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How good is the Travelocity credit card? [Originally Mastercard, now Amex]

How good is the Travelocity credit card? [Originally Mastercard, now Amex]

Old Feb 16, 10, 2:27 pm
  #91  
 
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Just signed up for this card and got approved for 18K credit line today. Now debating whether I should cancel my SPG card. MIght just keep my spg card since the annual fee is only $45/year and I only have to spend about $2000 per year to make up for the annual fee. spg card still good for topping off frequent flyer miles accounts though.
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Old Feb 17, 10, 6:20 pm
  #92  
 
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Sustainable?

Originally Posted by g50 View Post
True, but this does not add up to anywhere near the 4% they are giving back.
I think Barclays is the one that is actually running the program. I guess since the the no annual fee card pays 2% and the $69 fee card pays 4% then the other 2% would have to come from the profit made on people carrying a balance and the merchant fees.
I just got the Travelocity MC and everything looks like it is working as advertised (although, I did initially get the same confusing material describing the other rewards program). It appears that I am accruing at a 4% points rate.

My question is: how can they keep this up? The 4% rate is significantly higher than the interchange fees they are getting from merchants (say 2% - 2.5%). And, if it's true that the travel agent commission is very small then aren't they losing money on all of these transactions? The $69 annual fee isn't enough to make up for the losses. If they're losing at approximately a 1.5% rate (2.5% interchange - 4% points) then they fall under breakeven once there are $4,600 in purchases. That's without accounting for the value of the 5,000 signup bonus, either. I've got to believe some FTers are putting up $4,600 in purchases in a single month.

The question isn't totally irrelevant. I'm concerned they'll wake up one day, realize how much they are losing on the program, and then notify cardmembers that Travelocity points will be revalued to 1 pt = $0.01. At some point, their money has to run out, right?

I know that they must have some card holders that carry balances and they must make some interest income off of them but I wonder if that can be enough. Those balance holders come with bad debt expense (and credit card companies are incurring very high levels of bad debt expense in this environment) and even those balances are being originated at a 1.5-2% initial loss. Meanwhile, the horde of responsible FTers are costing 1.5-2% per transaction without corresponding interest charges (I hope).
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Old Feb 17, 10, 9:20 pm
  #93  
 
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Referral?

If there is any kind of referral program for this card, could one of you nice folks send me a PM?
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Old Feb 18, 10, 5:21 pm
  #94  
 
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No referral program

Originally Posted by ddutil View Post
If there is any kind of referral program for this card, could one of you nice folks send me a PM?
There is no referral program (that I know of). There is no mention of a referral program on the account management site, nor was there any mention of a referral program in the membership materials that were mailed. The best bet might be to apply through the link: http://www.mytravelocitycard.com/.
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Old Feb 19, 10, 9:40 am
  #95  
 
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Originally Posted by g50 View Post
They all should work, you are buying a regular room with real dollars through a travel agency and then getting a 4% per dollar spent credit fro Barclays. You can pick from a multiple of discounted rates and standard rates.
This actually seems perfect for Hyatt, because they don't have a credit card program. SPG hotels don't count reward stays toward status, so the travelocity card will help there as well.

For me the best is I have "points or dollars" at a better rate, for any hotel or airline.
I'm relatively sure you will NOT receive hotel points/qualifying nights for stays booked on Travelocity. Most hotel chains don't like you booking anywhere except their own site. I would love to be proven wrong though.

For airfare, it will likely be treated just as any other purchased airfare, so I plan on concentrating my redemption on air travel awards.
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Old Feb 19, 10, 9:51 am
  #96  
 
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Originally Posted by themicah View Post
"maximum fee $50))."
Thanks for pointing that out themicah!

Dumb question... but does anyone know how the BT is treated if you also make purchases? I know in the old days making purchases on a card u did a BT on is a big no no (the payments will only be applied to the BT, and your purchases will accrue interest ) but I'm wondering if some of the new laws changed that.

