Rapid Travel Chai

Delta has announced changes to its lineup of American Express cards, effective January 30, 2020. Visit the site NewDeltaAmex.com for the full details.

Delta has publicly stated that its credit card portfolio is key to its profitability, six months ago re-upping with Amex to 2029.

Grinding Customers:

Two themes I see in the changes are:

1.  Throw a bone to casual travelers that have kept using the Delta cards despite banks improving their own offerings (like the Chase Ultimate Rewards family of cards). Category bonuses on grocery stores and restaurants, even if not best in class, may extend cardmember loyalty for those not determined to maximize every reward and carry a bunch of cards. They may not recoup the difference in the annual fee increase, which will suit Delta fine.
2. Test the limits of the obsession of elite status chasers. The Reserve and Platinum cards have annual spend targets to earn Medallion Qualification Miles, ‘MQM Boosts’. You earn miles for the initial spend, plus bonus redeemable miles along with MQMs in the Boost. Example: $30k spend on a Delta Reserve earns a minimum of 30k points along the way, then the boost earns 15k MQMs and 15k redeemable miles. Going forward, the boosts are rebranded as ‘Status Boosts’ that only award the MQMs, not the bonus redeemable miles.

Not having access to the numbers, I think Delta is probably right on both themes in terms of overall portfolio profitability. People who have the cards in their wallets will probably keep them. 3x on Delta purchases can keep them around, no need to offer 5x.

Status chasers will probably stay so addicted that they won’t stop and so Delta saves money by cutting the bonus miles portion of the boost. At the margins, the increased annual fees will lose some small number of customers.

My Quick Takes on the Cards:

Support the blog disclaimer: I have included refer-a-friend links for the cards, as many of these offers are excellent. That is the personal cards. The refer-a-friend on the business cards is currently terrible. With the annual fees increasing, this is a time to get the cards if they are on your list. I’ll be getting the Delta Reserve Business myself. If between my wife and I we don’t have one of the cards, on the refer-a-friend you’ll need to scroll to the bottom of the card page and select to see the other card offers. Thank you.

Frequent Miler already has a detailed analysis that I mostly concur. My first reaction was ‘not terrible.’ I am less positive after digesting it for a few hours.

Here are my quick takes:

Delta Blue: 2x on restaurants and dropping the foreign exchange fee. Will remain a good downgrade option from the annual fee cards.

Delta Gold personal: tweaks at the margins to cards that weren’t good to begin with, except for occasional travelers looking to save on checked bag fees.

Delta Gold business: tweaks at the margins to cards that weren’t good to begin with, except for occasional travelers looking to save on checked bag fees.

Delta Platinum personal: unjustified $55 annual fee increase to add a few, modest bonus categories. MQM Boost devaluation hurts. At that high of an annual fee, the annual companion economy certificate should drop the fare code restrictions that make it often difficult to use.

Delta Platinum business: 1.5x on miles for purchases of $5k or more, that partly offsets the MQM Boost devaluation for those that can spend in large chunks.

Delta Reserve personal: unjustified $100 annual fee increase. Stupid requirement to book with the card to get Centurion Lounge access (what about corporate travelers?). Up to 4 Status Boosts per year (requiring total $120k spend) will tempt people going for the $250k Diamond MQD waiver, though hurt to not earn bonus miles.

Delta Reserve business: 1.5x is only on purchases after spending $150k in a year, making it a loser on that score compared to the Platinum business.

Delta Sky Club agents: no love for the Delta Sky Club agents that every day have to explain to customers that a Delta Platinum card is not an Amex Platinum card of the type that grants Sky Club access. Delta could have taken the chance to change the name to reduce confusion and disappointment.

My 2020 Strategy:

This is the first year I took the bait on spending $250k to get the MQD waiver for Diamond Status. This is because (1) ego addiction to Diamond that I’ve held since the status launch, and (2) I had not had the Reserve cards before and wanted to collect each bonus.

With these changes, unless I hit the cards hard next January, I will close these down except one for the $25k MQD waiver and settle for Platinum status.

The annual companion certs are a pain to use because of the fare code restrictions. I recently had a Seattle-New York trip with my wife that I checked daily for a month. Every nonstop was excluded by fare code, even when connections with awful connections were the same or more expensive cash price.

Diamond status value to me has been severely downgraded this year by Delta selling upgrades out from under me for cheap.

Amex limits us to five of their credit cards (charge cards excluded). I’d rather use the slots for Hilton or Marriott cards for their anniversary certs.

What is your 2020 Delta credit card strategy?