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These days if you want to fly, you need a credit card. In the past, consumers usually needed a credit card to book a flight,
but now you’ll need to swipe plastic for everything from excess baggage fees, to on-board food purchases.
Airlines such as Virgin, JetBlue, American, Southwest and Midwest, along with several others, have announced they are going "cashless".
This means if you want to buy a package of peanuts from a flight attendant, you'd better bring your credit card.
There are no laws that say a company or airline has to accept cash. Airlines and credit card companies say going cashless isn't profit-driven.
Rather, it offers convenience to customers who no longer have to hit the bank machine before a flight. They claim also that going cashless makes
it easier for airlines to handle small onboard transactions. However, cashless airlines have larger implications than the credit card companies
and airlines are willing to admit.
Going cashless allows airlines to create branding partnerships with credit card companies, while at the same time encouraging credit card companies to
strike exclusive deals with airlines. For example, going cashless gives an airline incentive to strike an exclusive deal to accept only MasterCard as long
as the credit card company in turn offers a branded rewards program to the airline's customers. This benefits airlines looking to attract loyal customers in
a competitive industry, while benefitting credit card companies, that shift the expense of rewards programs to the airlines themselves. Often, credit card
companies will ask airlines to pay in advance for the frequent flyer miles they offer customers.
Cashless airlines have another benefit for credit card companies – access to greater information about consumers' travel preferences. If a credit card company
knows you fly three times a week for work, always on the same airline, it can target you with all sorts of offers tailored to your travel preferences, such as
advertisements related to your most-frequented destinations.
Credit card companies say cashless airlines are a winning situation for everyone. But consumers looking for a bit of privacy and a choice of payment options may
think otherwise.
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