MilesBuzz! - UK and US, why there's such a gap in how much you receive if you're extensively loyal

Loyalty that Discriminates: US vs UK
Nowadays, when the air travel is widely accessible more than ever before, the faraway places have become easier to reach to both businessmen and tourists. The world has not changed in size, however, it has relatively become smaller and crossing the continents became a weekend get-away or a short business trip.
The airlines, hotels, car rental companies and even retailers have introduced loyalty schemes and programmes to attract their customers. The travellers interested in doing the business and exploring those faraway places, have also realized that those loyalty schemes can open new windows to the world they aim to see, especially if they acquire a product offered by those schemes’ loyalty partners, banks.
However, sadly, the American travellers are much more privileged than the British customers what comes to the loyalty. To illustrate, let’s have a look into certain benefits of some loyalty schemes in the UK and in the US.
American Airlines provides its customers an opportunity to earn miles using their credit card partner, Citibank. An American Citibank customer receives as much as 20000 bonus miles for becoming a Citi A Advantage credit card holder; however, the British customer gets only 5000. To a greater disappointment, the A Advantage card will no longer be provided by Citi bank and the loyalty scheme will cease on the 31st of December 2009.
In the US, a Hilton Honours American Express card brings you up to 30000 bonus points and even 100 USD voucher should you open a new account with them. Their Visa Signature partner is also generous in giving points that are enough at least for one free night, however, in the UK, Barclays provide its customer with only 7500 points for opening Hilton Honours Platinum Visa card enough to redeem for ¼ of the night in the category 3 hotel.
Starwood Preferred Guests in the US receive their 25000 points which gives a value for up to 6 nights for free, and the UK customers don’t really have this option at all.
The Americans get 30000 Priority Club Points for their Chase bank Visa cards, and British receive a modest 10000 from their Visa from Barclays.
British Airways only give 1000 miles for their card from American Express UK, and only 6000 miles for the American Express Plus (UK), however, in the US they provide 20000 miles for a Chase credit card and in addition they also receive a free companion ticket.
The only match in the UK stands for bmi credit card where the bmi amex from MBNA UK provides its customers with 20000 destination miles and bmi amex plus with an annual fee of 60 GBP provides with 24000 bonus miles, some of them elite qualifying and even Plus status in the bmi Diamond Club frequent flyer programme.
Delta airlines have treated the American residents with a great bonus opening their American Express card and receiving up to 40000 bonus miles 5000 of which become elite qualifying miles, the Delta customers receive 5000 SkyMiles from the HSBC’s partnership with Delta in Brazil, and in the UK, there is no opportunity at all. The Americans get the miles for each dollar shopping at www.skymilesshopping.com and the British get miles for their pounds spend at www.skymilesshopping.co.uk however, buying the same product from the American shopping site earns more miles than shopping in the UK.
Moreover, the exchange rate between GBP and USD is different and spending on the above mentioned card can be more challenging for the UK customers. Those loyalty schemes give one point for one British Pound whereas in the US, the American residents get 1 point per dollar spent.
In the 21st Century which brought so many EQUALITY issues, we can see such an inequality in the frequent travel loyalty schemes in the two countries, the UK and the US. Calling it discriminatory would not solve the strange sensation of feeling underprivileged as a customer in the U.K. but maybe the travel industry should reconsider and make the UK loyalty scheme a more favourable one.

The disparity has less to do with FF programs themselves and more to do with partner businesses. It is not up to AA how many miles Citi UK gives; AA is happy to sell as many miles as they can to Citi, be they for US or UK AAdvantage accounts. Rather Citi, and most other UK businesses, do not feel the need to offer the same type of incentives they do in the US.

Perhaps the majority of UK customers are less motivated by miles, giving businesses less reason to offer them generously?

Does MBNA have a much larger market share because of their BMI credit card? MBNA is paying BMI more per customer sign up than the competition is; how has this paid off for MBNA? Unless a large a portion of UK customers collecting BA miles switch to collecting BMI because of the MUCH better value both earning and redeeming, consumers are to blame. They don't care enough to find out what the better deal is or if they know, are unwilling to change their behavior for the richer program.

My speculation is that a larger percentage of American consumers are willing to modify their behavior based on loyalty schemes and that this is the reason for the disparities pointed out in the above article.

1. I'll trade you our healthcare system and our sign-up bonuses for your healthcare system and your sign-up bonuses. Then, I'll take my out-of-pocket savings and pay for more travel. ;)

2. US based customers on average have more opportunities to build-up points/miles, but also have fewer days per year to use those points/miles. So, are you saying it is unfair because you have so many more vacation days to pay for every year? :D

Avg. Vacation Days/Year:

U.S. 8.1
U.K. 28

http://blogs.bnet.com/bnet1/?p=485

3. The BMI cards used to be churnable and not available to US based DC members. I don't get jealous about much, but that one used to make me seriously salivate. :p

The population of the U.S. is five times the population of the U.K. More people means more potential for profits, so it's no wonder that these companies target the American public. It may not be fair, but capitalism never claimed to be.

