Barclays US Air Endgame Preview: Demise of Virgin America Visa

Bloggers with credit card representatives on their speed dial have long reported the most likely scenario for Barclays-issued US Airways credit cards is that eventually in the AA-US merger the cards will be discontinued and converted to the Barclaycard Arrival Plus™ World Elite MasterCard®.

The Arrival is attractive as a 2% cash back card (2.2% when redeemed for travel) and the current sign-up bonus is  40,000 points. However it is quite different from the US Airways cards that have companion passes, club passes, award discounts and in some cases, anniversary 10,000 point bonuses, that many cardholders hoped to retain indefinitely.

How will it likely play out? We have a case study with the recently discontinued Virgin America Visa. The Virgin America Visa was a specialist card that similarly had value for that airline’s flyers as well as some strategic award opportunities on partner such as Honolulu – Pago Pago, American Samoa, previously for 20,000 miles roundtrip, recently raised to 25,000. Virgin America points are difficult to earn and transfers from American Express are a dismal 2:1 ratio.

Barclays Arrival - Virgin America

Barclays recently mailed cardholders of the discontinuation of the card and set up newcardprogram.com with a FAQ. Later Virgin America emailed cardholders confirming the change and hinting that a new card partner will be announced in early 2014.

The key items:

  • Existing cardholders have until December 15, 2013 to opt out by canceling their Virgin America Visa.
  • Existing cardholders will earn with Virgin America through January 1, 2014. From January 2, they will earn Arrival points and receive an Arrival card.
  • Virgin America companion passes will be valid until their original expiration.
  • Arrival $89 annual fee waived for the first year.

There are reports that some in their Barclays letter have received an offer of 10,000 Arrival miles for $1,000 spend in the first 90 days, see a picture of one letter on FlyerTalk. Others, like me, have received no such offer.

Also, the Virgin America Visa had two versions, one with $49 annual fee and one with no annual fee and less benefits. All reports of the $49 version are that it is being converted to the Arrival. One report, again via FlyerTalk, is that no annual fee Virgin America Visas are being converted to the no annual fee Barclaycard Arrival™ World MasterCard®, the main difference from the $89 annual fee version is that 2x miles are only on dining and travel, everything else is 1x.

Barclays this year by many reports has gotten extremely tight on approving new card applications. Calls to the credit department to reconsider applications, even by moving credit or closing existing accounts, succeed much less frequently than with other issuers. In contrast, in 2012 I got 4 cards from them at once and others got more. It was also relatively easy to get multiples of the same cards and many have done so with the US Airways cards. I myself have 2. That is also more difficult now. I spoke to a friend this week who just tried for his second and the denial letter specifically cited that he already has a US Airways card.

I do not want my Virgin America to be converted to an Arrival because I am worried I may not later get the sign-up bonus as a new applicant. So I started calling Barclays and have only disappointing results.

Trying to get the 10k offer has gone nowhere.

Trying to convert to a different Barclays card has gone nowhere.

Saying I will cancel has not produced a retention offer. I have not pushed it to fully canceling because I may squeeze in a little more spend to get up to that 25,000 balance needed for Pago Pago.

So far I have not seen reports of anyone doing better.

Even though I previously said I would not apply for Lufthansa card, in light of this I decided to do so as a test. My application was denied. I called the credit department offering to move credit or close my Virgin America. I got through the first gate but a supervisor overruled and would not budge, citing the newness of my accounts, oldest with them is 17 months, and that they are not willing to extend more credit at this time. That I was not asking for MORE credit, just to MOVE credit did not sway them.

If you have US Airways cards now, enjoy them while they last, and get ready for a whole lot of Arrivals coming your way.

Disclaimer: I will receive a referral commission if you use my links and are approved for the Arrival or Lufthansa cards. Thank you.

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  • john

    Thank you for this! very informative. I had not known that they recently got stricter. will see if my two apps from a few weeks ago both are denied.
    When you say you app for lufthansa was denied, was it auto denied or after a few weeks?

  • john

    Oh and on a side note… I am sitting on about 105k hawaiian miles which I got specifically for a trip to pago pago. But its so damn far (from east coast) and availability is not great. plus there does not seem to be so much that makes the trip worth it (reading the samoa lonely planet); I guess well see who goes there first.

  • Andy O.

    I have the $49 a year Virgin card and got the conversion offer with 10k points. I called in to try and get them to convert the Virgin card to an Arrival card and offer me the signup bonus of 40k points. No luck on two different occasions. So I instead applied for the Arrival card and was approved. Hopefully I will still get 10k points to convert the Virgin card to an Arrival card. I’ll end up with two Arrival cards though. Maybe I will combine them if they will let me.

  • @john –

    In most cases Barclays does not seem to auto-deny. They usually send a letter a few days later and you can check http://www.myapplicationstatus.com for the result, they usually do not take more than 2-3 business days, note that the credit department is only open M-F 8-5 Eastern.

