American Express has unveiled major changes to the points earn and redemption rates across its card range: the latest big move by a card issuer in Australia’s rapidly evolving credit card market.

The most significant changes are to Amex’s own-brand cards, which earn the popular Membership Rewards points.

In most cases, customers will have to make more purchases to enjoy the same redemptions as today. Fortunately other Amex perks are unaffected and, on the whole, Amex cards will continue to be very rewarding.

Amex says this move is necessary so it can continue to invest in products, benefits, digital capabilities and the size of its merchant network in Australia, especially in light of new regulations that have forced merchant fees down across the industry. These fees partially fund reward schemes.

The changes to Amex’s earn and redemption rates will come into effect on 15 April 2019, so card members have six months to prepare. Amex will begin notifying customers shortly.

Here’s an overview of the changes.

Changes to Qantas and Velocity consumer cards

The changes to Qantas and Velocity consumer cards are quite simple: points earn rates will fall by 0.25 points per $1 spent for all purchases except with government.

Here’s how each card is affected.

Card	Current earn rates (points per dollar)	New earn rates (points per dollar)
Qantas Amex Ultimate Card	2.5 – Qantas purchases 1.5 – All other 0.5 – Government	2.25 – Qantas purchases 1.25 – All other 0.5 – Government
Qantas Amex Premium Card	2.25 – Qantas purchases 1.25 – All other 0.5 – Government	2 – Qantas purchases 1 – All other 0.5 – Government
Qantas Amex Discovery Card	2 – Qantas purchases 1 – All other 0.5 – Government	1.75 – Qantas purchases 0.75 – All other 0.5 – Government
Amex Velocity Platinum Card	2.5 – Virgin Australia purchases 1.5 – All other 0.5 – Government	2.25 – Virgin Australia purchases 1.25 – All other 0.5 – Government
Amex Velocity Escape Card	2 – Virgin Australia purchases 1 – All other 0.5 – Government	1.75 – Virgin Australia purchases 0.75 – All other 0.5 – Government

Changes to Amex’s own-brand cards

The changes to Amex’s own-brand cards, which earn Membership Rewards points, are more complicated, because both the earn and redemptions rates will be adjusted.

The easiest way to outline these changes is to look at each card separately.

Amex Explorer Credit Card

The popular Amex Explorer Credit Card currently earns 2 Membership Rewards points per $1 spent, except with government, where the earn rate is 0.5 points per $1.

From 15 April 2019, the earn rate on general spend will remain the same, at 2 points per $1, but with government it will go up to 1 point per $1.

The biggest shake-up is actually with the points burn rates.

Redemption	Current burn rate	New burn rate
Transfer to airlines	4 MR points = 3 frequent flyer points	2 MR points = 1 frequent flyer point
Hotel transfer partners	1 MR point = 1 Hilton Honors point 3 MR points = 2 Marriot points	2 MR points = 1 Hilton Honors point No change to Marriott (this was devalued a few months ago)
Travel agency spend / Pay with points / Credit on account.	13,500 MR points = $100	13,500 MR points = $67.50
Gift card purchase	$100 gift card = 13,500 MR points	$100 gift card = 20,000 MR points

Amex Platinum Card

Right now, Amex’s flagship card has a tiered earn structure: for each $1 spent, you earn 3 points at restaurants (capped), 2 points on travel and foreign currency spend (capped), and 1 point everywhere else, except 0.5 with government, utilities and insurance.

From 15 April 2019, the earn rate will be simpler and uncapped: 2.25 points per $1 spent everywhere except with government, where it will be 1 point per $1 spent.

Here are the new burn rates.

Redemption	Current burn rate	New burn rate
Transfer to airlines	1 MR point = 1 frequent flyer point	2 MR points = 1 frequent flyer point
Hotel transfer partners	1 MR point = 1 Hilton Honors point 3 MR points = 2 Marriot points	2 MR points = 1 Hilton Honors point No change to Marriott (this was devalued a few months ago).
Travel agency spend	10,000 MR points = $100	10,000 MR points = $50
Pay with points	10,000 MR points = $70	10,000 MR points = $50
Credit on account	10,000 MR points = $62.50	10,000 MR points = $50
Gift card purchase	$100 gift card = 13,500 MR points	$100 gift card = 20,000 MR points

As you can see, cardholders will be more rewarded on everyday spend (which is uncapped), but that comes with the loss of lucrative bonus earn categories.

Amex Platinum Edge Credit Card

This card also has a tiered earn structure: right now, for each $1 spent, you earn 3 points at supermarkets, 2 points at petrol stations, and 1 point everywhere else, except 0.5 points with government, utilities and insurance.

From 15 April 2019, the earn rate per $1 spent will be 3 points at supermarkets and petrol stations, 2 points on foreign currency spend and 1 point everywhere else.

Here are the new burn rates.

