ANZ and American Express have parted ways, with ANZ no longer issuing American Express cards to new cardholders. The changes come into effect from today for customers taking up a new ANZ card. Existing members will have their American Express cards withdrawn later in the year.
ANZ are also making significant changes coming to the points earning rates on the cards. This includes an increase in earnings on some cards, and the introduction of a tiered earning structure.
All four of the big banks have been issuing American Express companion cards within their card portfolios. The main reason for this was that it allowed the banks to pay a higher earn rate when spending on the American Express card.
Recent regulatory changes will shortly restrict the fees that American Express pay to the banks when using their cards. This will mean that the banks will have less funds available to issue Reward Points.
The changes affect the fees that American Express can pay to banks for issuing their cards. Indeed, the fees are basically being brought into line with those paid by Visa and Mastercard. The outcome of this, is that there will be no financial advantage to the banks in continuing to issue American Express companion cards.
ANZ is the first of the four banks to have pulled the plug on the companion card. The other three banks have not yet signalled their intentions, however, I would expect that they may follow the lead of the ANZ.
Existing Cardholders
As it stands, exisitng members will be able to use their companion card through until August 5, 2017. They will also, for the time being, maintain the current earn rate.
New Cardholders
ANZ has updated its website to reflect that new cardholders will only be receiving a single Visa card. New cardholders will also be on the new earn rates (outlined below)
New Visa Earn rates
As part of the revamp, ANZ is adjusting the earn rate on the Visa cards that they have issued. These new rates will apply to new cardholders. Existing cardholders will liekly be receiving communiction about how the change will affect them.
Overall, there is an increase in the initial earn on the cards. Some cards will gain a tiered earn structure, so the earn rate will decline after reaching a maximum earn rate in a month.
The following table outlines the changes that are being made across the range of credit cards.
| Card Type | Current Earn Rate | New Visa Earn Rate
(per dollar of spend) |
|
|---|---|---|---|
| American Express | Visa | ||
| ANZ Frequent Flyer Card | 1 Qantas Point | 0.5 Qantas Points | 0.5 Qantas Points up to $500 per statement 0.25 Qantas Points over $500 per statement |
| ANZ Frequent Flyer Platinum Card | 1 Qantas Point | 0.5 Qantas Points | 0.75 Qantas Points up to $3,000 per statement period 0.5 Qantas Points over $3,000 per statement period |
| ANZ Frequent Flyer Black Card | 1.5 Qantas Points | 0.75 Qantas Points | 1 Qantas Point up to $7,500 per statement period 0.5 Qantas Points over $7,500 per statement period |
| ANZ Rewards Card | 0.75 Rewards Points | 1.5 Rewards Points | 1 ANZ Rewards point up to $1,000 per statement period 0.5 Rewards point over $1,000 per statement period |
| ANZ Rewards Platinum Card | 1 Reward Point | 2 Reward Points | 1.5 ANZ Rewards point up to $2,000 per statement period 0.5 ANZ Rewards point over $2,000 per statement period |
| ANZ Rewards Black Card | 1.25 Reward Points | 3 Reward Points | 2 ANZ Rewards point up to $5,000 per statement period 1 ANZ Rewards point over $5,000 per statement period |
| ANZ Travel Adventures | 2 Rewards Points | 1 Rewards Point | 1.5 Rewards Points up to $2,000 per statement period 1 Rewards Point over $2,000 per statement period |
What now?
This is a fairly significant change from ANZ. However, they are likely to be the first movers. It is likely the other big banks will be adjusting their portfolios over the coming months. Whether they follow the ANZ’s lead, or make different changes remains to be seen
Fortunately, for exisitng cardholders, there is a notice period of a few months. During this time, it may be worth considering your options. Note, however, that other banks may well follow suit over the coming months.