From mid-2025, the Miles & More credit card will no longer be backed by DKB, but by Deutsche Bank.
(Photo: imago/Rüdiger Wölk)
frankfurt The bonus credit card market is constantly evolving. Earlier this week, the Lufthansa Miles & More credit card announced a change of bank. From mid-2025, Deutsche Bank will issue payment cards for Lufthansa’s frequent flyer program. So far is the online bank DKB.
The corresponding Eurowings credit card may also change soon. Major British bank Barclays is considering selling its private client business in Germany. The business includes the issuance of credit cards, including the Eurowings credit card.
What is a rewards credit card?
In the case of rewards credit cards, the technical term is called “co-branding,” where the bank issues the card under its brand with a partner company. The card bears the name of the partner – eg Miles & More or Tchibo Card Plus.
Four years ago, tech conglomerate Apple and U.S. bank Goldman Sachs caused a stir when they launched the Apple Card in the United States. Users usually enjoy advantages such as discounts when using co-branded credit cards.
In addition, banks and corporations are partnering with US payments groups Visa and Mastercard to issue co-branded credit cards. Card payments are processed through their system – either at the register or online.
What is currently happening in the German market?
Some banks are failing. This applies to Landersbank Berlin, which was once the co-branded market leader, has long managed ADAC credit cards and issues Amazon credit cards. She announced that the business would be winding down in 2021. Solarisbank has taken over the authorization of ADAC credit cards.
Commerzbank and Deutsche Bahn ended their credit card partnership last year. Commerzbank also ended its credit card cooperation with Tchibo in June 2023. The bank said its credit card partnership with TUI Travel Group will remain unchanged.
Bonus credit card business is often of little benefit to banks. This is because the fees charged by banks are capped in the EU. The so-called interchange fee cannot exceed 0.3% of the purchase transaction value. The cardholder’s bonus must also be paid out accordingly. In addition, Mastercard and Visa have a system fee.
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Sebastian Moss, a partner at consulting firm Roland Berger, expects credit card bonuses to continue to decline given tight margins. “As a result, some offers may be withdrawn from the market.” Maus sees the co-branding business as “basically unattractive”. For example, there are very few good credit card portfolios that allow banks to reach wealthy customers.
Banks can earn more if they offer so-called revolving credit cards (also known as “true credit cards”). Banks usually only debit a small portion of the outstanding amount from the checking account and keep the rest on the credit card account. On this outstanding amount, she charges interest, which can sometimes be very high. In some cases, additional fees apply. Such cards have significant disadvantages for consumers.
Will there still be an Amazon credit card?
It’s not clear yet. Amazon did not respond to a query from Handelsblatt about whether the U.S. group was looking for a new banking partner or had already found one.
Currently, Landersbank Berlin has issued Amazon’s Visa credit card. Tchibo no longer accepts credit cards.
Will Apple Card come to Germany?
This is currently unlikely. Because even in the US, Apple will obviously have to find new banking partners. The Wall Street Journal, an American business newspaper, and CNBC, the American stock exchange broadcaster, recently reported that Goldman Sachs is looking for a way to end its partnership with Apple. Discussions are underway with American Express about handing over the Apple Card, among other things.
Goldman Sachs announced earlier this year that losses in some of its retail banking businesses had totaled $3 billion since 2020. Clearly, the Apple Card business is simply not profitable. U.S. banks can make more money with credit cards. Interchange fees there are often as high as two percent.
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