CBA cuts QFF points

[Cool Cat Phil]

Received the dreaded letter today as well!

My plan of action is to use the CBA Diamond card in a reasonably heavy fashion over the next 7 weeks, paying off as many bills in advance as possible, by taking advantage of the higher QFF conversion rate whilst it still lasts.
( Many people did this when Optus pulled the pin on Qantas and paid their Contracts in advance as to accrue QFF points before the offer was dead)

Once May comes around, as I don't pay the annual fee ( due to holding a wealth package) I'm inclined not to cancel straight away, although I can see myself switching back to ANZ ( which I cancelled in August last year).
ANZ still have a current offer of the platinum card which comes with no annual fee for the first year, 50,000 QFF points ( with a modest spend requirement) and the conversion rate of the CBA diamond card ( albeit with the MasterCard spend conversion is only 0.5 QFF points per $).

The only problem in my situation is that the ANZ offer is not applicable to previous customers who held an account in the past 12 months.
So I'm going to have to wait till August if I'm going to make the switch back to ANZ and by that stage who knows what other banks will have 'enhanced' their conversion rates by then .

Note: The Current ANZ platinum offer ends this month, although ANZ compete hard in the Credit Card market, with regular promotions to attract new customers ( unlike CBA who offer the least number of promotions)

Following this thread with interest as I too would like to hear how CBA card holders are going to play their hand with this.

 

[Daver6]

My plan of attack is this. I have all my loans with CBA as well, so I'm hoping that will give me some sort of leverage. Basically, paying the wealth package fee gets me the discount on the loans plus the diamond card for free. I intend to point out to my manager that I can get the same rate elsewhere without the ridiculous wealth fee. The QF fee has tripled and they are now cutting points. I put a significant (proportionally for my spend) through the diamond Amex.

My real dilemma is I'm really happy with the level of service I get from CBA. I think if the annual wealth fee is waived, I'll stay put. If there is no movement on something, I'll seriously consider moving everything else where. If I stay, I will still need to find a new Amex that offers 1.5 pts/$ though.

 

[Cool Cat Phil]

My plan of attack is this. I have all my loans with CBA as well, so I'm hoping that will give me some sort of leverage. Basically, paying the wealth package fee gets me the discount on the loans plus the diamond card for free. I intend to point out to my manager that I can get the same rate elsewhere without the ridiculous wealth fee. The QF fee has tripled and they are now cutting points. I put a significant (proportionally for my spend) through the diamond Amex.

My real dilemma is I'm really happy with the level of service I get from CBA. I think if the annual wealth fee is waived, I'll stay put. If there is no movement on something, I'll seriously consider moving everything else where. If I stay, I will still need to find a new Amex that offers 1.5 pts/$ though.

Keep us in the loop how the " chat" with the bank manager goes, I might do the same if I can get into a branch sometime.

 

[SOPOOR]

i know i going to sound like a broken record
but im so annoyed by this move,

the MC rate was terrible to start with and now they are doing it again,

I sincerrely hpe there is an alternative and I will be jumping ship immediately

 

[ChrisFlyer]

For all those claiming this is a case of CBA being "stingy", this simply isn't true.

Your concerns need to be directed at the RBA, specifically their Payment Systems Board. The completely baseless caps they've imposed on interchange fees are the reason that Citi, ANZ and now CBA have made these changes.

Any decisions you make now on taking up a product issued by anyone other than Citi, ANZ or CBA for Visa and MasterCard scheme cards is going to leave you in a similar position. Until Westpac, NAB and other issuers of MC and Visa cards show their hand, it's not clear as to how the landscape will end up.

That's not quite true - the RBA's latest changes only affected Visa/MasterCard spend, specifically on super premium cards. CBA already gave itself quite a margin by handing out MasterCard World cards with much higher merchant fees yet awarding only 0.625 FF points per $1 as it was, so even with the current average interchange fee being lowered there was still plenty of wiggle room. CBA is just preserving its margin more so than being actually forced to cut anything.

(Other issuers that were awarding >1 point per $1 on a Visa/MasterCard, however, would have cut the points earned for this reason as cost of the points would have exceeded the revenue earned from the same transaction.)

The RBA's other suggested changes, which are still up for discussion, would affect bank-issued AMEX cards but haven't been enacted yet, so in that respect CBA is still receiving the same cut of the merchant fee on all AMEX spend but is just boosting its margin by awarding fewer points in return.

