Illustrating how some card issuers are pursuing reliable, and potentially the most profitable, credit card customers, JPMorgan Chase & Co. on March 23 launched a souped-up version of its AARP Visa credit card that offers more rewards for travel and support for charitable giving.
AARP, formerly known as the American Association of Retired Persons, is a nonprofit national organization with more than 38 million members. It advocates and provides services and discounts for Americans ages 50 and older.
Chase says it has had a relationship with AARP for more than 20 years, as acquired issuer First USA first launched its AARP credit card in 1990. The updated no-annual-fee card now offers two features applicable to AARP members–the ability to apply rewards toward travel and to charities in their communities, Emelie Calbick, general manager of the Chase AARP Visa card program, tells PaymentsSource.
To help address the problem of hunger among seniors, Chase will donate 3 cents for every purchase made, up to $2 million per year, to the Drive to End Hunger, a national AARP Foundation campaign.
Cardholders, who may earn unlimited rewards, receive 3% cash back on eligible travel-related purchases and 1% cash back on all other purchases.
Chase also added U.S.-based customer service and shopper protections, such as extended warranties, to the card at AARP members’ request, she says.
The New York-based issuer is using print and online advertising, websites, e-mail and direct mail to promote the card to AARP members, Calbick says.
The marketing effort places particular emphasis on the charitable donations the card supports. “We are reminding consumers about the issue of hunger among seniors and that just by using this card they can make a difference,” she says. “Without changing their behavior, they are automatically supporting this cause.”
Chase announced the Chase AARP card just a day after Bank of America Corp. announced its AAA card revamp (
Both efforts suggest issuers are revisiting targeting mainstream consumers, albeit through more conservative organizations, according to analysts.
Both cards seem to target older consumers who use credit cards to travel, and travelers tend to be the biggest users of credit cards for payments, says Ron Shevlin, senior analyst at Aite Group, citing Aite’s own market research. “It’s clear that credit card usage is down, but even if it has declined for those users over 50, they are still among the highest users,” he says.
The target marketing for the Chase AARP card makes sense not only because many consumers older than 50 have higher credit scores and use credit more, but also because they respond to incentives to use cards that offer rewards in areas they care about, such as travel and charities.
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