In 2016, a merger between Alaska Airlines and Virgin America was announced to the dismay of some frequent flyers.
The merger brought together the two brands under the Alaska Airlines parent name, effectively dissolving the Virgin America name. The good news for dedicated Virgin America customers was that Alaska Airlines promised to keep many of Virgin’s attributes intact, including mood lighting, music during boarding, and friendly onboard service. That, however, was the extent of the familiar features for Virgin America customers.
Loyal Virgin customers were concerned about the impact to their relatively new Virgin America credit card, which offered perks to frequent flyers. Those benefits included three times the points on every dollar spent on Virgin America flights or other fees, a $150 companion ticket each year for a Virgin America flight, one free checked bag, and priority boarding. Cardholders also received 20% off in-flight purchases, with no foreign transaction fees.
As of December 2017, the Virgin America credit card no longer exists. However, previous cardholders need to be aware of the changes brought on by the merger, and how to manage their account moving forward.
Will Your Rewards Transfer Over?
The rewards earned from the Virgin America Visa credit card through the end of 2017 were automatically transferred to the Alaska Airlines loyalty program, according to Alaska Airlines representatives. These rewards points did not expire with the sunsetting credit card, nor did frequent flyers experience a reduction in points or restriction on use moving forward.
The biggest changes are that previous credit card holders no longer earn points on their Virgin America credit card, and accumulated rewards are now only redeemable with Alaska Airlines. The good news is that cardholders do not need to take any action themselves to transfer rewards points from one program to the other.
What’s Happening With Virgin America Perks?
While the transfer of frequent flyer miles from the Virgin America Card to Alaska Airlines is good news for many travelers, that’s where the credit card benefits of the merger end.
Virgin America Visa cardholders can no longer use their credit card for purchases, which means they can no longer receive its perks. Free checked bags, priority boarding, and a companion ticket once per year are no longer available simply for being a card member. If previous cardholders want to continue earning rewards, they need to apply for a new Alaska Airlines credit card – or another credit card of their choice.
Alaska Airlines did not automatically transfer Virgin America Visa customers to its co-branded credit card after the merger. However, one benefit is that applying for a new Alaska Airlines credit card means cardholders are eligible for the sign-up bonus through the airline. This could offset some of the downsides to closing the Virgin America Visa credit card.
Should You Keep Your Credit Card Account Open?
The closing of Virgin America credit cards was one of the most concerning aspects of the Alaska Airlines and Virgin America. All cardholders were notified that their credit card would no longer be available for making new purchases, balance transfers, or cash advances at the end of 2017. For those cardholders who did not have a balance on their account, Comenity, the card servicer for Virgin America Visa, automatically shut down the account. Cardholders with an outstanding credit card balance can still view and pay on their Virgin America Visa until the balance is paid in full. Then, the account is automatically closed.
This is an issue for some cardholders because closing a credit card abruptly has a negative impact on one’s credit score. Not only does it reduce the available credit an individual can access, but it can reduce the average length of credit history. Both factors bring down a credit score quickly. Also, applying for a new airline credit card, whether with Alaska Airlines or elsewhere, creates a new hard inquiry on one’s credit report, which also drags down a credit score.
While there is no immediate recourse for cardholders who had their account automatically closed with Virgin America, keeping a close eye on credit score and history is important with this type of change. With airline mergers increasingly common, it is also important to beaware of these potential issues when opening a new airline credit card in the future.
Author: Melissa Horton
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