Article: CommBank Awards Isn’t Ideal for Frequent Flyers

[AFF Editor]

CommBank Awards Isn’t Ideal for Frequent Flyers is an article written by AFF editorial staff:

CommBank Awards Isn't Ideal for Frequent Flyers

There are many credit cards in Australian that offer better value and more transparency to frequent flyers than CommBank Awards cards.

www.australianfrequentflyer.com.au

You can leave a comment or discuss this topic below.

 

[Revenge]

I have a CBA Diamond Awards Mastercard. I like it for the following reasons:

1. I have a mortgage with CBA and they wrap the $350 fee in a package fee of the same amount that also covers the mortgage features, so it's essentially no extra cost for me.
2. The fact that it's possible to transfer points to QF, VA, UA and AC programs, albeit at pretty poor ratios.
3. The included international travel insurance is really good because it doesn't require you to purchase the flights on the credit card. So you can purchase flights using your Amex, and still get the CBA travel insurance.

I was previously enrolled in the auto transfer to Qantas points, but I am going off Qantas a bit recently so have instead elected to bank the CBA points in order to be able to transfer them to the desired other program as necessary. What you've said in this article about them removing award partners willy-nilly therefore scares me!

 

[theblank]

Kind of true, but with the Ultimate card there is no annual fee (anyone who doesnt meet the spend threshold is a mug and should't be in this game ) which makes it very hard to beat despite the reduced points earn. To get better you got to pay ~$300 a year which takes such a big chunk out of the nett return it cant be beat because of monthly (or annual) points earn thresholds.

 

[RooFlyer]

As a CBA customer, complete with personal, business accts, personal banker etc, no fees on the card, I gave up my CBA Diamond card years ago, when the scheme got enhanced a bit too much, and then went a'churning. Not sorry to see it go then, and by the sound of it, not sorry now. As a CBA shareholder, they can be as stingy as they like, now.

 

[docjames]

Fee-free from CBA (with HL) but i detest the $30 QF gouge to transfer to QF. I appreciate that is probably driven by QF not CBA.

 

[ChrisFlyer]

I think the biggest upside of a program with so many transfer partners, but rubbish transfer rates, is that it may be useful for truly global travellers.

There's more to loyalty than the big names like Qantas, Velocity, KrisFlyer etc. They all have their upsides, but so do others. So those who take a more advanced and strategic approach to miles might choose to build a balance in some offshore program somewhere - and one you can't usually top up by a simple transfer.

Winding the clock back a few years, I had a good balance of United miles - enough for a business class long-haul, but just a tad short of first class. Had I been able to simply convert credit card points, even at a poor rate, I'd have loved that simplicity to close that gap. Sure, it wouldn't make sense to convert credit card points in that way to start from zero, but if it's just a little top-up here and there, having the option can be quite useful. (Instead I had to shift around some hotel points from places like Hyatt and Marriott to get my United account high enough for the redemption, as it didn't make sense to buy in a relatively small quantity.)

But yeah, with CBA really being more of a mainstream program, the article really hits the nail on the head. People expect clarity, notice, and information. Right now, CBA isn't delivering that, and the allure of the hard-to-get foreign transfers is outweighed by failing with the basics.

 

[Mattg]

The transfer rate from CBA to Emirates Skywards is now 5:1 (previously an already lousy 4:1)

 

[Revenge]

Wow 5:1 for Emirates. That really is poor value.
For me, the Velocity redemptions at 2:1 are still decent value, and it's nice having options for AF/KLM Flying Blue (2.5:1) and United (3.5:1) in Australia. I could also imagine occassionally topping up my IGH or Bonvoy accounts from CBA awards if short for a hotel a redemption.

 

[p--and--t]

Was offered cc fee free due to mortgage with CBA.

But program benefits so poor went with other banks that I have to pay the annual fee but much better rewards.

 

[Scr77]

On overseas transactions, the Ultimate card works for me. Gives 1KF mile per dollar with no fees.

 

[levelnine]

Your average 'saver' level Emirates award in business class to Europe is around 200K Skywards points (+ $1200 in taxes) one way.

