NWA sues U.S. Bank over plans for new credit card

  • Article by: SUZANNE ZIEGLER , Star Tribune
  • Updated: April 24, 2009 - 9:53 PM

As Northwest's WorldPerks Visa credit-card program ends, the battle for the business of the cardholders heads to court.

The divorce of two Twin Cities corporate titans, Northwest Airlines and U.S. Bank, is headed for court.

Northwest sued in federal court Friday to stop the bank from moving Northwest WorldPerks credit-card customers over to U.S. Bank's new FlexPerks Visa card next month.

The bank said it was "surprised" by the lawsuit and said launching the FlexPerks credit card was "well within our rights."

U.S. Bank was the issuer of Northwest's WorldPerks Visa credit card, which allows customers to add frequent-flier miles by using the card, but that program will end in August, a casualty of Delta Air Lines' acquisition of Eagan-based Northwest last fall. Delta, which for now operates Northwest as a separate subsidiary, wants WorldPerks card users to move over to its Delta SkyMiles credit card, issued by American Express.

This month, U.S. Bank made its move to hang on to those customers. In introducing its FlexPerks Visa card, the bank sent promotional postcards to card holders telling them that they can look forward to a "hassle-free transition," that they don't have to reapply and they can keep the same card number. It also says points can be redeemed for travel on more than 150 airlines, including Northwest and Delta.

The move was hardly a surprise, but it's the timing of the new card's launch that has Delta upset. The bank said it would begin upgrading WorldPerks card holders to the new FlexPerks program in May.

Delta contends that by "force converting" customers to the new program, U.S. Bank is preventing them from earning WorldPerks miles before the card program expires in August, violating an agreement between U.S. Bank and Northwest.

"U.S. Bank's actions have confused WorldPerks cardholders about their ability to continue to earn WorldPerks, and ultimately SkyMiles, with the WorldPerks credit card through the card's expiration," Delta spokesman Anthony Black said in an e-mailed statement.

U.S. Bank said it is "very surprised and disappointed" that Delta took the action it did. "We are confident that we are well within our rights to proceed with the introduction of our new travel rewards program," bank spokeswoman Teri Charest said in an e-mail.

In the lawsuit, filed in U.S. District Court in Minneapolis, Northwest also said that U.S. Bank intends to capitalize on the WorldPerks name by using a "confusingly similar name."

Northwest seeks a temporary restraining order to prevent U.S. Bank from cutting off WorldPerks card holders who wish to use their card and earn WorldPerks miles through Aug. 22 and prevent U.S. Bank from awarding WorldPerks card holders any incentive other than miles. It also wants U.S. Bank barred from using the name "FlexPerks."

American Express plans to launch a media and marketing campaign Monday to promote the Delta SkyMiles card.

Suzanne Ziegler • 612-673-1707

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