Why credit card reward points aren’t all created equal

In the world of points-earning plastic, ‘one point’ doesn’t always mean ‘one frequent flyer point’...

By Chris Chamberlin, July 23 2021
Why credit card reward points aren’t all created equal
Disclaimer

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

The information provided on this page is purely factual and general in nature. You should seek independent advice and consider your own personal circumstances before applying for any financial product.

Whether searching for a new credit card or giving an existing card its regular check-up, many people focus on the number of ‘points’ that can be earned per dollar spent.

But 'points' alone don't always reveal the full picture.

For example, on Qantas- and Velocity-branded credit cards, one ‘point’ earned on plastic means one ‘frequent flyer point’ in your account – simple.

Yet many other credit cards take a different approach, first delivering ‘points’ in a bank’s own loyalty program, which can later be converted into frequent flyer points.

1 point doesn't always equal 1 point

Bank-operated loyalty schemes can be confusing for many shoppers, because each card issuer sets its own ‘conversion rates’ – these influencing the number of ‘bank points’ cashed-in for every actual airline frequent flyer point credited to your account.

Conversion rates can also vary from one bank to the next, even when crediting those heard-earned points to the same airline: and in some cases, even differ based on the colour of the card you hold.

Take St.George Amplify Rewards as an example: the loyalty program attached to the bank’s points-earning Amplify Platinum with Amplify Points and Amplify Signature with Amplify Points credit cards.

Amplify Rewards has three airline frequent flyer partners attached – Virgin Australia Velocity, Singapore Airlines KrisFlyer and Malaysia Airlines Enrich – and adopts a 2:1 points conversion rate from Amplify Rewards to each of those frequent flyer programs.

That means every 2 Amplify Points in your Amplify Rewards account are worth 1 frequent flyer point: 2 Amplify Points = 1 Velocity point, for example.

Once you know what the ‘points’ you’re earning are actually worth, you can then better-evaluate and compare each card’s true earn rate.

In this example, St.George’s Amplify Signature Visa with Amplify Points card offers 1.5 Amplify Points per $1 spent. Using that 2:1 conversion rate, we can see that the true reward per $1 spent is 0.75 Velocity points, 0.75 KrisFlyer miles or 0.75 Enrich miles, being the end result of those ‘1.5 points’, divided by 2, given the 2:1 exchange rate.

That’s not to be sniffed at – the Amplify Signature Visa is Australia’s highest-earning Visa card for KrisFlyer miles, especially with the bank’s 10% 'birthday bonus' thrown in on top.

However, it also shows that you need to know not just a card’s earning rate, but also its frequent flyer conversion rate, to understand the true value of the rewards you’re earning.

This works with any bank: once you know the card’s earning rate, and its conversion rate to your preferred frequent flyer program, you’ll be able to work out the true value of any credit card ‘point’ in Australia.

Stuck trying to find your bank's conversion rates?

The frequent flyer conversion rates attached to bank-operated loyalty programs aren't always easy to find, but Executive Traveller has done the legwork for you.

Here's a handy reference chart covering a range of credit card reward programs and the conversion rates they use when shipping points across to some of the more popular frequent flyer schemes.

Loyalty program
Virgin Australia Velocity
Singapore Airlines KrisFlyer
Cathay Pacific Asia Miles
Emirates Skywards
AMEX Membership Rewards
2:1
2:1
2:1
2:1
ANZ Rewards
2:1
3:1
3:1
N/A
CBA Awards
Ultimate: 2:1
Diamond: 2:1
Platinum: 2:1
Gold: 2.5:1
Awards: 2.5:1
N/A
3:1
N/A
Citi Rewards
Prestige: 2:1
Premier: 2:1
Rewards: 2.5:1
Prestige: 2.5:1
Premier: 2.5:1
Rewards: 3:1
Prestige: 2.5:1
Others: N/A
Prestige: 2.5:1
Premier: 2.5:1
Rewards: 3:1
Diners Club Rewards
1:1
2:1
2:1
2.5:1
HSBC Rewards
2:1
Premier: 2:1
Platinum: N/A
Premier: 2:1
Platinum: N/A
N/A
NAB Rewards
2:1
3:1
3:1
N/A
St.George Amplify Rewards
2:1
2:1
N/A
N/A
Suncorp Rewards
2:1
2.5:1
N/A
3:1
Westpac Altitude Rewards
3:1
3:1
3:1
N/A

This isn't a comprehensive list of the frequent flyer partnerships of each bank, of course, but highlights that different banks do indeed use different conversion rates – not only from one frequent flyer program to the next, but in some cases, between different types of points-earning cards.

It's also worth considering that different frequent flyer programs command different volumes of points to book comparable flights.

Etihad Guest, for instance, allows travellers to book many Virgin Australia flights from 6,900 Etihad miles, versus 7,800 Velocity Points or more directly through Virgin Australia – and that's just one example.

Wherever you're headed, knowing knowing not only your bank's earning rates, but also its conversion rates, is the key to getting great value from any credit card rewards scheme, and knowing where you stand when earning reward points.

Also read: This month's top Qantas credit card sign-up offers

Disclaimer

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

The information provided on this page is purely factual and general in nature. 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 not just with a single step, but also a strong latte, a theatre ticket, and later in the day, a good gin and tonic.

Qantas - Qantas Frequent Flyer

22 May 2018

Total posts 39

Several years ago I cashed in a pile of credit card points with Westpac.. I missed out by 3 months as the original was $1000 of flying for 80,000 points.. they changed it to $1000 for 160,000.. had to add a bit more to get an around the world business class trip.  Hopefully my current pile of 1m+ will get me some travel in ???????

Qantas - Qantas Frequent Flyer

21 Jul 2014

Total posts 3

I'm puzzled by the fact that Amex points cannot be directly transferred to One World.

05 Mar 2015

Total posts 316

That would be because there's no actual OneWorld loyalty program or single points 'currency', OneWorld is an alliance of airlines, each with their own frequent flyer program and 'currency'.

Hi Hank, AMEX Membership Rewards points can be converted into miles with the Oneworld frequent flyer programs of Cathay Pacific (Asia Miles) and Malaysia Airlines (Enrich). Plus, members at the Ascent Premium tier of Membership Rewards (generally those with an AMEX Platinum Charge Card or Centurion Card) can also convert points manually to Qantas Frequent Flyer. Those seeking Qantas Points will also find several direct-earning Qantas cards available from AMEX.


Hi Guest, join in the discussion on Why credit card reward points aren’t all created equal