available for this card.