Last year rewards lovers around the country felt their hearts sink as American Express announced it would be decreasing earn rates across many of its rewards cards on April 15 2019.
The debate on whether or not rewards cards are worth the points or perks they offer has been ongoing and with Amexs’ plans to reduce earning rates just around the corner, this could be the tipping point for many Aussie rewards lovers. But before you say goodbye to your prestigious plastic, Mozo research has proven that despite the upcoming changes, Amex rewards cards can still deliver better value than most.
So if you’re an American Express customer or are thinking about becoming one, we’ve got the details on how these new changes will affect your next shopping trip.
Amex point earn and redemption rates: what’s changed
The biggest change most reward lovers will want to know about? How many points you’ll earn per dollar spent. Let’s start with the good news. The Amex Explorer Card, Platinum Edge Card and Essential Card, which use Amercian Express’s own rewards points program, will keep their points per dollar earn rate.
However, cards linked to the Qantas Frequent Flyer or Velocity Frequent Flyer program will fall a quarter of a point per $1 spent.
How many points can I earn on my Amex rewards card?
|Rewards Card||Points per $1 previously||Points per $1 after April 15th 2019|
|Platinum Edge Card||1||1|
|Qantas Discovery Card||1||0.75|
|Qantas Premium Card||1.25||1|
|Qantas Ultimate Card||1.5||1.25|
|Velocity Escape Card||1||0.75|
|Velocity Platinum Card||1.5||1.25|
*These earn rate changes are for ‘regular spending’, which refers to merchants that do not fall under a specific category, such as supermarkets, petrol stations, government bodies or insurance.
While a quarter of a point might not seem like much of a difference, it’s the redemption rates Aussie spenders need to look out for. If you’re looking to score a free flight or $100 gift card, it now means spending more on your rewards plastic.
Getting specific, the number of points required to redeem a $100 gift card have increased by 48% across the Essentials, Platinum Edge and Explorer Credit Card, while points needed for a free Sydney to Melbourne flight have jumped by 50% on the Explorer, 50% on the Essentials and 100% on the Platinum Edge.
To put things into perspective, let’s compare how much you’d have to spend before and after the changes to earn a free Sydney to Melbourne flight and a $100 gift card:
|Spend to redeem a $100 gift card before changes||Spend to redeem a $100 gift card after changes||Spend to redeem a Sydney to Melbourne flight before changes||Spend to redeem a Sydney to Melbourne flight after changes|
|Platinum Edge Card||$13,500||$20,000||$7,800||$15,600|
|Qantas Discovery Card||$16,160||$21,547||$8,000||$10,667|
|Qantas Premium Card||$12,928||$16,160||$6,400||$8,000|
|Qantas Ultimate Card||$10,733||$12,928||$5,333||$6,400|
|Velocity Escape Card||$19,500||$26,000||$7,800||$10,400|
|Velocity Platinum Card||$13,000||$15,600||$5,200||$6,240|
What other changes is Amex making?
On April 15, American Express are also bringing in more positive changes to their rewards program, including an increase in card acceptance, improving government payment points earn and abolishing confusing points tiers. Here are the details.
Points tier adjustment
American Express rewards cards currently come with a points tier system that dictates how many points you’ll earn based on the transaction you make. This will now change to a flat earn rate across most Amex rewards cards, and depending on the way you like to use your plastic, could be good or bad news.
For example, the American Express Platinum Card (a charge card) currently uses a 3-2-1-0.5 points tier system - 3 points per dollar spent at restaurants, 2 points per dollar spent on travel and foreign transactions, 1 point per dollar spent on all other purchases and 0.5 points per dollar spent on government payments, insurances and utilities. On April 15, this will change to 2.25 points per dollar spent on all transactions except government payments, which earn 1 point per dollar spent.
So if you were used to growing your point stash by picking up the dinner bill, you’ll have to rethink that strategy. But on the flipside, in this case you’ll start earning more points per $1 on regular spends.
Increased government payment points earn
In the past, paying government bodies with your Amex card would see you earn 0.5 points per $1 spent. But from April 15, this will jump to 1 point per $1 spent on the Explorer, Essentials, Platinum and Platinum Edge Credit Card.
However, cards that are linked to Qantas or Velocity Frequent Flyer programs will remain the same.
Greater card acceptance
One good thing to come from the changes is that Amex customers will now have more opportunities to use their card than ever before.
In the past, American Express prided themselves on being a high-end card issuer, but this luxe status more than often meant having higher merchant fees than their competitors, which was then passed onto their customers through hefty surcharges.
American Express has lowered its merchant fees to bridge the price gap between their cards and Visa and Mastercard and bumped up the number of retailers accepting Amex cards by 120,000.
What isn’t American Express changing on its rewards cards?
We all know that a rewards card is more than just points and flights. There are also a bundle of added perks for travellers and shoppers alike that are not changing on April 15, including:
- Complimentary travel insurance - A free travel insurance policy that covers the cardholder, their partner and two dependent children, so long as you meet the minimum spend requirement to activate it.
