Australia's 'Big Four' banks slash frequent flyer points

By Chris Chamberlin, May 5 2017
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ANZ, Commonwealth Bank, NAB and Westpac have all rolled out sweeping cuts to credit card frequent flyer points.

The reductions affect almost every cardholder, with some cards soon to earn up to 85% fewer points per dollar spent than they do today.

The changes come in response to the RBA’s upcoming July 1 cap on ‘interchange fees’, which will restrict the amount that credit card companies earn every time a customer swipes their card to a mere 0.8% of a transaction’s value.

As a result, the banks will have less money coming in which can be invested in customer-pleasing perks such as frequent flyer points.

What’s more, that cap will apply not just to Visa and MasterCard spend, but also to American Express transactions on cards issued by the Big Four Banks – on which revenues of 2-3% are currently typical, but which will be lowered to just 0.8% in line with Visa and MasterCard.

Wherever you bank, here’s a summary of how the Big Four’s upcoming changes will affect you.


ANZ is no longer issuing new American Express credit cards and will deactivate all existing ANZ AMEX cards from August 5 2017 – instead providing new earning rates on its points-earning Visa credit cards of between 0.16 and 1.0 airline frequent flyer points per dollar spent, depending on which card and frequent flyer partner you choose and how much you spend.

Read: ANZ stops issuing American Express credit cards

Over at the Commonwealth Bank, AMEX cards will be retained but earning rates will be slashed by up to 85% on everyday spend, including CBA’s top-of-the-line Diamond Awards AMEX card which will soon earn fewer points per dollar spent on most transactions than its companion MasterCard.

Read: Commonwealth Bank retains AMEX cards, tanks credit card points

NAB will also continue issuing American Express cards but with the number of points earned per dollar spent cut by up to one third. Further changes to monthly points capping arrangements also clamp down on the total number of points attainable per month with reductions of up to 85%, and some customers earning no points at all after spending just $3,000 per month.

Read: NAB joins CBA in cutting credit card frequent flyer points

Finally, Westpac’s dual-card strategy of pairing an AMEX with a Visa or MasterCard will remain, but with cuts to AMEX earning rates of just over 15% on all above-Platinum cards, while Black-level MasterCards will also earn 60% fewer points on international transactions. Payments to the ATO won’t earn any points at all from July, except on direct-earning KrisFlyer cards which aren’t open to new customers.

Read: The next domino falls: Westpac reduces credit card points

Disclaimer

Executive Traveller may receive a commission when you apply for these credit cards via our links.

You should seek independent advice and consider your own personal circumstances before applying for any financial product.

Chris Chamberlin

Chris Chamberlin is the Associate Editor of Executive Traveller and lives by the motto that a journey of a thousand miles begins with a single step, a great latte, a theatre ticket and a glass of wine!

Qantas - Qantas Frequent Flyer

22 Jul 2015

Total posts 2

I have been busy maximising my NAB and CBA Amex for the last few months, as I had a feeling the banks would be making these cuts soon.  Thanks Government for these changes. I bet we will not see any reductions to credit card surcharges though.

Virgin Australia - Velocity Rewards

16 Dec 2015

Total posts 41

There's no upside for anyone here. This is a case of the RBA acting in an ideological fashion and protecting their NPP initiative.

Everyone in the RBA Payment Systems board should be sacked.

09 Feb 2012

Total posts 20

I got my letter yesterday from CBA regarding my diamond awards card. I'll be seriously considering dropping to a lower tier card (with a lower annual fee) considering this wipes out a lot of the benefits for me of the higher tier card.

The only upside is they have dropped all international transaction fees on the AMEX.

Hi ajobbins: just a heads-up that the fee waiver only applies to CBA's Platinum and Diamond cardholders for transactions made from July 1 2017 - so if you dropped below the Platinum card (such as to Gold Awards or basic Awards), this fee would still be payable. :)

09 Feb 2012

Total posts 20

Thanks ChrisCh - yep, understand. That's the one thing that might get me to keep it. I pay the platinum fee for my diamond card already, so there is no point dropping down - but I'll have to go over statements for the last year or so and work out how much I paid in ICC fees and if it would be offset by a high tier card charge.

Virgin Australia - Velocity Rewards

10 Dec 2016

Total posts 45

The BIG issue is that the banks are capping the spend on most cars for points earning, if you spend a lot on cards then all they are going to do is drive people direct to Amex

Qantas - Qantas Frequent Flyer

03 Apr 2016

Total posts 2

sad, as many companies charge an excess of up to 2-3%  for use of the Amex/double card or not accept the Amex at all. Even Princess Cruises has now introduced a 1.1% fee to use a credit card to settle on board costs, only for Australian card holders, so much for cashless on board. Discrimination is what I call it

11 Jun 2016

Total posts 14

Got the notification on my CBA platinum amex yesterday ........ terrible news and can't wait till the new Qantas direct card comes out

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