Facing slowing sales, Starbucks (SBUX) hopes to jumpstart growth by bringing more customers into its membership program.
The company announced on Thursday that it is launching a credit card with J.P. Morgan (JPM) and Visa (V). The Starbucks Reward Visa card will launch later this year.
The credit card will allow customers to earn “Stars,” or rewards points, which can be redeemed at more than 8,000 Starbucks locations. With a $49 annual fee, the card may only be worth the investment for customers who already make Starbucks purchases super frequently. The rewards points can only be redeemed for food or drinks from Starbucks and expire six months after they were earned.
Cardholders will automatically be enrolled in the company’s loyalty program and will receive additional membership perks. If Starbucks Rewards Visa cardholders spend enough money, they could potentially receive free food or drinks nearly every week during their first year, according to Jennifer Roberts, head of digital products at Chase.
“It’s important to us to make earning rewards as easy for our customers as possible and the Starbucks Rewards Visa Card is a powerful tool for us to do that because of how easily it fits into their daily lives,” said Matt Ryan, Starbucks chief strategy officer.
Branded credit cards have long been a popular way to boost customer loyalty. Uber, for example, launched a credit card in October. Many companies with co-branded credit cards also earn money when new cards are issued, as well as from fees and penalties paid by cardholders who are late paying off bills.
Starbucks shares are up 5.4% over the past year, while J.P. Morgan Chase shares are up 36.2% and the S&P 500 index is up 24% for the same period.