It was the battle of the banks this summer as the Canadian Imperial Bank of Commerce competed with Toronto Dominion bank to maintain rights to the company's portfolio of billions of dollars worth of Aeroplan customers and transactions.

Aeroplan, which is owned by Aimia Inc., is one of the most popular travel rewards programs on the market. After months of heated negotiations, the banks and Aimia finally reached a three-way compromise (and avoided a legal battle): CIBC would sell about half its portfolio to TD bank, and TD would become Aeroplan's primary financial services partner and credit card issuer.

Why did this happen?

CIBC's contract with Aimia was coming up for renewal in December. Quite simply, TD put an offer on the table (they proposed paying 15 per cent more per mile, and offered $100 million upfront to retain the partnership), and CIBC was given a chance to match it. Instead, a three-way deal was struck and it was announced that the banks would split the customers and TD would become Canada's primary issuer of Aeroplan credit cards.

CIBC will receive $312.5-million for the deal, with Aimia funding approximately $150 million. CIBC has been the card's main issuer for more than 20 years, but Aimia could not refuse the offer made by TD.

I don't understand, does this mean I am going to have to switch banks?

If you are a CIBC credit card holder only, with no other accounts or products with the bank, you will eventually be transferred to TD. You will not lose any of your points and you will continue to earn points seamlessly.

On the flipside, if you have an existing banking relationship with CIBC, in addition to being a CIBC Aeroplan credit card customer, you will remain with CIBC. There will be no change and you will also not lose any of your points. CIBC has maintained the rights to approximately 630,000 existing clients, and will also continue to issue new cards for the next 10 years.

Interestingly, CIBC recently announced the launch of its new travel rewards program Aventura on October 1st. Unlike Aeroplan miles, which only work with Air Canada flights, the Aventura plan will allow cardholders multiple reward options. CIBC says the new cards will give cardholders the option of choosing from multiple airlines and destinations, as well as their choice of seat.

TD also wants customers to have multiple TD credit card reward options. The bank will launch five new Aeroplan cards in Canada and the US next year. This deal will make them the market leader in credit cards, Reuters reports.

When does it come into effect?

The new agreement between TD and Aimia will come into effect on January 1, 2014 and will last for 10 years.

Who got the better end of the deal?

From a business perspective, reports have TD coming out on top. The bank said it "expects to acquire about 550,000 cardholder accounts from CIBC, representing approximately $3 billion in card balances and $20 billion in annual retail spending," according to an article on the CBC.

What if I want to switch travel rewards cards?

Who exactly will be making the switch from CIBC to TD is yet to be finalized; one thing is for certain, this is a great time for customers seeking new loyalty rewards programs. Lenders are anticipating an unprecedented market shift as consumers comparison shop their travel rewards credit card options. In preparation, many new promotions, reward options and perks are being introduced on a regular basis. From a consumer-standpoint, the travel rewards credit card market is really heating up and there is a great opportunity to get more for less.

Find the card that gives you the travel rewards you want. Compare travel rewards credit cards through KANETIX's free online credit card comparison service tool.

Looking for more information about credit cards?

Back to top