Barclay recently brought back their Arrival Plus credit card and at the same time (in what I’d call a desperation move) waived the fee on their awful Arrival Premier card. In doing this, I think Barclay missed an opportunity to improve the appeal on the Arrival Premier.
Barclay Misses The Point, Again
If you have been paying attention, you’ll notice the Barclay Arrival Plus is back on the market with a nice 60,000 mile bonus, after a $5,000 spend. The annual fee of $89 is not waived.
Around the same time, Barclay decided they would waive the annual fee on their bust of a card, the Arrival Premier.
With the Arrival Plus having a bonus, I think it would be even harder to recommend the Arrival Premier even with waived annual fee.
The Arrival Premier Concept:
I actually like the Arrival Premier concept of rewarding customers on the back end year after year. It is a win for the customer, since banks are tightening up on bonuses. It is a win for the bank since the card is in the front of your wallet.
Where Barclay really messed up, was well everywhere outside of the concept.
I think some people are willing to look beyond a bonus for a solid long term return. I am one of those people, since I have signed up for credit cards with no/low bonus for the long term return.
The Annual Fee:
Even with the $150 annual fee waived the first year, this is quite high for a card with no bonus, few benefits, and underwhelming transfer partners.
The Transfer Partners:
I really wish I was in the meeting where someone said, “I have a great idea for transfer ratios. Let’s have our super valuable (someone overvalued them 🙂) points transfer at 1.4:1 and 1.7:1.” What makes the pitch even worse, they agreed with it.
Airlines that transfer at 1.4:1 are:
- Air France/ KLM
- China Eastern
- EVA Air
- Jet Airways
- Malaysia Airlines
Airlines that transfer at 1.7:1 are:
- Japan Airlines
I mean did they not look at their competition? Maybe Barclay did this intentionally, so they can improve the transfer values and look like heroes?
They even plan to air Finnair and Alitalia? I think someone should tell them, you need add quality partners.
Doing a Little Math
There are plenty of articles talking about the perfect spend point on the Arrival Premier is $25,000 since it triggers the bonuses for Arrival Premier. With that in mind, let’s do some math showing why the Arrival Plus still makes more sense.
The Arrival Plus:
If you were to spend $25,000 on the Arrival Plus you would receive 50,000 miles, this would be in addition to 60,000 mile bonus you would earn.
This gives you a total of 110,000 miles worth $1,100, but you would also earn 5% back on the miles you redeem. Bringing your total value to $1,155 in year 1.
Subtract out your $89 fee and your first year value is a total of $1,066. Still a pretty solid amount of rewards.
If you stretch this to year 2, when the bonus is gone. You would earn $436, after you take out the $89 annual fee (and account for the 5% rebate as well). Not a card worth keeping in year 2, since you can find a 2% cash back card with no annual fee.
The Arrival Premier:
The Arrival Premier has slotted bonuses when you reach certain spending goals. You’ll earn a bonus of 15,000 miles after you spend $15,000 and 10,000 additional miles after spending another $10,000.
If you were to spend $25,000 on the Arrival Premier, will you will earn 50,000 miles from the daily spend. In addition you will earn an additional 25,000 miles. This gives you a grand total of 75,000 miles.
This is worth $750 if you were to redeem your miles against travel charges, like the Arrival Plus. Except you won’t get 5% of those miles back.
If you were looking to use your miles at one of their many enticing (🙄) transfer partners you would have:
- 53,571 airline miles using one of the 1.4:1 partners
- 44,117 airline miles using one of the 1.7:1
If we take a look at year 2, well you would earn the same amount of miles, but now we would need to add in the annual fee.
The $750 to redeem against travel charges is now $600.
If we were to try and make a value for the airline transfer partners, well lets say each airline mile is worth 1.6 cents per point.
With that value as our example:
- The 1.4:1 transfer partners would give us a value of $857 before the annual fee and $707 after taking subtracting the annual fee
- The 1.7:1 transfer partner would give us a value of $705 before the annual fee and $555 after you remove the annual fee.
Which would mean you would receive (in this example) more value using the miles as a for of cash back than transferring to partners with a ratio of 1.7:1.
If by chance you didn’t hit the $25,000 requirement for the bonus points, the value becomes even worse.
You might not be a fan of travel cash back, but a $600 bonus is $600. There isn’t a single reason for anyone to choose the Arrival Premier over the Arrival Plus even if its annual fee is waived.
The Arrival Plus out earns the Arrival Premier, in the first year and cumulatively over the first 2 years.
I think if Barclay really wanted to push the Arrival Premier, they should have upped the ante on the Arrival Premier with a bonus. Rather than further cannibalize their underachieving credit card by bringing back the Arrival Plus.
Let’s be honest with ourselves, even if Barclay offered a bonus on the Arrival Premier, neither the Arrival Plus or Arrival Premier are worth keeping beyond year 1. Since there are cards with better earning rates and lower annual fees.
To increase the value of the Arrival Premier, Barclay should have offered a bonus on this card rather than bringing back the Arrival Plus. I think there 2 possible options to make bloggers give it a little more attention and make it appealing to customers.
If Barclay wanted to make this a card try before you buy and still waive the annual fee. They could have offered a 40,000 point bonus to entice people, let’s say after a $3,000 to $5,000 spend requirement
The standard bonus on the Arrival Plus used to be 40,000 miles, which makes a good starting point.
I think this option serves 2 purposes for Barclay. It would bring more sign up’s to the credit card and comparing to the $600 bonus they are handing out now, they would have saved money in the process.
Barclay really wanted to grab headlines and decided to offer the 60,000 point bonus to the Arrival Premier. The annual fee wouldn’t have been waived on this offer either.
I think the spend requirement would need to be $5,000, just as it is currently for the Arrival Plus.
Barclay definitely would have bloggers attention and the attention of people who liked the Arrival Plus.
Both of these options would have gotten my attention and I would actually consider both of these for the bonus alone.
The Other Consideration:
With a bonus and a $5,000 spend requirement, many people would “only” be $20,000 away from triggering the 25,000 bonus for the spending levels.
I think this would have caused people to actually consider using their card and not sock drawer it. So, Barclay wins as they still are making money on the interchange fees.
I can already see the headlines on why you would want to/how to spend the extra $20,000 to reach those bonuses.
With Barclay entering the transferrable point arena, they can’t just pull their Arrival Premier. This would look quite bad, since the card is only a few months old.
They really need to take serious look at improving the card to make it somewhat compete with the other transferrable currency. Barclay is basically little league right now and they need to grow up fast to make it to the big leagues (or even the minor leagues).
The transfer rates are garbage and seriously who decided those rates?
There could possibly be a contractual reason they can’t add American Airlines on their list, but if they could this might change many people’s minds about the card. I think the other partner that would actually add quite a bit of value is Wyndham. No transferrable points (that I know of) transfer to Wyndham.
This could offer great value since their award stays are a flat 15,000 points per night.
While I personally can look beyond the sign up bonus for better daily return, this card has neither a bonus, nor superior earning potential. Sorry, but my USAA Limitless out earns this card since it earns 2.5% cash back with no annual fee.
I really want to like this card, I really do. But, Barclay is making it very easy to not like it.
Honestly, I don’t think the Arrival cards are Barclay’s best cards either, I think it is their Uber credit card.
If you want to improve your standings in the premium card game Barclay, you need to step up your game and fast.