CBA also hiked its self-imposed QFF opt-in fee from $10/year to $30/year - seems to me the bank is simply 'discouraging' Qantas points which it has to pay for immediately as opposed to Velocity points for which it only pays for when you go online and manually convert them across (which most people do probably once or twice a year when they have enough points to book something), leaving it more time to reinvest the money earmarked for that expense elsewhere.

(That or it's a case of "how far can we push it before the loss of customers outweighs the extra profits from those who keep the cards"...)

 

[theevilmuppet]

Being a CBA Diamond card holder this will impact me significantly. Once I receive official confirmation it will be a phone call to my relationship manager. I have significant loans with CBA and put a decent amount of money through my CBA cards. If they can't come to the party on this one, it might be time to move my business elsewhere. Fees going up, points earning going down does not make for a happy customer.

I do fear though that this is just the start of things and other banks will follow suite in the near future.

On the Visa/MasterCard earn rate, CBA simply don't have the room to move. Blame the ill-equipped idiots on the RBA Payment Systems Board for continuing to reduce interchange rates via regulation they clearly are not capable of understanding correctly.

As for this being the start of things, it's more like the middle. ANZ, Citi (and all the brands they issue for) and CBA have now stated their changes to the market. Only Westpac (and their subsidiaries), NAB and BankWest are yet to announce the changes they'll be making.

The RBA Payment Systems Board have recently released draft rules for regulation of companion American Express cards proposing to cap the interchange rate at 0.8% (currently it averages around 1.6 - 1.7%). Again, this is being done for no reason that can be articulated with any sophistication or financial basis. The entire RBA Payment Systems Board should be fired and excluded from corporate participation.

 

[theevilmuppet]

That's not quite true - the RBA's latest changes only affected Visa/MasterCard spend, specifically on super premium cards. CBA already gave itself quite a margin by handing out MasterCard World cards with much higher merchant fees yet awarding only 0.625 FF points per $1 as it was, so even with the current average interchange fee being lowered there was still plenty of wiggle room. CBA is just preserving its margin more so than being actually forced to cut anything.

(Other issuers that were awarding >1 point per $1 on a Visa/MasterCard, however, would have cut the points earned for this reason as cost of the points would have exceeded the revenue earned from the same transaction.)

The RBA's other suggested changes, which are still up for discussion, would affect bank-issued AMEX cards but haven't been enacted yet, so in that respect CBA is still receiving the same cut of the merchant fee on all AMEX spend but is just boosting its margin by awarding fewer points in return.

CBA also hiked its self-imposed QFF opt-in fee from $10/year to $30/year - seems to me the bank is simply 'discouraging' Qantas points which it has to pay for immediately as opposed to Velocity points for which it only pays for when you go online and manually convert them across (which most people do probably once or twice a year when they have enough points to book something), leaving it more time to reinvest the money earmarked for that expense elsewhere.

(That or it's a case of "how far can we push it before the loss of customers outweighs the extra profits from those who keep the cards"...)

I'd not agree with your statement about there being plenty of wiggle room there. CBA are in a somewhat unique position as both the largest card issuer and largest card acquirer in the country, hence they (if the changes apply to MSF as well as Interchange) will have more difficulty in keeping their acquiring business from operating at a loss (CBA are the odd one out here - the other banks do not even break even on acquiring).

Regarding the American Express change, on a financial basis I completely agree with you and should have done my homework in that regard as I didn't realise they were fiddling the American Express earn rate as well. The same goes for the increase on the opt-in fee for crediting points to Qantas Frequent Flyer. There's a concept of Stored Value in the payment market that is continuing to gain momentum and CBA seems to be catching on to that (they'd obviously prefer you waste your points at Flight Centre where they'll get to charge their client for their business banking operations).

 

[quokka77]

For those of you concerned about the reduced visa/mc earn rate, you could look to one of the smaller card issuers (jetstar, woolworths, Qantas CU), that still earn 1ppd. Yes, some are capped, and yes you run the risk of further devaluation, but some of those cards are running sign on bonuses which should compensate you, even if you have to move elsewhere later. For the Amex card, you could move to ANZ, as suggested (currently fee free for the first year). Or you could reassess your need for a Qantas-earning card, and move to the Dark Side of the Force.

