Privilege programs for credit cards

One of the perks that many credit cards now offer is an “automatic privileges” program.  These can include things such as the ability to get a free upgrade in a hotel, an upgrade to a better seat in a concert or going up a class on a flight.  Sometimes these are advertises and “privileges program” or “instant rewards”.

The credit cards work in a similar way to loyalty cards.   In return for getting some publicity with and access to a reasonably prosperous group of card holders a number of providers of services allow for extras such as free upgrades to the card users.

The free upgrades are very rarely paid for by the credit card provider if the card provider is a bank.  These free upgrades are quite common for card providers such as stores and airlines.

The way in which these cards work is that the good or service is paid for with the card and then there is an upgrade.  So if a traveller were to book a standard class ticket on a flight with the right credit card then they would be upgraded to business class.

In this way an airline can instil brand loyalty, advertise to a prosperous group of potential customers and fill up unused spaces.

These are usually limited in that the benefits are only available at certain times when airlines tend to be less likely to be used.  In the same way hotel rooms will often only be available for upgrades in off peak times and concerts when the ticket sales are lower.  This means that most of these upgrades are only available when there is a relatively low demand and so therefore some unused capacity.

Instant discounts are another feature of many of these cards.  This is when a card is used to buy some goods and the very fact that the card is used means that the card user gets a discount.  This is offered for the same reason as there are instant upgrades offered, in that it builds brand awareness and brand loyalty.

The instant rewards programs are being offered by a number of banks.  There can often be an issue of international coverage as many of the programs only operate in Australia, but for frequent flyers then the airline programs tend to have good international coverage as well as having the best in the value of the rewards that are offered.