- Airport lounge access -This perk lets you kick back and relax in a heap of different airport lounges all around the world before boarding your flight.
- Concierge service - Think of this as your own personal assistance, helping you book reservations to restaurants, hotels and other social activities while overseas.
- Pre-sale tickets to concerts - - If you’re a music, sport or entertainment buff, you’ll have access to pre-sale tickets to your favourite shows.
- Dining experiences - Or if you’re a foodie, American Express will invite you to exclusive dining experiences, food festivals while helping you discover the best places to eat in your location.
- Purchase protection - Items purchased with your card that are stolen, lost or damaged will be covered under Amex’s purchase protection insurance.
- Refund protection - If you purchase an item and then see it listed at a cheaper price elsewhere, Amex will refund you the difference.
- Emergency card replacement - No matter where you are in the world, if you lose your card, Amex will issue you another one within 2 business days for free.
Plus all the standard standard credit card features, like the interest rate, annual fee and 55 interest-free days aren’t changing.
Why are American Express making these changes?
One of the ways credit card companies fund rewards schemes is by charging merchant interchange fees. American Express lowered merchant fees in order to improve card acceptance, but while greater card acceptance, more opportunities to earn points and smaller surcharges are big wins for Amex customers, this meant having to reduce point earn rates to cover the cost.
Are American Express cards still worth it?
It’s the big question with the tricky answer, as it will depend on the person. But Mozo research shows that Amex rewards cards still hold more value than rewards cards issued by the big four banks.
Amex cardholders spend significantly less to bag either a $100 gift card or free one way flight from Sydney to Melbourne using points than customers of the big banks.
How does the average spend for an Amex card compare to the big 4 banks?
|Average spend required for a $100 gift card*||Average spend required for a one-way Sydney to Melbourne flight*|
*Spend required to earn enough reward points to redeem the relevant reward for each credit card, averaged across each provider’s set of product offers.
Which American Express card is right for me now?
All this means that finding your plastic match with American Express just got a bit tougher. To help you navigate through the range of Amex reward cards, we’ve created a list based on the type of spender you might be:
The ‘here and there’ spender:
You: Rarely use your credit card for everyday expenses and are not fussed with racking up points or using flashy perks. You’re just after an easy to manage piece plastic with a low rate and even lower annual fee.
Try: The American Express Low Rate Credit Card for its no annual fee and rock bottom purchase rate of 8.99%.
The cheap and cheerful spender:
You: Love the idea of having handy perks and points by your side, but don’t want the high end price tag. You’re looking to use your card for everyday spending and redeem points for the occasional flight.
Try: The American Express Essentials Credit Card to earn 1 point per $1 spent and enjoy its low purchase rate of 14.99%, and no annual fee.
But if you prefer your points to go toward you next flight, try the Amercican Express Qantas Discovery Credit Card for its earn rate of 0.75 Qantas points per $1 spent and $0 annual fee.
You: Are a frequent traveller looking to cash in on perks, like car hire and airport lounge access. And when you’re not travelling the globe, you’re at home bumping up your points stash whenever you can.
Try: The American Express Explorer Credit Card for the highest earn rate of 2 points per $1 spent, plus 50,000 Membership Rewards Bonus Points when you spend $3,000 within 3 months.
The freebie fan:
You: Know a good deal when you see one and always have your plastic ready to go. You love a freebie and don’t mind paying a higher annual fee because the rewards and perks are worth it to you.
Try: The Platinum Edge Credit Card for its reasonable $195 annual fee, complimentary travel insurance and $200 travel credit every year.
The travel addict:
You: Start planning your next adventure the second you finish your last one and are a big fan of travelling in style. You’re in it for perks like airport lounge passes, complimentary travel insurance and Frequent Flyer points.
Try: If stacks of bonus points are not your end game, try the Velocity Escape Credit Card and earn 0.75 Velocity Points per $1 spent, with the option to double that on Virgin Australia purchases.
The Velocity evangelists:
You: Frequently fly with Virgin and want to start earning points to put toward your next flight. Things like complimentary travel insurance and travel assistance are must-haves as well as everyday spending features, like purchase and refund protection.
Try: The Velocity Platinum Credit Card and receive 50,000 bonus points when you spend $3,000 in the first three months, plus a free return domestic flight every year after your first annual spend.
The luxe lover:
You: Love to spend big and need a card that can keep up with your shopping habits. You’re after a card that’s loaded with perks, like complimentary travel insurance, bonus points and free flights.
Try: The Qantas Ultimate Credit Card for its earn rate of 1.25 Qantas points per $1 spent, 100,000 bonus points if you spend $3,000 in 3 months and $450 annual Qantas Travel Credit.
Or if you’re after bonus Qatnas points, try the Qantas Premium Credit Card - there’s 30,000 bonus Qantas points on offer if you spend $3,000 in 3 months and two free Qantas Club lounge invitations after your first card spend on selected Qantas products.
But the best way to find out whether an Amex credit card is right for you is to start comparing. You can do this by checking out our rewards revealer tool or by heading over to our rewards card comparison tool.