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

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

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.

Did you find this helpful? Why not share this news?

Advertisement

RateCity

Money Health Newsletter

Subscribe for news, tips and expert opinions to help you make smarter financial decisions

By signing up, you agree to the ratecity.com.au Privacy & Cookies Policy and Terms of Use, Disclaimer & Privacy Policy

Advertisement

Learn more about credit cards

What does Westpac credit card insurance cover?

If you own a Westpac credit card, one of the perks may be  free travel insurance. If you’re eligible, you may be covered if you get sick while travelling, have lost your luggage, have to cancel a trip or have an accident while you’re on the move.

Besides these standard inclusions, the Westpac credit card insurance policy may also cover you for hospital essentials, emergency dental treatment and alternative transport if your original plans go awry. It may also cover loss of income when you get back home after being sick  overseas and your pets’ boarding costs too.

If you have any queries, the Westpac credit card insurance contact number is 1800 091 710. You can submit a claim online.

 

Can I transfer money from my American Express credit card to my bank account?

If you’re an American Express credit card customer, you may not be able to transfer money from your credit card to your bank account. However, you may be eligible for cash advances, which involves withdrawing money through an ATM. 

To qualify for a cash advance, you’ll likely have to enrol for American Express Membership Rewards. Consider checking your online credit card account to see if you can withdraw a cash advance and, if so, the fees and charges you’ll incur for this transaction. 

You should remember that cash advances are different from balance transfers, which were available with some American Express credit cards earlier. Balance transfers allow customers to consolidate debt from high-interest credit cards to a credit card offering a lower interest rate. If you only recently applied for an American Express credit card, balance transfers may not be available irrespective of the card you own. 

What is the CUA credit card increase limit process?

A credit limit is pre-assigned based on factors like your income, expenses, and debt by the card-issuing company. It varies from time to time based on credit utilisation and changes to your circumstances.

If your income has increased or your liabilities have reduced, you can request for an increase of your CUA credit card limit. You can lodge the request via online banking on the website, or by visiting the closest branch, or by downloading the application form and mailing it. While making the application, you may need to provide information about your income, employment status, desired limit, and the reason for the increase. The card-issuing company will assess your request before approval.

Before you apply for an increase to the credit limit, ensure your bills are paid in full and you aren’t asking for a very steep enhancement.

How can I increase my credit card limit on my American Express card?

If you want to increase the credit limit on your American Express (AMEX) credit card, you will need to apply through the AMEX Online Services, or by calling the number on the back of your card. You may need to share personal information that the bank can use to assess whether the requested limit is suitable for you and your current financial status. Once your application is approved, your new limit will be ready for use within an hour.

Do I get HSBC credit card insurance on purchases I make?

As an HSBC credit card (HSBC Platinum, HSBC Platinum Qantas and HSBC Premier World) cardholder, you may be entitled to complimentary international and domestic travel insurance. This HSBC credit card insurance covers you for hospital stays and medical expenses, flight cancellations or delays, as well as lost luggage or personal items.

To be eligible for the insurance, you should have paid for at least 90 per cent of your overseas return travel ticket with your HSBC credit card. The cover is automatically activated without a need to contact HSBC. However, it’s always best to let your card issuer know when you travel overseas. If you have pre-existing medical conditions, you’ll need to contact Allianz directly to organise cover for these as they aren’t covered by the insurance. You can call Allianz on 1800 648 093.

The complimentary international travel insurance that comes with your HSBC Platinum credit card is valid for up to four months from the date of your departure from Australia. Your HSBC credit card insurance cover also covers your spouse and dependent children if 90 per cent of their travel ticket is purchased using your HSBC card.

 

How does the ANZ credit card instalment plan work?

While you usually need to settle all or part of your credit card dues at the end of your statement period, some credit cards afford you the option of setting up instalment plans. This allows you to settle your credit card debt at a pace that's more convenient for you, paying a fixed amount over a fixed period, thus making it easier to budget your repayments every month.

With the ANZ credit card instalment plan, you can set up a structured repayment schedule for part or all of your balance, or even for specific purchases over a certain value.

Some of the benefits of instalment repayment include: 

  • Structured repayments: You’ll have a fixed sum to pay each month.
  • Easier to budget: A fixed repayment sum makes it easier to make your monthly budget.
  • Account benefits: You might also get benefits such as discounted interest rates or debt-tracking tools.

There are disadvantages of opting for instalment repayment, however, and they include:

  • Less flexibility: You will not be able to pay a smaller amount once you set an instalment plan.
  • Different interest charges: In case the instalment plan only covers part of the balance, different interest charges could apply, making it challenging to budget.
  • Additional fees: You might have to pay fees or penalty charges in case of missed payments.

How to increase your Qantas Premier credit card limit

When your income or spending habits change, you might wish to increase your credit card limit. The Qantas Premier credit card allows you to do this over the phone. You can contact Qantas Premier Card Support by calling on 1300 992 700. Unlike some other credit providers, Qantas doesn’t give you the option to increase your limit online.

Qantas will only accept your application if you have a good history of repayment and have not increased your credit or bought another credit product from Qantas in the past six months.

Before approving your Qantas Premier credit card limit increase, Qantas will perform a credit assessment on your current financial circumstances and ask why you would like to increase your credit limit.

To ensure that there are no bumps in your application process, you must provide accurate and recent information about your financial situation. You should also account for any future changes you’re anticipating which could hinder your ability to repay the loan.

Once the assessment is complete, Qantas will either approve or deny your application. If they approve it, you will need to sign a credit limit increase agreement - and you can request a written copy of the credit assessment. However, if your application is rejected, Qantas can opt not to provide a copy of the assessment.

Can a pensioner get a credit card?

It is possible to get a credit card as a pensioner. There are some factors to keep in mind, including:

  • Annual income. Look for credit cards with minimum annual income requirements you can meet. 
  • Annual fees. If high fees are a concern for you, opt for a card with a low or $0 annual fee. 
  • Interest rate. Make sure you won’t have any nasty surprises on your credit card bill. Compare cards with a low interest rates to minimise risk.

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.

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. 

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.

Can I get a credit card on part-time/casual work?

Yes, as credit card providers look at your annual income amount as well as your occupation. Minimum income requirements tend to be between $30,000 – $40,000 for standard and rewards credit cards, however low income credit cards can have minimum income requirements as low as $15,000 per year.

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 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.