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Why Virgin Velocity points owners may want to sit tight

Why Virgin Velocity points owners may want to sit tight

It’s been a very difficult month for Virgin Australia, as the Australian airline stood down 8,000 workers and announced it would go into voluntary administration on the back of the COVID-19 crisis.

While it is indeed a terrible situation for any affected, if you're reliant on Virgin Velocity points, you're affected, as well.

With a question mark looming over Virgin Australia and the airline on shaky ground, the chance of using any points gleaned from rewards systems begins to disappear into the sky with each passing day.

State of play for your Velocity points

As it stands, Virgin Australia was placed into administration but Velocity, a separate entity that is wholly owned by Virgin Australia, was not.

It was revealed that Virgin Australia owed $5.3 billion to creditors, including clients like travel agents and bondholders.

In Virgin Australia’s last annual report, the full value of Velocity points came in at $497.1 million. However, The Australian Financial Review (AFR) revealed that the trust Velocity holds its points in had lent around $200 million in secured loans to Virgin Australia . This “raised questions” around whether there were “enough funds in the trust to cover the full value of the points”, the AFR reported.

On the 21st April, Velocity frequent flyer customers were sent an email stating that Velocity was still operating, but it would be pausing all point redemptions for an “initial period of four weeks”. Customers were reassured that their points “weren’t going anywhere” and would not expire through this period.

For card customers, you’ll still be able to earn points through your spending, although you won’t be able to redeem them at this time.

Velocity customers may be asking themselves what will happen to their points as they wait on bated breath for them to be redeemable again.

Experts weigh in on Virgin Velocity points cards

Steve Hui, Founder of iFlyFlat, wrote about the future of Velocity points for frequent flyer credit card holders.

“Virgin Australia's Velocity Frequent Flyer program will survive, but members should expect their points to be worth less once a new owner is found for the airline,” said Mr Hui.
“The points are likely to be honoured in some form as the new owners want to retain the business's customers and get off to a good start.
“In the event that the airline is liquidated (worst case scenario) Velocity members could still expect some compensation,” said Mr Hui.

Many Velocity Points credit card holders may be wondering what they can do right now. In an interview with RateCity, Steve Hui said they have two possible options.

“Velocity co-brand credit card holders should wait or contact their bank to see what options they have for them,” he said.
“Some banks have paused the transfer of points from credit cards to Velocity. So those cards which earn Velocity directly, they will have other options.
“It is better to change to a credit card that first accumulate ‘Rewards Points’ with the card, which then you can select to transfer to an airline at a later date. Examples such as AMEX membership reward points, Amplify points, ANZ points etc.”

RateCity Research Director, Sally Tindall, said: “While Velocity has confirmed points are safe, it’s not yet clear what the program will look like on the other side of the pause.

“While a lot of people will sit tight, others might decide they’re not going to be travelling as much and don’t need a frequent flier card,” she said.

There are still actions credit card holders can take right now, according to Ms Tindall.

“Now is a good time to do a health check on your credit card, especially if your annual fee is due soon. Big spenders might find their rewards card is still working in their favour, while others might realise they’re better off switching to a low rate, low fee card without the bells and whistles.
"However, moving to a different credit card might not be that easy in this environment," she cautioned.
"Some companies have stopped taking credit card applications while anyone who’s lost their job might find they can’t get a new credit card application across the line. If that’s you, call your current provider and see if they can switch you to a low rate card, especially if you’ve got money owing on it."

Alternative frequent flyer credit cards

Without a crystal ball, it’s difficult to predict exactly how long Velocity Points credit card holders may be waiting to redeem their points, or if they’ll still be worth the same value.

If you’re considering looking into alternative frequent flyer credit cards for a worst-case scenario, you’ll need to know who the other big players are.

The airlines offering frequent flyer points in Australia are:

AirlineProgram Name
QantasQantas Frequent Flyer
JetstarJetstar Dollars
EmiratesSkywards
Virgin AustraliaVelocity Frequent Flyer

With Qantas being the largest airline in Australia by fleet size, international flights and international destinations, all of the big four banks offer customers Qantas frequent flyer credit cards.

Highest Qantas joining points bonus on credit cards

CompanyCardAnnual FeePurchase RateSign up FF PointsMinimum income per year
Qantas MoneyQantas Premier Titanium

$1,200

19.99

150,000

$200,000

NABQantas Rewards Signature

$395

19.99

130,000

-
ANZFrequent Flyer Black

$425

20.24

120,000

-
Qantas MoneyQantas Premier Platinum

$299

19.99

80,000

$35,000

Data accurate as of 29.04.2020. 

