Ongoing card bonuses (Virgin Money Flyer specifically, other cards in general)

[LonePine]

Hi all

We got the Virgin flyer last month with the 10k + 20K points offer and four TWO41 flights last month as it looked attractive at the time ($129 annual fee) as it was going to be a supplementary card.

However looking at it now, we normally churn about $4k a month through our cards and this one has a relatively poor spend per point ratio. We probably would have been better with the High Flyer with the higher annual fee - oh well.

We are new to this game but for those who have been around awhile, do the Card loyalty programs offer ongoing incentives from time to time to remain loyal and discourage churn?

 

[Moopere]

We are new to this game but for those who have been around awhile, to the Card loyalty programs offer ongoing incentives from time to time to remain loyal and discourage churn?

Generally no. The various providers seem to actually encourage churn really ... a bit like insurers do - I assume they count on it all being too hard for consumers who will by and large just stick with what they have. For points accrual, it appears to me the constantly churning cards is the best way to get large "bonus" points payouts each year.

The problem for me at the moment is that there are so few truly decent cards out there. As you churn through one, you need to pick up another to keep the earn going on fixed spend. Amex in Australia seems to have generally lost the plot and other cards tend to distribute ones earn throughout the various bank (and other) institutions own schemes. If you spend enough its probably not an issue, but for moderate spenders, like me, I end up with small balances of points all over the place which is not a good result.

 

[oz_mark]

See http://www.australianfrequentflyer....-discussion/bonus-point-promotions-48798.html

More likely to offer a low interest balance transfer than points though....

 

[Brettska]

Hi lonepine. I changed from the virgin flyer to the high flyer as I was putting enough through. They just did the cost difference for me on a pro rata basis. Has been well worth the points.

 

[LonePine]

See http://www.australianfrequentflyer....-discussion/bonus-point-promotions-48798.html

More likely to offer a low interest balance transfer than points though....

Thanks but the low interest balance transfer won't rattle my cage as we pay them off every month. Haven't paid interest on a credit card in around 15 years!

 

[Newk]

Thanks but the low interest balance transfer won't rattle my cage as we pay them off every month. Haven't paid interest on a credit card in around 15 years!

but if someone is offering you money for 0% interest for six months........?

 

[Deewhy]

I got an email offer for triple points for 1 month but that us all I've seen with this card.

 

[kaz]

but if someone is offering you money for 0% interest for six months........?

But once you have a balance transfer amount outstanding, all your other purchases made on the card are not interest free even if you pay the balance off each month. I found this out only after I had the card for 2 months and after paying the monthly balance of purchases made in full by due date (leaving only the balance transfer amount outstanding) I was charged interest for those monthly purchases. When I rang them I was advised to refer to their T&C's as below.

'1. If you do not pay your account in full by the due date and you carry a balance on your credit card from month to month the 44 days interest free period does not apply. If you then make a purchase you are charged interest. You will then need to pay your balance off in full for 2 consecutive months for the maximum 44 days interest free period to take effect.'

So, When you have a balance transfer amount owing, that is deemed as carrying a balance. So while the balance transfer is at a low interest rate, any other purchases you make are charged the full interest rate.
When I realised this I paid the account off in full.....so much for my 4.9 % low interest rate. !! Balance transfers are only good if you do not use the card for any other purchases while the low balance transfer amount is still owing.

 

[Aussie_flyer]

But once you have a balance transfer amount outstanding, all your other purchases made on the card are not interest free even if you pay the balance off each month. I found this out only after I had the card for 2 months and after paying the monthly balance of purchases made in full by due date (leaving only the balance transfer amount outstanding) I was charged interest for those monthly purchases. When I rang them I was advised to refer to their T&C's as below.

'1. If you do not pay your account in full by the due date and you carry a balance on your credit card from month to month the 44 days interest free period does not apply. If you then make a purchase you are charged interest. You will then need to pay your balance off in full for 2 consecutive months for the maximum 44 days interest free period to take effect.'

So, When you have a balance transfer amount owing, that is deemed as carrying a balance. So while the balance transfer is at a low interest rate, any other purchases you make are charged the full interest rate.
When I realised this I paid the account off in full.....so much for my 4.9 % low interest rate. !! Balance transfers are only good if you do not use the card for any other purchases while the low balance transfer amount is still owing.

that's why you dont use the card with the balance transfer on it for day to day purchases, instead you use your other card

 

[kaz]

that's why you dont use the card with the balance transfer on it for day to day purchases, instead you use your other card

Yep I realise that now that I was charged interest, but and as I closed my other card account which I transferred the balance transfer from, I had no choice but to keep using the card.

When i realised that I being charged interest on my purchases, for every purchase I made I then paid that amount to the account immediately to negate the purchase made, but as the statement had not closed for the month, Virgin money applied those payments against my balance transfer amount. I just couldn't win !!

 

[Aussie_flyer]

Yep I realise that now that I was charged interest.

I thought that it was widely known that carrying a balance on an account eliminates the interest free period.

 

[kaz]

I thought that it was widely known that carrying a balance on an account eliminates the interest free period.

I mistakenly thought that a balance transfer amount at a reduced interest rate was treated separately to purchases made on statement.

 

[robd]

I thought that it was widely known that carrying a balance on an account eliminates the interest free period.

I didn't know that, probably because I always pay my credit card balance by the due date.

I was offered a 0% balance transfer when I got the Virgin Flyer Card, and didn't take up the offer. Later, I was thinking I should have taken up the offer and earned interest by keeping my money in my bank account, rather than paying off my other card. Turns out I'm smarter than I thought I was!

 

[drsmithy]

So, When you have a balance transfer amount owing, that is deemed as carrying a balance. So while the balance transfer is at a low interest rate, any other purchases you make are charged the full interest rate.
When I realised this I paid the account off in full.....so much for my 4.9 % low interest rate. !! Balance transfers are only good if you do not use the card for any other purchases while the low balance transfer amount is still owing.

Sounds dodgy to me. Aren't card companies these days supposed to apply any payments to the charges attracting the highest interest first ?

 

[Newk]

Sounds dodgy to me. Aren't card companies these days supposed to apply any payments to the charges attracting the highest interest first ?

It is confusing, at least to this LB duck. I THINK it depends on when the card was issued. Someone will tell us I'm sure. But as a general rule I would advise clearing a card balance before using a balance transfer. And then put the card in the drawer until the balance transfer is paid off. Another reason why you cannot have too many credit cards

 

[oz_mark]

Sounds dodgy to me. Aren't card companies these days supposed to apply any payments to the charges attracting the highest interest first ?

The more significant issue is that you lose the interest free time altogether. Make a purchase, any you are charged the full interest rate until you pay off that transaction...

 

[drsmithy]

The more significant issue is that you lose the interest free time altogether. Make a purchase, any you are charged the full interest rate until you pay off that transaction...

That's what I mean, I didn't think this should happen now. They should keep track of the interest rate applicable to each charge as it hits the card and use it.

I'd be interested to hear what the ACCC had to say.

 

[burmans]

It is confusing, at least to this LB duck. I THINK it depends on when the card was issued. Someone will tell us I'm sure. But as a general rule I would advise clearing a card balance before using a balance transfer. And then put the card in the drawer until the balance transfer is paid off. Another reason why you cannot have too many credit cards

This first bit is absolutely correct, the law changed but for some reason best known to the regulators they quarantined the existing cards.
The recommendation is correct too!!