The news: Amazon and Chase rolled out new travel-based features for the Amazon Visa Card portfolio, which includes both the Prime Visa and Amazon Visa cards, per a press release.
- Prime Visa and Amazon Visa cardholders will now earn 5% back and 3% back, respectively, on purchases made through Chase Travel, Chase’s new booking platform.
- Both cards offer 2% back on local transit, including rideshares.
- They also feature daily rewards—an extremely valuable feature for 27% of respondents to our 2022 US Cash- Back Credit Card Benchmark survey—which lets cardholders view and redeem rewards on a daily basis rather than monthly.
Prime Visa and Amazon Visa already offered 5% back and 3% back on Amazon purchases, respectively.
Why this could work: Travel-based rewards can help attract and retain cardholders to the Amazon Visa card portfolio. They can also encourage broader card use than just Amazon purchases.
- The travel industry is booming as consumers release pent-up demand post-pandemic and take advantage of remote work’s increased flexibility. Amazon hopes to benefit from this traction and prevent the spend from going on travel-focused credit cards.
- Travel spending was 4% above pre-pandemic levels in January, according to the US Travel Association. And more than half of US consumers intend to travel within the next six months.
- The average cost of a one-week vacation in the US for one person is $1,578, per Bankrate. And total US digital travel sales will total $261.37 billion in 2023, according to our forecast, opening up a large volume stream for Amazon.
The bigger picture: The co-brand space is in flux.
Moving the Amazon Visa portfolio beyond a traditional retail card by adding travel-based features can help the co-brands stand out in the field and make them more of a primary card for customers. It also lets the cards compete in the general travel card landscape, boosting their growth opportunities.