Reduced AMEX earn rates from April 2019

[ramboflyer]

Having all but ditched QFF as my preferred program I am in the middle of changing over cards that give me good value to transfer to Krisflyer. Have now got the ANZ awards Traveller Visa card and qualified for the 80,000 sign on bonus points and now in the process of waiting on a response to my application for an AMEX Explorer card which will replace the AMEX Ultimate. Although I wont get the sign on bonus points it was a good points earning card. This devaluation of redeeming points changes everything.

The St George Amplify Visa Signature card will earn 0.75 Krisflyer miles per $1 spend. Given the 10% birthday bonus, the 100,000 sign on Amplify bonus points and the other extras like lounge access I think I might tell AMEX to forget the Explorer card and switch over to St George.

 

[JohnK]

Very disappointing.

I'm not a big user. Possibly $30,000-$40,000 spend/year. Already difficult saving for anything meaningful and this change will make that task even more difficult. No motivation to try and spend everything on card to look forward to an economy award after 3-4 years.

One thing continues to stun me which I do not believe has been mentioned here and that's understandable. Why the continued devaluation of existing card holders and one assumes loyal customers yet serial churners continue to be rewarded for very little gain? Or is the gain bigger than first appears? Another account open statistic? Makes no sense to me.

 

[andye]

The Reserve will now earn a bit less than the Charge (2 v 2.25) which is disappointing.

 

[lang_13]

Terrible news though not entirely unexpected considering the difference in earn rate between amex and visa/mc. I suppose they are banking on people holding onto cards due to a slightly better earn rate and wider acceptance. Downside is all banked MR points are now off to Krisflyer meaning 3 year expiry
Will prob hold onto Edge post April, but bin Explorer. I am of the view that disloyalty seems to pay more than loyalty ... will be interesting to see if banks crack down on approvals based on number of recent CC applications.

 

[desafinado74]

I expect a big backlash to this news, judging from the responses from here and the Australian Business Traveller. Seriously what are the guys at AMEX smoking ?! What irks me is there is no reduction in annual fees to go with these devaluations. Even my Coles Mastercard Plat card is better value than many of these AMEX cards now.

 

[andye]

I haven't studied this in great detail, but I have a feeling that this change will make Amex irrelevant in the Australian market. The Platinum Edge will earn 0.5 airline points per dollar for everyday spend, so many/most people would be better off investing the $200 annual fee in a Visa or Mastercard rather than continuing to hold the Amex. Or is the Platinum Edge hit harder than most?

Ive found statement credits (Shop Small etc) comfortably cover the fee for my cards

 

[trippin_the_rift]

Seriously I don't know how any legit loyalty professional can sign off on such a massive devaluation. Their role is to advocate for members. I would quit my job before agreeing to aimless value-stripping from the member base.

However, three interesting points to share:

1) The competition to Amex is realistically the Big 4 + Citi. All of which seriously devalued consumer card products over the past year. There is a significant lack of business creativity/innovation in Australian consumer banking. As others have pointed out in this thread - many other countries are ADDING cardholder benefits, lowering annual fees and increasing points earn all at the same time - even in markets which have lower interchange rates than Australia.

2) If the MDR to *ALL* merchants didn't drop by ~50%, the overall net effect of changes will mean higher margin and more revenue for Amex.

3) I was recently interviewed for a major travel industry publication which asked what I thought would be the disruption technology for airline loyalty over the coming year. What I know is that Airlines which devalue the loyalty programs take an instant hit on revenue, co-brand revenue and yield. Program changes mean the underlying core member base has a behavioural impact change and attracts a new type of customer with a new type of spending.

Those newly alienated loyalty members tend to stop buying into 'premiumness' in general and then chase the best price. If Amex can learn anything from this, is that for every cardholder they will lose, that cardholder is likely to chase the best deal, and be less prepared to pay a premium for a card in the future.

Charge cards are significantly overpriced with this latest change.
It's unfortunate the industry doesn't have more smart folks who can advocate for the customer.

 

[samopp]

Was told by an agent that all MR points earned before the change will be doubled, so the value transferred to airline partners will be protected. Also all the expenses including ATO payment will be earning at the normal rate. Not sure should I believe it or not, will check with another agent tonight.

 

[SeaWolf]

Ive found statement credits (Shop Small etc) comfortably cover the fee for my cards

I've found that too, but the statement credits are the same no matter if it's the most expensive Platinum Charge card or the no fee Essential card. For a decent number of people it's going to work out better to switch to the Essential card for statement credits and use a Visa/MC with a lower annual fee as their primary points earning card. The points earn will now be only slightly lower with the Visa/MC but it'll leave you much more money in your pocket with reduced fees.

 

[SeaWolf]

Was told by an agent that all MR points earned before the change will be doubled, so the value transferred to airline partners will be protected. Also all the expenses including ATO payment will be earning at the normal rate. Not sure should I believe it or not, will check with another agent tonight.

That sounds great, but a little too good to be true. Maybe we'll find out a bit more when we get the official notice of the changes.

