NAB slugs its credit card flyers, other banks coy
(from The Australian 21 May)


National Australia Bank told its 150,000 Gold Rewards card members on Friday it was diluting the value of their points and in future it would cost 1.5 points to buy every Qantas frequent-flyer point, rather than one for one. The new system is retrospective, so points customers accumulated believing they were worth one Qantas point each will have their value diluted from June 15.

The other major banks still offer one Qantas frequent-flyer point for each loyalty point.

However, ANZ and the Commonwealth Bank refused yesterday to disclose their intentions on points exchanges. Only Westpac stated it would continue its one-for-one deal.

NAB's general manager of cards, George Beatty, confirmed Qantas was charging the bank more to buy its frequent-flyer points since Ansett's demise, but claimed the change was driven by the demands of customers. "Customers wanted more choice in terms of reward. Travel is important, but it is not the most important," he said.

But Australian Consumers Association finance policy officer Catherine Wolthuizen said frequent-flyer points were overwhelmingly favoured by the banks' credit card holders. She accused NAB, which recently raised its fees and charges, and closed more country branches, of "gouging their customers".

All the banks were "asking for loyalty from customers in terms of rewards, yet their track record has been very poor in honouring that relationship", Ms Wolthuizen said.

NAB credit card customers get one point for every dollar they spend on their cards. A Melbourne-Sydney return flight that now costs 30,000 Gold Reward points will cost 45,000 points after June 15.

NAB also has announced a new $33 "program membership fee" on top of the $88.30 cost of a gold card.

However, NAB has a new deal with Harvey World Travel allowing customers to book trips with any airline. Under that system, a full-fare Melbourne-Sydney return trip would cost 66,000 points.

Mr Beatty said the extra cost bought convenience: "The biggest single cause of dissatisfaction with frequent-flyer schemes is you've got to book so far in advance it makes it meaningless," he said.

The ANZ is expected to launch a new credit card product soon, but it is unclear if that also will dilute the value of its customers' points. A spokeswoman would only say: "We are always looking to make improvements."

The Commonwealth's card services head, Nick Kennett, said his bank already concentrated on "pragmatic awards" rather than "aspirational" air travel, but it was "refreshing all the time".

A spokesman for Westpac, whose card customers lost millions of points upon the collapse of Ansett, said the bank's Altitude card allowed travel on "90 per cent of the world's airlines", and one point would still buy one Qantas point.