When first starting out in the frequent flyer space, it can be tempting to go straight for a card that earns Qantas or Velocity Points directly. And while there is certainly nothing wrong with that approach, it’s also worth considering picking a card that links to a bank reward program.
There are benefits and drawbacks, but overall, these flexible bank reward programs are generally a handy tool for advanced frequent flyers. You’ll find out why soon!
What are the main bank rewards programs in Australia?
Most major banks in Australia offer an in-house rewards program with various airline partners. You earn points in the bank reward program first, before later transferring them to various airline partners at your desire. For example, ‘3 to 1’ means three bank points transfer to one airline point or mile.
It’s not an exhaustive list, but here are the main programs and partnerships to be aware of:
| Rewards Program | Virgin Australia Velocity | Singapore Airlines Krisflyer | Cathay Asia Miles | Emirates Skywards | Air New Zealand Airpoints |
|---|---|---|---|---|---|
| American Express Membership Rewards | 2 to 1 | 2 to 1 | 2 to 1 | 2 to 1 | 200 to 1 |
| Westpac Altitude | 3 to 1 | 3 to 1 | 3 to 1 | 3 to 1 | 180 to 1 |
| HSBC Rewards | 2 to 1 | 2 to 1 | 2 to 1 | - | - |
| Amplify St.George, Bank of Melbourne, Bank SA | 2 to 1 | 2 to 1 | - | 2 to 1 | - |
| Citi Rewards Card | 2.5 to 1 | 3 to 1 | - | - | - |
| Citi Premier Card | 2 to 1 | 2.5 to 1 | - | - | - |
| Citi Prestige Card | 2 to 1 | 2.5 to 1 | 2.5 to 1 | - | - |
| ANZ Rewards | 2 to 1 | 3 to 1 | 3 to 1 | - | 200 to 1 |
| NAB Rewards | 2 to 1 | 3 to 1 | 3 to 1 | - | 200 to 1 |
It’s important to know that these are the transfer rates. The rates at which you earn points will differ wildly between banks and even on different cards within the same bank, so you need to do your research on those.
The main benefit of bank reward programs is you are not locked into a specific airline. You can transfer your points over to various airline partners at your leisure, depending on which airline offers the best reward seats for your next trip. There’s nothing worse in the points world than being stuck with hundreds of thousands of points you can’t use!
Know your earn rates with bank rewards programs
The best way to compare different bank reward program cards is to work out the ‘effective earn rate’ for your target airline. Let’s say you want to maximise your Singapore Airlines KrisFlyer balance. You have three cards in mind – the American Express Explorer, the ANZ Rewards Black and the St.George Amplify Signature.
The standard earn rate of each card is:
- American Express Explorer: 2 Membership Rewards point per dollar
- ANZ Rewards Black: 2 ANZ Rewards points per dollar (halves after $5,000/month)
- St.George Amplify Signature: 1.5 Amplify points per dollar
Next, we look at the transfer rates from each bank rewards program to KrisFlyer:
- American Express Explorer: 2 Membership Rewards points to 1 KrisFlyer mile
- ANZ Rewards Black: 3 ANZ Rewards points to 1 KrisFlyer mile
- St.George Amplify Signature: 2 Amplify points to 1 KrisFlyer mile
With those figures, we can now work out how many KrisFlyer miles you are earning per dollar (the ‘effective earn rate’):
- American Express Explorer: 1 KrisFlyer mile per dollar
- ANZ Rewards Black: 0.66 KrisFlyer miles per dollar (halves after $5,000/month)
- St.George Amplify Signature: 0.75 KrisFlyer miles per dollar
So if you were purely after a card that earned the most KrisFlyer miles on an ongoing basis, then the American Express Explorer is a good pick at one mile per dollar.
But you’ll also need to factor in annual fees and sign-up bonuses. For example, the American Express Explorer Card standard annual fee is $395/year (offset by a $400 travel credit), while the St.George Amplify Signature standard annual fee is $279 a year.
Summing Up
Plenty of your own research is required if you’re planning on joining a bank’s reward program. But it’s fairly easy to do the maths – just find out the card’s earn rate and transfer rate to your favourite airline. Take into account sign-up bonuses, annual fees and other perks that might interest you (such as lounge passes).
The other thing to bear in mind is that usually the cash back cards are capped on transaction value of $100, right? I haven’t seen one yet. So for transactions up to that value, yep, it’s a better return than a single point per $. But after, not so much. Pressure to innovate around rewards cards is good though 🙂
We use the Amex Platinum Edge for supermarkets, petrol stations, and (when we’re scrambling for points) supermarket gift cards for expenditure at other stores. It’s 3 points per dollar spent that way. There is an annual fee which is offset by a complimentary Australian flight so it’s pretty well cost neutral for us.
Then there are our Westpac Altitude Black Mastercard and Amex cards which are exempt from a steep annual fee with our home loan package. These linked cards give a reasonable complimentary overseas travel insurance (if you prepay $500 per person of travel costs) and offer automatic Australian car rental excess insurance.
The Westpac Altitude Black Amex gives a 1.5 points earn to the dollar which is better than the 1 point per dollar from Amex Platinum Edge at most retail stores. The Westpac Altitude Black Mastercard gives 0.625 points per dollar which is better than nothing!
It’s worth noting that the Amex Platinum Edge gives only 0.5 points per dollar for bills like council rates, telcos, electricity and gas and the Westpac Altitude cards offer no points at all if a bill is paid by BPay- so I use the Westpac cards and pay other bills either direct debit or online through the company portal (or through Post Bill Pay at the Australia Post portal). Some bills like our council rates I phone to pay (because their online payment fees are excessive).
Sounds confusing? Of course. Worth it? We’ve been travelling overseas on points once or twice a year for the last three years now.
I have a Nab credit card I use for everyday expenses and have racked up almost 200,000 points with Qantas
Let us know how you go.