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Aeroplan Credit Cards: TD, CIBC and Aimia Reach Agreement

Sept. 16, 2013
3 mins
A man holds up his credit card and types the information into his computer

A three-way deal has been reached regarding the future of Aeroplan rewards credit cards in Canada. Aimia, the owner of the Aeroplan program, TD and CIBC have hashed out an agreement to split existing consumers in what will total a $312.5-million deal.

TD will receive roughly half of CIBC’s current Aerogold Visa clients - about 550,000 cardholders, representing $3 billion in outstanding balances. Transferred customers will be made up of mostly credit card only-clients; CIBC will hang on to its cardholders with “broader relationships” such as bank accounts and mortgages. As part of the agreement, CIBC will retain the right to issue Aeroplan credit cards and products, while TD will become the official providing partner of Aimia for a 10-year term, to commence when CIBC’s current agreement expires on December 31. TD is paying $200 million upfront to CIBC, followed by three years of $37.5-million annual payments.

What Does This Mean For Current Cardholders?

CIBC clients have been waiting with uncertainty all summer as the big banks hashed out the legalities. CIBC initially called foul on the new TD - Aimia partnership, claiming the rewards provider was in breach of contract by not offering them the first right of refusal. Aimia countered by offering CIBC the chance to match TD’s offer, which included paying 15% more per mile and an upfront cash payment of $100 million. CIBC refused once again, and proposed a three-way settlement, while gently pointing to their potential legal recourse options. All the while, consumers were left wondering what would become of their current credit card programs and if they’d be required to make a switch. The new agreement removes a great amount of uncertainty for cardholders, who will all continue to have access to Aeroplan miles and redemption. For retained CIBC consumers, it will be business as usual until January, when new perks are to be added to the program.  It has yet to be reported on what the exactly the transition to TD will entail for the transferred clients, and whether they will receive new cards. However, TD has emphasized that the changes will be seamless, with no interruption to rewards earnings or redemption options. According to TD Chief Executive Ed Clark in a statement, the deal is very "customer-friendly".

Looking To Make A Switch?

Regardless if you’re with TD or CIBC, this season will prove beneficial for rewards credit card consumers. Lenders are looking to take advantage of any shakeup in the space, and new rewards options are slated to hit the market.  Picking some new plastic? Remember the three golden rewards rules:

  • Get easy earnings: Your card should earn rewards effortlessly at retailers you regularly shop at (think gas and grocery purchases).
  • Reward your lifestyle: For example, do you really travel enough to justify those pricey perks, or would a daily cash back option be more useful?
  • Redeem without restrictions: You should be able to cash in your points with ease. Look for options that pay in cash, or can be applied to your card balance. If your card is for travel, ensure you aren’t limited to any specific airline and aren’t subjected to blackout periods and limited seats. Still not sure what kind of rewards card is for you?
Penelope Graham

A first-time homeowner and newbie investor, Penelope Graham is the quintessential millennial, navigating the world of personal finance and wealth management. A self-professed monetary policy nerd, she follows the often-controversial housing market closely and specializes in mortgage, credit card and personal finance news.

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