American Airlines and Citibank have entered into an agreement to extend their cobrand credit card agreement by 10 years. This deal pushes out Barclays, and makes Citi the sole issuer of American Airlines credit cards in the U.S. starting in 2026.
We will start to see points transfers from Citibank to American AAdvantage and likely more,
The agreement creates an innovative alignment between the Citi ThankYou and AAdvantage® card programs
The very first airline frequent flyer credit card was the Continental TravelBank Gold MasterCard from Marine Midland Bank (now HSBC) in 1986. American’s first card came the next year. Yet the airline’s CEO Robert Isom says,
American is proud to have launched the first airline loyalty program, and with Citi, the travel industry’s first co-branded credit card.
The strength of our relationship with Citi has enabled us to deliver first-class products and customer service to millions of AAdvantage cardmembers. This expanded partnership will unlock even more value and exciting new benefits for all of our customers in the future.
American struck its last credit card deal with Citi and Barclays in 2016.
- Citi was the original partner for an American AAdvantage credit card, a relationship that dates back to 1987.
- Barclays became the issuer of the US Airways card as part of the deal which funded the America West acquisition out of bankruptcy.
- Barclays U.S. wasn’t big enough to swallow the whole AAdvantage cobrand portfolio, but they kept the ‘back book’ and even grew it, acquiring the old Bank of America US Airways portfolio. They kept topping off the funnel with onboard card acquisitions, and had the right to market in terminals (but not within 100 feet of an American Airlines lounge) while Citi got all other distribution channels.
By moving not just to exclusivity, but also putting in motion an acquisition of the Barclays AAdvantage card portfolio, this is clearly more than just Barclays no longer being competitive in the cobrand space.
It’s Citi taking on a larger role in the deal by aggressive choice, which signals that the economics for American are improved – which will grow even more with points transfers from ThankYou Rewards.
Citi had an opportunity to be exclusive 8 years ago, and transfers from Citi’s ThankYou Rewards to AAdvantage were on the table, but the bank balked at such an expensive deal.
Cobrands have only become even more expensive since then, and Citi did briefly have transfers to AAdvantage after American had launched the feature with Bilt Rewards (American and Bilt are no longer partners).
Here’s what consumers should know:
- You can currently get both Citibank and Barclays AAdvantage card products today. Flight attendants on board American Airlines flights often remind passengers of this. That means more miles than under a single issuer.
- The opportunity to do this will likely be going away. So you should consider jumping on it sooner rather than later.
- Since Barclays cardmembers will be transitioned to Citi products, Barclays cardmembers will want to consider cancelling Barclays cards before being transitioned, since there’s a risk that holding one of these cards will preclude a bonus on a Citi product in the future.
- We’ll likely see new and modified Citi products, but the general trend is towards higher annual fees. And while these products may be better integrated with AAdvantage, a higher price point for Citi suggests not just American gaining more of the bank’s surplus from the deal but consumers’ as well. Banks have been able to offer their own-branded cards richer than airline cards because of the amount airlines take from these deals and that amount is only going up.
- Greater specifics aren’t yet available, other than that Citi will become exclusive issuer in 2026 and Citi “will begin transitioning [Barclays] cardmembers to the Citi portfolio in 2026.
- “Barclays cardmembers will continue to experience the same benefits they do today.”
Today there’s not just competition between AAdvantage cobrands and other rewards products, but between cobrand issuers of the AAdvantage cards.
That’s good for consumers and it’s something we’ll lose, while American will see better economics from their deal no doubt.
If there’s a consumer upside here it’s the certainty of a 10-year time horizon, which will allow a slow-moving bank and program to innovate with a long enough runway.
So hopefully we see some creativity in card going forward.
I am personally disappointed that I will lose the Barclays Aviator Silver, which I spend on for my federal tax payments because one of the processors treats it as a debit card – letting me earn miles and loyalty points for a flat $2.50 rather than ~ 1.9%. Assuming card number changes in the future, that benefit is unlikely to survive a move to Citi.
Meanwhile, Barclays continues as a smaller player in cobrand having recently announced deals with Breeze Airways, GM, XBox, and the expansion into a premium JetBlue card that helps fund their entry into airport lounges.
