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Credit Cards and COVID-19: How Card Companies can Communicate Value

April 09 2020 by Mark Miller

This article is part of our Content Contributor Series and originally ran in the Comperemedia Bolder Thinking Blog

Over the past few weeks, you’ve probably received emails from every company you’ve ever done business with, reassuring you that they are taking all of the necessary steps and precautions to protect you, their valued customer, from the novel Coronavirus. Whether it’s “A Message from our CEO” or “COVID-19 Update,” the message likely goes on to explain cleanliness protocols, employee wellness, and enhanced customer accommodation.

Financial institutions have been right alongside, providing updates on branch availability, mobile banking functionality, and other changes to your accounts, like reduced interest rates.

It is, of course, a difficult time for credit card marketing. Many of the biggest launches and highest volume campaigns of the past couple years have been in the travel, dining, and entertainment spaces: areas which in today’s environment have become largely irrelevant, at least for the foreseeable future. Digital and TV spend for Capital One’s Savor Card, for example, has dried up over the past two weeks.

What’s missing?

Personalized messaging specific to credit cards

What has been mostly absent though, is specific messaging pertaining to the cards in your wallet. While many banks have included generic language about offering assistance to those impacted by the Coronavirus, and various news outlets have outlined specific assistance programs like fee waivers and deferred payment options, messages to specific cardholders have been notably vague.

The minimal exceptions to the trend include Apple Card, whose customers received an email that introduced a “Customer Assistance Program” allowing them to skip their March payment without incurring any interest charges (it’s worth remembering that Apple Card never charges fees for late or missed payments) and Citi, whose rather generic COVID-19 email on March 10 listed their “always on” assistance programs like credit line increases and collection forbearance. 

Leveraging existing rewards and benefits

In addition to offering customers specific types of hardship assistance, credit card issuers could still leverage some of the rewards and benefits of their products. It’s true that travel restrictions and “shelter in place” rules have driven airline passengers and diners to all-time lows, but people are still visiting essential retailers, ordering food from restaurants, and shopping online.

Discover’s current 5% cash back category (through March) includes grocery stores, Walgreens, and CVS, while American Express offers 6% cash back at grocery stores on the Blue Cash Preferred Card. Holders of the American Express Gold Card earn 4X points at grocery stores and restaurants, which may include carry-out orders. They can also earn a $120 annual statement credit for dining with participating restaurants, including food delivery services GrubHub and Seamless.

Valuable partnerships during COVID-19 pandemic  

Food delivery 

In January Chase introduced a new brand partnership with DoorDash, offering enhanced benefits on Sapphire, Freedom, and Ink Cards. Notably, DoorDash sent emails to “valued Chase customers” announcing exclusive, priority in-app chat functionality, while Chase did not. Apple Card holders earn 3% daily cash back on Uber Eats, while Uber Visa Card holders earn 5%. Anyone with a World Elite card from Mastercard gets $5 off a $25+ food order from Postmates. Despite enhanced usage of these services by customers staying at home, the credit cards that incentivize them have remained silent.

Online shopping

Online shopping is another area where credit card issuers can promote their value. Although not directly linked to COVID-19, Chase has sent out reminders of the extra points available if customers use the Chase Shopping Portal. Chase, Discover, and Capital One cardholders can also use their reward balances to make purchases on Amazon.com. Many credit cards allow users to redeem points for merchant gift cards, which could generate some cash flow relief for struggling retailers.

Supporting small businesses

This is a sensitive time for marketers. Customers are experiencing high levels of stress around their physical and financial health, so maintaining a gentle balance between assistance and promotion is key. Helping local and small businesses seems to be a winning formula so far. American Express runs a “Shop Small” campaign that could be leveraged during this time, both for local restaurants and retailers with an online presence. And while not a credit card issuer, online lender Kabbage created a site where customers can easily purchase gift cards to support their local small businesses.

What we think

These initiatives, while a shift from some of the more luxury spending that has driven a lot of credit card volumes, could still go a long way in increasing usage, helping customers save on essentials, and building loyalty. If the economy, as expected, enters a prolonged recession, many cards may be abandoned, especially from those whose wallets are over-filled. Being transparent and proactive with offers of assistance, and promoting those features and benefits that help customers in this time of crisis, can help keep your card at the top of the wallet now and in the uncertain future.

About Author
Mark Miller

Mark Miller is Associate Director of Insights for Payments with Comperemedia. He focuses on credit cards, lending products, and the general financial services landscape.

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