In terms of Qantas joining points bonuses for new customers, the highest offerings on the market from card providers are anywhere from 80,000 to 150,000 Qantas points. But there are catches.

RateCity analysis found that the highest joining points bonus for Qantas frequent flyer credit cards was for the Qantas Money Qantas Premier Titanium. However, as the name suggests, this is a premium card with a minimum income requirement of $200k and an annual fee of $1,200 – the highest on the market.

There may be expensive hoops to jump through with any frequent flyer credit card you’re considering applying too, including annual fees and high minimum income requirements. Be sure you read a card’s terms and conditions, as well as the Product Disclosure Statement, for a full break down of these costs before you consider applying.

Big four banks’ Qantas frequent flyer credit cards

ANZPurchase Rate (%)Annual Fee
Frequent Flyer

20.24

$95

Frequent Flyer Platinum

20.24

$495

Frequent Flyer Black

20.24

$295

NABPurchase Rate (%)Annual Fee
Qantas Rewards Premium Card

19.99

$250

Qantas Rewards Signature Card

19.99

$395

CBAPurchase Rate (%)Annual Fee
Commbank Ultimate Awards Credit Card with Qantas Frequent Flyer Direct

20.24

$30

Commbank Diamond Awards Credit Card with Qantas Frequent Flyer Direct

20.24

$379

Commbank Platinum Awards Credit Card with Qantas Frequent Flyer Direct

20.24

$279

Commbank Awards Credit with Qantas Frequent Flyer Direct

20.24

$89

*Qantas Frequent Flyer Direct allows you to opt in for $30 and convert CBA Award Points to Qantas FF Points
WestpacPurchase Rate (%)Annual Fee
Altitude Platinum Qantas Points

20.49

$200

Altitude Black Qantas Points

20.49

$300

Data accurate as of 29.04.2020.

RateCity analysis has found that NAB offers the lowest purchase rate for a Qantas frequent flyer credit card at 19.99 per cent.

Further, if you’re looking to avoid fees, Commbank’s Ultimate Awards credit card has the lowest annual fee ($30) of big four bank credit cards connected to Qantas.

Is now the right time to take action?

Keep in mind that taking out a second credit card or moving to a lower rate card during the COVID-19 crisis and recession may be a difficult endeavour. Banks like Macquarie are not approving new credit card applications at the moment, and a second credit card can affect loan chances.

Before you apply, consider if this is the best time to take out a new credit card. If you’re struggling with debt, or if you’re facing issues with employment or your income, it may not be the wisest time.

Look at your budget and map out to see if you could afford a new credit card’s fees and costs right now. Doing some research around alternative options as a worst-case scenario may help you feel better prepared for the future.

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

This article was reviewed by Head of Content Leigh Stark before it was published as part of RateCity's Fact Check process.

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Learn more about credit cards

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.

What should I do if my ANZ credit card has expired?

Your ANZ credit card is considered expired only after the last day of the month and year marked on your card. For instance, if your card’s expiry date reads 03/22, it is valid until 31 March 2022 and expires on 1 April 2022. Typically, you should have received a new credit card by that date, and you won’t have to request a new card. 

Once you get the new card, you should remember to switch any automatic payments you have - such as a utility or mobile phone bill - from your expired credit card to your new credit card. Equally, if you are using CardPay Direct to repay your ANZ credit card debt, you may need to update the credit card account details for that service as well. 

In case the new card doesn’t arrive by the expiry date of your current credit card, you can call ANZ on 13 22 73 to find out the reason and if you need to request an expedited card. Please note that if you were planning to close your credit card account or request a credit card upgrade, you may need to call ANZ at least before the 25th of the month your current credit card expires in, as that’s when they may send you the new credit card.

How easy is it to get a credit card?

For most Australians, there are no great barriers to applying for and getting approved for a credit card. Here are some points that a lender will consider when assessing your credit card application.

Credit score: A bad credit score is not the be all and end all of your application, but it may stop you being approved for a higher credit limit. If your credit score is less than perfect, apply for the credit limit that you need, rather than the one you want.

Annual income: Most credit cards have minimum annual income requirements. Make sure you’re applying for a card where you meet the minimum.

