Ford plans new credit card to increase loyalty

Ford Motor Co. plans to follow its rivals by offering a credit card that would allow customers to more easily finance repairs and earn them money toward service or new-vehicle purchases.

The Visa card, which will be tied to the FordPass Rewards system and is expected to launch in the second quarter, would allow users to accumulate points for any purchase, automotive-related or not, that could be redeemed in Ford showrooms or service centers, according to dealers briefed on Ford's plans.

Cardholders can earn 5 percent back on certain Ford transactions, plus another 5 percent through FordPass Rewards. The card will offer 3 percent back for gasoline, auto insurance, parking and other auto-related purchases, as well as on dining, and 1 percent back on all other purchases.

Users would be eligible to get 0 percent interest for six months on purchases of $499 or more at Ford, Lincoln or Quick Lane stores and could earn credits for hitting annual purchasing thresholds, dealers were told.

There is no dealer participation fee, and Ford's retailers would earn a $65 sign-up bonus for each person enrolled and approved, people familiar with the plans told Automotive News. Dealers were told customer enrollment will be completely digital and that the card will be offered through the First National Bank of Omaha, not Ford Motor Credit Co.

A Ford spokeswoman declined to comment on any details about the credit card.

The card is the latest effort by the automaker to boost customer loyalty and retention. The company in late 2018 tapped Elena Ford, a great-great-granddaughter of Henry Ford, to become its chief customer experience officer, and in 2019 rolled out the points-based FordPass Rewards program.

Competitors including General Motors and Fiat Chrysler Automobiles have similar credit card offerings. Ford introduced a card for business owners in 2000 and offers a Quick Lane credit card, although it's unclear whether that will continue when the new card is launched.

Virtually every dealer signed up for FordPass Rewards when the program was introduced last year, officials said, largely because Ford offered to fund it. FordPass Rewards replaced the underutilized Owner Advantage Rewards program that was available at fewer than a quarter of Ford's retailers.

While Ford traditionally has strong brand loyalty, according to IHS Markit data, it has said it wants to improve those numbers to help dealers increase profits. When FordPass Rewards started, Ford said only 52 percent of new-vehicle buyers come back to the dealership for their first oil change.

Ford benchmarked a number of nonautomotive loyalty programs while developing FordPass Rewards, including those from Delta Air Lines, United Airlines and Marriott International.

The new credit card, dealers said, will help create more repeat business.

In addition to starting FordPass Rewards, Ford opened a redesigned call center in Texas, piloted a mobile service network, offered easier lease renewals and is testing new types of showrooms. While officials declined to provide numbers, last year they said Ford was doubling its spending on customer experience to improve its standing relative to rivals such as Toyota.

"Right now, we need to take care of the customers we have," Elena Ford said last year. "It's like at a restaurant. If the service is lousy, you're not going to go back, even if the food was good. It's part of keeping them in the Ford family."