Select Barclaycard Arrival Plus Cards Being Converted to Mercury Mastercard
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You've probably never heard of a Mercury World Elite Mastercard, but thanks to a Barclays asset sale last year, you have now. Select Barclaycard Arrival Plus World Elite Mastercard holders are receiving notices via mail informing them that their card will soon be morphed into something else: Mercurycard.
Beginning September 24, 2018, a subset of Barclays customers (including some who hold an Arrival Plus) will see a new card arrive courtesy of First Bank & Trust. Why? According to a Wall Street Journal report, Barclays rather quietly sold off $1.6 billion "of credit card balances owed by mostly near-prime and subprime borrowers to privately held personal-loan firm CreditShop" in 2017. CreditShop predominantly hands out personal loans to near-prime and subprime borrowers, but was pegged to release its own credit card at some point. That card is the Mercury Mastercard (which is being issued by First Bank & Trust).
What's most interesting about the report finally kicking into action is the inclusion of the Arrival Plus, which isn't generally thought of as a subprime product. The aforesaid article does mention that the "balances CreditShop bought from Barclaycard come from a range of Barclaycard cards, but they aren’t associated with the issuer’s co-branded cards that it has with airlines, hotels and other merchants and that account for the majority of its overall card portfolio."
A TPG reader shared scans of a notice received in the mail, which outlines the impending transition. On the rewards front, it appears that while the 2x rewards on all spending will remain, the redemption side will function a bit differently. Mercury cardholders will be able to redeem 1,000 points for a $10 statement credit, and will automatically receive a 5% redemption bonus for every statement credit redemption. With the Arrival Plus, you can only redeem rewards as statement credits toward travel purchases, not toward any purchase, and you must redeem a minimum of 10,000 Arrival miles, so the threshold is lower with the Mercury card. There will not be a limit set on the number of points one can earn with the card.
It looks as if the new card will maintain the lack of a foreign transaction fee, but it's unclear if the typical $89 annual fee found on the Arrival Plus will be maintained or eschewed.
Credit swaps and sales do happen with some frequency as banks evaluate the level of acceptable risk they're willing to take on, and which accounts fall below a given threshold. We reached out to Barclays and CreditShop, and confirmed that a "negligible" amount of Arrival Plus cardholders will receive a notice of transition this week or next. Furthermore, there's no reason to panic given that the sell-off already happened last year, though it is a good reminder that moving and shaking can indeed happen in the reward cards space.
Given that this transition is simply the execution of a deal that went down in Q1 of 2017, those who do receive notices should realize that it was based on scenarios from that period, and isn't reflective of their credit situation in the here and now. It also isn't an indicator that more swaps are coming. As for the Arrival Premier card? None of those cardholders will be impacted, as it was just launched in April of 2018 — a full year after the asset sale that led to the notice shown above.