Commonwealth Bank slashes frequent flyer points on credit cards
By Chris C., September 10 2013
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.
The Commonwealth Bank is set to slash the rate at which the bank’s American Express, MasterCard and Visa credit card holders earn Qantas and Virgin Australia frequent flyer points.
The as-yet-unannounced changes to the per-dollar earning for CBA’s family of Commonwealth Awards cards – flagged in the fine print at the bottom of this web page – will take effect from October 1st.
In particular the cuts will see Commonwealth Bank cardholders hit with Australia’s worst earning rates for Qantas Frequent Flyer points.
Additionally, from November 20 the bank will no longer allow points to be transferred to Air New Zealand’s Airpoints program, which closes the door to flight redemptions across the breadth of the Star Alliance.
Here’s how the changes shake out.
Qantas Frequent Flyer
From October 1, the following reductions to Qantas Frequent Flyer earn rates (per $1 spent) will apply:
Awards card: American Express drops from 0.75 to 0.6 points, with MasterCard/Visa down from 0.5 to 0.4 points.
Gold Awards card: American Express from 1 to 0.8 points, and MasterCard/Visa from 0.5 to 0.4 points.
Platinum Awards card: American Express from 1.5 to 1.25 points, while MasterCard/Visa remain at the already-low 0.5 points.
Diamond Awards card: No changes are being made to the current earn rates (1.5 points with American Express and 0.625 points with MasterCard).
Taken as read, CBA’s Awards cards will offer Australia’s worst earning rates for Qantas Frequent Flyer points.
The point-capping rules for each card remain unchanged.
Velocity Frequent Flyer
Many Virgin Australia travellers also take a hit, with the bank decreasing the value of existing Commonwealth Awards points for customers with Awards and Gold Awards cards – although not the premium Platinum and Diamond cards – by setting a poorer ‘exchange rate’ against Virgin Australia’s Velocity Frequent Flyer scheme.
Customers can currently convert every 2 Commonwealth Awards points for 1 Velocity point, but after November 1 the swap rate jumps to 2.5 Awards points, representing a 25% cost increase on the previous rate.
Here are the lower ‘effective earning rates’ for converting Commonwealth Awards (based on each dollar spent) to Virgin Australia Velocity points as of November 1.
Awards card: American Express from 0.75 to 0.6 points and MasterCard/Visa from 0.5 to 0.4 points.
Gold Awards card: American Express from 1 to 0.8 points and MasterCard/Visa from 0.5 to 0.4 points.
Platinum Awards card: American Express from 1.5 to 1.25 points, while MasterCard/Visa remain at 0.5 points.
Diamond Awards card: these retain their existing earn rates (1.5 points with American Express and 0.625 points with MasterCard).
Air New Zealand Airpoints
D-Day for the CBA’s Air New Zealand flyers is November 20, after which you’ll need to funnel your Commonwealth Awards to your Virgin Australia Velocity account and make Air NZ bookings by treating the Kiwi carrier a Virgin Australia partner.
Commonwealth Awards
The Platinum Awards American Express card is also facing a reduced earn rate when it comes to the bank’s own Commonwealth Awards.
From October 1, cardholders will earn 2.5 Awards points per $1 spent, down from the existing rate of 3 Awards points per dollar.
All other cards (including the Platinum Awards MasterCard/Visa) retain their existing Awards earn rates.
Why wasn’t I told?
If you’re wondering why the Commonwealth bank hasn’t advised you of these changes, the answer lies in the applicable Terms and Conditions which you can download here [170kb PDF].
Section 2, pages 3-4, allows the bank to make changes “at any time”, provided that customers receive “at least 20 days written notice of any changes … to Qantas Frequent Flyer Direct or Airline Rewards … which the bank reasonably considers to be material”.
Assuming the CBA rates this drastic devaluation of points as being noteworthy and ‘material’, we’d expect that customers will receive a letter from the bank this week.
Keep up to date with the latest news for business travellers and frequent flyers: follow @AusBT on Twitter.
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 is a a former contributor to Executive Traveller.
Qantas
22 Oct 2012
Total posts 318
This makes the Woolworths Mastercard continue to look a pretty good deal. With an annual fee of around $80, they offer 1 point per dollar, with no annual cap. Can you beat that?
Their only problem is that they sometimes provide very small credit limits, and one has to fight hard to get it increased.
Qantas - Qantas Frequent Flyer
17 Aug 2012
Total posts 2199
Yay for Qantas Cash.