Compare the UK to Canada and you have a much closer comparison.

OP raises a very interesting question.

One might say it is because the credit card biz is much more profitable overall in US--but, I suspect that is not true since AFAIK interest rates in the UK are at least as high if not higher than in US. However, I suspect UK interchange rates are a lot lower.

Perhaps someone with inside knowledge of the UK situation will chime in and better inform us? :confused:

I must have missed something. Where is this reported?

OP, on your next post could you add line breaks in between you paragraphs? That will makes longer posts readable to folks with old eyes, like mine.


To a greater disappointment, the A Advantage card will no longer be provided by Citi bank and the loyalty scheme will cease on the 31st of December 2009.

welcome to rip-off britain ;)

Don't forget to mention the US has far superior Hilton hotels, Bose headphones cost far more in the UK than the US.

Hopefully a new AA card will be released very shortly - maybe with a better opening offer. We should know this month.

1. I'll trade you our healthcare system and our sign-up bonuses for your healthcare system and your sign-up bonuses. Then, I'll take my out-of-pocket savings and pay for more travel. ;)

2. US based customers on average have more opportunities to build-up points/miles, but also have fewer days per year to use those points/miles. So, are you saying it is unfair because you have so many more vacation days to pay for every year? :D

Avg. Vacation Days/Year:

U.S. 8.1
U.K. 28

http://blogs.bnet.com/bnet1/?p=485

3. The BMI cards used to be churnable and not available to US based DC members. I don't get jealous about much, but that one used to make me seriously salivate. :p

2/3 social commentary that has nothing to do with anything raised by the OP. So take the savings from swapping healthcare and spend it quickly; your non-violent death mortality rate is going to be much higher as you count your money instead of receiving cancer drugs and other lifesaving treatments. That's not flippant opinion, it is fact.

It does amaze me how few people in UK make good use of loyalty schemes which are available, and until that changes I guess we will continue to get poor returns.

Most have a supermarket loyalty card but I read somewhere recently that only about 40% of the points earned on Tesco (the biggest) ever get used. Those Tesco points get me at least 2 free -inc taxes - flights within Europe (usually on BA) annually.

Despite the fact that I only got 5,000 opening bonus on my AAdvantage card (25,000 in US I believe) and 1 mile per £, this is (was) the best for me as a fairly regular traveller to US. The only comparable card was BA but the higher reward redemption costs, especially those taxes, made it an easy decision to go with AA. There is a new card promised to replace the Citi one.

The idea of using the shopping portals to earn miles/points does not seem to be one which has caught on widely as yet.

I'm doing my bit to get people switched on to schemes by reminding them that it cost me 40,000 miles plus £80 taxes each to take my partner to Hawaii next March. ^

2/3 social commentary that has nothing to do with anything raised by the OP. So take the savings from swapping healthcare and spend it quickly; your non-violent death mortality rate is going to be much higher as you count your money instead of receiving cancer drugs and other lifesaving treatments. That's not flippant opinion, it is fact.

Generally when someone says: "it is fact" it ain't.

Anyhow, the topic is why the diff in programs between countries.

I think the differences have a lot more to do with differences in credit card programs than anything else. The same thing holds for any kinds of rewards-based credit cards; they're almost non-existent in the UK, and pretty much never more than 1%. Even now 2% is easy in the US, and more in various categories. It's also, in my experience, harder to get a lot of credit cards in the UK than in the US.

There were periods when the UK Citi AA card offered 20,000 miles as an introduction offer, tied to a certain amount of spending on the card.

The number of organisations offering credit cards in the UK ballooned upwards mainly with the coming over of American companies who did throw out offers a few years back, but these have been in retreat lately.

While not knowing the particulars of what the UK CC companies charge the retailers on a transactional basis, could it be that UK companies have lower retailer charges than the US? I know that may rewards/points style cards in the US charge a surcharge on the transactions depending how the agreements are set up with the retailer. Perhaps there are statutory limits on the amount of charges on transactions in the UK?

2/3 social commentary that has nothing to do with anything raised by the OP. So take the savings from swapping healthcare and spend it quickly; your non-violent death mortality rate is going to be much higher as you count your money instead of receiving cancer drugs and other lifesaving treatments. That's not flippant opinion, it is fact.

Sure thing, chief.

If it's "flippant" and "off-topic" then don't comment on it.