Does anyone who did the BT know? If not I will just pay off the BT before I use the card.
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Old Feb 19, 10, 10:14 am
  #97  
mia
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Originally Posted by doctor15 View Post
I'm relatively sure you will NOT receive hotel points/qualifying nights for stays booked on Travelocity. .
I think it largely depends on the type of booking. If you merely make a reservation through Travelocity, points will often still be awarded because they are functioning as a travel agent. However, if you purchase a prepaid stay Travelocity is functioning as a consolidator and points typically are not awarded.
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Old Feb 19, 10, 10:19 am
  #98  
 
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Originally Posted by doctor15 View Post
Thanks for pointing that out themicah!

Dumb question... but does anyone know how the BT is treated if you also make purchases? I know in the old days making purchases on a card u did a BT on is a big no no (the payments will only be applied to the BT, and your purchases will accrue interest ) but I'm wondering if some of the new laws changed that.

Does anyone who did the BT know? If not I will just pay off the BT before I use the card.
According to the statement I got from them, payments go to pay off higher APR charges first.
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Old Feb 19, 10, 10:37 am
  #99  
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Originally Posted by mia View Post
I think it largely depends on the type of booking. If you merely make a reservation through Travelocity, points will often still be awarded because they are functioning as a travel agent. However, if you purchase a prepaid stay Travelocity is functioning as a consolidator and points typically are not awarded.
Have you had pts awarded on hotel stays booked thru Travelocity / Expedia / Orbitz via the type of "agency bookings" as you described?

The few bookings I made in this fashion have not earned points with various hotel chains.
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Old Feb 19, 10, 10:41 am
  #100  
 
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Originally Posted by doctor15 View Post
Dumb question... but does anyone know how the BT is treated if you also make purchases? I know in the old days making purchases on a card u did a BT on is a big no no (the payments will only be applied to the BT, and your purchases will accrue interest ) but I'm wondering if some of the new laws changed that.
My understanding is that from and after February 22 payments are supposed to be applied to the highest rate balance first (whereas before payments were applied to the lowest rate balance first, so you had to pay off the whole 0% APR BT before you could pay off your 20% APR purchases). How that will work in practice, however, I'm not sure. It's not clear to me how grace periods will be affected, for example.


Originally Posted by mia View Post
I think it largely depends on the type of booking. If you merely make a reservation through Travelocity, points will often still be awarded because they are functioning as a travel agent. However, if you purchase a prepaid stay Travelocity is functioning as a consolidator and points typically are not awarded.
This is correct in theory. But I don't think you can use points from this card to pay for a non-prepaid hotel res on Travelocity. So doctor15 is probably right that if you use points to pay for hotel rooms, you're unlikely to get hotel points.
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Old Feb 19, 10, 12:37 pm
  #101  
 
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Originally Posted by themicah View Post
My understanding is that from and after February 22 payments are supposed to be applied to the highest rate balance first (whereas before payments were applied to the lowest rate balance first, so you had to pay off the whole 0% APR BT before you could pay off your 20% APR purchases). How that will work in practice, however, I'm not sure. It's not clear to me how grace periods will be affected, for example.




This is correct in theory. But I don't think you can use points from this card to pay for a non-prepaid hotel res on Travelocity. So doctor15 is probably right that if you use points to pay for hotel rooms, you're unlikely to get hotel points.
For me, true for Hyatt stays. But, as Rick (Frugal Travel Guy) and gleff have mentioned on their blogs, they've successfully received points and night stay credit with Marriott for bookings through other sites (Travelocity, Priceline, Expedia). YMMV
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Old Feb 19, 10, 1:55 pm
  #102  
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Originally Posted by Happy View Post
Have you had pts awarded on hotel stays booked thru ...
Not recently enough to be relevant. On further reflection, it doesn't matter. If you book through Travelocity but pay at the hotel the credit card transaction will only earn 2 points per dollar, and if you book and pay Travelocity online it is a prepaid consolidator transaction which is unlikely to earn hotel points.
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Old Feb 19, 10, 2:23 pm
  #103  
mia
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Originally Posted by bluto View Post
...how can they keep this up?
I share your concern. Consider this...

http://www.bloomberg.com/apps/news?p...d=a5VIUqAWd7ik

[American Express] dominates the market for affluent users, with individual card purchases averaging $9,342 in 2008 compared with $2,672 for San Francisco-based Visa Inc. and $2,300 for Purchase, New York-based MasterCard Inc., AmEx said in a Feb. 3 presentation for analysts, citing company reports.

