NAB to shake up rewards credit card program while maintaining AMEX partnership
NAB will soon restructure its rewards credit card program, which includes scaling back the earn rates attached to AMEX companion cards, while significantly reducing points caps across the board in a move expected to hit big spenders the most.
The major bank has confirmed that interchange fee regulations being introduced by the Reserve Bank of Australia has influenced the revamp set to take place in July.
Key changes:
- NAB’s American Express companion card earn rates will be slashed
- Points caps will fall significantly across four of its rewards card products
What’s staying the same:
- NAB will continue its affiliation with AMEX
- Visa earn rates will remain unchanged
Westpac has also announced today it will be adjusting AMEX earn rates that apply to one of its rewards cards, dubbed the Altitude Black, however the major bank is leaving the amount of points cardholders can earn uncapped.
This comes one day after competitor CommBank unveiled a major rewards card overhaul, where affected cardholders are similarly set to face lower AMEX earn rates and points caps once July hits the calendar.
Despite all the bad news around the changing rewards credit card landscape, it may come as a relief to some Aussie spenders loyal to AMEX companion cards that three out of the four big banks are maintaining their partnership with the US card provider.
ANZ is the only major who’s abandoned American Express as a result of the RBA interchange fee cap regulations, that will soon place tighter restrictions on the fees charged between banks.
How will NAB restructure rewards?
American Express earn rates will fall
The major bank will no longer offer AMEX companion cards with earn rates as high as 1.5 points per dollar spent. Instead, earn rates will drop to 1 point with the premium Velocity and Qantas card, and 0.75 when it comes to the Qantas Rewards and Velocity Rewards cards.
| NAB rewards credit cards affected | Current points earn rates per $1 spent with AMEX companion cards | New* points earn rates per $1 spent with AMEX companion cards |
|---|---|---|
| Qantas Rewards Qantas Rewards Premium | 1 1.5 | 0.75 1 |
| Velocity Rewards | 1 1.5 | 0.75 1 |
*Changes effective from July 1
Points caps will drop
As detailed in the table below, from July 1 cardholders with one of the four affected NAB credit cards in their wallets will no longer be able to accrue points once they exceed a significantly lower spend threshold. Monthly spend caps will drop with Qantas and Velocity Rewards cards to just $3,000, while the monthly points cap on the premium versions will fall to $5,000.
| NAB rewards credit cards affected | Current points cap (spend per month) | New* points cap |
|---|---|---|
| Qantas Rewards | $20,000 | $3,000 |
| Qantas Rewards Premium Velocity Rewards Velocity Rewards Premium | $25,000 $20,000 $20,000 | $5,000 $3,000 $5,000 |
*Changes effective from July 1
How NAB cardholders will be affected
For everyday Aussies who only use their credit card once in awhile, the upcoming drop in AMEX companion card earn rates and points caps may not impact heavily on the amount of points they generally accrue each month. However, it’s a different story for big spenders.
Scenario: Based on Mozo data, the rewards value will fall by 30% (or 6,750 fewer points) for Qantas Premium cardholders whose monthly purchases add up to $1,500 each month - assuming they use their AMEX companion card 75% of the time and Visa companion card 25% of the time.
“Obviously the most brutal change is the severely reduced points cap, where cardholders with deep pockets will no longer have the opportunity to rack up points by spending as much as $20,000 or $25,000 in a month,” explained Mozo’s Data Services Director, Andrew Duncanson.
Duncanson is expecting to see the value of rewards reduce further over time, as banks seek to offset their profit losses due to the RBA’s regulatory changes.
“I’d urge all Aussie rewards card lovers to choose their cards carefully and keep an eye on the market, to ensure they’re being offered the best value for money.”
If you’re in the market for a new rewards credit card, Mozo’s comparison hub is the ideal place to shop around with around 115 cards to choose from.