Delta amends credit card processing deal

By Jeremy M. Simon

Delta Air Lines announced that it eliminated a $1.1 billion holdback after amending its Visa and MasterCard credit card processing agreement.

The holdback, consisting of an $800 million cash reserve and an associated $300 million letter of credit, was put in place while Delta was going through bankruptcy proceedings. The $800 million will be used to bolster Delta's U.S. and international markets.

At this time, the whole cash reserve has been returned to the airline, while the letter of credit was terminated.

Earlier, the credit-card processors withheld paying Delta for an amount generally equivalent to potential liability for tickets bought using Visa or MasterCard that had yet to be used for travel.

However, Delta acknowledged that processors may again withhold credit-card payments to the airline after Oct. 31, 2008, if the agreement is not extended.

Published: June 20, 2007

	Three most recent Frequent flier programs, airline rewards stories: Bankrupt American Airlines says your frequent flier miles are safe – In a move to retain its most loyal customers, American assures customers their AAdvantage rewards miles are 'yours and will remain yours' as the airline goes through Chapter 11 bankruptcy ... Buying airline miles: Is it worth the cost? – The offers can be tempting: buying airline miles to boost your mileage account. But how do you know you're getting a good deal and not just adding to the airlines' bottom line? ... Mint bans $1 coin trick that let rewards credit cards rack up points – A favorite frequent flier points-building scheme -- buying coins from the Mint on credit cards, returning the metal but pocketing rewards, is no longer allowed ...

	CreditCards.com's newsletter Did you like this story? Then sign up for CreditCards.com’s weekly e-newsletter for the latest news, advice, articles and tips. It's FREE. Once a week you will receive the top credit card industry news in your inbox. Sign up now!