There has been an increase in the number of co-brand partnerships between credit card companies and airlines in Australia as competition heats up between Australian airlines wanting to enter the credit card space.
Major card issuers are pairing up with airlines and their loyalty programs to lure in new customers with travel perks. As a welcome result, Australians now have a full array of travel credit cards at their disposal. We have compared ten of the most popular co-brand travel cards in the market and found that the American Express Velocity Platinum Card, a card released by American Express in partnership with Virgin Australia, leads the pack across all products and customer profiles.
The Qantas American Express Ultimate Card, offered with Australia’s flagship carrier Qantas, and the Virgin Australia Velocity High Flyer issued by Virgin Money also ranked highly across the board. Other cards considered include the ANZ Platinum Qantas Frequent Flyer Card, Citibank Emirates Card, Jetstar Platinum MasterCard, Westpac Altitude Platinum Plus, Westpac Earth Platinum, NAB Qantas Platinum, and the Singapore Airlines Westpac Platinum Card.
To gauge the value of the cards, we assumed characteristics that would be typical to a frequent flyer cardholder. For example, he or she would not be transferring balances, earns the initial bonus points by making a minimum purchase, and shops at bonus partners about 20% of the time to maximise earning power. The per-annum Net Rewards Return (NRR) was calculated by adding up the initial bonus points, points earned from the first year of spending, and the value of complimentary flight offers, and taking away the annual fees, taxes, and any redemption charges to the flight rewards.
We also pictured three customer spending with a monthly spend of $2,000, $4,000, and $8,000 per month, and considered the value of domestic (Sydney-Melbourne) and international (Sydney-USA) flights. They then drew up the top three cards* for each profile.
Figure 1: Net Rewards Return on $2000 per Month Spend - Domestic
Figure 2: Net Rewards Return on $2000 per Month Spend - Domestic
Figure 3: Net Rewards Return on $8000 per Month Spend - Domestic
The American Express Velocity Platinum Card aced the list in the domestic travel category for all spending profiles. Net rewards for $2,000, $4,000, and $8,000-per-month spenders were valued at $834, $1,385, and $2,488 respectively. The Qantas American Express Ultimate Card came in second, and the Virgin Australia Velocity High Flyer Card ranked third.
The American Express Velocity Platinum Card continued to outrank the competition in international travel, offering net rewards of $1,319, $2,353, and $4,421 respectively to users spending $2,000, $4,000, and $8,000 per month. The Qantas American Express Ultimate Card and Virgin Australia Velocity High Flyer remained at second and third place in the $4,000 category, but switched places in the $4,000s. In the $8,000 sector, the Qantas card was nudged back to second and the ANZ Platinum Qantas Frequent Flyer Card surged to third place.
Figure 4: Net Rewards Return on $2000 per Month Spend - International
Figure 5: Net Rewards Return on $4000 per Month Spend - International
Figure 6: Net Rewards Return on $8000 per Month Spend - International
The AMEX Velocity Platinum Card’s strong suit lies largely in its generous point-earning scheme. Every dollar spent on the card earns the user at least 1.5 Velocity Points, and earns twice as much at partner airlines Virgin Australia, V Australia, Pacific Blue, and Polynesian Blue. Customers also get complimentary return flights between selected Australia cities after the first spend on the card every year.
Most of the cards surveyed boast a range of other perks, including bonus points upon signup, travel insurance, and access to a wide range of lifestyle rewards. Every card has something to offer. For avid travellers and those who want to put their dollars to work, these co-brand cards are definitely worth a look.
Visit our Frequent Flyer Credit Cards guide for a comprehensive comparison of Australian frequent flyer card offers.