Credit card lenders taking axe to rewards programs

Credit card lenders taking axe to rewards programs

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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Learn more about credit cards

What's the best credit card for rewards?

There is no one-size-fits-all best rewards credit card. It's best you research what type of rewards program you'd like, as well as the fees, interest rate and conditions associated with those types of cards before making a choice. 

Rewards credit cards can also come with high annual fees that may end up nullifying the rewards, so think how often you use the card to decide whether the benefits outweigh the extra cost for you. A card with a lower annual fee might require a lot of spending to get any useful rewards, while another card with a higher annual fee might need fewer purchases to get a reward. 

Which credit card has the highest annual percentage rate?

The credit card market changes all the time, so the credit card with the highest annual percentage rate is also liable to change.

Keep in mind that credit card interest rates are expressed as a yearly rate, or annual percentage rate (APR). A low APR is generally good but also consider:

  • There can be different APR's for each feature of the card (e.g. purchases may have an APR of 14 per cent, while cash advances on same card could have an APR of 17 per cent.
  • Credit cards with a variable rate can change throughout the year, affecting your APR, so check the full details.
  • If you pay your balance in full every month, having the lowest APR is not as important as the other fees associated with the card. However, if you carry a balance from month to month, then you want the lowest APR possible.

How to calculate credit card interest

Credit card interest can quickly turn a manageable balance into unmovable debt. So being able to understand how interest rates translate into dollars is an important skill to acquire.

The common mistake people make is focusing on the credit card’s annual percentage rate (APR), which often sits between 15 and 20 per cent. While the APR does provide a rough idea of how much interest you’ll pay, it’s not entirely accurate.

This is because you actually accrue interest on your balance daily, not annually. So, you need to work out your daily periodic rate (DPR). To do this, divide your card’s APR by the number of days in a year (e.g. 16.9 per cent divided by 365, or 0.05 per cent). You can then apply this figure to the daily balance on your credit card.

How do you cancel a credit card?

It’s important to cancel your old cards to avoid any additional fees. Unless you’re doing a balance transfer, you’ll need to pay the outstanding balance before you cancel your credit card. If you’ve opted for a card with reward points, make sure you redeem or transfer the points before you close your account. To avoid any bounced payments and save yourself an admin headache, redirect all your direct debits to a new card or account. Once you’ve done all the preparation, call your bank or credit card provider to get the cancellation underway. Once you receive a confirmation letter, destroy your card and make sure the numbers aren’t legible.

How is credit card interest charged?

Your credit card will be charged interest when you don’t pay off the balance on your credit card. Your card provider or bank charges you the individual interest rate that is associated with your card, which is usually between 10 and 20 per cent. 

The interest will be added onto your bill each month or billing period if you don’t pay off the balance, unless you are in an interest-free period.

You will be charged interest on anything that hasn’t been paid for inside the interest-free period. Usually you will receive a notice on your bill or statement saying you will be charged interest so you have some form of notice before you’re charged.

How do I increase my Virgin credit card limit?

If you’re a Virgin Money cardholder and you’re looking at increasing your credit card limit, the first step is to get in touch with Virgin’s credit team on 13 37 39. 

Once you request a Virgin Money credit card limit increase, the lender will do an assessment of your current financial position to make sure you can repay the credit. Virgin Money will typically take 7 to 10 working days to complete this process.

Virgin Money has strict terms around credit increases. To be eligible, you must have opened your account no less than nine months before making the application. Also, at least six months must have passed since your last credit limit increase. The maximum increase you can expect will be 50 per cent of your existing credit limit.

How do I increase my Suncorp credit card limit?

You can ask Suncorp to increase your credit card limit  by contacting  131 155 or by visiting your nearest branch. You’ll have to meet Suncorp’s credit criteria and general terms. For example, you may not receive an increase in your limit if you have successfully applied for one or in the past nine months. Similarly, the bank will look at whether you’ve applied for other credit products recently. 

When assessing your application for a credit increase, banks look at a range of criteria, such as your income and your spending and repayment history. Usually you’ll hear back within a couple of weeks. 

Can I transfer money from a credit card to a bank account with HSBC?

With HSBC’s cash transfer function, you can transfer money from a credit card to a bank account. Customers who wish to make cash transfers have to apply through HSBC and are charged interest on the transactions, but no other fees. Under the program, customers can:

  • Borrow between $500 and $15,000, so long at least 20 per cent of the credit limit is still available after the transfer
  • Transfer to any nominated bank account quickly. 


