Rewards Rev Up Affinity Card

Recent changes made by Bank One to its AARP affinity card have revved up new account acquisitions. The new AARP Rewards Platinum Visa card introduced in September gives cardholders a 1% rebate on purchases. Although the rebate concept has been around for nearly two decades it had not typically been used on affinity cards as issuers observed that the affiliation with a particular group was sufficient to attract cardholders. Apparently that's not enough any more. Joseph McDonough, senior vice president of relationship management at Bank One Card Services told the American Banker, "we heard loud and clear from [AARP] members that they preferred a rewards card to a plain-vanilla affinity product."

Among the 17,000 AARP members who attended the annual "member event" in Chicago last month, 20 times as many attendees signed up for the card as did in 2002. Bank One has been issuing the AARP affinity card for 13 years. The dollar rewards earned on the card can be redeemed in $25 increments for cash or as gift certificates to certain retailers. The new product has attracted about 200,000 cardholders. Some of them came from the existing 1.2 million cardholder base for the traditional AARP affinity card that does not offer rewards.