We’ve crunched the numbers on the highest-earning frequent flyer cards



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As banks quietly shake up the credit card landscape by hiking interest rates and shaving earn rates on some rewards schemes, RateCity.com.au has crunched the numbers on the highest-earning frequent flyer cards.

Yesterday, Westpac increased interest rates on most of its credit cards by 0.25 per cent, following a similar move by its subsidiaries St. George Bank, Bank of Melbourne and Bank SA last month which hiked some rates by 0.25 per cent.

Bankwest is also reducing the number of Qantas Frequent Flyer points that can be earned on its Qantas Mastercards from 22 May 2019. The move follows on from American Express’s announcement last year that it would overhaul its rewards offering in April 2019. 

Meanwhile, some card providers are offering huge sign-up bonuses and attractive points-per-dollars spent in a bid to inject life into a slowing credit card market.

New research from RateCity.com.au has revealed some of the highest earning frequent flyer cards for people spending $20,000 per year over three years.

Qantas Money’s Qantas Premier Platinum card topped the RateCity.com.au list, with an earn rate of 1 point per dollar on all purchases up to $10,000 per month and a sign-up bonus of 100,000 points in the first two years. This card offered the highest gain of $1,913 after three years. The research factors are based on someone redeeming the points for Sydney-Melbourne flights and factors in the cost of the annual fee, however it assumes the person is not paying interest on the card.

Sally Tindall, research director at RateCity.com.au said the changes are a timely reminder for people to check they’re on the right card.

“There are a lot of cards offering huge sign-up bonus points but many of them come with a catch. Every card in our top five list had a relatively high interest rate and a hefty annual fee.

“Credit card numbers are on the decline so it’s no wonder lenders are throwing in serious sweeteners to get new customers in the door,” she said.

“If you are looking to reassess your credit card, try and pick one that compliments your spending habits. The last thing you want is a credit card that sends you financially backwards.”

Things to look out for with frequent flyer cards:

  • Rewards – don’t sign up to a frequent flyer credit card if you’re someone who doesn’t fly often. If you’re not using the points, then you’re likely to be shelling out money for nothing.
  • Fees – many of the frequent flyer cards discount the annual fee in the first year. But be aware, all of the cards in our top list had ongoing annual fees of at least $129;
  • Interest rate – most frequent flyer cards have high interest rates attached, so if you are someone who has even a dollar of debt on your card, then you could be better off ditching rewards in favour of a low rate card.

Some of the highest earning frequent flyer cards – based on an annual spend of $20K after 3 years

Lender

Card

Earn rate

Sign up bonus

Conditions for bonus points

Annual fee

Interest rate

Estimated gain ($) after 3 yrs based on $20K annual spend

Qantas Money

Qantas Premier Platinum

1 point per dollar on everyday purchases up to $10,000 per month, 0.5 points thereafter. 1.5 points on International purchases, 1 additional point on select Qantas products.

70,000 first yr
30,000 2nd yr

70,000 points awarded when $3,500 is spent within 90 days of card approval plus 30,000 points awarded on your first anniversary

$149 in first yr then $299

19.99%

$1,913

Virgin Money

Virgin Australia Velocity Flyer (Points offer)

0.66 points per dollar up to $1,500 per month, 0.5 points thereafter

                           75,000

if you spend $1,500 every month in the first 3 months from approval (you will receive 25,000 Velocity points each month)

$64.50 in first yr then $129

20.74

$1,688

ANZ

Frequent Flyer Black

1 point per dollar on the first $7,500 per month, 0.5 points per dollar thereafter

100,000 points and $200 cash back

when you spend $4,000 on eligible purchases in the first 3 months from approval.

425

19.99

$1,585

American Express

Qantas Ultimate Card

1.25 points per dollar for most purchases. 2.25 points Qantas products and services, 4.25 points Qantas wine, 0.5 govt bodies. Also offers $450 travel credit a year

                        100,000

if you spend $3,000 on eligible purchases within the first 3 months from approval. This offer is available to new Card Members only

450

20.74

$1,559 plus $450 worth of travel credit per year

St George, Bank of Melbourne, BankSA

Amplify Signature (Qantas)

0.75 points per dollar uncapped.

                           80,000

if you spend $4,000 on eligible purchases within 90 days of card approval

$179 in first year then $279

19.74

$1341 plus up to 10% bonus points depending on your birthday

 Source: RateCity.com.au. Correct as at 1 May, 2019 and subject to change. 

Notes: 

This scenario is modelled on a cardholder with an annual spend of $20K per year, or $1667 per month. We looked at cards that were directly linked to Qantas and Virgin frequent flyer programs in the RateCity database.

The total gain / loss is the dollar value of the points earned in 3 years, minus the cost of the annual fee. It does not include any interest charges or late payment fees.

For cards that tier your points depending on where you spend, we have assumed the points earned were at the standard rate, with the exception of cards that allocate higher points for everyday purchases of food and petrol which we have factored in as 1/3 of the monthly card spend.

Sign up bonus points were not allocated where the cardholder would not meet the spend conditions, based on a monthly spend of $1667.

The value of the points were calculated for both Qantas and Virgin, based on a Sydney – Melbourne flight, 6 months out, on a Saturday at 8am, returning on the following Saturday at 4pm.

Specials whereby the card issuer waives or reduces the annual fee in the first year were taken into account.

Sign up offers of cashbacks were included in the calculations and deducted from the annual fee costs. Annual travel vouchers which have more onerous terms and conditions than points were not included but noted at the end.

Cards have a range of additional perks such as insurances, fraud protection, conceirge services, airport lounge passes which have not been taken into account.

For St George / Bank Melbourne / Bank SA Amplify Signature the final total does not take into account birthday points which varies according to a person’s birthday.

Where there are bundle cards (in the case of Westpac) we have assumed they applied for both cards at the same time and the spending is split evenly between the 2 cards.

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