Change coming to frequent flyer points

carddA MAJOR shake-up is coming to credit card rewards programs and it could make it harder for customers to earn valuable frequent flyer points off purchases.

From July 1, many new and existing card holders can expect to see a revamp to the banks’ rewards programs, which may include reduced earn rates and limits on the kinds of transactions that attract points.

ANZ, Commonwealth Bank, NAB, Westpac, St George, Citibank and the Bank of Melbourne have already announced changes to their card portfolios, and other changes are expected to be reported closer to July 1.

“The practical impact of this is banks are going to make less money on these cards than they used to, and the way they’re dealing with that is by cutting the number of points they offer on their frequent flyer and rewards cards,” Mr Kidman told

“Essentially, banks purchase those points in bulk from airlines, so it costs them money, and now that they have less money, they’re going to buy less of them.

“The end result for the consumer is pretty much every card on the market is cutting in various ways the number of points you can earn.”

The changes will not affect customers with stand-alone retail loyalty cards, such as Coles’ Flybuys cards and Woolworths’ Frequent Flyer cards.

Mr Kidman said he expected more changes would be announced before the end of the financial year.

“Some banks have literally cut the number of points you can earn, compared to what you might have earned before,” Mr Kidman said.

“A lot of them have put caps in place, so they’ll say customers can still earn points but only on the first $3000 they spend, for example. That’s a big nuisance if you’re a bit of a points hog and you’re pushing everything through your card to earn points.

“And quite a few of them have changed where you can earn points. So previously, anything you might have spent on your card would earn you points, but now, it might only be with specific retailers or airlines.”

Mr Kidman said he expected to see many card holders rethink their accounts and shop around after the changes come into effect on July 1.

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