Credit card lenders taking axe to rewards programs


Alex Ritchie

Alex Ritchie

( 9 min read )

As of July 1, the way consumers earn and spend rewards points will drastically change. 

These changes come from recommendations made the Reserve Bank of Australia (RBA) who put forward regulations that will cap interchange fees from 2.0 per cent to 0.8 per cent.

Interchange fees have previously been used to fund lender rewards programs. 

RateCity research has found that credit card companies are cutting ‘earn rates’ as much as 83 per cent, and capping the amount of points you can earn by up to 85 per cent.

Who has already changed?

NAB, Citi and Suncorp have already made changes to their rewards cards.

As of 15 June, NAB customers saw the amount they could earn per statement period drop from 25,000 to 5,000 on some cards.

Suncorp is the first provider to increase their ‘burn rate’, that is, the number of points you need to purchase rewards items, hiking them by around 17 per cent for their most popular gift cards.

RateCity Money Editor Sally Tindall said CBA and Westpac would be making similar changes come 1 July, alongside other banks including St George, Bank of Melbourne and Bank of SA.

“Your dollars will simply not generate as much,” she said.

“Even if you spend up big in a month, the points cap implemented by most of the big banks will see you hitting your limit before you earn anything worthwhile,” said Ms Tindall.

Major Credit Card Lender Changes:

CARD

WHAT’S CHANGED

REWARDS OFFERING

DATE OF CHANGE

CBA Awards Card

Reduced number of points earned outside of higher rewards merchants.

Reduced points cap.

Earn 1.5 points per $1 spent at higher rewards merchants & 0.5 points per $1 everywhere else.

New cap of 50,000 Awards points per year (30,000 for Qantas Frequent Flyer).

1 July 2017

CBA Gold Awards Card

Reduced number of points earned outside of higher rewards merchants.

Reduced points cap.

Earn 2 points per $1 spent at higher rewards merchants & 0.5 points per $1 everywhere else.

New cap of 75,000 Awards points per year (60,000 for Qantas Frequent Flyer).

1 July 2017

CBA Platinum Awards Card

Reduced number of points earned outside of higher rewards merchants.

Reduced points cap.

Earn 2.5 points per $1 spent at higher rewards merchants & 0.5 points per $1 everywhere else.

New cap of 150,000 Awards points per year (120,000 for Qantas Frequent Flyer).

1 July 2017

CBA Diamond Awards Card

Reduced number of points earned outside of higher rewards merchants.

Reduced points cap.

Earn 3 points per $1 spent at higher rewards merchants & 0.5 points per $1 everywhere else.

Max. of 1,000,000 Awards points per year

1 July 2017

Citi Signature Qantas Card

Introduced a tiered earn rate so you earn more points per dollar at certain merchants.

Introduced points cap.

Cap of $20,000 / month.

1 pts per $1 at a range of restaurants, hotels and flights, 0.75 pts per $1 at selected petrol stations, supermarkets and retailers, 0.5 points everywhere else.

15 June 2017

Citi Signature Rewards Card

Introduced a tiered earn rate so you earn more points per dollar at certain merchants

Removed the cap of $20,000 per statement period.

2 pts per $1 at a range of restaurants, hotels and flights, 1.5 pts per $1 at selected petrol stations, supermarkets and retailers, 1 pt everywhere else.

15 June 2017

Citi Prestige Qantas Card

Introduced a tiered earn rate so you earn more points per dollar at certain merchants.

1.5 pts per $1 at a range of restaurants, hotels and flights, 1 pts per $1 at selected petrol stations, supermarkets and retailers, 0.5 pt everywhere else.

15 June 2017

Citi Prestige Rewards Card

Introduced a tiered earn rate so you earn more points per dollar at certain merchants

3 pts per $1 at a range of restaurants, hotels and flights, 2 pts per $1 at selected petrol stations, supermarkets and retailers, 1 pt everywhere else.

15 June 2017

NAB Qantas Rewards Card

Reduced number of points earned.

Reduced points cap.

0.75 Qantas points per $1.

Max. of 3,000 points per statement period.

1 June 2017

NAB Qantas Rewards Premium Card

Reduced number of points earned.

Reduced points cap.

1 Qantas points per $1.

Max. of 5,000 points per statement period.

1 June 2017

NAB Velocity Rewards Card

Reduced number of points earned.

Reduced points cap.

0.75 Velocity points per $1.

Max. of 3,000 points per statement period.

1 June 2017

NAB Velocity Rewards Premium Card

Reduced number of points earned.

Reduced points cap.

1 Velocity points per $1.

Max. of 5,000 points per statement period.

1 June 2017

ANZ Rewards

Scrapped AMEX card.

