The Social Swipe: How Credit Cards Are Using Social Media

NEW YORK (MainStreet)  — Social media has played a major part in company advertising campaigns and customer service initiatives during the past few years, and 2011 saw several credit card issuers using these networks as product enhancements. 

American Express (Stock Quote: AXP) launched its “Link, Like, Love” service – which offers discounts and experiences to cardholders based on their “likes,” interests and social media connections – back in July and followed it up with the Gift Chain in November. This promotion allowed cardholders to earn prizes off of holiday gift purchases that could be shared, in certain instances, with their Facebook friends.)

Earlier this year, Citi (Stock Quote:C) launched a Facebook application allowing cardholders to pool rewards points and put them toward a common goal, such as a family trip or a large charitable donation.

Experts say these promotions will proliferate throughout 2012 since they offer many opportunities that traditional advertising campaigns do not.

“Issuers are going to devote more of their marketing budgets and resources to social media campaigns because they are more cost effective and more easily tracked,” says Curtis Arnold, founder of CardRatings.com. “They allow companies to engage directly with customers and get instantaneous feedback.”  

Major issuers acknowledge that social media has become an active part of their business model, but insist their efforts are concentrated in providing a better experience for existing cardholders. 

“Acquiring new customers is not the objective of our social media strategy,” says Laura Rossi, a spokeswoman for Chase. “Our social media strategies are designed to build a sense of community and to facilitate interactions with the Chase card brands customers are passionate about.”

While the issuers we spoke with refrained from sharing their next big social media campaigns, they did say more social is on the way in 2012.

“Look for us to continue to roll out a series of never-before innovations in the space that bring even more value to our [card members] and merchants,” says Leslie Berland, senior vice president of digital partnerships and development at American Express.

Ben Woolsey, director of marketing and consumer research with CreditCards.com, expects these promotions to move onto mobile channels as issuers look to capitalize on partnerships they have with wireless providers.