If you comment on it, claim it to be a fact, then prove it.


BTW, my comments were meant to be in jest. Oh, well.

While not knowing the particulars of what the UK CC companies charge the retailers on a transactional basis, could it be that UK companies have lower retailer charges than the US? I know that may rewards/points style cards in the US charge a surcharge on the transactions depending how the agreements are set up with the retailer. Perhaps there are statutory limits on the amount of charges on transactions in the UK?

Possibly so. I saw it claimed in another thread that Canadian merchant fees were capped or otherwise set to be the same across all types of cards (I don't remember if that claim was substantiated or disproved)--in the U.S., debit cards and non-rewards cards have the lowest merchant fees, while government, corporate, and premium rewards cards have the highest merchant fees. Merchants (by agreement with the credit card assocaitions) cannot pass these charges on to customers, so they are largely transparent.

I have another idea, too: The U.S. also has a very established credit card culture. People are now using their credit cards to buy $0.99 value meal items at fast food restaurants. I've even (ashamedly!) used a credit card to buy a 50-cent stick of gum at a gas station (I had no cash! :o). The credit card companies require their merchants here to not charge surcharges or require minimum purchase amounts (whereas, in many other countries, laws allow merchants to pass these on). The result is that people are accustomed to using their credit cards everywhere, meaning that card companies are earning more than in places where credit card usage is lower or discouraged by surcharges and minimum purchase requirements. On top of that, the U.S. consumer debt culture means card companies are tons of money on financing charges, so they can afford to pay high rewards.

Sure thing, chief.

If it's "flippant" and "off-topic" then don't comment on it.

If you comment on it, claim it to be a fact, then prove it.


BTW, my comments were meant to be in jest. Oh, well.

Ok chief:

http://www.telegraph.co.uk/news/uknews/1560849/UK-cancer-survival-rate-lowest-in-Europe.html

Ok chief:

http://www.telegraph.co.uk/news/uknews/1560849/UK-cancer-survival-rate-lowest-in-Europe.html

Although not as bad as a third world country, there is too much income disparity in the UK compared to US. In the US one-size-fits-all approach work well since most consumers are wealthy. In the UK there are too many 'classes' of consumers, making such promotions not profitable..

Although not as bad as a third world country, there is too much income disparity in the UK compared to US. In the US one-size-fits-all approach work well since most consumers are wealthy. In the UK there are too many 'classes' of consumers, making such promotions not profitable..

This even holds partially true for most western European countries. Despite their high standard of living, they remain a rigid class structured society with a large segment of low cost skilled labor.

Airline miles occupy a different level of psyche in the US. It's a big country, at the end of the day, and you need to fly to get around. Hence the attraction of miles.

It simply isn't the same in Europe because of the smaller distances involved to see relatives, friends etc.

You also fail to compare like with like. Most US miles collectors will redeem their 25k sign-up miles for a short domestic flight - and even a lot of those now need 50k miles.

BA will fly you to some parts of Europe for just 9,000 miles, and at present you get 7k for getting the BA Amex.

I would wager that the BMI Amex bonus of 24,000 miles - which is good for 2 business class tickets to Moscow - actually gives you more 'bang for the buck' than almost all US FF card bonuses (except the new BA Chase one!).

Ok chief:

http://www.telegraph.co.uk/news/uknews/1560849/UK-cancer-survival-rate-lowest-in-Europe.html

Well, that said nothing about cancer drugs, and didn't seem to take into account diet/nutrition (such as comparing UK cancer rates to countries where a known low-cancer rate Mediterranean diet predominates) and environment, but I'll grant that the UK seems to have a problem with diagnostics and radiation treatments.

Unfortunately, the UK appears to spend less per capita on healthcare than most of the other Western European countries as well, and as the article noted:

"A second article, which looked at 2.7 million patients diagnosed between 1995 and 1999, found that countries that spent the most on health per capita per year had better survival rates."

So, I'll concede that if you leave out other data such as infant mortality and life expectancy, societal impacts (like bankruptcies and lack of, or under coverage) and cancer treatment is your sole factor in deciding the quality of a health system, then you're right, the U.S. has a much better system.

Back on topic:

Raffles makes a good point and it seems that the marketing of CCs in the U.S. has tended to focus on sign-up and "get a free flight," usually 25k miles or even 16 RR credits.

And, a good comparison between the two countries might be:

What does a bank pay in cash today for a third party for a referral in the U.S. and U.K.? A while back, IIRC some people were getting $200-$300 per new account. That would equate pretty well with 25k miles at the bank's purchase price.

Another issue is the lack of cross-border competition for credit cards due to the local nature of credit reporting agencies and regulatory issues.

