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Thursday, Jan. 19, 2012
Credit card firms see profit in overseas push
Credit card companies are enhancing their services for overseas travelers to draw in new members and encourage card use amid a boom in foreign trips due to the rising yen.
Among such services, customers of Mitsubishi UFJ Nicos Co.'s Platinum American Express Card now don't have to take their heavy winter coats when they travel to a warm destination between Dec. 1 and the end of March.
Instead, customers who pay an annual membership fee of ¥21,000, can leave their coats at Narita, Haneda, Chubu, or Kansai airports for up to 30 days and pick them up when they return.
They can also have their luggage picked up at home and have it waiting for them at their destination airports when they travel on Japan Airlines flights bound for any international airport outside the United States.
The moves come at a time when the recent strength of the yen against the euro and dollar has boosted travel abroad.
The number of passengers aboard international flights during the recent New Year's holidays from Dec. 22 through Jan. 9 came to roughly 770,000, up 10 percent from the previous year, according to data compiled by 10 Japanese airlines.
Credit card companies are hoping to capitalize on the surge after struggling with sluggish revenue from their cash advance services in recent years.
The complete implementation in June 2010 of revisions to the moneylending law, capping cash loans at one-third of a borrower's annual income, hurt such lending and pushed down the card companies' overall earnings.
Trying to make up for it, they've been focusing on getting wealthy customers to use platinum cards more often, according to an industry official. The companies also expect trips to serve as the key to pushing up their profits.
A recent survey that Mitsubishi UFJ Nicos conducted among its highest-spending customers showed that men in their 40s used credit cards on trips in general twice as much as they did before entering the top category and four times as much when those trips were overseas.
"Those who used to pay with their cards only on limited occasions likely use them when they go on trips," said Mahito Ozawa, director of product development at Mitsubishi UFJ Nicos.
Akio Iwata, a consumer life analyst knowledgeable about credit card services, said, "travel services can satisfy consumers the most in terms of convenience."
Credit card companies have already been offering platinum members such benefits as travel accident insurance, access to airport lounges and travel concierge services but are now looking to add to that, according to Iwata.
"Recently, they have been seeking more originality, and the number of services that benefit their customers in further practical ways seems to be increasing," Iwata said.
Credit Saison Co. launched a service last July enabling customers of its American Express cards to get a discount on accommodations and tours booked on the website of its alliance partner, online travel agency Expedia Inc.
Under the service, Credit Saison's American Express card members get a discount of up to 8 percent on hotels or up to ¥3,500 on overseas tour charges.
In the four months since the service started, use of the cards has jumped 3.8-fold from the same period last year, according to a company official.
Sumitomo Mitsui Card Co., which has been strengthening its travel services for wealthy customers, introduced last autumn a Platinum MasterCard for an annual fee of ¥52,500, allowing customers on international flights to have two pieces of luggage delivered between their homes and destination airports at no additional cost.