 

[Freq Flier 2013]

My plan of attack is this. I have all my loans with CBA as well, so I'm hoping that will give me some sort of leverage. Basically, paying the wealth package fee gets me the discount on the loans plus the diamond card for free. I intend to point out to my manager that I can get the same rate elsewhere without the ridiculous wealth fee. The QF fee has tripled and they are now cutting points. I put a significant (proportionally for my spend) through the diamond Amex.

My real dilemma is I'm really happy with the level of service I get from CBA. I think if the annual wealth fee is waived, I'll stay put. If there is no movement on something, I'll seriously consider moving everything else where. If I stay, I will still need to find a new Amex that offers 1.5 pts/$ though.

Daver I don't understand what you want the relationship manager to do? He's not going to change the whole system just for you? It's bank policy and that's it. Doesn't matter how many millions you have with the bank. My advice is to change banks if you are really that unhappy.

 

[SOPOOR]

For those of you concerned about the reduced visa/mc earn rate, you could look to one of the smaller card issuers (jetstar, woolworths, Qantas CU), that still earn 1ppd. Yes, some are capped, and yes you run the risk of further devaluation, but some of those cards are running sign on bonuses which should compensate you, even if you have to move elsewhere later. For the Amex card, you could move to ANZ, as suggested (currently fee free for the first year). Or you could reassess your need for a Qantas-earning card, and move to the Dark Side of the Force.

I will def look at one of these,

however I am looking for a 1.5per dollar amex card as well, if there is no alternative I might as well stay with cba as 1.25 per dollar isnt that bad

 

[Daver6]

Daver I don't understand what you want the relationship manager to do? He's not going to change the whole system just for you? It's bank policy and that's it. Doesn't matter how many millions you have with the bank. My advice is to change banks if you are really that unhappy.

I think I said I was actually quite happy with CBA. I don't expect my relationship manager to change my earn rate. What I'm hoping for is some other form of compensation. Some things that spring to mind include a lump some of bonus points, removal of wealth package fee or a further reduction in interest rates. That's just three options that immediatly come to mind. I believe all those would be within the realm of possibilities. I think it would be remiss to not make contact with my manager and ask the question prior to jumping ship.

 

[SOPOOR]

Unfortunately i dont have the wealth packageand pay the annual fee

The only saving grace is the 10 to 15k i put theough but never pay interest

 

[cove]

When we were approached by CBA to switch our business the biggest reason to pass on the offer was the CBA suite of credit cards were quite inferior to the Westpac Kris Flyer Platinum Amex that our 5 partners use. Since then Westpac stopped issuing new cards but we all have this card as our best card for overseas travel on earned miles.
Combining this with a Citibank Visa was pretty logical.
For Qantas points we think Qantas Credit Union cc is the best but the request for 3 months history on credit cards was something that slowed my application down.

 

[ragingsheep]

The RBA Payment Systems Board have recently released draft rules for regulation of companion American Express cards proposing to cap the interchange rate at 0.8% (currently it averages around 1.6 - 1.7%). Again, this is being done for no reason that can be articulated with any sophistication or financial basis. The entire RBA Payment Systems Board should be fired and excluded from corporate participation.

Left on their own, credit card interchange rates continually go upwards and super premium products are continually subsidised by small merchants, low end cards and non-super premium card users.

 

[Lord Mud]

Im in the same boat with Daver6, I have also have a business plat card which has been affected in the same way. I intend to have a chat with relationship manager and/or Customer relations.

I will likely ask for a reduction in annual fees on the bus plat and wealth package. We will see how it all goes I guess.

 

[Skrambled]

Got my letter....how disappointing. Any responses from relationship managers?

 

[Daver6]

I'm expecting a response late next week from mine.

 

[amaroo]

Dia turned into an instant dud when they pulled ATO earn.

We both get this card fee free ... will keep in the undies draw in case things change.

 

[cove]

No point staying with CBA direct when there are other options. I never did a CBA card directly.
Your undies drawer will fill up if you have had a mix of cards that used to pay out on ATO.

 

[amaroo]

No point staying with CBA direct when there are other options. I never did a CBA card directly.
Your undies drawer will fill up if you have had a mix of cards that used to pay out on ATO.

Doesn't hurt to wait and see, plus fee free is the bait ... Who knows - it might end up being a high earner once the others play follow the leader.