kawoh

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.

Eugene

Nope, not "only in Australia".

See http://www.flyertalk.com/forum/Forum91/HTML/000228.html .

Perhaps NAB marketing folks hired some of the Carlson's brightests...

SPN Lifer

Actually, due to the value of the Australian Dollar, people who earn points in that currency have been getting an extraordinarily good deal for many years.

This is the real story behind the slightly higher levels required to spend Qantas miles as compared to American-based carriers. It is also the basis for the erstwhile 2:1 Starwood conversion ratio, not just the former use of kilometres instead of miles, as had been often mentioned.

I was looking into arbitraging my frequent flyer miles by earning them in Australian dollars.

Right now Diners Club (U.S.) does not even offer a conversion of points to Qantas miles, though of course Diners Club (Austr.) does. And they are still at 2:1!

If all the other Australian banks follow the lead of National Australia Bank, then it looks like this gravy train is over, and I'm too late to climb aboard.

But you haven't been "robbed." The bank just woke up to what a great deal they have been giving you and decided to bring things in line with the rest of the world.

Have any other banks in OZ followed suite?

hillrider

Oh yes he has! This is no different than a bank giving (for whatever reason) 10% interest on its accounts. 6 months later, it decides that since everyone else gives 5%, it should give out 5% as well, and apply this interest retroactively (by cutting any non-witdrawn interest in half). No problem changing the rules going forward (you can always change bank), but dinging the unclaimed interest is robbery.

I hope that Australian consumer protection laws and its judiciary system are strong enough to punish this shenanigan.