Redemption	Current burn rate	New burn rate
Transfer to airlines	1 MR point = 1 frequent flyer point (Emirates is 4:3)	2 MR points = 1 frequent flyer point
Hotel transfer partners	1 MR point = 1 Hilton Honors point 3 MR points = 2 Marriot points	2 MR points = 1 Hilton Honors point No change to Marriott (this was devalued a few months ago).
Travel agency spend	10,000 MR points = $100	10,000 MR points = $50
Pay with points	10,000 MR points = $70	10,000 MR points = $50
Credit on account	10,000 MR points = $62.50	10,000 MR points = $50
Gift card purchase	$100 gift card = 13,500 MR points	$100 gift card = 20,000 MR points

This card will continue to be the most rewarding in Amex’s range for supermarket and petrol station spend.

Changes to Amex business cards

I’ll only mention the two business cards I’ve written about in the past.

From 15 April 2019, the Amex Business Explorer Card will have the same earn and burn rates as the consumer-oriented Explorer card above.

There will be no changes to the Amex Qantas Business Rewards Card.

Why Amex is making these changes

The card payments landscape has changed substantially in the last two years, with increased regulation altering the economics for card providers, most of whom have responded by making major changes to their rewards programs.

To ensure it’s able to compete effectively, Amex says it’s had to close the gap between the merchant fees it charges and those of its competitors. These fees partially fund rewards programs, so while greater merchant acceptance of Amex means card members have more opportunities to earn points, sadly those points will soon deliver fewer benefits.

While this is disappointing, it’s important to keep in mind that Amex’s products continue to provide excellent value. Points earn rates will remain market leading, and there are so many other perks to enjoy with Amex cards, like lounge passes, travel credits, complimentary insurances and discount offers.

You can read more about the changes to Amex cards on its site here.

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Like many Australians, I LOVE wine, and buying wine through Qantas is one of the best ways to earn Qantas Points.

The Qantas Wine service is very convenient, it offers good quality drops, and there are often excellent opportunities to earn lots of bonus points.

Clearly, I’m not the only one who loves this points hack, because Qantas has released data today that shows Australians have earned over 1.5 billion Qantas Points from wine purchases since Qantas Wine launched in 2011.

Qantas Wine has even crowned its first “points millionaire”, with one person earning close to two million Qantas Points on red wine alone! (Sadly it’s not me).

The average Qantas Wine member earned approximately 10,000 points last year, which is actually quite modest given you can pick up that amount of bonus points on one moderately-priced case.

As the most popular varietal, Shiraz is responsible for sending the most Frequent Flyers on holidays, generating more than double the amount of points than the second most popular wine – Cabernet Sauvignon.

Head of Qantas Wine Lisa Hudson says: “Qantas Wine is a great way for our members to discover more than 2000 quality wines at all price points, handpicked from leading Australian wine regions by our expert buyers.”

“What we’re seeing now is people taking advantage of the points offering to get more value from their wine consumption, allowing them to enjoy their favourite tipple while topping up their points balance.”

When you buy wine from Qantas, you earn 1 Qantas Point for every $1 spent, and earn up to 10,000 bonus points per case.

Premium members earn 3 points per dollar spent plus get free delivery and other perks. Premium membership costs $99 or it’s free with some credit cards, like the Qantas Amex Ultimate Card.

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Bad news for Velocity Frequent Flyer members who redeem points for reward flights: Virgin Australia is introducing a “carrier charge” fee for bookings made on or after 1 January 2019, on all Virgin Australia operated flights, and Delta Air Lines operated and marketed flights between Sydney and Los Angeles.

Virgin Australia argues that “this is in line with local industry practice” – which is mostly true – and that Velocity “remains competitive” – which is much less true. In fact, the airline is losing one of its main advantages: since its main competitor Qantas has a superior network and alliances, the fact that Velocity’s reward fees were lower was one of the program’s key selling points.

Much of that competitive edge is now gone – at least on international flights.

Here are the new charges.

Combined with the news that the points transfer rate from Velocity to Singapore Airlines KrisFlyer is about to get worse, it’s shaping up to be a bad week for loyal Velocity Frequent Flyer members.

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Bad news for Velocity Points holders who like to transfer points to Singapore Airlines’ KrisFlyer program (and vice versa): the airlines have announced that the points conversion rate between the two programs is about to get worse.

Right now, you can transfer points from one program to the other at a 1.35:1 ratio. In other words, 13,500 Velocity Points transfers to 10,000 KrisFlyer miles, and vice versa.

From 1 January 2019, this ratio changes to 1.55:1: a devaluation of 15%, which is quite significant.

This is disappointing news, since the ability to convert Velocity Points to KrisFlyer miles is a unique and valuable feature of the program. While Singapore Airlines award seats can be booked directly through Velocity, sometimes it’s cheaper to transfer miles to KrisFlyer, plus the program gives you access to a broader range of redemption options, the global Star Alliance network, and other benefits, like free stopovers.

If you want to transfer points to KrisFlyer before the devaluation kicks in, bear in mind you must use the points within three years otherwise they will expire.

I’ve written before about how to book Singapore Airlines’ sought-after business and first class seats with Velocity Points. I’ll update that article when the program changes kick in.

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