Norwegian Air unveils new no-annual-fee cobranded credit card
On Tuesday, low-cost carrier Norwegian Air and credit card company Synchrony launched the airline's first cobranded credit card in the U.S. The new Norwegian Reward Card is tied to the carrier's existing Norwegian Reward loyalty program and offers credit card rewards in CashPoints, the currency of Norwegian Reward.
Details on the new no-annual-fee Norwegian Mastercard include:
- A sign-up bonus of $50 in CashPoints after making $500 in purchases in the first 90 days after receiving the card
- 2% on Norwegian flights, 2% on dining and grocery and 1% on everything else
- A bonus of $100 in CashPoints after spending $20,000 each year after the account opening date
- Redeem CashPoints anytime on any Norwegian flight with no blackout dates and no minimum spend requirement
- Priority boarding
- No foreign transaction fees
Norwegian Reward members can also earn Cashpoints with partner hotels, renting cars and shopping online. For every purchase made with the Norwegian Reward Card via reward partners — including Avis, Hotels.com, eShop and more — members earn an additional 1%. The 2% on Norwegian flights booked at Norwegian.com/us with the card are on top of the usual earnings from the net fare.
Kristin Møllerplass, Norwegian's head of Loyalty and Engagement, has worked on launching the new card for the past year. "We now have 1.4 million members in the U.S. market. This is our most important market and one where we have our highest growth," she said. "Norwegian wanted to tap that membership base, because it's very attractive."
One additional feature of the card is it comes with a double expiration period for points when linked to a Norwegian Reward profile, going from two to four years. The extended expiration period covers all the Cashpoints you earn, not just the ones you earn with card spending. The change was based on member behavior, said Møllerplass. Expiration is still based on the month in which you acquired the points, meaning each set of earned points has its own expiration date.
Norwegian Reward isn't a fantastically rewarding loyalty program. It's revenue-based with CashPoints earned at a rate of 2% of the amount spent on LowFare tickets and 20% on Flex tickets. Taxes, charges and optional services are excluded from earning points. CashPoints are equivalent in value to Norwegian Krone, so at current exchange rates, that makes 9.15 CashPoints effectively worth $1 US off Norwegian flights. Unfortunately that means you get a set return of an extremely low 0.22 cents per dollar spent on Norwegian LowFare flights, though obviously that rate is improved significantly if you pay for it with the Norwegian Reward credit card. The sign-up bonus of $50 in CashPoints is also not terribly competitive, though the minimum spend of $500 is low and easily achievable.
On the positive side, since Norwegian Reward is a revenue-based program, there are no limits on award availability, and you can redeem for flights partially with points and partially with cash. Points can be used to pay for seat reservations, luggage fees and more, and can also be pooled within a family. Additionally, Norwegian has a related companion program that offers customers a choice of additional elite status-style benefits after every six flights.
Finally, the earning rates on the US-based credit card are tied to the dollar value of CashPoints, not just directly to CashPoints. That means a $100 grocery purchase that codes in the 2% bonus category will earn you $2 worth of CashPoints or roughly 18 CashPoints, which is a lot better than a $100 grocery purchase earning just 2 CashPoints.
Møllerplass says future plans include a second credit card. "As we look at different members in our Norwegian Reward base, we see growth in our high-frequency flyers and want to offer them a product tailored to their needs as well," she said. "We're here to cater to our members. If that's what they want, they'll get it."
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