Building your portfolio of credit cards for 2018

By Chris Chamberlin, January 22 2018
Building your portfolio of credit cards for 2018
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.

With so many banks cutting credit card frequent flyer points during 2017, that fantastic piece of plastic in your wallet mightn’t be as rewarding as before: and if you’re still using it to pay for your everyday purchases, you could be missing out on valuable points every time you shop.

For example, if your main card is a Commonwealth Bank Diamond Awards AMEX – the top-of-the-line rewards card of Australia’s largest credit card issuer – the number of points you’ll earn on most purchases has recently been slashed by over 80%.

That begs the question, why earn as little as 0.2 frequent flyer points per dollar spent with CBA, when you could be taking home nearly eight times as many points by using a better credit card with a similar annual fee?

Here are three things to consider when choosing your credit card line-up for 2018.

Step one: Choosing the right frequent flyer program

With so many frequent flyer programs and bank-operated rewards schemes in the market, it can sometimes be hard to decide which points are the best points to earn from your credit card.

Certainly, Qantas Frequent Flyer is the most popular choice for Australians with around 35% of all credit card spend nationwide attracting Qantas Points, but Virgin Australia’s Velocity Frequent Flyer scheme is another strong contender, with both programs having webs of partner airlines attached.

For example, Qantas Points aren’t only useful for booking Qantas flights: they can also be used to fly with Air Vanuatu, American Airlines, British Airways, Cathay Pacific, China Eastern, Emirates, Fiji Airways, Finnair, Japan Airlines, LATAM, Malaysia Airlines, Qatar Airways, SriLankan Airlines and more.

Snooze in Cathay Pacific business class courtesy of your Qantas Points...
Snooze in Cathay Pacific business class courtesy of your Qantas Points...

Similarly with Velocity, you can of course burn your points on flights with Virgin Australia, but also for travel with Air New Zealand, Alitalia, Delta, Etihad Airways, Hawaiian Airlines, Hainan Airlines, Hong Kong Airlines, Singapore Airlines, South African Airways, Virgin Atlantic and more.

On top of that, there’s the option of earning points in offshore programs like Cathay Pacific Asia Miles, Etihad Guest or Singapore Airlines KrisFlyer, but this is a strategy taken by more advanced frequent flyers: and if that’s not you, a simpler choice is between Qantas and Velocity.

Step two: Choosing the right AMEX card to maximise your points

American Express cards offer some of the highest frequent flyer earning rates in Australia, so if you’re serious about racking up some solid points on your credit card spend, get things off to a flying start with an AMEX card of your own.

For earning points with Qantas, the Qantas AMEX Ultimate Card serves up 1.5 Qantas Points per dollar spent on most purchases, uncapped, with a side of 100,000 bonus points for eligible new customers (apply by April 9 2018 and spend $3,000 in the first three months), plus a $450 Qantas flight voucher every year that offsets the card’s $450 annual fee.

That means if you’d otherwise spend at least $450 on flights with Qantas each year, the card is practically free – but for less-frequent travellers, the $249/year Qantas AMEX Premium Card is a more affordable alternative which still scoops up 1.25 Qantas Points per dollar on most spend.

Velocity loyalists will instead gravitate to the AMEX Velocity Platinum Card with its own earning rate of 1.5 Velocity points per dollar spent plus an offer of 50,000 Velocity points for eligible new cardholders.

This bundle also includes a complimentary return flight each year, two Virgin Australia airport lounge passes, two visits to the American Express lounge at Sydney Airport, domestic and international travel insurance and more, to provide extra value in return for the card’s $375 annual fee.

Unwind before your flight with Virgin Australia lounge access, courtesy of your AMEX card...
Unwind before your flight with Virgin Australia lounge access, courtesy of your AMEX card...

There’s the American Express Explorer Card to consider as well, from which points can be manually converted to Velocity plus a host of global airline frequent flyer programs including Asia Miles, KrisFlyer and Skywards, with a yearly $400 travel credit again negating the card’s annual fee, being $395.

One advantage to the Explorer card is that you can choose where to send your frequent flyer points later – so if you don’t have a set plan for your points but you know you should be earning them anyway, you can do so while keeping your options open.

