New U.S. Credit Card Gives Norwegian Air Additional Lifeline

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Low cost airline Norwegian has struggled, in part because of the brutally competitive low cost transaltantic market, in part because of high costs at the airline, and in part by bad luck – the grounding of hte 737 MAX, the long-term stranding of a plane in Iran, major engine retrofit work that was required for many of their aircraft.

However while just six months ago they seemed to be in a perilous situation, they do seem to have lengthened their runway quite a bit after asset sales, better third quarter financial performance and a new joint venture with China Construction Bank. I’m really rooting for Norwegian since they serve not just London from my home airport, but they’re adding an Austin – Paris flight as well.

A new move today opens up a potential additional income stream for the carrier. Synchrony bank has introduced The Norwegian Reward Card, a co-brand Norwegian Air Mastercard for the U.S. market.

  • Initial bonus: $50 in CashPoints after $500 in purchases within 90 days
  • Earn: 2% on Norwegian flights, dining and groceries, 1% on other spend
  • Annual bonus: $100 in CashPoints after $20k spend each cardmember year (at exactly $20k spend all on groceries, this becomes a 2.5% grocery card)
  • Additional benefits: Double expiration for points, priority boarding, no foreign transaction fees

Doubling the validity of points is useful. Normally a point earned is valid for the rest of the year in which it’s earned plus two years. Co-brand cardmembers have their points valid for four years instead of two years.


Copyright william87 / 123RF Stock Photo

Norwegian believes they have the critical mass now to make a U.S. co-brand work. Norwegian Reward has 10 million members worldwide, 13% of which are in the U.S.

The endorsement from Synchony is meaningful. Not only was I already of the view that Norwegian is poised to make it through winter and reach the lucrative summer travel period in 2020, but their co-brand partner has done its own due diligence and is confident moving forward launching a financial product with Norwegian’s name.

In my own view a no annual fee 2% cash back card on everything that also lets you transfer points (Citi® Double Cash Card) is the better play, and indeed the card that all cash back products have to measure themselves against.

Nonetheless I love the introduction of a new airline co-brand rewards card into the market. I asked Kristin Møllerplass, Norwegian’s Head of Loyalty and Engagement, about the possibility of a premium card with additional benefits and that seemed like something under consideration. She offered, “We would like to be relevant and cater for difference customer bases. We are paying close to attention to member feedback, as well as monitor he development in the member base. If we see that our members would appreciate a fee card, we would do our best to provide a product tailored to them.”

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. “[A]t exactly $20k spend all on groceries, this becomes a 3% grocery card”

    I believe it’s a 2.5% grocery card, as the language indicates $20k in total spend is a $100 bonus, so that’s an additional 0.5% no matter which category.

    Still a very mediocre card with a pathetic bonus.

  2. And Ben demonstrates why the US Travel Credit Card marked is F***ed up.

    When frequent flyer / hotel status is given away on the back of breakfast cereal boxes, and points given almost willynilly, they lose their value, not in the monetary sense, but by people.

    Travel sites like this wouldn’t exist were it not for the stupid amount of commission that these card companies pay, and, directly, this is paid by the consumer themselves in inflated prices. You don’t see this cost because it’s built into the cost of the product itself. But it’s there.

    And, why is this relevant with Norwegian? Because it competes on price. Not product (although having flown it, it’s actually a good product), but price.

    What’s the point I’m making? Perhaps taking a step back once in a while isn’t such a bad thing. We quite often see people whining on various forums that “I didn’t get an upgrade despite having unicorn status at XXXX”. Perhaps if status / points were just that little more difficult to earn, we’d value them more.

    Wasn’t expecting that to be a rant, but that’s what happens when I read articles just before lunch 🙂

  3. @Oh Matron! – “Travel sites like this wouldn’t exist were it not for the stupid amount of commission that these card companies pay,”

    There’s no commission or referral credit of any kind to me from this card. Indeed, I tell you this isn’t where you should be spending money. My coverage is (a) there’s a new product, and (b) it creates a new revenue source that helps keep the airline afloat. What’s causing the rant here?

  4. Norwegian competes on product too. It’s free WiFi on intra-Europe flights is a big reason for me to choose them over SAS, British Airways, Lufthansa, and Air France-KLM.

    My most recent Norwegian economy class seating intra-Europe was no worse a product than BA is even in business intra-Europe.

  5. @gary

    Not sure where the rant came from. Has probably been fermenting away for some time. We had a cap imposed in Europe last year, which devastated the travel CC market (fees capped at 0.5%), which is great for consumers / companies because it protects them from unscrupulous payment companies

    But, it means, unless it’s a cobranded card from Amex, or unless the Travel credit card is trying to gain market share (Like Virgin Atlantic’s new CC), a decent amount of points when signing up is almost unheard of.

    I think the rant was indirectly aimed towards Ben: Stop your whining, as the alternative could be a lot worse

    PS: Whilst you may not earn any commission from Norwegian, that’s certainly not true of other cards 😉

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