Hawaiian Airlines is switching credit card companies and banks with the launch of a new mileage card that will offer additional benefits but will require nearly 300,000 customers to change their accounts and could lead to higher fees and interest rates.
The state’s largest airline will change to MasterCard from Visa and will use Barclaycard US as the issuing bank rather than Bank of America. Bank of Hawaii, which began co-branding the card in 2008, will remain part of the four-way alliance as the marketing and servicing partner. The change will become effective April 28, and current cardholders are expected to receive their new cards in the mail in mid-April. About half of those cardholders affected are Hawaii residents.
Existing Visa cardholders won’t need to reapply, but the annual fee and interest rate could be higher than what cardholders currently are paying. There will be an $89 annual fee — some cardholders are paying $50 now — and the annual interest rate will be either 15.99 percent or 24.99 percent, depending on credit history. Some cardholders now are paying less than 11 percent. Existing cardholders also will get new account numbers and will need to change their information if they make automatic payments.
“Generally what we try to do is map over the existing product that they have, but not in every instance does it happen,” said Matt Massaua, general manager of airline programs for Barclaycard US. “In the vast majority of cases, we’ll bring people over with the interest rate and the credit limit that they have.”
Massaua acknowledged that existing cardholders will be inconvenienced if they have autopayments.
“We definitely recognize there’s a transition associated with autopay, so there will be a lot of information coming out during the conversion of how to change your autopay,” he said. “This is the type of card that will be often used for autopay because of the great benefits.”
The new cards come with several benefits, such as a free first checked bag for the primary cardholder any time a ticket is purchased directly from Hawaiian. There also will be no foreign exchange fees on purchases outside the United States and one $100 companion discount per year.
New Hawaiian cardholders will receive 35,000 bonus HawaiianMiles when they spend $1,000 or more on purchases in the first 90 days and a one-time 50 percent discount on a coach round-trip companion fare between Hawaii and North America.
The four companies participating on the card said they will make a donation of up to $100,000 to the Polynesian Voyaging Society’s Malama Honua Worldwide Voyage as part of their promotion of the new credit card.
Tony De Sanctis, senior vice president for card services at Bank of Hawaii, said Bank of Hawaii’s inclusion on the card was important because roughly one-third of the cardholders in Hawaii make their payments by walking into a Bankoh branch.
“Hawaiian Airlines is making a financial investment in supporting the local Hawaiian customers by giving the Bank of Hawaii branch network a part of the feature set because it really does make a difference to the client,” De Sanctis said. “They do business with Hawaiian Airlines, and they do business with Bank of Hawaii, but being able to do business in the same place is critical. … To Hawaiian Airlines’ credit, they recognized that and really gave Bank of Hawaii the opportunity to be part of that.”