Age & residency: You need to be at least 18 years old to apply for a credit card in Australia, and most require that you are an Australian citizen or permanent resident. However, there are some credit cards available to temporary residents.

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.

What should you do when you lose your credit card?

Losing your credit card is a serious situation, and could land you in financial trouble. Here is a simple guide detailing what to do when you lose your credit card.

Lock you card – Contact your provider and inform them about your lost credit card. From here lock, block or cancel your card.

Keep track of transactions – Look out for unauthorised credit card transactions. Most banks protect against fraudulent transactions.

Address recurring charges – If your card is linked to recurring charges (gym membership, rent, utilities), contact those businesses.

Check credit rate – To ensure you’re not the victim of identity theft, check your credit rating a month or two after you lose your credit card.

Does ING increase credit card limits?

You may want to increase your credit card limit for many reasons, such as having access to more spending money. However, if you are using the Orange One credit card issued by ING, you may not be able to do so. 

ING customers can choose a credit limit of their preference when applying for the Orange One credit card. Depending on your financial situation, this limit can be anywhere between $1,000 and $30,000. If you qualify for a Rewards Platinum card, the minimum credit card limit will likely be $6,000. 

Ideally, you should set your credit card limit knowing how much you can afford to repay each month and keep your expenses lower than this level. With most credit cards, you should have the option of requesting a credit card limit increase at a later time, although you will need to qualify for any increase. With an ING credit card, limit increases are out of the question (at the time this was published), which means you may want to apply for a higher credit card limit from the beginning. Remember that you have the option of decreasing your ING credit card limit at a later time.

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.

Should I get a credit card?

Once you've compared credit card interest rates and deals and found the right card for you, the actual process of getting a credit card is quite straightforward. You can apply for a credit card online, over the phone or in person at a bank branch. 

How do you apply for a credit card?

You can apply for a credit card online, over the phone or in person at the bank. Once you’ve compared the current credit card offers, the application process is quick and easy. Before you get your application started, you’ll need to gather your personal information like proof of ID, payslips and bank statements, proof of employment and details of your income, assets and liabilities. To be eligible for a credit card, you’ll need to be an Australian citizen over 18 and earn a minimum of $15,000 each year. Once you’ve applied for a credit card, you should get a response fairly instantly. If your credit card application has been approved, you should receive a welcome pack with your new credit card within 10-15 days.

What should you do if your credit card is compromised?

Credit card fraud is a serious problem. If your credit card is compromised and you’re wondering what to do, here are a few precautionary steps to take.

Contact you credit provider – Get in touch will your credit card provider. If you feel your card has been compromised, you should be able to lock or block it.

Monitor your accounts – Keep an eye on your credit card accounts. Any unauthorised transactions could be a sign your credit card has been compromised.

Check your credit rating – It’s also important to check your credit rating, to ensure you’re not a victim of identity theft or some other financial mischief.

How to get a credit card for the first time

A credit card can be a useful financial tool, provided you understand the risks and can meet repayment obligations.

If you’re a credit card first-timer, review your options. Think about what kind of credit card would suit your lifestyle, and compare providers by fees, perks and repayments.

Once you’ve selected a card, it’s time to apply. Credit card applications can generally be completed in store, online or over the phone.

When you apply for a credit card for the first time, you must meet age, residency and income requirements. As proof, you must also provide documentation such as bank account statements.

Does Woolworths Qantas offer any credit card insurance?

Credit cards can be useful for managing your expenses, but they also come with other advantages like credit card insurance. Your Woolworths Qantas Platinum Credit Card may offer a host of complimentary insurance options, which include: 

  • Travel insurance: Cover for your whole family when they travel with you, with unlimited overseas medical emergency cover and $500,000 accident insurance for accidental loss of life.  
  • Purchase security insurance: If you purchase an eligible product with your Woolworths Qantas Platinum Credit Card, the cost of theft or damage that occurred within 90 days of the purchase will be covered, provided the amount doesn’t exceed the purchase price of the item or up to $2500 per event. 
  • Extended warranty insurance: If you purchase eligible goods with your Woolworths Qantas Platinum Credit Card, this complimentary insurance will extend the manufacturer’s Australian warranty by up to 12 months. 
  • Global hire car excess waiver: If you’re legally liable to pay an excess or deductible in the event of loss or damage to a rental vehicle that was booked using your Woolworths Qantas Platinum Credit Card, the costs will be covered. 

To find out more about Woolworths Qantas credit card insurance, you can call them on 1300 10 1234. 

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.