Credit Cards Plus

Some credit cards allow their users to get upgrades for free in hotels, at concerts or on flights.  This is usually advertised as a privileges program or as “instant rewards”.

Essentially credit cards with these programs can get free upgrades.  These credit cards work like loyalty cards in that in return for access to a reasonably prosperous group of card holders; many companies will allow for free upgrades and other extras for the card users.

The way in which the cards work is that if the card holder was to book a flight on economy by cash or with another credit card then they would be flying economy class.  However if they used the right airline and booked with the right credit card then they could find themselves flying business class.

Airlines do this for a number of reasons.  Firstly they have a reasonably cheap way of advertising to a very desirable set of potential customers.  They also can instill loyalty in customers even when they are not due to get the upgrades.

These upgrades are mostly for rooms and seats that would otherwise go unoccupied and so are a clever way of discounting these goods without advertising that the price is down, and so making them seem less exclusive.  Just as people can get upgraded on to business class when there are too many economy class seats booked, this is one of the ways in which they can choose who gets upgraded.

Many of these upgrades are limited in time so they will not tend to be available when there would otherwise be a high demand.  So times during the holiday season may not be available for flights and the upgrades for hotel rooms will not be available during midweek while for concerts they would not be on the first few nights.

Another way in which these schemes work is through instant discounts when using a card.  Many of the cards that offer upgrades will also offer discounts for using the card.  This is in effect the same for a provider as an upgrade as it is a way of hiding discounts while also building up brand awareness and brand loyalty with a number of good customers.

Many banks are now starting to operate these schemes, but two that have been prominent – and that have genuinely international coverage – are Citibank and American Express.