Registered HSBC online banking users can log in to their accounts and select credit cards online from the My Banking tab. They can then complete the form from the Cash Transfer option. On approval, the requested amount is transferred to the nominated bank account within three days.

Customers can also register for the cash transfer program via the Mobile Banking app. Don’t forget to check the interest rate you’ll be charged, both before and after any promotional period.

Increase your credit card limit with Westpac

You can apply to increase your Westpac credit card credit limit at any time, and most credit card providers have made it really easy to do so. You can use your online banking portal, the credit card provider’s mobile app, or even the telephone. 

Applying online to increase your credit limit with Westpac is the easiest option if you’ve already activated Westpac Live Online Banking. All you need to do is fill in the required information and then hit ‘submit’ to apply for an increase in your credit card limit.

Most banks will ask for details of your financial situation at the time of applying for a credit increase. This is done to ensure your new limit meets the lender’s criteria. 

You can apply for increasing your credit limit in any of the following ways:

  1. Visiting your nearest Westpac branch
  2. Calling Westpac on 1300 651 089
  3. Logging in on Westpac Live Online Banking

How to increase the NAB credit card limit?

If you use your NAB credit card regularly, you could consider requesting a higher credit limit. The good news is that it's fairly easy to do so using either the NAB app or NAB internet banking. 

NAB app: 

  • Step 1: Download the latest version of the NAB app.
  • Step 2: Select the ‘My Cards’ menu. 
  • Step 3: Select the card you want to increase the credit limit for. 
  • Step 4: Select ‘Usage Controls’ and then click on ‘Change Credit Limit’.

NAB internet banking: 

  • Step 1: Log into your account. 
  • Step 2: Choose the ‘My Cards’ menu. 
  • Step 3: Choose the card for which you want to increase the limit. 
  • Step 4: Choose ‘Change My Credit Card Limit’.  

If you don’t have the NAB app or cannot access NAB internet banking, you can even visit your local branch or call their contact center. 

Once you’ve applied to increase your NAB credit card limit, you’re likely to be asked for your

  • current employment details  
  • total income, before and after-tax deductions  
  • assets, liabilities, and expenses information

NAB will then assess this information to determine if your current financial situation suits the increased credit limit request, and your application will either be accepted or denied.

However, this process will only work if you’re attempting to increase your personal NAB credit card limit. For a business credit card, you can contact the NAB Corporate & Business Servicing team or speak to your NAB relationship manager. 

How can I increase my Bankwest credit card limit?

When you apply for a Bankwest credit card, you get assigned a pre-set credit limit, which will end up being the most that you can spend on your credit card before having to pay it off. Your credit limit is chosen for you and your current financial situation, and you should remember not to overspend, irrespective of the limit, in order to avoid racking up a massive bill.

However, banks and lenders understand that your needs will change, and have made it possible for you to increase your credit card limit, allowing you to get extra cash when you need it most. Moreover, with a higher spending limit, you may be able to get access to certain perks and benefits with your Bankwest credit card.

To increase your Bankwest credit card limit, you can visit any of the bank’s branches or call 13 17 19 and follow the steps outlined.

What does ANZ credit card insurance cover?

ANZ offers complimentary insurance on some of its credit cards, which can provide some protection against unforeseeable incidents, like the theft of your card. Depending on the type of credit card you own, you may be eligible for different insurances. For instance, most ANZ credit card customers may qualify for Purchase Protection Insurance and Extended Warranty Insurance. Customers who own premium credit cards may also be eligible for Guaranteed Pricing, Rental Vehicle Excess, International Travel, and so on.

Consider checking your ANZ credit card insurance features listed in the Insurance Policy Information booklet to know which items are covered. Also, while ANZ issued the credit card, they are not the insurer. For this reason, you may need to send your insurance claims - and get your ANZ credit card insurance refund - to the insurance provider.

How can I get a Woolworths store card credit limit increase?

If you are looking to increase the credit limit on your Woolworths card, you can call 1300 101 234 to make an application. You will need to have held your Woolworths credit card account for at least six months before asking to increase your limit. 

As with most credit limit increase applications, your financial situation and spending history will be reviewed in order to assess whether your new requested credit limit is appropriate. After the assessment, Woolworths will let you know whether or not you’ve been approved. 

 

Why do different credit reporting bureaus use different scores?

The reason Equifax, Experian and Illion use different scores is because they are independent companies with their own different methodologies. As a result, a score of, say, 700 would mean different things at different credit reporting bureaus.

However, the one thing they have in common is that they divide their scores into five tiers. So if you receive a tier-two credit score from one bureau, you will probably receive a tier-two score from the others, as well.