Delta to launch new credit card targeted at millennials

Credit: AP

Credit: AP

Delta Air Lines is debuting a new credit card with American Express targeted at young travelers and casual travelers.

The new credit card launching Thursday, the Blue Delta SkyMiles card, will have no annual fee and double miles for spending at U.S. restaurants and flights booked with Delta.

The Blue card will not offer a free checked bag or priority boarding like other SkyMiles credit cards do, nor will it offer a companion certificate like the Delta Platinum and Reserve AmEx cards do.

“But there’s a large segment of new travelers and travelers who travel casually right now, where this card makes a lot of sense,” said Sandeep Dube, Delta vice president of customer engagement and loyalty. “They are trying to fund their next trip or vacation.”

The launch of the card is one of a series of recent steps Delta has taken to target millennials, including partnerships with Lyft and Airbnb.

“The two things we know about the millennials are they love to travel, they love to dine,” Dube said, pointing to a survey of U.S. consumers aged 18 to 34 conducted by Delta and AmEx showing 37 percent say they spend more on dining than other discretionary expenses.

Some travelers say they don’t travel often enough to want to pay an annual fee for an airline credit card, Dube said.

The card will replace the airline’s SkyMiles Options credit card, which also had no annual fee but did not come with the same double miles offers. Options cardholders will be migrated over to the Blue card..

Delta’s gold, platinum and reserve credit cards charge annual fees but also include benefits such as a free checked bag and priority boarding on Delta flights, perks valuable to frequent travelers.

The Blue card is designed “for travelers who are just beginning to travel” and want to earn miles for everyday spending, said Lisa Kalhans, vice president of co-brand product management at American Express. Those people might be less interested in benefits they could only use when they fly.

For new Delta SkyMiles American Express card members, the card also offers a bonus of 10,000 miles after $500 in card purchases during the first three months.

Airline credit cards like Delta’s face competition from travel rewards cards like the Capital One Venture card, which offers miles with flexibility to book any airline.

For airlines, getting a credit card emblazoned with the company’s name into the wallets of customers, particularly when they are young, can have a significant effect on customers’ attachment to the airline, especially if they pull the card out every time they make a purchase.

“It drives deeper loyalty,” Dube said.