 

[HockeyMonkey]

I don’t see any reference to the Westpac Black Amex card being affected, earning 1.25 points per dollar locally and 2 overseas

 

[theblank]

I expect a big backlash to this news, judging from the responses from here and the Australian Business Traveller. Seriously what are the guys at AMEX smoking ?

There is a lot of entitled views thats for sure. I wonder what the same people are going to do when they find out all the Visa/MC earns will soon become 0.33 ppd. Its already started - see Westpac.

What irks me is there is no reduction in annual fees to go with these devaluations. Even my Coles Mastercard Plat card is better value than many of these AMEX cards now.

If you think about it, based on your argument Annual fees should be increasing every year, in line with inflation, (yes I know its not much) yet they havent.

Its still pretty much the same FF points to actually fly for a very long time, but in the same time many of us are earning twice the money spending twice as much, earning twice the bank points, and we make a killing on Sign up bonuses.

IMO, we are still generating way more FF points than we could have 20+ years ago.

 

[theblank]

I don’t see any reference to the Westpac Black Amex card being affected, earning 1.25 points per dollar locally and 2 overseas

Westpac has reduced the transfer rates earlier this month. now only 1 FF ppd for local spend.
( 1 WBC = 0.33 FF)

 

[HockeyMonkey]

Westpac has reduced the transfer rates earlier this month. now only 1 FF ppd for local spend.
( 1 WBC = 0.33 FF)

I don’t think that reduction affected QF transfers (yet)

 

[burmans]

I expect a big backlash to this news, judging from the responses from here and the Australian Business Traveller. Seriously what are the guys at AMEX smoking ?! What irks me is there is no reduction in annual fees to go with these devaluations. Even my Coles Mastercard Plat card is better value than many of these AMEX cards now.

I don't see a big backlash, I see a number of very vocal people on forums we frequent which delude is into thinking everyone thinks like this. This is pretty much standard corporate practice these days, get people on board with an attractive offer then gradually downgrade the offer and rely on the fact that 90% are too lazy to move. And the evidence show this works despite the very vocal minority!

 

[ozstamps]

Having just added a third AMEX to my wallet I was dreading the day that this would happen, but knew that it would eventually when I noticed Flight Centre were now only charging 0.92% surcharge for AMEX compared to the 2.97% they used to charge.

That part is very true across the board. Most non merchant member posts on this thread are totally inaccurate - Amex fees have dropped heavily for merchants in recent years. Do good turnover, and do NOT charge any surcharge as I never do, and a Rep calls YOU and offer a lower rate "in recognition of not charging surcharge fees". They did to me at least, and I appreciate it.

I PREFER taking Amex, over any other kind of card.

As a small sole trader merchant it costs me only about 1% FLAT to accept Amex, from local or foreign buyers. It was about 3 times that only a few years back.

Accepting VISA/MC via my large Bank is a lottery re the cost to me for each $100 spent. ALL foreign buys (huge part of my business) cost me 3.25% flat. Outrageous, but that is the rate.

Local Visa/MC card users cost me from well under 1%, to up to over 3% depending on WHAT type on card type level they have - I never know of course, who is using a debit card, and who is using a Westpac Plutonium card etc. All I see are 16 number cards. So I prefer Amex at all times. 1% I can work with happily. Over 3% hurts.

As to earn rates, the humble green card is looking very good after April 2019 - less than $100 a year to have - and $60 of that you get back each year via the ''Shop Small'' each November.

 

[jinks485]

Was told by an agent that all MR points earned before the change will be doubled, so the value transferred to airline partners will be protected. Also all the expenses including ATO payment will be earning at the normal rate. Not sure should I believe it or not, will check with another agent tonight.

Per the FAQ on Amex's website:
Q: What happens to the points I have in my account on 15 April 2019?
A: Your points balance will remain the same, however the rate at which you redeem points will increase from 15 April 2019. This means you will need more points to redeem travel, hotels, experiences, goods and gift cards at eligible partners from 15 April 2019.

 

[lovetravellingoz]

Churn and burn strategy will continue!

.

There are many ways to skin a cat. And I have also many FF cats In addition every year that I can recall has presented new ways to skin. Every year has seen some ways cease and/or reduce.

Churning and burning does not mean, and has not meant, that you could not con-currently skin FF points in many different ways.

However churn and burn is capped by the offers available and for quite a number of people the Amex changes will mean less overall FF points earnt per year. For some (ie those that could leverage large business spend) it will really, really hurt. I am probably in the middle ground where I will lose a healthy amount, but not the multi-millions per year than some will lose.

So yes I will keep churning and burning. Yes I will keep earning FF points in multiple ways. Yes I have no doubt that in the next 12 months I will have earnt new and/or increased FF points in some way/s just as I have done for decades. But the changes mean that one particular way of skinning points will now gain less points.

 

[kkl]

Will amex also be reducing the mr point value in their travel portal? Currently 1c /mr

 

[SOPOOR]

I think the Plat Edge will still be the card of choice for supermarket and petrol spend - 3 points / $ which I think translates to 1.5 airline points

Can you please ask woolies to restart accepting gift cards for cough cough purchases!!