Verizon Credit Card Taps Into Hot New Thing in Rewards Programs
Verizon Communications Inc. is getting into the credit card game.
The wireless provider introduced a card withSynchrony Financial andVisa Inc. on Monday, taking advantage of a rush among banks to rebuild reward programs after the coronavirus pandemic devastated spending on dining and travel.
Cardholders who sign up for Verizon’s auto-pay feature will receive a discount on their bills of as much as $10 a month per line on certain plans. The card, which debuts Friday, offers 4% back on gas and groceries, and 3% on dining and takeout. Users earn so-called Verizon dollars, which are valued at $1 when used on Verizon purchases.
Banks such asAmerican Express Co. have been re-working some of their most popular rewards to adjust to changes in consumer spending. With pandemic restrictions in place, the card industry is aiming new incentives at more homebound expenses such as mobile-phone bills and streaming services. AmEx’s Platinum card, known for its premium travel offerings, now gives users as much as $20 a month toward wireless bills.
For Synchrony, debuting in the pandemic came down to the fact that it saves customers money, “which is really important right now,” Tom Quindlen, who leads the company’s retail card business, said in an interview.
Research showed customers are now more interested in saving on essentials such as connectivity services, fuel and food, said Frank Boulben, Verizon’s senior vice president of consumer marketing and products.
Customers can also bank their reward dollars and use them on new 5G devices, Boulben said. “It fits the timing of the 5G technology cycle.”
For banks, rewarding spending on wireless bills is a way to promote the stickiness of their products. Many consumers will set up auto-pay with their cards, leaving them less likely to ditch the product over time.
The coronavirus pandemic has made it more difficult to assess customers’ creditworthiness, forcing many banks to pull back on offering new accounts. Synchrony, the country’s largest provider of private-label credit cards, has said it’s using its vast trove of internal data to evaluate customers’ finances and manage credit lines.
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