It seems likely that Barclay's designed this program based on their cardholders' average charge volume. I don't know how their experience varies from the Mastercard norm, but $69 is exactly 3% of $2,300. Barclay's could afford to rebate 4% at that volume because they are essentially returning the annual fee plus a share of the transaction fees.

The problem I see is that Travelocity is not promoting this card. In fact, they mention that American Express is Travelocity's Official Card. I think this means that the card will attract a disproportionate number of high spenders with a low breakage rate (unredeemed points), because it will be discovered on sites like Flyertalk. Barclay's will soon see that the cost of the rewards program is outstripping the revenue, and act to restrict redemptions.

The easiest course would be to enforce the card Terms & Conditions as written. The terms cap redemptions at 20,000 points, $400. There's no provision for stacking multiples of 20,000 to buy more expensive trips. Stacking seems to be a remnant of an older Travelocity program.

Beyond that Barclay's could impose an annual point earning cap, reduce the number of points per dollar, or simply devalue the points as you suggested. We've seen this before, most recently with Citi's ThankYou Network.

Last edited by mia; Feb 19, 10 at 2:35 pm
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Old Feb 19, 10, 7:42 pm
  #104  
 
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Originally Posted by mia View Post
I share your concern. Consider this...

http://www.bloomberg.com/apps/news?p...d=a5VIUqAWd7ik

[American Express] dominates the market for affluent users, with individual card purchases averaging $9,342 in 2008 compared with $2,672 for San Francisco-based Visa Inc. and $2,300 for Purchase, New York-based MasterCard Inc., AmEx said in a Feb. 3 presentation for analysts, citing company reports.

It seems likely that Barclay's designed this program based on their cardholders' average charge volume. I don't know how their experience varies from the Mastercard norm, but $69 is exactly 3% of $2,300. Barclay's could afford to rebate 4% at that volume because they are essentially returning the annual fee plus a share of the transaction fees.

The problem I see is that Travelocity is not promoting this card. In fact, they mention that American Express is Travelocity's Official Card. I think this means that the card will attract a disproportionate number of high spenders with a low breakage rate (unredeemed points), because it will be discovered on sites like Flyertalk. Barclay's will soon see that the cost of the rewards program is outstripping the revenue, and act to restrict redemptions.

The easiest course would be to enforce the card Terms & Conditions as written. The terms cap redemptions at 20,000 points, $400. There's no provision for stacking multiples of 20,000 to buy more expensive trips. Stacking seems to be a remnant of an older Travelocity program.

Beyond that Barclay's could impose an annual point earning cap, reduce the number of points per dollar, or simply devalue the points as you suggested. We've seen this before, most recently with Citi's ThankYou Network.


Well at this time, they're not advertising it or anything. so I doubt many people know about it outside of flyertalk. If they devalue the program like Citi did with Thank you network, then people will just leave. I think you can say the same thing about other CC programs too, because we've seen devaluation in all rewards programs (hotels, airlines, credit card rewards, etc). Also this card has an annual fee, so it must be worth it for people to pay the annual fee to keep this card.
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Old Feb 20, 10, 12:40 pm
  #105  
 
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So have people generally been happy with this card? I have been considering it as a backup card to my SPG Amex. Just to confirm, $20,000 in spend on the Travelocity MC earns 40,000 points which can be redeemed for an $800 credit towards ANY purchase at Travelocity?

Last edited by broadwayblue; Feb 20, 10 at 12:51 pm
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