    My prior only chance at Pago Pago ran into the same issues, the flight schedules do not line up well with US mainland flights and award availability is tight. My research is the same, does not seem the most attractive destination. More mainstream though I do not know about availability is the same price to get to Papeete, Tahiti. I also have a stash with Hawaiian that I have not found a use, I am thinking perhaps their Korean Air partnership might work for something intra-Asia.

    @Andy O – great that you got the Arrival approved, that is best-case for people that are in Barclays’ good graces. May I ask how much spend you put on the Virgin card? I am assuming that is the trigger for the 10k. In 10 months of having the card I only put about $2k total on it.

  • Mike

    Not sure it is getting harder for new applications. My 21 year old daughter graduated from college this past Decemeber. She worked temp jobs for two months and landed a permanentposition April. She is renting a place and pays 1/2 of the utilities. Has never had a credit card in She got an instant approval for a Barclay’s US card.

  • @Mike – good point, true first-time applicants seem to be ok for at least one card, where Barclays has really tightened has additional applications for those with existing accounts, especially with low usage and/or recently opened.

  • Ted

    So what happens to the US Air miles one has already accumulated? Is this a use them or lose them scenario, or can they be rolled over into an AA account? Also will the US Air companion certificate be valid with the new AA?

  • @Ted – miles you earn with card go to your US Airways account monthly so none would be lost, just at some point the card likely will be converted to an Arrival card and no more miles earned from then on. Since the two airlines have said the programs will be combined, though not given a date, eventually those miles will be combined with AA. For the companion cert, presumably they will be honored until expiration, like with Virgin America, however nothing official has come out and how and when it will definitely happen.

  • Muerl

    So two data points here.

    1. I applied with that US Airways link, and after I applied I got a server error. However the application went through. I checked online later.

    2. After the server error I applied for the Arrivals card. I was waitlisted. So I called their credit department and managed to get an approval for two cards on the same day, I think saying that I applied for both because I thought the US Airways card was buggy and had not gone through.

    Also, they keep changing their credit analyst number,

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  • ang

    i signed up and was approved on monday for the us airways card (i also signed up for the sapphire and chase BA and was approved). i am now thinking i should have tried to sign up for the arrival card too. if i do it today, do you think i’ll get approved? if i do sign up, will that result in two separate pulls since it’s a few days apart? or do you think i should just wait 91 days? i am not sure if that will be too late and my us airways card will be converted to arrival by then =(

    the barclays card is my first card with them.

  • @ang – if you try today it will be a separate pull. Since this is your first Barclays card I would chance it. They seem most generous at the beginning. In many states they pull from TransUnion which few others banks do, so it almost a free pull. Good luck and will be curious to hear your experience. If you get auto-approved you might even try a 3rd application after that until you get rejected. Last year I was able to get 4 in a row, maybe a new account can still get a big score. Those pulls should merge.

  • ang

    thanks stefan! i’ll try it tonight and see what happens and report back. i am getting my feet wet into this hobby so this was my first AOR.

    in case you are curious, i got an error message twice when i applied for the us airways. the first time i didn’t make it to submit yet and got the error. so the second time i got the error message, after i hit submit, i went to the check your application status site and saw i was approved. i got an email yesterday saying my card will be mailed. i also applied for this card before the two chase ones just in case.

    thanks for taking out the time to respond to my question =)

  • @ang – good luck, feel free to ask any questions. We all are learning at this as things change. Just set goals and don’t go beyond your comfort level.

  • ang

    hey stefan, i tried to click on your arrival links, but the links don’t seem to be working.

  • @ang – I am testing the links and they seem to be working so I am not sure of the issue, you can also try the direct link: http://track.linkoffers.net/a.aspx?foid=21645051&fot=9999&foc=1

    Thank you.

  • ang

    when i click, it goes here “http://www.dnsrsearch.com/index.php?origURL=http%3A//www.rapidtravelchai/barclaycardarrival89annualfee&r=http%3A//rapidtravelchai.boardingarea.com/2013/11/15/barclays-us-air-endgame-preview-demise-of-virgin-america-visa/%3Freplytocom%3D252184”

  • @ang – got it fixed with your help, thanks!

  • john

    Ha, so I have two barclays cards that I do not use (yes, I know you are supposed to use them; what a hassle) – have had them for over 6 months. Applied for both personal and biz us air cards on the same day (in addition to three other cards with other banks that were all approved) and its been two weeks. Checked the app status and said I was denied. Still have not gotten the letter. Cant decide if its worth calling to beg. I think not. Probably should just start using their stupid cards.

  • Pingback: What Will Happen to US Airways Card Accounts During Merger: Evidence from the Recent Discontinuance of the Barclay’s Virgin America Card | milevalue.com()