Well, that said nothing about cancer drugs, and didn't seem to take into account diet/nutrition (such as comparing UK cancer rates to countries where a known low-cancer rate Mediterranean diet predominates) and environment, but I'll grant that the UK seems to have a problem with diagnostics and radiation treatments.

Unfortunately, the UK appears to spend less per capita on healthcare than most of the other Western European countries as well, and as the article noted:

"A second article, which looked at 2.7 million patients diagnosed between 1995 and 1999, found that countries that spent the most on health per capita per year had better survival rates."

So, I'll concede that if you leave out other data such as infant mortality and life expectancy, societal impacts (like bankruptcies and lack of, or under coverage) and cancer treatment is your sole factor in deciding the quality of a health system, then you're right, the U.S. has a much better system.

Back on topic:

Raffles makes a good point and it seems that the marketing of CCs in the U.S. has tended to focus on sign-up and "get a free flight," usually 25k miles or even 16 RR credits.

And, a good comparison between the two countries might be:

What does a bank pay in cash today for a third party for a referral in the U.S. and U.K.? A while back, IIRC some people were getting $200-$300 per new account. That would equate pretty well with 25k miles at the bank's purchase price.

Your comment was on healthcare. Obesity, violent deaths, diet, nutrition and so on have nothing to do with healthcare. Back out those factors and the recent University of Penn study shows the US well ahead of Europe on life expectancy. People getting killed in a car wreck or by guns or by french fries has nothing to do with the quality of health care or the effects thereof.

Why does the US spend more on cancer treatment than other countries? Seems like the obvious difference is government control of decisions around healthcare in those countries vs. the system we have.

The 'problem' the UK has with diagnostics and treatments, that leads to much higher rates of death would be...that healthcare system you said you'd take.

OP: I take it that this 100k mile offer from Chase/British Airways will really irk you.

http://www.mychasecreditcards.com/britishairways/hp_postpin

Sorry.

OP: I take it that this 100k mile offer from Chase/British Airways will really irk you.

http://www.mychasecreditcards.com/britishairways/hp_postpin

Sorry.

Saw that too...I'm thinking of signing up for it myself.

Your comment was on healthcare. Obesity, violent deaths, diet, nutrition and so on have nothing to do with healthcare. Back out those factors and the recent University of Penn study shows the US well ahead of Europe on life expectancy. People getting killed in a car wreck or by guns or by french fries has nothing to do with the quality of health care or the effects thereof.

You can't back out those factors because they are primary in importance for survivability. High Vitamin D, Omega 3 and Vitamin C levels, for instance are highly correlated with Cancer survivability because of the punishment taken by radiation and chemo treatments. U.K. survivability rates would necessarily be expected to be lower because of diet/nutrition and can be just as important of a factor when compared to similar patients who consume a mediterranean diet for instance.

Environment is also just as important, as you can treat someone and then push them back into the same environment that may have been a factor in contracting cancer in the first place. For instance in the U.S., the lowest survival rates for cancer are in New York, the highest in Hawaii. Few people could argue that New York doesn't have world class hospitals, Doctors and technicians.

Why does the US spend more on cancer treatment than other countries? Seems like the obvious difference is government control of decisions around healthcare in those countries vs. the system we have.

The U.S. spends more on nearly every aspect of healthcare per capita ($4,200+), yet only out performs these other systems in high tech systems.
(The U.K. spends less than $1,700 per person)

The U.S. spends 13% of GDP on healthcare, yet has 47 million uninsured and tens of millions underinsured. The U.K. spends 7% and covers everyone. Should they spend more? That's a question they need to address.

18,000 - 45,000 people die in the U.S. every year because they have no health insurance. How many more because they are underinsured?

Who controls decisions on healthcare in this country. Insurance companies. Though, any system that doesn't maximize my personal insterests/health/safety stinks, why should the government scare me more than private interests that profit from denying me care?

The 'problem' the UK has with diagnostics and treatments, that leads to much higher rates of death would be...that healthcare system you said you'd take.

And I'd take it in a heartbeat versus the high-cost, high-deductible, lifetime limited, deniable by a claim-rep supposed crap I have today. Would I rather have the French system (#1 on the WHO list)? Of course.

The back and forth has been fun, but I'm checking out of this thread and I'll let you get the last word or twenty.

Saw that too...I'm thinking of signing up for it myself.

Ah, something we can agree on...

And I'd take it in a heartbeat versus the high-cost, high-deductible, lifetime limited, deniable by a claim-rep supposed crap I have today. Would I rather have the French system (#1 on the WHO list)? Of course.


Isn't it going through it's own 'reform' that adds direct costs to the patient due to unaffordability to the collective people/state?