Increased the initial earn rate on the Visa card however the rate reduces after you reach a certain spend each month.

1 point per dollar up to $1,000 / month and 0.5 points per dollar thereafter, with no cap on points.

5 August 2017

ANZ Rewards Platinum

Scrapped AMEX card.

Increased the initial earn rate on the Visa card however the rate reduces after you reach a certain spend each month.

1.5 points per dollar up to $2,000 / month and 0.5 points per dollar thereafter, with no cap on points.

5 August 2017

ANZ Rewards Black

Scrapped AMEX card.

Increased the initial earn rate on the Visa card however the rate reduces after you reach a certain spend each month.

2 points per dollar up to $5,000 / month and 1 point per dollar thereafter, with no cap on points.

5 August 2017

ANZ Travel Adventures

Scrapped AMEX card.

Increased the initial earn rate on the Visa card however the rate reduces after you reach a certain spend each month.

1.5 points per dollar up to $2,000 / month and 0.5 points per dollar thereafter, with no cap on points.

5 August 2017

ANZ Frequent Flyer

Scrapped AMEX card.

Removed the cap on the number of points you can earn.

Introduced a tiered earn rate.

0.5 Qantas points per dollar up to $500 / month and 0.25 points per dollar thereafter, uncapped.

5 August 2017

ANZ Frequent Flyer Platinum

Scrapped AMEX card.

Removed the cap on the number of points you can earn.

Introduced a tiered earn rate

0.75 Qantas points per dollar up to $3000 / month and 0.5 points per dollar thereafter, uncapped.

5 August 2017

ANZ Frequent Flyer Black

Scrapped AMEX card.

Introduced a tiered earn rate

1 Qantas points per dollar up to $7,500 / month and 0.5 points per dollar thereafter, uncapped.

5 August 2017

St George Amplify Platinum Card

Reduced points on overseas purchases

1 reward point per dollar spent at Australian and overseas outlets (0.5 points per dollar if you choose Qantas points)

1 July 2017

St George Amplify Signature Card

Reduced points on overseas purchases

1.5 reward points per dollar spent at Australian and overseas outlets (0.75 points per dollar if you choose Qantas points)

1 July 2017

Bank of Melbourne Amplify Platinum

Reduced points on overseas purchases

1 reward point per dollar spent at Australian and overseas outlets (0.5 points per dollar if you choose Qantas points)

1 July 2017

Bank of Melbourne Amplify Signature Card

Reduced points on overseas purchases

1.5 reward points per dollar spent at Australian and overseas outlets (0.75 points per dollar if you choose Qantas points)

1 July 2017

Bank SA Amplify Platinum

Reduced points on overseas purchases

1 reward point per dollar spent at Australian and overseas outlets (0.5 points per dollar if you choose Qantas points)

1 July 2017

Bank SA Amplify Signature Card

Reduced points on overseas purchases

1.5 reward points per dollar spent at Australian and overseas outlets (0.75 points per dollar if you choose Qantas points)

1 July 2017

Virgin Australia Velocity Flyer

Reduced earn rate

Earn 0.66 points per $1spend up to $1,500 and 0.5 points thereafter

15 June

Virgin Australia Velocity High Flyer Card

Reduced earn rate

1 point per $1for the first $8000 then 0.5 points thereafter

15 June

Suncorp Gold Credit Card

Increased the number of points needed to redeem some rewards such as major outlet gift cards by around 17%

Earn 1 point per $1, up to $1,500 per month and 0.5 points per dollar thereafter.

15 June 2017

Suncorp Platinum Credit Card

Increased the number of points needed to redeem some rewards such as major outlet gift cards by around 17%

Earn 1.25 rewards points per dollar.

15 June 2017

REWARDS CARDS – RATECITY PICKS

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There are still competitive options out there if you are willing to look beyond the major banks. The exception is ANZ who have decided not to implement a cap where you stop earning points completely. 

RateCity research has found that more competitive options would include looking for cards with low or no annual fees, without caps on points.

RateCity’s Choice for Rewards Cards:

Card

Annual Fee

Cap on points

Spend to break even

Perks

Coles Rewards MasterCard

$89

No cap

$8,900

2 flybuys points per $1, free delivery with Coles online, 62 days interest-free, no int transaction fees, $100 Coles voucher on sign up.

AMEX Essential

0

No cap

$0

Earn Amex points which can be transferred to a range of frequent flyer programs, no annual fee, moderate interest rate, smartphone screen insurance, $50 bonus on signup.

Coles No Annual Fee Mastercard

$0

No cap

$0

1 flybuys point per $2, free delivery with Coles online, no annual fee, 62 days interest-free, $100 Coles voucher on sign up.

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