A year on from the interchange fee regulations, earn rates have dropped while bonus points have increased across rewards credit cards.
In 2017, the value of rewards credit cards appeared to take a hit following the introduction of interchange fee regulations on 1 July. Earn rates dropped, points caps and reduced rates were introduced and dual credit cards were largely removed from the market. You can see the full list of the rewards credit cards that were impacted by the regulations on finder.
With these changes, we predicted that the value of rewards credit cards would fall significantly. Australia’s interest in rewards credit cards also fell as a result, according to research from finder in January 2018.
But it’s not all doom and gloom for points chasers. According to finder’s recent analysis of the Australian credit card market between June 2017 and June 2018, introductory bonus points offers have increased significantly in the last 12 months. The median sign up bonus points on offer has increased from 40,000 to 50,000 points in the last year. Some introductory offers have even gone as high as 150,000 bonus points!
However, as the bonus points have ballooned, the spend requirements to earn these bonus points have also risen. Usually you have to spend a certain amount in a set period to earn the bonus points, with the current spend median at $3,000 up from $2,500 in 2017.
Although bonus points offers are up, earn rates have dropped on average. Across all rewards credit cards, the average earn rate was 1.07 points per $1 spent in June 2017. This has since dropped to 1 point per $1 spent. American Express cards are known for their higher earn rates and you can still expect to get a higher than average earn rate with your Amex. However, American Express earn rates have fallen from 1.51 points per $1 to 1.10 points per $1 since June 2017.
Nonetheless, there are still a bunch of cards that offer up to 1.5 points per $1 spend. This is why it’s important to compare individual earn rates before you pick a rewards credit card.
So, can you still get value from your frequent flyer credit card? Based on the average earn rates, a cardholder spending $3,000 per month could earn 54,000 points a year. If that was in Qantas Points, that’s enough to fly return from Melbourne to Sydney three times (8,000 points each way), one-way from Sydney to LA (45,000 points) or in business class from Sydney to Bali (50,000 points). Most of these flights have the potential to help offset your card’s annual fee.
How much value can I get from my frequent flyer credit card?
To demonstrate the value you can get from your frequent flyer credit card a year on from the interchange fee regulations, Points Finder has looked at the potential monetary value you can get from the card based on the rewards you can redeem. To give you a few ideas, the examples are based on the value you’d get if you redeemed your card’s bonus points for a gift card, economy flight or business class flight.
|Credit Card||Rewards program||Rewards point per $1 spent||Annual fee||Purchase rate||Bonus points||Value in gift cards (Finder value metric:
$5 per 1,000 points)
|Value in economy flight (Finder value metric: $20 per 1,000 points)||
Value in business flight (Finder value metric: $40 per 1,000 points)
|American Express Westpac Altitude Black – Qantas bundle||Qantas||1.25||$499||20.24%||120,000||$301||$2,551||$5,551|
|American Express Westpac Altitude Platinum – Qantas bundle||Qantas||1||$50 first year, $249 after that||20.24%||90,000*||$520||$2,230||$4,510|
|NAB Qantas Rewards Signature||Qantas||1||$295 first year, $395 after that||19.99%||100,000||$325||$2,185||$4,665|
|St.George Amplify Signature – Qantas||Qantas||0.75||$279||19.49%||90,000||$261||$1,881||$4,041|
|Virgin Australia Velocity High Flyer||Velocity||1||$289||20.74%||80,000||$231||$1,791||$3,871|
|ANZ Frequent Flyer Black||Qantas||1||$425||19.99%||75,000||$70||$1,555||$3,535|
|HSBC Platinum Qantas||Qantas||1||$199||19.99%||60,000||$221||$1,481||$3,161|
|Qantas American Express Ultimate||Qantas||1.5||$450||20.74%||55,000||$5||$1,370||$3,190|
|Macquarie Black Qantas||Qantas||1||$99 first year, $299 after that||20.70%||40,000||$221||$1,181||$2,461|
*This bonus points offer is exclusive to finder
From this lineup of cards, you can get between $5 or $5,550 extra value from your card based on how you spend your bonus points. As you can see, redeeming your points for an economy or business class flight offers much better value than gift cards. Cards with higher bonus points also generally offer more value for your money. As these cards usually come with bigger annual fees, make sure to consider how these costs can eat into the overall value of your card.
Although credit card earn rates have gone down across the board since the interchange fee regulations rolled out in July 2017, you can still get hundreds or thousands of dollars worth of extra value from your frequent flyer credit card. If you’re in the market for a card, you can use our frequent flyer credit card comparison to get started. Pay attention the bonus points offer, earn rates and annual fees to find the most valuable card for you.