Step three: For everything else, there’s Visa or Mastercard

AMEX cards may earn the most points, but they’re not always accepted and can sometimes attract a surcharge, which is why many savvy shoppers keep a Visa or Mastercard in reserve, to still earn some points everywhere else.

For heavy spenders seeking Qantas Points, the Qantas Premier Platinum Mastercard offers one Qantas Point per $1 spent up to $10,000 per month on most Australian purchases, lowering to 0.5 Qantas Points per $1 spent thereafter at home, plus 1.5 Qantas Points per AUD$1 spent in foreign currencies.

You’ll pay $149 in annual fees in year one and can earn 75,000 bonus Qantas Points when you spend $3,000 within 90 days of card approval, but the annual fee does increase to $299 in future years, with perks like two airport lounge passes, discounted Qantas companion fares and travel insurance given in return.

A more affordable alternative – particularly if you often shop where AMEX is indeed accepted – is the HSBC Platinum Qantas Visa, priced at $199/year with 60,000 Qantas Points upfront (spend $3,000 on purchases in the first three months) and an earn rate of one Qantas Point per $1 spent up to $2,500 per month, reducing to 0.5 Qantas Points per $1 spent thereafter, capped at 7,500 Qantas Points monthly.

Prefer to earn Velocity points? The ANZ Rewards Black Visa comes with no annual fee in the first year and an earn rate of two ANZ reward points per $1 spent (equal to one Velocity point per $1 spent) up to and including $5,000 per month, and the equivalent of 0.5 Velocity points per $1 spent thereafter.

ANZ points can also be converted into KrisFlyer miles, but at a less generous 3:1 rate – so if that’s your goal, the St. George Amplify Signature Visa gets a better bang for your buck, offering up to 0.825 KrisFlyer miles per dollar spent through the Amplify Rewards scheme, being 0.75/$1 up front with a yearly 10% bonus in the month of your birthday on the credit card points you've earned in the past year.

Whichever cards you choose, just be sure to use the right card for the right purchase: don't whip out a Mastercard or Visa if you could have paid by AMEX instead and earned more 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

06 Nov 2014

Total posts 343

Excellent choice. Pretty much what I have in my wallet.

 

My main cards are:

1. Amex - explorer and platinum edge. Explorer is my go to card for everyday spent and edge just for supermarkets.

2. Non-Amex - I use ANZ Qantas black card mainly over the premier card. Main problem with premier is that it doesn't award points on government spent such as rates and council parking. Those one even with explorer is only 0.5ppd. So ANZ at 1ppd is still good.

 

I do have CBA diamond card still, not because it's great but because it's free to me as part of the mortgage package. I use it for free travel insurance and no foreign transaction on its Amex that still earns 1.5 Velocity ppd (1.65 if you factor in regular 15% bonus).

 

I also have Citiprestige which was the best card until Jun last year. Now it's only used for restaurants that don't acccept Amex. Otherwise I'm only keeping it for PP, chauffeur and 4th night free. May cancel it soon....

 

Already cancelled my Altitude Black that I held for 13 years. Used to be the best Amex card before explorer......

Etihad

07 Jan 2016

Total posts 10

Would you recommend CBA travel insurance over the Amex Explorer's?

agreed on the Altitude Black.....

Qantas - Qantas Frequent Flyer

06 Nov 2014

Total posts 343

I wouldn't recommend it over any other TI. I activate it simply cuz it's free. The only issue with other TI that comes with the card is that you need to book a rt on that card for it to be activated. If you used your explorer then you are covered by explorer. But it didn't hurt to activate CBA either.

CBA TI also covers travels on miles redemption while explorer doesn't unless you used the MR to book directly (not via another FFP).

26 Jul 2013

Total posts 12

Your wallet pre and post is almost identical to mine! I do have one question... what do you think is the best visa/mastercard that has uncapped points?

Qantas - Qantas Frequent Flyer

06 Nov 2014

Total posts 343

That's the $6M dollar question I've been asking as well. Few options:

1. ANZ black card which earns 1ppd QF/VA points up to $7500/statement and no annual fee for first year. $7500 should be adequate for most people.

