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NAB makes big changes to its rewards program


Nick Bendel

Nick Bendel

( 3 min read )

NAB has cancelled its American Express credit card and also changed earn rates for two of its Visa cards.

The big four bank announced today that all NAB American Express cards would become invalid on 21 February 2018.

From 13 November 2017, American Express cards will no longer be offered on new NAB accounts. Applicants after that date will receive a Visa card instead.

NAB said it had decided to cancel its American Express program in response to the cap on interchange fees. This regulatory change has reduced the amount of money that banks can earn from credit card transactions – and then use to fund rewards programs.

New earn rates for Visa cards

Meanwhile, on 13 November, NAB will also change the Visa earn rates for its Qantas Rewards Premium Card and Velocity Rewards Premium Card.

Currently, customers earn 1 reward point for every $2 they spend, although this is capped at $5,000 per statement period. So the maximum customers can earn is 2,500 points per month.

Under the new system, the following earning rates will apply:

  • First $3,000 = 1 rewards point for every $1.50 of spending
  • Next $3,000 = 1 rewards point for every $3.00 of spending
  • Above $6,000 = 0 rewards points

That means customers will be able to earn a maximum of 3,000 points per month.

Best-case scenarios

Rewards become more complicated once you consider annual fees, which are $250 for the Qantas Rewards Premium Card and $150 for the Velocity Rewards Premium Card.

Currently, it’s impossible to finish ahead with the Qantas Rewards card, assuming you convert your rewards into Woolworths $100 gift cards (see table below). Given that the annual fee is $250 and you can earn no more than $152.67 of rewards per year, the best you can do is a $97.33 loss.

Under the new system, customers will be able to earn up to $183.21 in rewards, which means the best-case scenario will be a $66.79 loss.

For the Velocity Rewards card, the best-case scenario right now is a $2.67 profit, based on $152.67 in maximum rewards and a $150 annual fee.

In the future, the best-case scenario will become a $33.21 profit, based on $183.21 in maximum rewards.

 

QANTAS REWARDS PREMIUM CARD

Best result after annual fee Spending needed to break even each year Result after $20,000 annual spend
Current Loss of $97.33 Impossible $250 annual fee – $50.89 rewards = loss of $199.11
Future Loss of $66.79 Impossible $250 annual fee – $61.07 rewards = loss of $188.93

 

VELOCITY REWARDS PREMIUM CARD

Best result after annual fee Spending needed to break even each year Result after $20,000 annual spend
Current Profit of $2.67 $58,950 $150 annual fee – $50.89 rewards = loss of $99.11
Future Profit of $33.21 $58,950 $150 annual fee – $61.07 rewards = loss of $88.93
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