For the first time, issuers can now select the core benefits they want to provide to their premium MasterCard cardholders, as part of a new, innovative program that MasterCard is offering to U.S. issuers.
At no additional cost, issuers can choose new benefits bundles on Gold and Platinum MasterCard credit and debit cards with credit lines or total relationship balances of $2,000 or more.
MasterCard issuing banks can now select their core benefits package from seven bundles of retail, travel, and combination benefits. This will allow the banks to tailor their products to cardholder demographics and segment their card portfolios to match their customers' spending patterns and specific needs, for example offering travel benefits to frequent travelers and retail benefits to shoppers.
The new retail bundles include combinations of extended warranty; purchase assurance; and satisfaction guarantee. Travel bundles include benefits frequent travelers will find most useful: collision damage waiver, roadside assistance, and coverage against hotel/motel burglary and lost luggage. The benefits will be available to cardholders on September 1, 2005.
"The new benefits program from MasterCard offers a greater level of flexibility to issuing banks," said Bonnie McEneaney, senior vice president, Global Cardholder Services, MasterCard Advisors. "Where before, banks received one bundle of core benefits, now they will be able to choose the benefits that fit their customers' preferences, at no additional cost. By giving the banks the ability to choose, MasterCard is providing the issuers with more opportunities for product differentiation than anything else available in the market today."
The composition of the MasterCard benefits bundles reflects findings from research conducted which revealed that consumers prefer to use cards that alleviate their particular worries and fears. For example, more than half of the respondents (57 percent) said that they would use their card more frequently if price protection were a benefit; 49 percent said they most valued extended warranty protection.
Issuers will be able to make their benefit choices on an annual basis, with an option to purchase additional benefits to complement the bundles they offer.