Consumers are looking to switch up their travel reward credit card options, according to a recent study commissioned by Capital One. Results released from their Canada Points Pain survey show 75 per cent of respondents are taking a “closer look at their options”, upon hearing of recent changes to a leading airline travel rewards program, and an additional 38 per cent say they plan to change their card.
Says Capital One President Rob Livingston in a statement,” Cashing in travel rewards is supposed to be the fun part, not a source of stress.” Given other recent data that shows four in 10 Canadians find travel rewards credit cards to be confusing, it appears he’s hit the nail on the head.
Consumers Are Reacting To Market Shakeups
While Capital One’s reference to a “leading travel rewards program” is purposely ambiguous, it’s not a huge stretch to speculate who the survey may be referring to. As previously reported, CIBC, TD and Aimia, the owner of the Aeroplan rewards program, have inked a deal to split existing CIBC Aerogold card holders between the two lenders. The $312.5-million deal will see roughly 550,000 clients switch to TD (representing about $3 billion in credit card balances), while CIBC will retain about 630,000 current clients with broader banking portfolios (clients with savings accounts and mortgages with the lender).
The split is the resolution found between the three companies, following TD and Aimia’s attempts to move Aeroplan cards away from CIBC entirely. CIBC, which has been the leading provider of Aeroplan for decades, called foul to the proposed deal, proposing instead a sale of existing clients to TD. The lenders and rewards company spent the summer mulling over their options, while credit card customers waited in the wings.
Still No Answers For CIBC and TD Clients
The general message is that any transition will be “seamless” for transferred customers. “From our point of view, this is a very customer-friendly deal,” stated TD Chief Executive Ted Clark after the initial announcement.
However, current cardholders haven’t been told much more than that. Alison Warren, a current CIBC customer and Aerogold card holder, says she hasn’t heard a word from the bank about the new developments. “ I would assume I would be staying as a [CIBC] customer as I bank with them – but there’s all this information in the news right now, and the banks aren’t saying anything to the customers,” she says. “Why am I hearing everything through news outlets?”
She’s certainly not alone in her frustrations. Globe and Mail columnist Rob Carrick recently published an article brimming with irate feedback from clients in limbo. His suggestion for TD: waive any first year annual fees as a measure of good faith, and to ease the transition for former CIBC clients who’ve already paid it.
Here’s what we know about the transition so far:
- The new agreement takes effect between TD and Aimia on January 1, 2014.
- Clients with only CIBC credit cards are most likely to be transferred over to TD.
- CIBC will continue to provide Aeroplan cards – for remaining clients, there will be no change.
- CIBC plans to roll out a new travel rewards card in the new year to counter new options hitting the market.
- New TD cards will be gradually circulated to transferred clients in the new year.
Are you currently a CIBC Aerogold customer? Give me a shout should you hear any updates on your status as a credit card customer.