Virgin Money changes reward earn rates on Velocity Flyer and High Flyer cards

Sally McMullen 4 April 2017

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Velocity Flyer and Velocity High Flyer cardholders will no longer collect extra points on Virgin transactions.

In a trend we've seen over the last few months, Virgin Money is the latest credit card issuer to alter its credit card reward earn rates. As of June 15 2017, owners of the Velocity Flyer and Velocity High Flyer Visa credit cards will notice some changes to how many points they can earn.

From 15 June, cardholders will no longer earn additional points when they use their card to make transactions with Virgin Australia. Currently and until the June deadline, Virgin Velocity Flyer cardholders can earn 1 Velocity Point per $1 spent on any purchase with Virgin Australia. However, from 15 June 2017, transactions with Virgin Australia will collect points at the same rate as all other eligible purchases. In other words, you'll soon earn 0.66 Velocity Points per dollar spent on Virgin Australia transactions and all other eligible purchases. This will reduce to 0.5 Velocity Points per dollar once you've spent $1,500 or more each statement period.

The loss is even greater for Virgin Australia Velocity High Flyer cardholders. While you’d usually earn 3 Velocity Points per $1 spent on Virgin Australia transactions, cardholders will now earn just 1 Velocity Point per dollar spent with Virgin Australia.

The terms and conditions of the Velocity High Flyer card reduced earn rate are also about to change. Currently, cardholders earn 1 Velocity Point per $1 spent on eligible purchases up to $10,000 and 0.5 Point for every $1 spent thereafter. However, from 15 June, this reduced earn rate threshold will decrease to $8,000 each month. For the Velocity Flyer card, the earn rates will remain at 0.66 points per $1 spent, up to $1,500 per month and 0.5 Velocity Point per $1 thereafter.

The good news is that these changes won't have a drastic impact on all Virgin Money Velocity Flyer and High Flyer cardholders. While the reduced earn rates on Virgin Australia transactions is a loss, it will only make a significant difference if you regularly spend with the airline. Unless you regularly fly for business or leisure, it’s unlikely the change in earn rates will hurt your points balance too much.

Similarly, the reduced points cap threshold will only impact cardholders who spend more than $8,000 per statement period. This might only affect big spenders who use their card for business transactions or big-ticket purchases and have expenditure of more than $8,000 each month. Otherwise, you’ll enjoy the same earn rate as always.

Plus, cardholders will continue to enjoy perks such as the $129 Virgin Australia Gift Voucher each year, two complimentary lounge passes and bonus points offers.

While it’s difficult to say exactly why Virgin Money has altered the earn rates conditions across its Velocity Flyer and Velocity High Flyer cards, it’s likely that we can attribute the change to the upcoming interchange fee regulations. As of 1 July 2017, interchange fees will be capped at 0.8% across all Australian-issued Visa and Mastercard credit cards. As high-end rewards cards usually collect fees between 1.5% to 1.7% of the transaction, many card issuers have been changing and reducing the value of their rewards programs to offset the losses they’ll experience come July and beyond.

Find out more about how the interchange fee regulations will impact your credit card rewards program.

If you’re one of the Virgin Money cardholders who will be stung by the upcoming reward changes, you can compare other frequent flyer credit cards to see if there's a better value product on the market.

Picture: Shutterstock

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