So even with a top tier CBA card, you need to spend $666K on your card to get a single return trip. At that point, you have to wonder who bothers.

 

[Hunter4vr]

Their list of partners is very good but the earn rate after factoring the redemption rates is awful, they don't seem to even have decent sign-up bonuses either.

CBA cards have always been a miss for me.

 

[Revenge]

Yeah the only reason I have one is because it is included in my mortgage package fee and because the travel insurance is (or at least was) great due to the fact you didn't need to make the flight purchase on the card. I've gotten 12 months of free travel insurance for the family out of it for the US and Canada, which would have been expensive.

 

[Pele]

I echo the comments of many above- i could have a free one due to a mortgage with them but i dont.

I have been churning for 10 years and CBA are hands down the worst of any major bank. They arent getting better either. I have had cards with almost every other bank in this time and am yet to see a reason to go for a CBA credit card.

 

[sydunipete]

Agreed. I keep my Ultimate even though they seem to make it harder and harder to do so ($4K spend to avoid fees, required spend for travel insurance to kick in etc etc).

But what it does offer is travel insurance that doesn't require a return ticket and that allows up to a 12 month trip. That alone allows me to justify the monthly fees but if that feature ever fell away I'd be gone in a flash.

The rewards transfer to VA is ok with twice yearly bonuses.

The Master card is accepted in more places than my Amex Platinum and is fee free for overseas transactions. So for me, that combination of Ultimate CBA MC and Amex Plat works pretty well.

 

[Lynda2475]

FYI WBC/SGB, NAB and ANZ will also give you a black/platinum points earning card as part of home loan package so effectively free, but those cards have better earn rates.

Even if you have to pay an annual fee accepting a poor earn rate to save ~$300 is flawed economics if it means you earn significantly less than the annual fee in useable points.

 

[bam71]

We had the Diamond for years, but haven’t used it for a very long time it as its point value is dreadful, much better to use our Amex Plat and Edge, and we have HSBC QF Plat for those that dont take Amex. Just got replacement cards from CBA and I just cut them up and closed the account. Very poor value ( for us anyway).

 

[jkbaus]

I have Diamond. Originally CBABankcard, then BA Gold. Offered to upgrade to Diamond with annual fee remaining at $59 but about to go up to $96 pa.
Kept it for using the travel insurance for many years.
This card has a high credit limit and as I am retired, I am unlikely to get any other card with a decent credit limit.
Rarely use this card. More likely to use my Amex Edge, Anz travel adventures, and 28 degrees for o/s.

 

[theblank]

Was offered cc fee free due to mortgage with CBA.

But program benefits so poor went with other banks that I have to pay the annual fee but much better rewards.

I find it hard to beleive that Paying a large Annual fee gives you a greater net benefit, but I am sure you did the due diligence.

I have 2 general rule of thumb:

(1) spend 10K to earn $100 points value. Therefore a $400 annual fee means $40k spend to just break even.b
and most cards have upper points earn limits at around 80k spend so that diminishes
(2) any free Rewards credit card beats any with an Annual fee, assuming $1 spend = 0.50 VFF

I did the deep dive with spreadsheets, and my latest is that the Commbank Smart for my meagre spend of around 30-40k coughs over anything else by a long shot - mainly due to the extra 1000pts for one transaction a month and no Annual fee.

 

[p--and--t]

I find it hard to beleive that Paying a large Annual fee gives you a greater net benefit, but I am sure you did the due diligence.

I have 2 general rule of thumb:

(1) spend 10K to earn $100 points value. Therefore a $400 annual fee means $40k spend to just break even.b
and most cards have upper points earn limits at around 80k spend so that diminishes
(2) any free Rewards credit card beats any with an Annual fee, assuming $1 spend = 0.50 VFF

I did the deep dive with spreadsheets, and my latest is that the Commbank Smart for my meagre spend of around 30-40k coughs over anything else by a long shot - mainly due to the extra 1000pts for one transaction a month and no Annual fee.

Yep, diff cards for different folks and diff spends and diff benefits.