Downside is after first year the annual fee of $400+ can really sting.

2. St George amplify is uncapped and non-tiered. Earns 0.75ppd (0.875ppd factor in BD bonus). The cross over line is spending of $10k/statement in which both ANZ and St George earns 8750 points. So if your average spent is >$10k/statement, go with St George. If not, stick with ANZ. However do factor in that St George has a more favorable transfer ratio to KF than ANZ. But if you are aiming at QF or VA, then $10k is the cut off.

3. Coles wasn't a bad budget non-Amex card. But Citi just took over and it won't award points on government spent. Plus they just suspended FB to EY, which makes it less appealing.

22 Jan 2018

Total posts 1

Yeah... Citi cards used to be the best until they changed their points policy last year...

Qantas - Qantas Frequent Flyer

06 Nov 2014

Total posts 343

Still some value. Their merchant categories seem to be more generous than Amex. Eg. I've discovered most food outlets in food court like Gong Cha ice tea place is categorized as restaurants and earns 3ppd (1.5 VA/1.2KF), and my local Asian grocery is considered as supermarket and earns 2ppd (1VA/0.8KF). However, they don't make much difference. Only a couple of hundred points here and there. The inability to earn on rates, rego and land tax is a big killer, and the poor earn rates for big bills like insurance doesn't help either. That's the reason why QF premier isn't that useful imho. These big bills is what ANZ...et al come in handy.

Qantas - Qantas Frequent Flyer

18 Feb 2017

Total posts 25

Do any of these cards earn points when paying the ATO? I (sadly) have a mega tax bill to pay...

Qantas - Qantas Frequent Flyer

06 Nov 2014

Total posts 343

Amex earns 0.5ppd if you pay directly. Alternatively you can pay via rewardpay. There is an article by ausbt on how to use it. Small fee involved tho.

09 Jul 2016

Total posts 28

Qantas Bankwest world does

Virgin Australia - Velocity Rewards

20 Dec 2011

Total posts 18

I think Amplify pays on ATO

. Thankfully my WPBC Krisflyer cards do too

09 Jul 2016

Total posts 28

the WPBC has ~3 months left on it now?

Virgin Australia - Velocity Rewards

20 Dec 2011

Total posts 18

daft009 - my WPBC KF cards were reissued to me last year with an expiry of 06/21
All Westpac-issued American Express cards are being deactivated on April 4 2018, regardless of the expiry date printed on the card, as we reported last year.

Westpac will soon unveil a brand new credit card issued directly by American Express, not Westpac (just with the Westpac logo on the front), for which existing customers will have the opportunity to apply for - but it'll be a new product, so things like fees, earning rates etc. may change.

Virgin Australia - Velocity Rewards

20 Dec 2011

Total posts 18

I did get a letter telling of this for my WPBC Black Amex but not for the Kris Flyer card? Am i too hopeful?

09 Jul 2016

Total posts 28

yep! its going too :'(

Qantas - Qantas Frequent Flyer

17 Jan 2018

Total posts 3

Have AMEX given any clue as to which card they will offer to replace the Westpac/ Amex visa which finishes in April.

It's a new card being launched in partnership with Westpac which will be announced soon (rather than moving customers to an existing card like AMEX Explorer, for example).

Qantas - Qantas Frequent Flyer

17 Jan 2018

Total posts 3

Thanks Chris Ch very h

Virgin Australia - Velocity Rewards

29 Jul 2016

Total posts 3

In anticipation of the changes westpac are rolling out i've dumped my Altitude Black and have already taken out a Platinum Velocity card from Amex, was approved over the phone the next day after applying with no hassles. I wanted to partner that with the Velocity High Flyer but Citi have unfortunately knocked me back on it for whatever reason. I'm now on the hunt for a Visa/Mastercard with a direct earn to Velocity. Preferably with bonus sign up points, any suggestions?

Virgin Australia - Velocity Rewards

20 Dec 2011

Total posts 18

Hmm... now that i have stopped crying over the impending loss of the WPBC KF Amex (which paid 1.25 points/$ for ATO) I need to consider what next next.

- is there a high earner for ATO?

- if yes, is there a high earning cap


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