Mastercard has announced new benefits for its World and World Elite cardholders, such as cellphone insurance and Lyft credits. These deals are designed to reward routine spending rather than a big bang like a 100,000-point sign-up bonus.
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Earlier this week, Mastercard announced new benefits for its World and World Elite cardholders.
The best known World Elite cards are the Capital One Savor Cash Rewards Credit Card, the Citi Prestige and the Barclaycard Arrival Plus World Elite Mastercard. Notable World Mastercard offerings are the Bank of America Cash Rewards credit card, the Amtrak Guest Rewards World Mastercard and the Frontier Airlines World Mastercard.
The new benefits include:
- Cell phone insurance: This covers stolen or damaged mobile phones as well as cosmetic screen scratches. The maximum is $800 per claim for World Elite cardholders and $600 for World cardholders, and the annual cap is $1,000. You have to pay a $50 deductible per claim.
- Lyft: World Elite cardholders receive a $10 credit after taking five rides in a calendar month. The credit is automatically applied to the next ride and is capped at one per month.
- Postmates: World and World Elite cardholders receive $5 off every order of $25 or more.
- Boxed: World Elite cardholders earn 5 percent Cash Rewards on these purchases, which can be used toward future Boxed orders.
- Fandango: World Elite cardholders earn double Fandango VIP+ points for the movie tickets they buy via the Fandango app or Fandango.com. This equates to 500 points worth $5 for every two movie tickets, which can be used to buy more movie tickets or to stream movies and TV shows on FandangoNOW.
- Identity theft protection: This provides enhanced access to personal information monitoring (for example, you’ll receive notifications if your name, Social Security number, email, username or password are found on the dark web). And if your identity is stolen, a team of identity theft resolution specialists will help resolve the incident quickly.
I discussed all of this with Mastercard’s executive vice president of Core Products for North America, Amnah Ajmal, and she stressed the customer experience. These perks are easy to use because cardholders are automatically enrolled. They’re simple and intuitive.
As Ajmal put it, “We are leveraging technology to seamlessly embed products and solutions into their everyday lives.”
These new features are another example of the ongoing value trend that I addressed recently. These deals are designed to reward routine spending rather than a big bang like a 100,000-point sign-up bonus. And the card issuers and networks think they will keep customers loyal instead of churning through one sign-up bonus only to drop the card in search of another.
Heated competition between card networks
That’s another interesting aspect of this announcement. Most credit card perks are marketed at the issuer level. Meaning it’s Capital One, Citi or Barclays that dangles the sign-up bonus, the 4 percent cash back on dining or the fourth-night free hotel promotion.
In this case, it’s Mastercard (the card network) that’s providing the perks. I think that illustrates the competition between the card networks (particularly Mastercard and Visa). American Express and Discover are also card networks, of course, but I put them in a slightly different category because they also issue cards.
Mastercard and Visa are very well known among consumers, but they don’t really sell directly to consumers. They operate behind the scenes to process transactions. You may not have thought much about this, but it’s the issuers who decide which card network to partner with. If you get the Capital One Savor, Capital One has determined that’s a Mastercard. You can’t get a Capital One Savor Visa because it doesn’t exist. Likewise, my Chase Freedom is a Visa. That’s just what it is.
Someone asked me about this when Apple and Goldman Sachs recently announced Apple Card (which will be a Mastercard): How do the issuers (and their co-brand partners) decide which network to use? Pricing and availability are factors, of course, but those don’t vary that much in the U.S. between Mastercard, Visa, American Express and Discover.
Increasingly, the card networks are differentiating themselves to the issuers (and, in turn, consumers) through perks like the ones Mastercard unveiled earlier this week.
To be fair, Visa does this too, through their Visa Signature program (there’s also the even more exclusive Visa Infinite branding). Like a World or World Elite Mastercard, a Visa Signature card generally appeals to a more affluent audience with better credit. The Chase Sapphire Preferred Card is a popular example. Visa Signature cards offer extended warranties and several travel and emergency assistance benefits.
This competition is very positive for consumers. It’s a good reminder to check on the free perks offered by the cards you already have, or might be considering.