Qantas - Qantas Frequent Flyer
11 Sep 2013
Total posts 3
Depending on circumstances the HSBC Visa Qantas Platinum Card may be better. Yes the $199 annual fee is more but in addition to the 1 point per dollar on local spending they also give a return of 2 points per dollar for overseas spending. Personally for someone like me who purchases most of my airline tickets from overseas sites and uses my card for overseas expenses the points can rack up pretty quickly. Have to admit that I get great business class fares from overseas travel agents as I am not originally from Australia so for someone who spends locally I agree the Woolworths card would be just about the best at the moment.
13 Sep 2013
Total posts 22
Hi SydneyDoc215
Do you actually purchase airline tickets from overseas sites with an Australian departure port?
If yes would you can to share which sites allow you to do that?
13 Sep 2013
Total posts 22
Hi SydneyDoc215
Do you actually purchase airline tickets from overseas sites with an Australian departure port?
If yes would you can to share which sites allow you to do that?
Qantas - Qantas Frequent Flyer
10 May 2011
Total posts 732
Interesting article especially in conjunction with the article of Ben Schlappig yesterday and yet another example of the fact we live in a different world where points are not handed out like candy when taking out credit cards / services from Financal Services companies (which is the main points generator for US based FF).
I wonder if this change was prompted by the fact that CBA has to pay QF a much higher fee to buy the miles. Don't think this info is available however?
Let's hope the other banks will not follow suit (I know NAB made some slight changes recently to their FF earning cards, but not affecting earning of FF points).
21 Apr 2012
Total posts 3006
It's a simple case of demand and supply. With only two main operators, each with their suit of high-end and low-end products, it would not make sense for them to compete aggressively through frequent flyer schemes.
Consequently this affects the consumer through limited choices for earning points from third parties, poor rates of accrual from existing channels and fewer opportunities to game the system.
I fear this is yet another variant of the “tyranny of distance” argument, which has precipitated the idea that rampant competition is not ideal for survival – that somehow managed oligarchy is the consequence to bear to ensure our current living standards and quality of life.
Qantas - Qantas Frequent Flyer
19 Nov 2011
Total posts 243
Saying goodbye to CBA credit card for me.
I've got QF Bankwest Plat which earns me 1 QF point per dollar.
AMEX Plat CBA will be comparable to Plat Edge which Membership Reward points are much more better value than CBA Awards and I get a free domestic flight annually.
QantasFF Platinum
16 Feb 2012
Total posts 152
I received a letter that my Qantas American Express Ultimate Card was changing from 1.5points per dollar to 1.0 points per dollar in July.
Is there ANY Card out there that still offers 1.5 points per dollar for general purchases? (I dont need the insurance and concierge services)
Qantas - Qantas Frequent Flyer
10 May 2011
Total posts 732
The NAB Premium Card (formerly NAB Platinum) offers 1.5 points per dollar spend on everyday purchases. Points are capped at 100K per statement period (so effectively you can earn a maximum of 1.2 million points per year....). Fee is reasonable at 250aud per year and it even has insurance and concierge sevrices (although you do not need it).
Qantas - Qantas Frequent Flyer
19 Nov 2011
Total posts 243
Sounds like the high annual fee on this card is not worth the point reduction.
Qantas - Qantas Frequent Flyer
10 Apr 2012
Total posts 319
Thanks for the heads up.. looks like it will be bye bye Comm Bank Plat Amex and hello Qantas Cash Card for the time being.
Virgin Australia - Platinum
21 Dec 2012
Total posts 86
I believe for Visa, Macquarie and Citibank have the best for Qantas at 1 for 1 uncapped or $200K a year which to be honest is a fair bit.
Virgin money Platinum offers 1.25 for every dollar spent direct to Velocity uncapped.
Qantas - Qantas Frequent Flyer
19 Nov 2011
Total posts 243
Which Citibank VIsa?
Visa Select? Visa Signature? or the standard Visa Platinum that you are referring to?
Virgin Australia - Platinum
21 Dec 2012
Total posts 86
The new Signature card. Select does as well although the annual fee is a fair bit higher and I dont think its worth it personally for only an extra point on Qantas spend:
Additionally, all these cards say eligible spends, I wonder what an ineligible spend is?
See the link
https://www.qantas.com.au/fflyer/dyn/partners/card-citibank
Qantas - Qantas Frequent Flyer
19 Nov 2011
Total posts 243
Ok - I'm confused.
Between 1 Oct to 1 Nov:
Spend on AMEX Platinum: $1 to 2.5 CommAward Points which converts to 1.25 Velocity points. (exchange 2.5 CommAwards to 1 Velocity Point)
After 1 Nov:
Spend on AMEX Platinum $1 to 2.5 CommAward Points which converts to 1 Velocity Point. (exchange 2.5 CommAwards to 1 Velocity Point).
Am I correct?
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